Foreign Relations of the United States, 1964–1968, Volume XXVII, Mainland Southeast Asia; Regional Affairs

84. Memorandum of Conversation¹

Washington, January 12, 1967.

SUBJECT

• Contribution to the Prek Thnot Project

PARTICIPANTS

• Canada
  • A.E. Ritchie, Ambassador of Canada
  • Michael Shenstone, Canadian Embassy
  • Peter Roberts, Canadian Embassy
• United States
  • William P. Bundy, Assistant Secretary, EA
  • Josiah W. Bennett, EA/ROC
  • Charles A. Kiselyak, EUR/CAN
  • Charles C. Flowerree, EA/VN

Mr. Bundy opened the discussion by re-capitulating the present status of the funding of the Prek Thnot Project. He said that the Japanese had agreed to contribute fifty per cent of the foreign exchange cost of the project and noted that the remainder would have to come through contributions from countries other than the United States as we were prevented by Congressional action from contributing funds to projects in Cambodia. In answer to a question by Ambassador Ritchie, Mr. Bundy explained that our inability to contribute was based on no other consideration than the aforementioned act which forbade the United States Government from making contributions to countries which trade with North Vietnam. Exceptions would necessitate a Presidential waiver on grounds of overriding National Security interest. Although we are unable to contribute to this project ourselves, we have undertaken to encourage other countries to make pledges. Ambassador Ritchie then asked whether Congress would not recognize a project in Cambodia as being important to United States National Security. Mr. Bundy replied that even if Congress did so, it would be unlikely that Sihanouk would accept funds vouchsafed to him in the name of United States National Security.

Ambassador Ritchie next asked whether the Asian Development Bank would be able to participate in the funding of the Prek Thnot Project. Mr. Bundy said that he thought that the ADB was unable to undertake the handling of soft loans of this nature, but he would have the matter examined further. He then went on to say that thus far, in addition to the Japanese pledge, about three and one half million dollars might be expected from Australia, the Netherlands, France, India and Pakistan. The cost of the project could be reduced somewhat if the power plant were deferred; however, there would still be a shortfall of some five to six million dollars.

Mr. Bundy then brought up the question of timing, saying that it was imperative to move ahead rapidly as Sihanouk might reject the whole project out of pique, if it appeared doubtful that adequate funds would be forthcoming. The Japanese initiative in this instance was commendable, and we did not wish to see it fail. He also noted that this project has value as an example of a way which is open to other countries in Southeast Asia to help themselves. Returning to the subject of timing, he spoke of the forthcoming trip by UN Under Secretary Narasimhan who will visit several Southeast Asian capitals to discuss the project before going to Phnom Penh. Time is therefore of the essence.

Ambassador Ritchie said that he presonally could appreciate the argument which Mr. Bundy had presented. His government, however, had serious doubts about the wisdom of participating in this project. In the first place, Ottawa considered that its technical soundness has not yet been demonstrated. Moreover, Canada was already heavily involved in the Nam Ngum Project. Ambassador Ritchie promised to report the United States views, but said he anticipated some resistance in Ottawa.

He again raised the question of the inability of the US to participate. Mr. Bundy restated the legislative problem with this particular project but pointed out that we are ready to contribute to other projects in the area as indicated in the Presidentʼs State of the Union message. As an example, he noted our willingness to contribute to the Southeast Asian Educational Organization,² and the Presidentʼs proposal for a 200 million dollar special fund to be administered by the ADB.

Ambassador Ritchie said that he would put the question of a Canadian contribution to the Prek Thnot Project to Ottawa.³

1. Source: Department of State, Central Files, E 11–2 MEKONG. Secret. Drafted by Flowerree.
2. Director of the Bureau of the Budget, Charles Schultze, recommended that the United States agree to Eugene Blackʼs proposal for a $28 million contribution for regional education institutions in Southeast Asia over the period covering fiscal years 1967–1973, subject to provision of funding by Congress. (Memorandum from Schultze to the President, November 10, 1966; Johnson Library, National Security File, Memos to the President, W.W. Rostow, Vol. 15, Nov. 1–30, 1966) On November 17, 1966, Rostow reported in a memorandum to the President that the results of an informal poll he took among the Congressional leadership indicated that most leaders supported the idea, but some were generally unwilling to make such a long-term commitment. (Ibid.)
3. On January 23 Rusk sent Canadian Foreign Minister Paul Martin a letter requesting that Canada consider a contribution toward the Mekong Committeeʼs Prek Thnot project. (Department of State, Central Files, E 11–2 MEKONG)