103. Draft Memorandum From the Deputy Assistant Secretary of State for East Asian and Pacific Affairs (Berger) to the Assistant Secretary of State (Bundy)1

SUBJECT

  • Aid to Burma?

Summary

1. There have been intimations that the Burmese Government may soon approach the United States Government for economic aid on a substantial scale. This paper examines the factors to be considered in determining our response and concludes that we should be chary of entering into any aid program with Burma under present circumstances. We can, however, be helpful in minor ways in showing our good will toward Burma and, in certain circumstances, it might be in our interest to join, in a limited way, with other friendly nations to help Burma.2

Burmaʼs Exposed Position

2. Burmaʼs 1200-mile frontier with Red China dictates her foreign policy of neutralism and non-involvement. However much Burma may fear Red China or sympathize with her neighbors who are fighting the expansion of communist influence in Southeast Asia, she will not publicly declare herself in support of others, let alone join others in a common cause. While standing up to Red Chinese pressures and harassments with dignity and firmness, Burma avoids outside entanglements in order not to give Red China additional cause for complaint or activity directed against her.

3. Hence, Burma has stayed clear of regional defense associations or bilateral defense agreements, and is unwilling to join even the more [Page 250]innocuous cultural, political or economic associations such as ASPAC, ASEAN, or the Ministerial conferences on trade, agriculture and education, or the Asian Development Bank. Her sole memberships are in ECAFE, the Colombo Plan, and the Mekong Committee.

4. The strength of Burmaʼs position via-a-vis Red China lies in her nationalism, which is well-developed, real and fervent, and in the continued weakness, up to now, of the Burmese Communist Party. Should Communist China decide to abandon its “respect for Burmese neutrality,” which has characterized its policy until recently, step up its support of the Burmese communists and help them to develop cadres for a “national liberation front,” a serious insurgency situation could develop within a few years, for there are shocking weaknesses in Burma which can be easily and rapidly exploited.

a.
The Burmese Government is both ineffective and incompetent in dealing with its internal problems.
b.
Doctrinaire economic policies, developed under the slogan of Burmaʼs “nationalist way to socialism,” have caused the economy to decline in all key sectors: food and manufacturing production, domestic and international trade, and foreign exchange earnings and reserves. As a dramatic example, this nation, which was one of the largest producers and exporters of rice in the world when it became independent, has allowed its rice production to so run down that it has barely enough rice to feed its people. As a result of this and similar shortcomings, there is growing popular dissatisfaction and dissension in Burma in both the Burmese portion of the population as well as among the large minority ethnic groups.
c.
These ethnic groups, who live in the border areas, have closer ties with similar ethnic groups in Laos, Thailand, and China than with the Burmese. Some of these groups are fiercely independent, and have resorted to arms in pursuit of autonomy. Others are passive or resigned. In their attitudes toward Red China and communism, some ethnic groups are hostile, others indifferent, while still others would not hesitate to take help from communist sources outside Burma in furtherance of their resistance to Burmese dominations.
d.
Banditry is widespread in many parts of the country.

5. In short, the authority of the Burmese Government even now does not exist or is being challenged in many parts of Burma. With an ineffective military government, a deteriorating economy, disaffected national and ethnic groups, and widespread banditry, Burma is ideal terrain for communist insurgency, whose invariable aim is to destroy the authority of the government, starting in the rural areas, and set up its own authority instead. A real effort by Red China to exploit these weaknesses—and there are signs that Communist China now intends to do so—could in a few years produce an insurgency far more dangerous [Page 251]than exists in Thailand, and one much more akin to what we have been confronted with in South Viet-Nam.

6. Should general economic conditions worsen and the internal danger grow, the Burmese Government will more and more be forced to turn to outside powers, especially Japan and the United States, and possibly Russia, for help—economic and military—to enable it to defend its national independence against these internal threats supported from China. But Burmese nationalism is so prickly, and her attachment to doctrinaire socialism so pervasive, that she would insist that help be without strings, that there be no interference in her internal affairs, and that there be no obligation to abandon either her domestic policies or her neutralist and non-involvement foreign policy.

7. All the foregoing suggests that Burma is, at present, hardly a country to which we should give aid or commit ourselves to support. Yet the temptation to provide help to resist a growing communist-led insurgency within Burma will be great. And, one step leading to another, we could, if we pursued this course, find ourselves in a few years enmeshed in a situation which not only would be costly, frustrating and complicated, but most unpromising as to any successful outcome.

8. It is important, as we move into this new and more dangerous period which is now unfolding in Burma, with the prospect of aid requests being put upon us, that we establish very clearly with the Burmese what we are and what we are not prepared to do:

a.
In my view we should state bluntly to the Burmese that so long as Burma pursues her present economic policies we are not prepared even to consider aid requests, since aid will produce no meaningful or constructive results in present circumstances. Only if the Burmese abandon unwise economic policies and embark on a course that will reverse the disintegration of recent years are we prepared to consider aid and support. We ourselves are not prepared to give the Burmese advice on what that new course should be. World Bank and IMF services and experts can provide this advice if the Burmese wish to avail themselves of it. This is what Indonesia has done, when it reversed its course, and this is what we suggest for Burma.
b.
Secondly, we must point out that aid is not the answer to Burmaʼs problems. There is much that Burma can do by itself without aid to reverse its economic decline. The restoration of incentives to produce, especially among farmers, and the restoration of features of a market economy, are essential. If Burma does move in these new directions we are prepared to join with the Japanese and other friendly countries to see what we might be able to do, in concert with others, to help. However, we will not act alone or bilaterally.
c.
Thirdly, that while we understand and respect Burmaʼs desire, given her geographic position, not to get involved in the wider aspects of [Page 252]the free world-communist confrontation, we cannot treat Burma in isolation of this wider struggle. Before we can provide aid there are domestic and international aspects of such help to which we must pay attention. For us to help Burma we require that she bring forcefully to the attention of the UN the developing insurgency which is being fostered from the outside and seek UN moral support and endorsement of her efforts to preserve her national independence. Unless Burma is willing to seek the support of world opinion on her behalf—an effort to which we would lend our help—we would find it difficult to provide aid. If UN support is not forthcoming, we would be prepared to reexamine our position on aid, but the important thing is that Burma must itself make the effort to obtain UN resolutions calling on member countries of the UN to help Burma.

9. There are other aspects of Burma which would complicate our giving aid, for example, the military dictatorship, the governmentʼs narrow political base, the Burmese attitude toward its minority groups, etc., but there is little need to raise these matters in the first instance. The first hurdle to be mounted is the will of the Burmese Government to initiate fundamental economic change. If they would move sensibly and pragmatically in the right directions in these regards, we can assume that they would also see the light in regard to political and minority matters.

10. Meantime we can say that we are prepared to do some simple things even at the outset to show our good will toward Burma. We are willing to train economists in the US, provide books to its universities, put Burma in touch with the latest scientific developments in rice culture, help train civil servants in administration, give Burma the benefit of our experience in countering insurgency, and sell arms and equipment useful in counter-insurgency on commercial terms.3

  1. Source: Department of State, Central Files, AID (US) BURMA. Secret. Drafted by Berger.
  2. John C. Bullitt, Assistant Administrator of the Far East, Agency for International Development, commented on Bergerʼs memorandum stating it was “excellent” and the recommendations “just right.” Bullitt did suggest minor revisions. (Memorandum from Bullitt to Berger, December 14; ibid.) William Gleysteen, Deputy Director, Office of United Nations Political Affairs, agreed with the summary statement and “the thrust of its subsequent discussion,” but suggested revisions in recommendation 8c that would downplay the support Burma could expect in the United Nations. (Memorandum from Gleysteen to Berger, December 20; ibid.) Ralph Clough of the Policy Planning Staff agreed with the recommendations, but felt the paper overstated the insurgent threat directed from China; underestimated Burmese nationalism as a countervailing force; and stressed that Burmaʼs immediate neighbors should take the lead while the United States remained in the background. (Memorandum from Clough to Berger, December 22; ibid.)
  3. According to telegram 151165 to Rangoon, April 23, the East Asia Interdepartmental Review Group reviewed the question of additional aid to Burma. It concluded on April 12 that the United States should decline to give Burma aid under PL–480 and should decline a request from Burma for a pre-investment survey. The United States was prepared to provide a “modest amount technical assistance in form of participant training” and would advise Burma to join the ADB and seek economic advice from international organizations. (Ibid.)