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

291. Memorandum From the Officer in Charge of Economic Affairs (Cleveland) to the Director of the Office of Southeast Asian Affairs (Anderson)¹

Washington, November 13, 1959.

SUBJECT

• Acceleration of the Aid Program in Laos

I. Introduction

The bulk of the funds in the Laos Aid Program has been used to support the Lao Armed Forces and the Lao National Police. The relatively small amount devoted to economic purposes has been distributed among many projects in all segments of the economy with special emphasis on the improvement of transportation facilities, particularly roads. Almost without exception, none of the projects has been implemented rapidly or efficiently enough to gain significant political impact; on the contrary, most have been delayed so long that a negative reaction has set in. Difficulties encountered in carrying out an effective program have been well aired in the Sessions Report, the ICA Evaluation Report, the GAO Report, and the Report of the Hardy Subcommittee on Government Operations. In spite of all these past reports on the weakness of the operation in Laos, it is doubtful that even today we can really move forward fast enough to produce early significant visible results.

II. The Problem

What can be done in Washington and in the field to accelerate the aid program?

III. Considerations

A. Funds While funds available for economic projects have been relatively limited, this has by no means been a major inhibiting factor in program execution. There has been a growing pipeline of unspent project funds.

B. Personnel Failure to staff the US Operations Mission in Laos with competent and qualified personnel has been the chief handicap in the accomplishment of an effective aid program. In spite of the fact that Laos has world-wide priority for ICA personnel staffing, recent cables from the new USOM Director indicate that ICA simply is not able to provide the Mission with a full staff of professionally and linguistically qualified personnel.

C. Procedures Cumbersome ICA procedures are blamed in certain cases for delays involved in the execution of the aid program, e.g., USOM waited from March until October simply for concurrence in a road alignment. However, in cases where normal procedural requirements have been waived, projects have fared little better (e.g., Vientiane power plant, an “impact” project in 1956—design and construction of a distribution system for the plant have not yet been started). The history of waiving normal procurement and contracting procedures has not been such as to encourage ICA to make future expectations unless over-riding advantages are clearly apparent.

D. Composition of the Aid Program While the Lao program does place special emphasis on roads, and to a lesser extent on education, it also contains numerous projects in agriculture, public health, public administration, etc., some of which are only being partly implemented owing to lack of personnel. This tends to result in a dissipation of the energies of USOM thinly over a variety of unsuccessful projects rather than concentration on a few well-conceived high priority projects.

Conclusions

1. In view of the ICA’s difficulties in personnel recruitment, the restrictive procedures imposed by legislation, the peculiar nature of the Lao problem, and past experience in the operation of the program, it is not likely that a conventional aid program will produce the desired results even if more funds were available.

Recommendations

1. In line with the Prime Minister’s expressed desires, drop all projects which we cannot effectively carry out and concentrate only on those which can really produce results. The chief determinant as to retention of a project should be the availability of qualified personnel.

2. Be prepared to solicit third countries or UN assistance in those fields from which the US withdraws. In the first instance this should be discussed with the French.

3. Projects should be examined at a high level to determine where waivers of normal ICA procedures would be of substantial benefit. Such waivers should be granted expeditiously.

4. In view of the expressed wish of the RLG and the overall benefits obtainable, the road program² should be the principal area of concentration; an all out effort should be made to provide funds, staff and equipment to accelerate progress in this field.

1. Source: Department of State, Central Files, 751J.00/11–1359. Confidential. Drafted by Erikson.
2. Anderson wrote the following footnote in the source text at this point: “We have just completed a good session with Aldrich of BPR, recently returned from Laos, (memo of conversation follows) D.A.” The memorandum of conversation has not been found.