Foreign Relations of the United States, 1964–1968, Volume XXV, South Asia

521. Telegram From the President’s Special Assistant (Rostow) to President Johnson in Texas¹

Washington, November 4, 1968, 1505Z.

CAP 82673. Secretary Rusk urged me this morning to lay before you the Pak tank and India aid decisions.

The following paper presents the two issues.

1. Ayub’s Tanks. The issue is whether to:

A. Spend $3 million in military aid funds to try to persuade Turkey to sell 100 M–47’s to Pakistan. We would replace them with 100 M–48’s. Nitze says he can find the money.

B. Or remove the ban on arms aid to the subcontinent altogether and sell the tanks directly to Ayub. If the Turkish deal falls through, this would be the only practical alternative to get Ayub even 100 tanks. My earlier memo and Nick Katzenbach’s are attached.²

2. Indian Aid. You asked me to lay out for you alternative aid packages.

These facts should be taken into consideration:

• —There is no pressing food shortage in India. But the Indians need:

  A. Food imports to keep prices down and to help them continue their promising program of agricultural reform.

  B. They need fertilizer imports for next spring’s harvest. If they cut back here, they will not get the full advantage of the miracle seeds now in place.

• —The Indians fear a sharp cutback in foreign development aid. They expected a commitment of $200 million from IDA by now. They can no longer count on this. Second, they are completely in the dark about the U.S. program. Normally we would have pledged our aid for fiscal 1969 in a consortium meeting held in late summer or early fall. There has been no meeting because of uncertainty about what the Congress would appropriate.

  A. The danger is they may over-react by overcautious budgetary decisions—which they are in process of making now—they could in effect put their whole development program in suspense.

  B. Whether they over-react or not, the sharper the cutback in available foreign exchange, the sharper the cutback they will have to make in development investment.

These are the alternatives:

A. Food aid only. This could range from one million tons to the 2.3 million tons we originally proposed. One million tons would reopen the pipeline and give the Indians some confidence. The 2.3 million ton figure (which would bring our 1968 shipments up to the 1967 level) would give them the best chance of getting a grip on their agricultural price and supply problems.

B. Food aid plus an interim loan commitment. Building from the food aid decision, we would add say $100 million as a loan commitment now. This would be large enough to have a good psychological impact and would still leave roughly half the fiscal 1969 appropriation for decision by your successor. Perhaps half the loan money would be for fertilizer and the rest for industrial imports. Bill Gaud would have to decide on the mix in light of the total program.

C. Food aid plus the total FY 69 aid appropriation for India. This would mean food aid plus an estimated $195 million in loan money. (We gave $285 million last year.) The main argument for committing the full amount now is that it would do the most good now. It would have the greatest impact on Indian budgetary decisions and on their fertilizer procurement policy. It would give them some margin to gamble that IDA may still come through by the middle of 1969. Your successor would still have the decision to make on calendar 1969 food aid and time to work out the next India consortium pledge and get it through the Congress.³

1. Source: Johnson Library, National Security File, Country File, India, India’s Food Problem, Vol. IV. Secret.
2. See Document 519 and footnote 2 thereto.
3. A handwritten note on the memorandum by Jim Jones quotes the President’s response: “Give them the 2.3 mill. tons that you proposed plus the $195 mill. loan and announce it this afternoon. Also give Ayub some food or something. LBJ/JRJ”