DEPARTMENT OF STATE Memorandum of Conversation
DATE: July 18, 1952
SUBJECT: Government of Pakistan's Request for Special Assistance in Arms Procurement
PARTICIPANTS: The Secretary Mir Laik Ali, Adviser to the Ministry of Defense, Government of Pakistan Ambassador Mohammed Ali SCA - Lee E. Metcalf
COPIES TO: S/S (2) NEA S/MSA CIA BNA Embassy Karachi Embassy London
Mir Laik Ali began the interview by handing me a letter from Prime Minister Nazimuddin which alluded to a "growing sense of insecurity [which] is spreading over the minds of the people of [Pakistan] as the result of changes that are taking place in a big way in several of the larger surrounding countries." The letter pointed to the limitation of Pakistan's resources in developing a defense establishment, and sought the good offices of the Department of State in furnishing some of Pakistan's needs.
Lai Ali expanded on Pakistan's "growing insecurity" by describing what his government sees as a potential threat to Pakistan's existence from Soviet Russia, or form an increasingly Soviet-dominated Communist China, or possibly from India. He said that the sense of insecurity with respect to India stems from the fear of the communization of that country, as distinct from a threat of the present Indian Government arising from current controversies.
At this point I commented that this observation concerning India was new to me and that it was disturbing to hear. Laik Ali replied that measures are being taken by the Indian Government to combat Communism and that while he hoped those measures would indefinitely postpone the evil day, Pakistan must prepare for the worst. He explained that the Cabinet had discussed this developing political situation several times, particularly in the light of Pakistan's military weakness. Several cost estimates of Pakistan's desired defense structure were made and invariably they were beyond the country's resources to afford. Finally, a compromise program was devised and he, Mir Laik Ali, was delegated to seek procurement assistance where it might be available.
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He said that after taking into account all purchases which Pakistan could practicably make in Great Britain and elsewhere, material in the amount of about $200 million would need to be procured in the United States. The proposed basic defense structure which this material would help to equip is a ten-division army, five armored and five infantry, and 15 air squadrons. Laik Ali said that plans to expand the navy have been abandoned because of cost. He asserted that on the basis of a projected study of Pakistan's economic and financial position, and having calculated the sacrifices that would have to be made in the expenditure of foreign exchange, especially that affecting economic development, the Pakistan Government would be in a position to make dollar defense expenditures at a rate of $15 million a year for a period of three years, after which it would desire to negotiate smaller annual payments over a period of years until the material is paid for. Mir Laik Ali indicated that perhaps price concessions might also be made to ease the burden on Pakistan.
He explained that Pakistan did not hope to build up a defense establishment of a size to combat a major aggressor but that it did hope to attain sufficient strength to stave off any aggressor until such time as outside aid would become available.
I asked Mr. Laik Ali if due consideration had been given to Pakistan's capacity to afford this size of a defense structure. He replied affirmatively, repeating that sacrifices would have to be made.
I then asked if Pakistan would not find it easier to incur sterling rather than dollar debt for purchases of this size. Laik Ali replied in the affirmative but said that it is a question of the limited capacity of Great Britain to deliver the goods on a satisfactory schedule that obliges him to look to the United States for part of his requirements. I told Laik Ali that the Department would have to look into the production and legal questions involved in a transaction such as he has proposed and that if these investigations lead to a point of taking certain policy decisions, I would be glad to talk with him again.
NEA:SOA:LEMetcalf:erp 7/21/52