Foreign Relations of the United States, 1958–1960, East Asia-Pacific Region; Cambodia; Laos, Volume XVI

162. Memorandum From the Assistant Secretary of State for Far Eastern Affairs (Robertson) to the Deputy Under Secretary of State for Economic Affairs (Dillon)¹

Washington, January 24, 1958.

SUBJECT

• Special Assistance Funds for Laos

As you will recall from our discussions during the recent visit here of Prime Minister Souvanna Phouma of Laos, the May elections in that country are of vital importance for its future. If the Pathet Lao, who will be participating for the first time as a legal political party, win a significant number of the 21 National Assembly seats at issue, the Communists would be well on the way toward achieving their objective of taking over the entire country; if, on the other hand, the Government is victorious in the great majority of districts, the Communists would suffer a setback from which they would require a long time to recover.

Ambassador Parsons has recommended that we immediately undertake a crash program of village-level political impact projects to make the villagers aware of 1) the Royal Government’s concern with their problems and 2) the reality of American aid.² Such a program would do much to counter the anticipated vigorous Communist campaign in the villages and the increasingly widespread criticism that American aid benefits the few in the cities and is largely unknown to the rural population.

Examples of the projects envisaged are the drilling of wells in drought areas, bulldozing of simple roads linking villages, construction of school buildings, repair of pagodas, and the provision of medical aid and training facilities. Each project would be examined in terms of its immediate and tangible political advantages in a particular situation, would make maximum use of local resources and labor, and would be relatively inexpensive. A $500,000 fund would cover the cost of 1) two additional Operation Brotherhood teams for six months and 2) other village-level projects over the next few months, both in the period before the elections and for a sufficient time afterward to insure that the effects of the program on the public mind were lasting.

Although ICA does not normally engage in activities like repairing pagodas, all the proposed projects further Mutual Security Program objectives. The USOM in Laos could not, however, get this sort of program under way within the time available, and need is urgent, for there remain but three months before the May 4 elections.

Consequently, Ambassador Parsons has recommended that the $500,000 fund be established for use at his discretion as specific needs arise, the disbursement to be handled [less than 1 line of source text not declassified] on a voucher basis. Such a system would permit projects to be undertaken quickly, would bypass the obstacles which the Pathet Lao Minister of Planning might place in our path if the usual aid procedures were followed, [2½ lines of source text not declassified].

I agree with the Ambassador’s recommendation. The proposal has also been discussed with Dr. Moyer of ICA, who concurs.

Recommendations

1. That you sign the attached memorandum to the Director of the International Cooperation Administration requesting that $500,000 from the Special Assistance Fund be allocated for Laos on the foregoing basis.³

2. That you telephone Mr. Smith to inform him that this memorandum is on its way to him and that in view of the urgency of the situation you hope action can be taken within the next two or three days.

1. Source: Department of State, Central Files, 751J.5–MSP/1–3158. Secret; Limit Distribution. Drafted by Byrne and cleared by Kocher, Jones, Robertson, Saccio, and Barnes (U/MSA) in draft.
2. Recommended in telegram 1114 from Vientiane, January 3. The telegram was signed by Chargé Bacon, but it had been read in draft by Ambassador Parsons before he left for the United States. (ibid., 033.51J11/1–358; included in the microfiche supplement)
3. A copy of the memorandum to James H. Smith, Jr., drafted on January 24, is in Department of State, FE/SEA (Laos) Files: Lot 65 D 169, 361 Hardy Hearings 1959. In the memorandum, Dillon requested approval of a $500,000 authorization from the Special Assistance Fund and presented arguments similar to those in the memorandum above. ICA agreed [2 lines of text not declassified].