Office of the Historian

318. Memorandum From the President’s Special Assistant (Rostow) to President Johnson1

Washington, April 18, 1966, 4:30 p.m.

State of play in India and Pakistan. As soon as she returned to New Delhi, Mrs. Gandhi scheduled her Planning Minister (Asoka Mehta ) [Page 615] to fly to Washington today to begin talks with the World Bank this week.2 By coincidence, Ayub’s Finance Minister (Shoaib) arrives today for similar talks.3

The difference between these two missions is that the Indians are working from your assurance to Mrs. Gandhi that if they meet the Bank’s terms, we will help. The Pakistanis are still waiting to find out where they stand. Secretary Rusk will have recommendations on next aid steps for Pakistan in the next day or two, and we may suggest that you see Shoaib for a few moments to pass your current feelings direct to Ayub.

The stumbling block with Pakistan is more political than economic. Pakistan made its deal with the Bank two years ago. The problem is that, since Ayub’s visit here, he has feted Liu Shao-chi, paraded Chicom military hardware, blocked any progress on non-Kashmir issues at the India-Pak ministerial meeting, failed to reopen our closed facilities and permitted some use of the US as a whipping boy in connection with the Chicom visit. On the other hand, Ayub himself has been quite restrained during the Chicom tour and is carefully sending Bhutto to both the CENTO and SEATO ministerial meetings (he missed last year). The question Secretary Rusk will be putting to you is whether you are willing anyway at least to spell out the economic and political terms of an aid deal or whether you feel Ayub’s performance requires us to hold off on any offer now.

We are still a couple of weeks from having a recommendation for you on next steps on military aid. However, State and Defense are working on details, and we are already tying it in with the economic talks by trying to establish ceilings on defense expenditures.

Worldwide responses to your Indian food message are still coming in, and we will give you a more detailed report as soon as B.K. Nehru gives us a late reading on India’s own approaches. In short, we now figure that other donors have come up with about $165 million in a variety of contributions—or within about 20% of matching the value of your 3.5 million ton offer ($210 million at world prices).

Walt
  1. Source: Johnson Library, National Security File, Country File, India, Vol. VII, Cables, 1/66–8/66. Confidential.↩
  2. Mehta visited Washington April 18–May 6.↩
  3. Shoaib visited Washington April 18–29.↩