323. Memorandum From the President’s Special Assistant (Rostow) to Secretary of State Rusk1
Washington, April 23, 1966.
In the course of a review of various foreign policy problems before him, the President made the following decisions:
- 1.
- Project loans for India.2 The President would prefer to see our resources at this time going to agriculture rather than to projects of [Page 620] this type. He would wish to know to what extent the electric power projects would actually contribute to agriculture. If, however, it is impossible to transfer these resources more substantially towards use in support of agriculture, the President approves the opening of negotiations on these projects with the Indians at an early appropriate moment.
- 2.
- Pakistan aid strategy. The President first wishes to know if the proposed two-tranche project loan assumes that we will get from the Congress the full amount we have asked. What do we do if Congress cuts our request? Within the limits set by the answer to that question and by Pak compliance with conditions set forth in the memorandum to the President of April 19, recommendations 1 and 2 are approved.3 The President reviewed the history of the steel mill4 negotiations with Pakistan over recent years. He observed that we appear to have something like a moral obligation in this matter. If AID and the Export-Import Bank agree, they may proceed with this project loan.
[Here follow summaries of Presidential decisions unrelated to South Asia.]
W.W. Rostow
5
- Source: Johnson Library, National Security File, Files of Walt Rostow, Non-Vietnam, April–July 1966. Top Secret.↩
- In an April 13 memorandum to the President, Secretary Rusk recommended resuming negotiations on four AID project loans, which were suspended when a hold was placed on new economic commitments to India and Pakistan. The loans in question were to support minerals exploration and thermal power plant extensions at Dhuvaran and Durgapur, and to help finance the construction of the Beas Dam, designed to provide irrigation for 6.5 million acres in western Rajasthan. The total dollar amount was $85.3 million. (Ibid., Memos to the President, Walt W. Rostow, Vol. I, 4/2–5/26/66)↩
- Concerning the recommendations in Under Secretary Ball’s April 19 memorandum to the President, see Document 321. Recommendation 1 of Ball’s memorandum proposed the resumption of AID commodity lending in 6-month segments beginning in July at the level needed to support Pakistan’s development program and self-help policies. Ball proposed the resumption provided that the other members of the Pakistan consortium contributed a proportional share and that Pakistan limited its defense expenditures to agreed levels, made a conscientious effort to maintain the “spirit of Tashkent,” demonstrated a satisfactory level of cooperation with the United States and appreciation of U.S. interests in Asia, and accepted the conditions advocated by the Pakistan consortium relating to import liberalization and Pakistan’s development program. Recommendation 2 proposed negotiation a new P.L. 480 agreement, subject to the understanding that Pakistan would make a greater effort to promote agricultural output. (Ibid.)↩
- Reference is to the proposed steel mill to be built at Karachi.↩
- Printed from a copy that bears this typed signature.↩