Foreign Relations of the United States, 1969–1976, Volume E–7, Documents on South Asia, 1969–1972
Document 117
117. Telegram 29201 From the
Department of State
to the
Embassy in Pakistan
1
2
Washington
,
February 20, 1971, 2101Z
SUBJ:
Arms for Pakistan—Financial Aspects
REFS:
(A) Islamabad 1291, (B) State 20428
1.
Appreciate your frank reiteration of views (
reftel
A) regarding our position in response to Pakistani requests for credit or other financial easement in purchasing items under arms package. Wish to assure you again that subject has been most carefully considered from all conceivable angles, resulting in decision conveyed
reftel
(B).
2.
We have also considered your assessment and new points raised in
reftel
. Like you, we would be disappointed if our effort to do something for Pakistan in military supply field, for political reasons determined last June, were to founder over questions of financing. But in terms of our overall policy toward Subcontinent we see no reasonable or viable alternative to taking such risk now, especially in view seriously strained current state of Indo-Pakistan relations.

Any loosening of terms or conditions of one-time exception arms offer—for example under guise of ex post facto finding
APC
’s to be non-lethal and thus eligible for
FMS
credit—would surely generate strongly adverse reaction and misunderstanding in India as well as U.S. Congress.
3.
In reviewing overall problem of credit and financing we determined that increased
FMS
credit for non-lethal purchases offered most practical means of extending
GOP
some financial relief. This judgment was based on (1) fact that Pakistan’s military materiel purchases in recent years have always considerably exceeded amount of
FMS
credit allowed (average of about $20 million purchases annually last four years against maximum of $5 million credit); (2) no
FMS
credit extended in
FY
70 and level of purchases relatively low; and (3) knowledge of substantial level of orders already placed or serious interest expressed by
GOP
in defense purchases for
FY
71, including one and possibly two C–130 aircraft, T-37 aircraft, helicopters, jeeps and trucks.
GOP
orders for or interest in most

of latter items now confirmed by DRP-104 Feb 71, with estimated total $12 million for items already eligible for
FY
71
FMS
credit.
4.
While we would not wish encourage Pakistanis through credit offer to purchase military supplies they had not intended order this
FY
, we see basis for believing they can use as much as $13 million credit in normal course this year. Important, however, inform
GOP
of this
FMS
credit level soonest per
reftel
(B) not only to permit early planning for utilization by
GOP
but also as an earnest of our endeavor be as helpful as possible in this way.
5.
Regarding lethality of
APC
’s, as armored combat assault vehicle this item is considered in lethal category by both State and Defense. In any event, we could not agree for political reasons (para 2 above) to remove item from lethal category in order qualify it for
FMS
credit for Pakistan; to do so at this stage could seriously damage our credibility with both Congress and Indians.
6.
While recognizing current delicate political situation in

Pakistan, suggest you seek opportunity soonest to convey to
Yahya
position contained State 20428. Your conversation with him should help clarify protracted misunderstanding over financing of arms package and permit resumption of normal discussions with
GOP
regarding procurement of items under alternatives offered.
END
Rogers