345. Memorandum From Secretary of State Rusk to the Administrator of the Agency for International Development (Gaud)1


  • Supporting Assistance Level for Thailand

Your memorandum of May 192 noted that you have now approved a Supporting Assistance Level of $25.3 million for Thailand and that the U.S. Ambassador and AID Mission in Bangkok have urgently and consistently recommended an additional $11 million. You ask for guidance and instructions as to whether it is necessary on political/security grounds to grant the additional $11 million, which you argue the Thai could finance on their own.

I do believe that the additional $11 million is required on political/security grounds. Despite the favorable elements to which you refer in the Thai financial situation, I believe it is simply not realistic or politically feasible to ask the Thai to pick up this clearly needed amount in the necessary time frame. We have to reckon that the favorable Thai economic and financial situation, on an over-all basis, is balanced against counter-insurgency requirements which must at this moment have a considerable claim for priority attention on their financial resources. We must further reckon that Thailand remains under a serious threat of more direct aggression, so that the maintenance of some financial cushion is desirable from that standpoint in the interests of confidence. Finally, there is the element of the Thai contribution to the Viet-Nam conflict in the form of bases and most recently a battalion; I mention these not because our supporting assistance should in any sense be considered a quid pro quo—being rather determined by clear and largely insurgency-related needs—but because it accentuates the practical judgment that Thailand needs some leeway before it can expect to pick up additional costs related to the insurgency, to the degree that we would all agree was financially theoretically possible.

Let me say that I accept the clear implication of your memorandum that we should be moving the Thai to pick up a greater proportion of these costs, and we shall certainly be doing so in the coming year.

As you know, the Mission requested some $35 million in SA in its original FY-1967 program nearly a year ago, and it has consistently [Page 775] maintained that a program of this size was needed. The $25.3 million figure represented, not a field submission but a Washington allocation of then-available funds. I do not believe we should get into the position, either to ourselves or before the Congress, that the $25.3 million and the $11 million have separate justifications—that one is “economic” and the other “political/security”. The total program was framed in accordance with the Missionʼs assessment of valid needs in order to achieve U.S. objectives in Thailand. In looking at the $11 million, we have concluded that the Thai could in theory finance it but that, for political and security reasons already noted, they cannot practicably be asked to take the necessary measures in this time frame. In a sense, our present reading of the Thai financial and political picture might in theory lead to an argument that some part, or even all, of the total $36.3 million program could be borne by the Thai. Regardless of where one might draw the line, the fact is that our over-all basis for the entire program is the economic, and particularly the insurgency-related, need of Thailand, and an over-all judgment that this is a fair contribution by the U.S. in light of all factors with stress on those of a political and security nature.

I trust that this gives you the guidance and comment that will enable you to go forward at once with the necessary actions.

Dean Rusk
  1. Source: Department of State, Central Files, AID (US) 10 THAI. Confidential. Drafted by Bundy.
  2. Not printed. (Ibid.)