82. Memorandum of a Conversation, Department of State, Washington, September 29, 19591
SUBJECT
- Indus Waters Settlement
PARTICIPANTS
- The Under Secretary
- H.E. Morarji Desai, Finance Minister of India
- H.E. B. K. Nehru, the Commissioner-General for Economic Affairs, India
- Mr. A. K. Roy, Secretary, Ministry of Finance, India
- Dr. J. J. Anjaria, Chief Economic Adviser to Government of India
- SOA—Frederic P. Bartlett
The Under Secretary asked Mr. Desai whether he considered that the Indus waters question had a good chance of final settlement.2 The Finance Minister said that he believed it was good. Mr. Dillon explained that he had talked to certain members of the Congress about it and that their reactions had been favorable because in their minds it represented a specific, concrete contribution to the easing of tensions between India and Pakistan.
Mr. Nehru then inquired how the United States Government intended to handle its financial commitments under the IBRD’s plan. The Under Secretary replied that no final decision had been reached. He believed, however, that the United States commitment for at least next year could be handled within the regular framework of the MSP. Mr. Nehru noted that the financial aspects of the Bank’s plan were most important because, if these were not firmly agreed upon, there would be no water treaty. The Under Secretary said he appreciated this and explained that all of the potential contributors to the Indus Basin Development Fund had indicated acceptance of their commitments in letters sent to the Bank. The Under Secretary continued that perhaps the Administration would seek a general authorization to cover its planned contributions, but not try to obtain a single appropriation to provide all at one time the total amount required over ten years.
Mr. Dillon said he had talked recently with Mr. Iliff of the Bank and had been pleased at the news that Germany had indicated that it would contribute thirty million dollars to the Fund. Mr. Dillon understood that Mr. Iliff was presently seeking to negotiate an arrangement with the Germans which would provide that any surplus of funds (including Germany’s share) remaining in the Fund at the completion [Page 187] of the works covered by the Bank’s Plan would be turned over to the IDA. In this way Germany would be assured that its contribution would not be used to reduce the commitments of the original contributors.
- Source: Department of State, Central Files, 690D.91322/9–2959. Confidential. Drafted by Bartlett.↩
- Indian Finance Minister Desai was in the United States for talks with U.S. officials and for the annual meetings of the IBRD and IMF. See also Document 242.↩