Foreign Relations of the United States, 1969–1976, Volume IV, Foreign Assistance, International Development, Trade Policies, 1969–1972

63. Draft Letter From Secretary of State Rogers to the Chairman of the Senate Foreign Relations Committee (Fulbright)¹

Washington, undated.

Dear Mr. Chairman:

In Mr. Abshire’s letter to you of September 3, 1971,² he indicated that consonant with the President’s memorandum, we would be prepared to provide the Committee with planning material and factors relating to the military assistance program. This letter contains that material.

In providing this information, I want to be as responsive as possible to the Committee’s interests. We recognize that the Congress, in dealing with the Administration’s request for military assistance, wishes to know how these programs may develop over a number of years in the future. I note too that you appreciate that there are serious limitations to our ability to make useful projections five years into the future.

We have been working for the last year to improve the capability in both the Department of State and the Department of Defense to plan our military assistance grant and credit programs. The new planning system which we are establishing to be effective in making projections must treat directly with a number of problems and issues. It must deal with all of our Security’s Assistance Programs on an integrated basis; we are beginning by handling grant and credit programs as a single planning problem. It must seek to relate resource transfers for military purposes to U.S interests and objectives in a given country and region. It must determine whether our interests and objectives are both realistic and attainable within budget parameters which for future years are not clearly defined. Finally, we must develop alternatives that provide clear choices for decision-makers in setting program goals.

This planning approach is intended to point our programs in a general direction. We cannot predict where and how, over the next five years, crises will occur. We know of no analytical method, as I made clear in my testimony, to pin-point trouble spots over an extended period. We are thereby handicapped in developing accurate five-year projections of U.S. interests and programs.

The process is further complicated because our own interests will shift from time to time. In future year planning we can only provide very tentative views on what our future interests will be; the reality will depend upon a broad range of considerations, including:

• —the outcome of major international negotiations, such as those with the Soviet Union on Berlin, SALT and Mutual and Balanced Force Reductions.
• —U.S. efforts to normalize relations with the People’s Republic of China.
• —the future impact of current international balance of payments and monetary discussions.
• —the outcome of our efforts to develop a more coherent multilateral approach to international trade and investment questions, and to international development programs.
• —the willingness of the parties to disputes to resolve their differences through peaceful negotiations.
• —the degree of success in reaching regional arms control arrangements.
• —our allies’ willingness to increase their share of the security burden.
• —continuing requirements for our friends and allies to maintain security forces.
• —the situation that finally emerges in such areas as the Middle East, South Asia and Southeast Asia.

All of the above imponderables and variables bear some relationship to military assistance planning; because our expectations in each case could be seriously mistaken, I must emphasize this caveat in regard to the figures we provide.

In preparing the figures for you, I have asked my staff to consider a number of basic principles in their planning effort. These principles include the following:

1. Selectivity. The focus of our security assistance is on clearly designated countries of significant importance to our own security given the limited resources that are likely to be available. In the case of grant military assistance, for example, the principal recipients would be: Korea, Cambodia, and Turkey. In the case of FMS credit, Israel is a major recipient.

2. Total Resources. We give due weight to the resources of recipient countries as well as to the full range of possible U.S. aid contributions. The primary U.S. resources are grant military assistance, excess defense articles, and foreign military sales (credit); directly related to and supportive of such military assistance is economic supporting assistance. We look carefully at the recipient’s allocation of its own resources along with those which may be provided by third countries. Recipient country resource allocations reveal how that country views its own problems; third-country contributions reflect regional concerns.

3. Local Military Planning. More must be done to encourage recipient countries to do their own planning, establish their own priorities, and regulate their own domestic budgets. The United States in the past has made many of the basic determinations of the amount and kind of equipment which countries receive.

4. Self-Sufficiency. We expect allied and friendly countries to assume a larger share of their defense burden. To assist them towards this objective, we plan to help them develop local defense-related production capabilities, and as their economies develop, to shift our military assistance from grants to cash and credit sales. This shift will be more gradual in some cases than in others. For instance, Turkey is expected to have continuing foreign exchange problems over the five-year period which will inhibit its meeting its defense needs fully through purchases. Nevertheless, we assume that Turkey will be able to absorb increasing amounts of credit. Korea, if it continues its present rate of economic development, might take on a larger share of its defense requirements than originally planned. As we shift from grant to sales, we must continue to measure with care the impact of this shift on the economies of our allies.

5. Force Modernization. While there is a natural desire of recipients to improve the level of sophistication of their equipment, in many cases this is just not economic or efficient. Hard choices have to be made between modernizing and maintaining force structure, keeping up maintenance, and providing adequate logistics support. Modernization in most cases should have a lesser priority than the development of these latter factors.

6. Maintenance and Operations Costs. These costs should be transferred to the host country on a phased basis. Modernization should be planned so that, wherever possible, operations and maintenance costs should not become an unduly onerous and long-term burden to the recipient country or to the United States.

7. Excess Defense Articles. Planning should utilize, and take carefully into account, the significant amount of excess defense materiel and equipment now becoming available. But mere availability of excess stocks should not become a rationale for their transfer to countries whose domestic resources are required for higher priority needs. The provision of excess must be carefully justified by military requirements, economic benefits to the recipient and savings in U.S. funded programs.

With these planning factors in mind, the Department of State and the Department of Defense have developed tentative levels for U.S. military assistance grant aid and foreign military credit sales for the period fiscal year 1973 through 1977. In the light of the above planning factors and with the caveat about our inability to predict accurately particular developments in the future, there follows a discussion of these figures on a region-by-region basis.

East Asia and Pacific. The East Asia and Pacific area throughout the next five years will probably continue to receive the largest amount of security assistance. In FY 1973 it will be projected to receive about $700 million,³ roughly divided $600 million in grant MAP and around $100 million in FMS credit. (These figures do not include Vietnam, Thailand, and Laos which are in the Military Assistance Service Funded Programs and the figures will have to be increased accordingly when these programs are returned to the Military Assistance Program.) The principal countries supported will be Cambodia and Korea at levels somewhat above FY 1972 requests and together they will absorb about five-sixths of the East Asia grant program. Projecting over the five years in the East Asia and Pacific area, we envisage the MAP grant program being reduced to about the $250 million level in FY 1977, with the FMS credit program increasing to about $125 million. The total program for East Asia and Pacific thus will decline more or less on a straightline basis over the next five years from about $700 million per year to about $375 million per year. Cambodia is projected to receive about $125 million in grant aid in FY 1977, but here again I want to emphasize that any aid to this country will depend on the outcome of the situation in Southeast Asia. The other principal recipient, Korea, is projected to receive about $75.0 million in FY 1977.

Table I provides illustrative figures for programs in this area.⁴

Near East and South Asia. This is the next largest area program. For FY 1973 we project a level of about $200 million in grant military assistance and up to $450 million in foreign military sales credits. These projections reflect a continuing large foreign military sales credit program for Israel and maintaining the grant MAP program for Turkey at about the $100 million floor level for FY 1973. In addition Jordan and Greece will be recipients of grant and credit assistance. Assistance to Jordan is projected for mainly grant aid while Greece is projected for about $75 million, two-thirds of which is credit. Our projections for the period five years hence, FY 1977, show a total program of about $350 million, about $75 million of which is projected in grant assistance and $275 million in credits. Israel would continue to be a major recipient of credit with Turkey and Greece also receiving respectively about $25 million and $55 million in credit. Over 90% of the grant program in FY 1977 would be supplied to Turkey.

Table II contains figures for projections in this area.

Europe, Africa, Latin America and Non-Regional Programs. These programs, already small, would continue to decline. Grant assistance for Europe would move from just over $10 million in FY 1973 to just over a million dollars in FY 1977. African programs would decline from $20 million in grant assistance and $18 million in credit in FY 1973 to $15 million and $12 million respectively in FY 1977. The Latin American program total is projected at about $10 million in grant and $75 million in credit throughout the five-year period. In addition to the above there will be non-regional programs which will require about $20 million in grant MAP over the five years.

Table III summarizes this information.

Totals. Looking at the total obligational authority requirements for the grant and credit program in our five-year projections for the period 1973 to 1977, we envisage the grant program moving on a roughly straightline basis in FY 1973 from between $820 and $850 million to about $370 million in 1977. We project the FMS credit program for FY 1973 at between $525 and $625 million moving again on a rough straightline basis to a projected program for FY 1977 of $450 to $480 million. These latter ranges reflect a number of areas of uncertainty in some of our program predictions within the various regions and emphasize again the very tentative nature of our projections for the next five years. Table IV provides this information.

I have offered this material in the realization that these are very generalized and tentative projections. We are working to improve the quality of our planning, and I expect that future year budget submissions will reflect the improvements which we are now making.

I hope that the information in this letter is responsive to the request which you have made and that it will provide a basis for moving forward in your consideration of the FY 1972 requests under the Foreign Assistance Act.

Sincerely,

William P. Rogers⁵

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 228, Department of Defense, XIII 8-11/71. Secret. Attached to a September 18 memorandum from Executive Secretary Eliot to General Pursley providing Laird with a copy of a letter with 5-year MAP projections that Rogers reportedly had discussed with Laird by phone on September 14. Eliot noted that Irwin had informed Laird’s office the previous day that Rogers would like to have the letter available for a meeting with Fulbright at 10 a.m. on September 20. Copies of Eliot’s memorandum were sent to Kissinger and Dean. Eliot also provided a draft letter to Senator Proxmire. Secretary Rogers and David Abshire met with Senator Fulbright on September 20 from 9:48-11:45 a.m. (Ibid., Personal Papers of William P. Rogers, Appointment Books) No other record of the meeting has been found.
2. Not found.
3. These and the following projections are given in current dollars. [Footnote in the source text.]
4. None of the tables is printed.
5. Printed from a copy that bears this typed signature.