Office of the Historian

62. Memorandum of a Conversation, Department of State, Washington, February 24, 19591

Washington, February 24, 1959

SUBJECT

  • India–Pakistan Economic Relations

PARTICIPANTS

  • The Acting Secretary
  • Mr. Mohamed Shoaib, Pakistan Minister of Finance2
  • Mr. Zahiruddin Ahmed, Financial and Economic Minister, Embassy of Pakistan
  • SOA—Mr. Frederic P. Bartlett

Mr. Shoaib indicated that ideally, instead of being distrustful of each other and diverting scarce resources to unproductive military purposes, both India and Pakistan should actively collaborate for their mutual benefit in the economic field. This would benefit the subcontinent as a whole, but, as long as basic problems confronting the two countries remained unresolved, such collaboration would be impossible. Of these problems, Mr. Shoaib felt that the solution of the Indus waters question was even more important than Kashmir. In his opinion, the stalemate over Kashmir could continue, but the Indus waters problem simply had to be solved before India carried out its announced intention to use waters from the eastern rivers for its new Rajasthan irrigation development. Mr. Shoaib characterized the Indus question as one of “life or death” for Pakistan and hoped that the United States Government would use its good offices with India to see that the latter did not divert waters presently reaching Pakistan from the three eastern rivers until adequate replacement supplies were available from the three western rivers. Meanwhile, Mr. Shoaib believed, the IBRD’s plans for a water scheme in the Indus were “moving along rather nicely”. He hoped that countries friendly to both Pakistan and India would be able to help in any eventual implementation of the Bank’s plans.

In general Mr. Shoaib felt that the United States, which had given so much help to both Pakistan and India, had a perfect right to speak frankly to both governments on questions concerning their economic development and the relationship of military expenditures to such development.

  1. Source: Department of State, Central Files, 690D.91322/2–2459. Confidential. Drafted by Bartlett and approved by Herter.↩
  2. Shoaib arrived in the United States on February 24 for a 3-week visit; see Document 345.↩