Foreign Relations of the United States, 1961–1963, Volume XIX, South Asia

32. Telegram From the Department of State to the Embassy in Afghanistan ⁰

Washington, July 22, 1961, 6:16 p.m.

35. Joint State/ICA Message. Embtels 1130¹ and 1131.² You may at your discretion convey substance of following which represents our carefully considered present position to RGA. While aware this falls short proposals reftels more specific response not now practicable or possible.

1. US is prepared, as we have already demonstrated by our actions to date, to assist Afghanistan in efforts move forward with pressing economic development needs.

2. We plan give first priority successful completion of projects in which we are already engaged. While exact phasing and costing not certain, present estimates are that they will require about $50 million in next two years.

3. We are prepared continue provide wheat under the Food for Peace Program to help meet Afghan food needs. Sales proceeds will help finance agreed development projects.

4. We are willing study in detail Second Five-Year Plan when made available to us with view to determining extent to which we can associate ourselves with it. We havemade advance aid level commitments, subject to fund availability, only on very limited basis (India, one year plus conditional commitment for second year subject to review; Pakistan, part of one year) and only after we have had prolonged and detailed review with government of country concerned and with other interested governments covering soundness of plan, feasibility of specific projects included in plan, priorities as between projected requirements, adequacy of the self-help measures being taken by country, including raising domestic revenues, and all other relevant factors.

5. We are prepared to consider undertaking new projects and/or expansion existing activities of high priority to the RGA which will help meet Afghanistan’s urgent development needs. In January we offered to provide grant aid ($17 million) for expanded education programs which the Afghan Government still has under consideration. We are prepared to consider grant financing for technical assistance and for capital costs of educational and other social infrastructure projects. In view of general US policy of increased reliance on loan financing, bulk of future industrial, transportation, irrigation, power and other economic infrastructure project proposals will primarily be considered for development loan financing; if the long-term borrowing authority is enacted we will be able to commit funding for specific projects over a period of years more readily than in the past.

6. When considering new project proposals we will wish study carefully their technical and economic priority, adequacy and soundness of design and plans for implementation, adequacy of Afghanistan’s provision for financing share of costs, consistency of financing plans with financial stability, and soundness of financial and administrative arrangements for continuing operations.

7. We are prepared, as illustrated by Nathan Contract, to assist Afghanistan to improve its capacity to formulate and execute a sound long-term development plan.

Rusk

0. Source: Department of State, Central Files, 789.5-MSP/6-2161. Secret. Drafted in SOA by Carle, cleared by Talbot and Perkins (S/S) and with B/FAC and ICA, and approved by Bowles.
1. In telegram 1130 from Kabul, June 20, the Embassy proposed a detailed program of assurances regarding the estimated magnitude of economic assistance that could be provided to Afghanistan over a 2-year period. (Ibid.)
2. In telegram 1131 from Kabul, June 21, the Embassy requested that the program of assurances outlined in telegram 1130 be given serious consideration. In light of public commitments made to India and Pakistan, and with indications that similar commitments would soon be made to Iran, the Embassy considered that it was “virtually necessary” to reach an understanding with Afghanistan on future foreign aid. (Ibid.)