73. Action Memorandum From the Assistant Secretary of State for Far Eastern Affairs (Bundy) to Secretary of State Rusk1


  • Question as to SEATOʼs Role in Economic Development Activities


SEATO Secretary General Vargas in his Confidential Report,2 which will be considered at Canberra, states his conclusion that there is urgent [Page 184] need for SEATO to take a more positive role in economic and social development, and asks a clear decision from the Council whether he should push forward with a meaningful expansion of activities. (SEATO-sponsored projects at present include the SEATO Graduate School of Engineering—soon to become autonomous as the Asian Institute of Engineering; Medical Research Laboratory; Clinical Research Center; Cholera Research Laboratory; Meteorological Telecommunications Project; Military Technical Training School; Tribal Research Center; Vehicle Rebuild Workshop Project, etc.)

Two different answers to the Secretary Generalʼs question have been proposed:

We should express our support for the Secretary Generalʼs position and indicate our willingness to assist, as appropriate, on projects which meet SEATOʼs recently established criteria and which have been approved in accordance with SEATO procedures so as to avoid duplication of effort. We should also have in readiness a statement which you could make proposing that SEATO undertake a project relating to rural development and internal security and announcing United States willingness to contribute up to one-half million dollars in support of such a project. (Arguments in favor of this are given at Tab A.)
Alternatively, we should take the position that, in future, United States interest in SEATOʼs activities in economic development should be confined to security-related projects. If such a suggestion by the United States is to be made at Canberra, the Secretary should specify in his statement that (a) we believe SEATO activities should be security-related, and (b) the United States offer of one-half million dollars would be devoted during this coming year to such activities as seminars, field trips, conference and training programs associated with civic action/internal security possibilities, and not, at this time, to implementation of action projects within villages, etc. (Arguments in favor of this position are given at Tab B.)

There is no legal impediment to the use of United States funds for SEATO projects under either alternative. These are funds available for either alternative.

The issue is one of policy on which your decision is requested.3

If you approve either alternative 1 or 2, you are also requested to approve the attached SEATO Scope Paper (Tab C), which refers to an announcement of “U.S. willingness to make a substantial financial contribution to an appropriate SEATO project.”

[Page 185]

Tab A

Arguments in Favor of Alternative 1

SEATO as an organization is important to the US, both internationally and domestically, especially now during the Vietnamese conflict. It is the only organization of its type. If it falters, we cannot replace it. Under present conditions, the organization per se can do little in the military field. The life blood of essential activity must be supplied in large measure by US support for a constructive, though not necessarily large, economic program.
Secretary General Vargas deserves US support in his efforts to provide energetic leadership for SEATO. His budgetary proposals for the cultural program have been steeply slashed. If he is now told we want to restrict economic program to certain aspects of security-related projects, he will lose spirit and SEATO may lose a Secretary General.
The US is already committed on the general scope of SEATOʼs economic activities. These commitments which include Article III of SEATOʼs Charter, the London communiqué of 1965, and the criteria for projects recently approved by the Council Representatives at a recent meeting contemplate a wider range of SEATOʼs economic projects than merely those security-related. (Texts below, at clip.)4
SEATO is a going concern which can add a regional component to economic activities which no other organization is now able to supply. Neither the ADB nor SEAMES is airborne as yet. SEATO can and undoubtedly will continue to make a useful contribution in security-related projects. We should not, however, seek to restrict SEATO to non-operational type project of a security-related nature.
SEATO has shown its ability to handle economic projects with a high level of competence. It has also shown the ability to relinquish projects when they have reached a stage when they can become independent or be handled effectively under other auspices. SEATO opens its facilities generously to non-SEATO area members. One of the SEATO Graduate Schoolʼs problems is to deal with the large number of Indian applicants; Burmese and Malaysians have also attended.
Area nations within SEATO look to the US for leadership. Large investments are not necessary. What is needed is a forthcoming attitude on the part of the United States. Conversely, an indication of US desire to curtail SEATOʼs activities will have a discouraging effect. So far as obtaining financial assistance for projects is concerned, a realistic appraisal suggests that the “uncommitted” nations of the area will not in any case contribute: Cambodia, Burma, India, etc.
We should not give the impression that staunch service on the Free World side is a disqualification for participation in broad-gauge regional economic activities. If it is felt desirable to avoid channeling funds from the so-called “Presidentʼs Fund” through SEATO, there are other funds which can be so channeled. SEATO procedures provide a mechanism to avoid duplication of effort.

Tab B

Arguments in Favor of Alternative 2

The Presidentʼs April 7, 1965 Johns Hopkins speech dealt with United States interest in Southeast Asia regional development in non-cold war terms. In that speech and subsequently, we have declared our desire that non-aligned countries like Cambodia, Burma and Indonesia participate, and that room be left for a peaceful North Viet-Nam. Mr. Black has attempted to present the Presidentʼs interest in the area to the Japanese and others in these terms.
Over recent months, the Japanese, the Thai, the Koreans, the Malaysians, and others, have organized meetings and moved towards the creation of institutions, based upon this construction of the Presidentʼs desire to support economic and social growth possibilities outside the framework of the cold war.
Adoption of this general principle on membership has eased political tensions amongst representatives of countries dedicated to the examination and solution of common economic and social problems. For SEATO to confine its interest in, and competence on, internal security problems within the region is compatible with purposes served by other organizations, avoids risk of duplication and competition that might arise from broader sphere of activity, and is consistent with the defense purpose of the alliance.
The experience of other alliances, e.g., NATO and CENTO, in the economic field has been one in which the most creative and productive efforts of the countries involved have taken place outside rather than within the alliance structure. Mr. Vargas and the SEATO secretariat might well benefit from a narrow rather than a broad definition of their responsibilities in the economic and social field, and might over time be more productive were their efforts narrowly focused to civic action and internal security.
[Page 187]

Tab C5


Canberra, June 27–29, 1966


U.S. Objectives

To demonstrate, especially to Australia, New Zealand and other SEATO Treaty Area members, continuing U.S. support for SEATO.
To demonstrate continuing SEATO political and military support for the GVN, a Protocol State, in its effort to stem Communist aggression from the North.
To help sustain SEATOʼs sense of mission under current conditions of considerable frustration within the Organization.

Means of Attaining Objectives

By seeking a strong endorsement in the communiqué of the GVNʼs resistance to Communist aggression, of plans and preparations for elections to the GVN Constituent Assembly, and also of the revolutionary development program based on the Honolulu Declaration.
By encouraging publicity, including a statement of endorsement in the communiqué, for the contributions, especially military contributions, by SEATO members to Viet-Nam.6
By developing U.S. statements on Viet-Nam and on SEATO that will be concrete and constructive.
By seeking to improve the status of the Vietnamese observer at the Canberra Meeting as compared with the 1965 London session.

Possible Obstacles

If the French nuclear explosion in the Pacific is set off shortly prior to or during the SEATO Council Meeting, the attention of Treaty Area members, especially Australia and New Zealand, will tend to be diverted accordingly.
If internal conditions in the GVN remain in source of immediate and serious concern, the U.S. task will be greatly increased.
The U.K. will wish to ensure that there is no implication in the communiqué that the U.K. is committed to any military contribution to SEATO.
The French observer will probably be a consistently negative influence, and will disassociate France from Council decisions and the communiqué.
Pakistan is likely also to be negative in attitude while avoiding actual obstructionism.
  1. Source: Department of State, S/S-Conference Files: Lot 67 D 305, CF 48. Confidential. Drafted by Bacon with concurrences from Poats and Barnett.
  2. Not further identified.
  3. There is no indication of Ruskʼs decisions on the source text.
  4. Attached, but not printed.
  5. Drafted by Bacon and cleared by representatives of 11 relevant bureaus and offices in the Department of State and AID.
  6. No paragraph 3 appears in the source text.