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13A Ware St., Apt 10
Cambridge 38, Mass.
23 September 1959

Dr. Henry Kissinger
Center for International Affairs
Cambridge, Mass.

Dear Dr. Kissinger:

Enclosed is a synopsis of much of the thinking
and preliminary work I've done in the last weeks on disarmament
as assigned. I regret that I've not been able to go farther
to project this into writing, but maybe you'd better see my ideas
before they go to that stage.

I'm also enclosing a carbon copy of a letter
I wrote to Arthur Smithies last week, on his request, to magnify
a point I made in conversation with him somewhat earlier. The
letter was in reference to an IDA conference with Charles Coolidge,
and Dr. Smithies wanted to pass on my idea. This I think he
did with attribution and full description of my responsibilities.

I hope I can get to see you before you
leave on Friday.

[L.C]

13A Ware Street
Cambridge 38, Mass.
16 September 1959

Professor Arthur Smithies
Department of Economics
Harvard University
Cambridge 38, Mass.

Dear Professor Smithies:

This letter is composed to record a point we made in conversation last week which I do not feel adequately prepared at the moment to expand beyond the following details, but which may be useful to you in your coming discussions. Perhaps the idea is already current coin with those who have given the problem of disarmament more intensive study than I, so I confine my presentation of it here to preparing a mere talking point for fuller discussion.

This is that the field of disarmament now seems to offer distinct opportunities to the West, possibly compensating for some military and psychological disadvantages that may be attendant, as a means by which the West can accellerate liberal tendencies within the Communist Bloc and thereby create domestic sanctions on the will and the ability of Soviet leadership to resort to aggression as an instrument of governmental policy. Technical discussions with the Soviets over the last year appear to indicate a small area of potential limited agreement on at least one phase of disarmament—the suspension of nuclear testing. Although the Soviets continue to balk at the problems of implementing a workable control system, a solid agreement on such an issue could constitute a major impulse to openness and restraint in Soviet society, and should hence remain an important early objective of US policy.

Neglecting the military aspects of test cessation for the sake of further discussion, early action on this issue would appear to be a means by which diplomatic agreement on one of the symptoms of international hostility can serve to lessen some of the causes of these antagonisms, namely the traditional capability of Soviet leadership to exploit domestic fear and resentment of the West without significant internal opposition. A workable test ban, for example, if enforced by teams of mobile inspectors functioning visibly and effectively, could heighten in the Soviet people a sense of responsibility for the use of the national resources they are applying to military efforts, a realization of possible fallibility on the part of their leadership in the pursuit of peaceful objectives, and demands for responsible governmental conduct in the observance of international agreements. The presence of international inspectors or the functioning of an aerial inspection system would be endowed with the sanctity of international

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Rivkin

agreement and could not thereby fail to impress the Soviet citizenry
with the realization that "peace and friendship" are more demanding
and self-applicable objectives than more slogans have implied.

How effective such a limited exposure to the interests of the
"outside world" would be in altering and upsetting the balance of
Soviet society that such a limited exposure fosters its aggressive
character cannot be predicted, nor can it be evaluated whether
such an advance would be worth the loss of life and the military and
psychological disadvantages that might accompany a partial withdrawal or an
ineffective test ban. Yet it should be apparent that a disarmament
agreement at this time, however innocuous, does carry with it the
potentiality of contributing to ultimate self-restraint in Soviet
activities. Such an evolution might well be considered a legitimate
objective of major priority for the US in the face of a
hostility from the Soviets that could well continue to grow even
more menacing in the years to come.

The parable of Aesop recounted by George Kennan need not be overworked to be instructive, how the traveler was induced to remove his cloak not by the gusty puffing of the wind, but by the warming rays of a gentle sun. Further thought on my part may, I hope, refine these ideas beyond their current rudimentary form.

J.R. Rivkin

23 September 1959

Disarmament, a Synopsis

1. The Setting of the Problem

Disruption of pre-World War II nation structure, maintenance of occupation regimes in absence of restored sovranieties. Western disarmament save for nuclear weapons. Maintenance by Soviets of major conventional forces and growing nuclear capability. Fall of China; East Europe consolidated into Communist Bloc. Rebuilding of Western strength on a) strategic nuclear capability and b) military (conventional), economic, and political collaboration.

Current status—mutual deterrence behind thermonuclear weapons, economic burdens of armaments, restiveness within Bloc for freer and more materially revalued conditions (and basic security), world-wide political and economic conflict continuing in which representation of peaceful intentions is a strong point of appeal. Disarmament henceimplies both economic and political alterations that may be attractive to both sides. Field, however, highly ambiguous, with the manifestations of hostility often confused with it their causes.

2. The Record of Negotiation

Early hopes: the Baruch Plan. Soviet opposition to realistic control schemes and call for banning nuclear weapons. The emergence of rigid patterns of negotiation and propaganda. Simultaneous pressure by the Soviets for reduction of conventional armaments either by agreed percentages or to agreed levels, but in a manner difficult to monitor.

# The evolution of Western aims from ownership of nuclear weapons by an international agency to control thereof. #Proposed for"phased reductions" to bring sides together and build confidence and trust.

#Budgetary control proposals. # End runs (atoms for peace, nuclear test suspension). # Aerial and ground inspection proposals. #Disengagement and the problem of Germany.

Three Phases of negotiation: 1946-50, 1950-55, 1955-present. Since 1957, new methods of procedure—item by item attacks on elements of armaments, exchanges of technicians in addition to political conferences. Progress in defining the basic requirements for general test-suspension, emphasized by recent unilateral temporary suspensions. No real progress on surprise attack, and continuing disagreement over the initiative and decisiveness of test suspension teams. Current Soviet proposal.

3. The Elements of Consistency, Objectives and Positions.

West has sought to defend against disarmament agreements that are a) unenforceable and/or disruptive of current power balances. No action has seemed preferable to agreements that would manifestly work to our disadvantage. Meanwhile, we have sought to reach self-enforcing agreements as a means to confidence building. We have referred to Soviet intransingence as a demonstration of bad faith. Glib settlements no treatment, or mitigation, for basic antagonisms.

Soviets have sought to capitalize on the attractiveness of disarmament to raise and tantalize hopes, to use issue as a means of propaganda pressure and anti-Western propaganda, and to work for weapons

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curbs and troop withdrawals that can disadvantage the US. Inspection
long opposed as infringement on territorial integrity and secrecy.
Currently Soviets seem moved by inner pressure on resources and possible
desire to disadvantage West by dramatic-seeming disarmament proposals.
Opposition to inspection weakening, though not totally. Meanwhile, the
US apparently willing to fudge on its scruples (180 stations) for
sake of agreement.

4. Problems of Technology and Intent in Enforcement.

The capabilities of various detection methods (technical), their weaknesses.
Mechanisms for exchange of information and personal inspection. The
primacy of realistic objectives and good faith. Operation of control
and inspection machinery (Korean example).

The Problem of Communist China. Providing sanctions for violations.

5. Current status and areas of potential agreement.

Technical discussions in recess after some agreement on <u>XX</u> detecting
nuclear surface explosions, closeness of positions on underground explosions,
and no marked progress on surprise attack. Soviet acceptance of principles
of <u>XX</u> inspection, but continued adherence to veto requirement on operation.
New Soviet plan: disappointing and reactive.

Negotiations temporarily stalled but prospects for erosion if trading
is energetic. Components of, perhaps, package agreement---cessation of
tests, with some inspection; anti-surprise attack; troop reduction; outer-
space control; evacuation of overseas bases; German settlement; recognition
of Communist China.

5. Areas of Risk and Opportunity for the U.S.

Risk: 1. Blow to NATO and Western morale through bi-lateral negotiation, establishment of power vacuums, or cynical evasion.

2. Weakness in tactical nuclear development.

Opportunity:

1. Lessening of tensions and animosities and building of
   confidence via self-enforcing agreements

2. Intelligence information, destruction of Soviet secrecy

3. Political evolution (see enclosure).

# Political Implications of Support for India's Third Five Year Plan

## 1. Problem and Scope

The next 18 months will see increasing attention in India to the formation of goals and programs for the third Five Year Plan, scheduled to begin in 1961 on the completion of the current half-decade development effort. Inevitably this third Plan will require major infusions of external financial assistance to achieve measurable levels of economic progress, just as the expansion of India's national product to date has been heavily dependent on foreign capital loans and grants for its moderate growth. In consideration of the likelihood that heavy American participation will be required to underwrite meaningful Plan objectives, this paper presents an analysis of the political implications of various relevant policy choices open to the U. S.

Two potential courses of action are taken here to constitute realistic alternatives for the U. S. in responding to the requirements of future Indian development. These alternatives are, simply, to continue support for Indian economic growth on the scale and with the intensity roughly characterizing our current efforts, or two undertake a comprehensive Western development program on a scale significantly larger than at present. The discussion that follows will examine these alternatives for their ability to contribute to U.S. policy objectives in South Asia--not solely in regard to Western aims within India but in terms of both the relations between India and her Afro-Asian neighbors and the long-term posture in the area of the free world vis-a-vis the Bloc. In addition, further analysis will consider the essential attributes of style and visible purpose associated with an aid program

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to India, in order to isolate the techniques of implementation likely
to maximize opportunities for real political gains through economic
assistance.

## II. Economic Ends and Means.

U. S. economic assistance programs, in whatever form conceived and
whatever their ultimate purpose, are initially directed toward achieving
greater viability for the economy of the recipient nation. For India,
U. S. aid operations since 1951 have contributed to furthering the
primary goals of that nation's five-year development plans, i.e., enabling
India to achieve a moderate rate of real economic growth in excess of pop-
ulation increase. In no other Afro-Asian nation within the free world
have the problems of economic development been of such magnitude as in
India, a nation of 400 million people with extreme strategic and politi-
cal significance for the West. Despite substantial human and material
resources developed under British rule, India gained a legacy of profound
poverty along with independence. Current national income has been raised
to approximate a level of $50 per capita per year, a deceptively high
statistical rendering of the distribution of penury among millions of
Indians. The foremost objective of the Indian Government, deeply imbedded
in national policy and confirmed in the universal aspirations of India's
people, has hence become the achievement of a real improvement in
national living standards.

India's two Five Year Plans have demonstrated that worthwhile gains
in product can be achieved by careful planning and allocation of domestic
resources and that the present moderate Indian leadership is a generally
competent agent to these ends. Increasingly, however, it has also become
apparent that the achievement of satisfactory growth depends on continuing
foreign assistance to provide the margin by which progress can be achieved

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over constant population expansion. U. S. and other Western loans, grants, surplus disposal, and technical assistance programs have thus far provided the major source of such outside assistance, and further requirements indicate that the need for external aid will certainly not diminish.

Currently the U. S. is providing economic development assistance in various forms at an annual rate of about $300 million, with loans and other recoverable credit exchanges constituting the bulk of the U. S. contribution. In addition, substantial quantities of capital are each year contributed by other Western nations, the International Bank, and recently by the Soviet Bloc. Even with this assistance shortfalls have developed in meeting planning objectives, while India's reserves of foreign exchange have been drawn down to the point where they can no longer backstop her development efforts as they have during the past decade. It is therefore apparent that current rates of Western capital contributions will not continue to facilitate the same degree of economic growth as in the past. From this, the following alternatives for the future can be projected:

a) India will have to alter her policies for economic growth either by forcing higher levels of internal savings through markedly increased domestic regimentation; by turning to other sources for external economic assistance, namely, the Soviet Bloc; or by curtailing specific development projects and hence settling for lower rates of economic growth.

or

[L.C]

b) Major additions of Western capital will be required over the next several years to maintain current practices of voluntary production, to minimize the impact of Soviet contributions, and to continue to slow but measurable economic growth over population increases.

Each of these alternatives corresponds to a specific course to which U. S. economic aid programs could accommodate in regard to Indian development in the Third Plan period. The question that first presents itself in considering these alternatives is to arrive at some determination of the monetary spread between the levels of economic assistance that would be called for in each policy. Dr. Millikan has estimated that the divergence would be by a factor of two, in that allocations of U. S. economic assistance in all forms would have to total between $600 and $800 million a year for the expanded program. In a separate paper Professor Smithies is presenting a more detailed determination of these requirements, including in a summary that an over-all Western investment of $1 billion a year in India would be required to sustain the fruitful annual growth level required for the time period considered.

Such assistance would have the broad immediate aim of fostering increased viability in the economy of a developing nation of crucial importance to the West, whether American aid would amount to $600 million each year or the current $300 million -- no small figure in itself. But beyond these immediate aims for Indian assistance lies a realm of more self-centered motivation for an aid program in support of political objectives toward South Asia that are firmly established in U. S. policy. These objectives, which will be dealt with below in detail, involve:
1) the fostering of a stable and democratic noncommunist government in India; 2) increasing the association of India with the West and decreasing

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that nation's susceptibility to Communist Bloc pressures; and 3) decreasing divisive tensions between India and other South Asian nations, especially Pakistan. Presumably, each formulation of a U. S. assistance program would serve these objectives in a distinctive manner; the aim of this analysis is to see how the above three political objectives would fare from a twofold varience in the expenditure levels of U. S. aid.

### III. Political Objectives.

1) **Fostering Democratic Growth.** The Indian Congress Party under P. J. Nehru was more of a crusading national movement than a political party until it entered the mold of parliamentary politics. Today the Congress retains much of its amorphous decentralization while constituting the major grouping in the national Parliament and controlling state governments in the majority of India's federal subdivisions. No other political party appears capable of challenging Congress hegemony in the foreseeable future, and the leaders of the independence movement continue to represent a broad consensus of national attitudes. Yet this same process of reflecting the aspirations of 400 million people, of diverse races and languages and varying degrees of literacy, bespeaks the immense problems of the Congress in formulating national policy and implementing it with energy and consistency.

Twelve years after independence the Congress presents the appearance of flabby middle age. Instances of nepotism and corruption in the practical affairs of politics and administration have tarnished its respectability as the incarnation of national ideals. Nehru's age, disillusionment, and waning interest in organizational problems have diminished his towering eminence as party leader, and no youthful candidates for succession have emerged. In state governments, factionalism and bickering are further dividing the Congress, while the articulateness and numerical strength

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of the domestic Communist party are showing rapid growth. The future of
India's political life does not appear to indicate rapid or violent political
change but rather a progressive weakening of the power and vigor of its
current leadership in the absence of major efforts to reverse prevailing
trends.

The advent of independence found India with effective political tools
for forging a representative democracy along Western models. Three centuries
of British rule had endowed the nation with a working administrative
machinery, a loyal army and civil service, developed resources and trade,
civic bodies and voluntary interest groups, municipal politics, an
educated middle class, and proven experience in policy formulation and
execution. India had evolved a tradition of tolerance and compromise in
its political life, which it manifests today in the illustrative forms
of a free press, opposition parties, constitutional safeguards against
oligarchy and the deprivation of personal rights, and a Supreme Court and
independent judiciary. Under the leadership of the Congress Party these
institutions have been given meaning in programs of moderate socialism
based on consent and governmental restraint and of "positive neutralism"
in foreign affairs. While these policies have not always served specific
US aims, they have broadly reflected the practical conditions of India's
domestic and world situation, while exhibiting a basic, if peculiar,
loyalty to the free institutions in which India and the West share a common
interest.

But together with its impressive endowment of traditions and skills
India gained staggering liabilities in the form of economic problems whose
treatment will ultimately spell the viability of the state's current
course. The easing over time of these problems has become the core of

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the policies of the incumbent government. Indian interest and expectation have been widely stirred to the goal of economic advancement, from the time when the idea of such progress became a binding slogan of the independence movement, through the early slow efforts of the last decade. To keep up with population rises, a 2 percent annual product expansion is required. This leaves little remaining from any unregimented growth rate to turn into fulfilling the promises of the Congress Party for real improvement; but this is the margin on which "delivering the goods" to the electorate must depend. The treadmill seems to be running very fast indeed when the economic aims of a government in a particular field can be no greater than merely holding the line against increases in the *rate* of deepening unemployment, as has become India's sad necessity during the second Five Year Plan. But even though this situation sorely taxes available resources, it serves to magnify the "buying power" of each dollar of investment capital in excess of subsistence requirements in terms of its capability for producing politically beneficial results.

Nehru's response to the imperatives of growth facing India has been to aim at a moderate yearly improvement in national product through a combination of public and private investment based on persuasion rather than forced allocation of resources. To date, results have been only barely satisfactory, requiring an increasing dependence on foreign capital to achieve the slight margin of real growth inherent in a 3 percent annual increase in over-all production. Many shortfalls have developed, not only in the over-all economy but in specific depressed areas as well. In the face of aroused expectations these shortfalls have produced apathy and dissatisfaction concentrated in part in areas like Kerala, where a Communist state government achieved power in 1957 by legal means.

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Meanwhile, the Chinese colossus to the north, utilizing methods of terror and coercion to achieve industrial and agricultural expansion, has consistently and spectacularly worked an annual growth twice as large as that of India. Thus, the race against poverty and internal discontent is made all the more precarious by the symbolic successes of Communist China's totalitarian ideology.

While no exact projections can be made as to the bearing on India's political development of specific levels of future Western assistance, the effects can be foreseen for varying orders of magnitude in foreign contributions related to firm targets of economic growth. In this regard, "sufficiency" can be taken as the estimate that a $1 billion annual Western contribution would produce a substantial growth rate, while "in-sufficiency" can represent continuing the current level of assistance, roughly half as great.

From the foregoing analysis it can be deduced that the course of continuing current levels of assistance would foster a scant margin of real economic growth -- if any at all -- with the consequence of further weakening and debilitating India's moderate leadership. Continuing delays in internal development produced by canceling or stretching out growth objectives would undermine popular confidence in the route taken by the government toward economic progress under free institutions. Unemployment, apathy, and discontent would provide fertile ground for bolstering the internal Communist position and fragmenting the already strained bonds of national unity, especially in the event of subversion from without.

Though the decay in national cohesion behind Congress Party policies would not be sudden, it would nonetheless be certain, in response to the substratum of despair in Indian life which need only lose its varnish of

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hope to emerge as ugly discontent. In this regard, the parallel of
China's long decline under similar conditions is vivid, that a U.S.
White Paper might once again have to proclaim the futility of tardy and
incapable intervention. Such a long-term judgment cannot be firmly stated,
but both intuitive and practical evidence strongly substantiate its
likelihood.

Equally tentative would be the judgment that stepped-up assistance
and halt these trends; but the evidence is so clear as to make the
conjecture appear legitimate. The assurance of adequate investment capital
would enable the present regime to approach its objectives in the develop-
ment of industry and agriculture with significantly increased flexibility
and confidence. Along with shoring up the policies of the government for
economic growth, ample funding would lend credence to the ideology with
which such a growth is being undertaken. The demonstration of foreign
respect and participation in the government's programs could not fail to
make a deep impression on the mass of Indians, and thereby contribute to
strengthening Congress Party power, particularly in those areas where
unemployment and apathy have already enabled gains in Communist influence.
Such support -- especially when contrasted to the effects of its absence --
could have a major bearing on Congress fortunes in national elections
occurring just after the outset of the third Five Year Plan.

Beyond its initial political objectives, concerted and tangible
economic assistance appears to offer particular long-range significance
in fostering internal stability at a time when India's political insti-
tutions are evolving through a crucial formative stage. The viability
of rule by consent in an impoverished context remains to be firmly

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demonstrated not only within India but throughout Asia and Africa.
With the alternatives of authoritarian and communist regimes so apparent,
continuing optimism and moderate achievement of Indian objectives will
be essential to establishing the relevance of domocratic systems to the
developing Afro-Asian world.

(2) **Increasing association with the West.** India's nationalist
struggle against the British generated an abiding determination to remain
free of European colonial domination and power politics. Since independence,
this distrust of Western motives has led India to obscure its real
identities of values and interests with the leading anti-communist states
and to be somewhat harsh and intolerant in its criticisms of Western
policies. Toward the U.S., there exists an abiding reservoir of good
feeling, first derived from American support for the independence move-
ment and from our successful efforts to achieve British withdrawal after
World War II. Today, this appreciation broadly appears to be growing,
out of gratitude for U.S. economic assistance and a greater understanding
of respective Western and Communist aims; Chinese repression in Tibet and
the brutalities of Communist rule in Kerala province may well accelerate
the trend.

There have been times during the last decade when Indian foreign
policy has sorely tried the patience of the United States in carrying out
our world responsibilities. Leaving aside criticisms of the correctness
of these Indian policies, it can be seen that neutralism and antipathy to
nuclear war have derived from India's peculiar position as one of the
world's largest nations but one disproportionately weak despite its great
geographic size and population. A reinforcing amalgam of moral conviction

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and shrewd practical judgment has led India to adopt a course of aligning
with neither of the world's power blocs in the hopes of safeguarding its
national independence from both.

Yet dependence on foreign assistance, as has already been noted, has
become an abiding factor in the achievement of India's prime domestic
aim, economic growth. Thus far, the government has approached the problem
of obtaining foreign credits by attempting to disassociate the source and
quantity of such assistance from influence over its substantive policies
or from affixing to India the label of overt political commitment to its
patrons. In short, India's self-apparent aim has been to "have its cake
and eat it too"; but the reality, while still in flux, indicates distinct
potentialities to the contrary.

Until 1957, when the Soviet Bloc began to participate in financing
Indian development, the West was virtually the only source of economic
assistance. Since that period, the Soviets have initiated an energetic
and cleverly administered program of loans and technical assistance to the
extent that by the end of 1958 more Bloc technicians were engaged in
development work in India than personnel from the U.S., and contrasts
between the two assistance programs had begun to draw wide domestic and
foreign attention. Thus, despite its reluctance to allow foreign
assistance to serve as the tool for external policies, India has un-
consciously become the focus for a power struggle in which economic
assistance programs manifest the world-wide hostility between the West
and the Bloc.

Over the years, Western programs have by far exceeded the magnitude
or long-term economic significance of anything the Soviets mustered.
Loans, grants, technical assistance, and agricultural sales by the West

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have been aimed toward integrating with and facilitating the Indian government's expansion plans. A broad characterization would represent Western, and primarily U.S., assistance as contributing to the over-all growth of the economy and strengthening the basic institutions of domestic exchange and production in a responsible manner. The yield of this assistance has been respectable, but not spectacular, and has generated the approval and gratitude of moderate leadership groups for its soundness and restraint.

Recent Soviet contributions, on the other hand, have been able to capitalize on areas of special political appeal in India's development objectives. Where strained investment capital has fostered notable gaps in internal growth, the Soviets have moved in with speed and efficiency, despite occasional official Indian reluctance. Their assistance has concentrated on massive and discrete development projects in heavy industry and agriculture, such as the Bhilai steel mill, that tend to achieve clear recognition as Bloc creations. Exchanges of persons for training purposes have also increased respect for Soviet methods, particularly in the light of a supposed similarity in experience within Soviet development over the past 40 years. Condemning the Russians for "dirty pool" in this regard not might make their successes easier for us to explain, but it could diminish the imprint they are making on the minds of a people, largely illiterate, who have been deeply stirred to a desire for material improvement. Each shortfall in internal growth only ripens the opportunities for successful Soviet penetration.

In the light of this analysis, the conclusion is obvious that the Soviets' task of cultivating support within India for their objectives is facilitated by a situation that tends to magnify the importance of

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their assistance. It would be neither realistic nor necessarily desirable for the West to crowd the Bloc from the field of economic assistance, but it is also apparent that the U.S. should aim wherever possible to reduce the distinctive impact of their aid and to render it politically innocuous.
As the preceding discussion has indicated, the primary factor working in the Soviets' favor is India's shortage of sufficient resources in its efforts to achieve a satisfying rate of real growth. This shortage makes any additional contribution welcome in spite of its underlying intent.

Hence, a U.S. assistance program pitched at a level that would not notably reduce India's straightened situation would accomplish little in terms of diminishing the significance and appeal of current Soviet efforts. Although India has thus far preserved its wariness at Soviet open-handed assistance, deepening hopelessness about future economic growth would tend to drive the Indians to accept Soviet offers with increased willingness and regularity. U. S. assistance, on the other hand, whatever its size, will continue to draw less than its proper share of credit so long as it continues to enable the incidence of shortfalls which the Soviets can then proceed to fill. But while such will be our inevitable burden so long as we continue to peg our contributions to the absorptive capacity of the Indian economy, understandable disenchantment can be expected to flow from instances where we withhold funds from crucial objectives that Indians consider to be both legitimate and necessary.

A more ambitious U.S. program, however, could go far toward removing or lessening the opportunities for Soviet gains at our expense. Should the impression be clearly made that the U.S. is financing an achievable if modest rate of continuing growth, Soviet contributions could be put in their proper perspective as welcome but not life-saving assistance.

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Toward the U.S. and the West, on the other hand, the impression can be strengthened that nations of similar ideologies and purposes are cooperating to assist the development of a valued and respected friend. The course of moderate growth that the Indians have themselves chosen as their objective could thereby be fostered within the frame of their own aspirations to both economic progress and freedom from external domination.

From such a stepped-up assistance program, the West could not expect to achieve blind subservience on the part of the Indians to anti-Bloc policies. But an increased understanding of Western aims and motives could be expected to follow from a positive demonstration of interest and respect for India, backed up with a concerted assistance program; ripening sophistication within India and continuing familiarity with Communist practices can from then on be expected to create sufficient hanging rope for the Bloc. Of no less importance, the strengthening of the Indian economy would in the short run contribute to heightening India's abilities to resist Bloc military and economic pressures, and in the long run would constitute a permanent antidote to whatever ideological inducements Communism offers to developing nations.

3. **Reducing South Asian Tensions:** A recent statement by Prime Minister Nehru recorded his conviction that the decision to seek partition of India into separate Moslem and Hindu states was one of the greatest mistakes of his life. Aside from the bloody violence on both sides that marked the departure of the British in 1947, the division of India and Pakistan has left many serious problems for both nations in the continuing unsettlement and antagonism between them. Currently these hostilities appear to have embroiled both states in a mutual arms race of sorts, in which the United States suffers from the curious anamoly of contributing

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to the capabilities of both sides. For Pakistan, the United States has sponsored major military assistance programs to shore up that nation's ability to withstand Soviet penetration; meanwhile, India, the beneficiary of substantial United States economic assistance, has seen a need to divert a sizeable part of her domestic resources to maintaining a military capability in excess of that of Pakistan.

As is the usual case in arms races, the root of conflict lies much deeper than the outward manifestation. Specific instances of grievance exist between India and Pakistan that the years of their independence have done little to dispell. These divergences are primarily four in number, with the first two being by far the most prominent:

a. The political status of the states of Kashmir and Jammu

b. Water rights to the Indus River and its tributaries

c. Blocked assets impounded by both countries on partition

d. Continuing unsettlement of refugees uprooted by partition and violence

Neither nation can afford the continuing strains of mutual hostilities and of interrupted trade, and the absence of a binding division of the Indus waters to some extent constitutes a drag on the development efforts of both nations. In addition, the antagonisms between India and Pakistan have provoked hostility toward the United States within India for furthering the military capabilities of its enemy and have distracted Indian attention from perceiving the ultimate designs of Sino-Soviet Bloc in South Asia.

Much of the hatred generated by the partition will probably remain whatever the progress in smoothing specific controversies between the two nations; but these instances of conflict appear to be resolvable given a

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political will for settlement and sufficient resources to carry out mutually acceptable policies. While the Kashmir dispute is primarily political in origin, solutions for the questions of the Indus waters, blocked assets, and refugee resettlement all appear to be contingent on the availability to each nation of adequate funds. Various estimates of the expenses involved in redistributing the Indus waters have been made in recent years and currently stand at about $1 billion over at least a decade. Needless to say, this money is not currently available to either India or Pakistan in budgets that are barely adequate to fulfill day-to-day requirements. Making these funds available would require reducing or altering current commitments (a course which for India has been demonstrated to be extremely serious and hence unthinkable in this regard), or finding additional sources of external revenue.

Current levels of United States assistance would hence be inadequate to achieve the removal of specific barriers in Indo-Pakistani relations at the same time as continuing development at the existing rate in the Indian economy. Only through the availability of additional funds from either the United States, other Western nations, the IERD, or the Soviets could water redistribution projects be approached or specific efforts to provide permanent housing and employment for partition refugees be undertaken. The availability of adequate financial support, while not necessarily lessening the hostilities of race and history, could nonetheless ease the settlement of substantive divisive issues. If sponsored by the Western friends of both nations, working agreements on the more easily resolvable problems could, in addition, induce fruitful negotiation on the political future of Kashmir, where indications have been that a settlement could be reached under favorable circumstances. Here again,

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no miracles can be expected, but a demonstrated concern on the part of
the West for improving relations between the two nations could well
facilitate the reduction of antagonism between them, and the provision
of financial support from abroad could make a mutually desirable settle-
ment appear feasible. While assistance to Pakistan to supplement an
Indian aid program is beyond the scope of this study, it is apparent
that joint assistance to both countries could have the effect of waving
the carrott -- if not the stick -- to induce India and Pakistan to reach
a more viable and peaceful relationship as a condition to receiving major
financial support.

#### IV. A Note on Style

The analysis of this paper has thus far proceeded on the assumption
that a level of annual economic assistance to India roughly twice as
great as is currently undertaken would have certain anticipated political
results according to all available indications. This section will
address itself to examining this assumption -- not in terms of questioning
it, but to qualify it. Such qualification concerns the manner and the
purposes by which economic assistance for India would be raised and
administered.

A $1-billion-a-year contribution extending over five years would have
only one precedent in history for size and comprehensiveness in internation-
al economic assistance, that of the Marshall Plan. If a parallel could be
shown to exist to a significant degree between the approach and scope of
European reconstruction and future economic assistance to India, then
fruitful development might be foreseen for India with extremely beneficial
political consequences for the U. S. There are, of course, major visible

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departures between the Indian example and the ERP, especially in terms
of the absence in India of the basic skills, developed resources, and
surviving economic structure of Western Europe in 1947. But the Marshall
Plan can perhaps serve as a useful model in terms of its spirit and
approach to the task of cooperative economic development on a massive
scale.

American financial assistance provided the prime impetus for the
recovery of Western Europe after World War II, but this assistance was in
itself less significant than its psychological impact. The final level
of our aid, in fact, never reached the estimates and commitments that
were made at the outset of the Plan. Nonetheless, the outflow of credits,
grants, and commodities from the U. S. represented a symbolic pledge of
interest and support for the recovery efforts of a continent whose
strength we considered vital to our continued security. This demonstra-
tion of American concern and willingness to help to the extent necessary
furnished the dynamism and inspiration for Europeans themselves to pick
up the pieces of their shattered societies. While India's problems are
of a somewhat different kind and order, here, too, hopelessness constitutes
the most dangerous menace to economic and political health, just as post-
war apathy could well have delivered Europe to the Communists. The
indications are thereby strong that a program of psychological, as well
as economic assistance to India, can offer a similar prospect of achieving
major successes. The developmental problems of India are so deep and
long-lasting as to make a moderate improvement appear the only feasible
possibility; but European recovery itself proceeded far faster and more
successfully than ever anticipated.

(No Page 12)

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Commentaries on the effectiveness of the Marshall Plan single out its emphasis on cooperative pooling and the responsibility placed on individual countries to put their own houses in order. Such an approach could have similar application to Indian development, were the major nations of the free world to declare their willingness to facilitate a firm margin of growth. Economic assistance coupled with favored nation treatment by the U. S., the Commonwealth, Japan and Western Europe could "cover the field" of India's major foreign economic contacts and thereby facilitate both its internal development and international solvency. As in the European experience, the most effective means of implementation in terms of fostering ultimate Indian stability could be to underwrite the determination by the Indians of their own objectives and programs. India's efforts with two Five Year Plans have thus far demonstrated a responsible capability for formulating and executing economic programs, marred only by an understandable tendency to respond to acute demands for real growth by overestimating available resources. Were the Marshall example to be followed, U. S. policy would be to induce the Indians to formulate their own goals and programs over which the West could extend mild censorial restraint by providing the financial backing. Pre-planning cannot assure total harmony in implementing but the prospects appear unlikely that any cross-purposes would be significant.

A consideration of Indian attitudes toward their own economic needs can uncover further evidence to support the acceptability of such a cooperative Western approach. Initially it is clear that the Indians would like nothing better than to feel capable of working the annual margin of real growth that they see as essential to their viability as a nation.

A cooperative Western program of sufficient size to fill the capital

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requirements of the third Five Year Plan would enable Indian planning to proceed with confidence and flexibility. In addition, Indians would well appreciate a joint program based on Western acknowledgement of responsibility for an underdeveloped country and on respect for the needs and values of the Indian nation. Indians could thereby interpret a cooperative program sponsored by many developed nations as being an indication of India's value to the free world, not to the policies of any one of its members. Such an interpretation would serve to corroborate India's image of its role as a free nation loyal to both its democratic institutions and its Asian setting.

The West, for its part, could draw substantial benefits for its own global interests by directing a cooperative approach to Indian development. But the realization of such benefits would depend on a firm conviction in the ultimate significance, real and symbolic, of achieving a viable base for free institutions in India, supplemented by considerable patience that such economic and political health will redound to the benefit of the West. This commitment must be held not only by the U.S. but by Japan and the leading nations of Western Europe, where the significance of India's future economic and political health may currently be under-appreciated.

For as the nations of the Afro-Asian world begin to emerge from their historic subjugation, it is becoming increasingly important for the West to communicate its values and motives to these peoples in a manner capable of generating understanding and respect for Western achievements, both material and spiritual. Over the long term, the West has the choice of continuing to perpetuate an image of itself as a group of imperialist, exploiting nations, whose interests toward the East have now shifted to

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maintaining military security but remain as unconcerned as ever to Asian aspirations. Perhaps this image is indelible; it will surely persist as long as we find it essential to our survival to confront the Communists with world-wide military force. But major opportunities for tempering and countering this stereotype of self-serving repression can only be neglected at our own ultimate risk.

V. Conclusions

This paper has examined the possible political implications of various courses of action open to U.S. economic assistance programs to India during the period of the third Five Year Plan. Chosen as realistic alternatives were (1) the continuance of aid at roughly the same levels as at present and (2) a concerted program of Western assistance cooperatively initiated and totalling approximately twice that of the present annual contributions from both the U. S. and its allies. From analysis presented here and elsewhere it was concluded that the lower aid level would produce shortfalls in achieving a steady rate of real growth, while the higher level could facilitate the requisite annual expansion of production for a measurable and sustained increase in Indian well-being.

These two alternatives were contrasted for their probable bearing on three firmly held U.S. aims towards South Asia. The lower aid level, it was seen, would not materially strengthen the political appeal of the moderate ruling Congress party and could tolerate a continuing decay in governmental authority at a time in which India's democratic institutions are evolving through a crucial for mature stage. Higher aid levels, on the other hand, would work to strengthen the position of the Congress party, which has committed itself to moderate economic progress under

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free institutions. A successful demonstration of democratic methods in India would have extreme symbolic value in Asia at a time when Communist China is achieving steady and spectacular growth through coercion.

Higher levels of economic assistance to India would further strengthen appreciation in that country of Western aims and beliefs, particularly if such aid would be administered with respectful tolerance by the West. Absence of sufficient foreign assistance from the Free World, on the other hand, contributes to the significance of Soviet aid efforts in India by heightening its value to the fulfillment of Indian economic plans.

It was further shown that sizeable additional funds will be necessary to remove several outstanding points of conflict between India and Pakistan, whose hostility creates continuing obstacles to mutual growth and free world unity in Asia. Current levels of assistance are inadequate to achieve continuing growth while attending to such additional tasks as Indus waters development and refugee resettlement; a firm program of Western assistance to both nations would have distinct persuasiveness in enabling the settlement of specific grievances and the normalization of political and economic relations.

Finally, attention was turned toward goals to which a stepped-up aid program should be oriented and the manner in which it should be conducted. Here the example of the Marshall Plan was shown to have relevance, in terms of its spirit and principles of operation. A major and cooperative Western effort could generate the optimism necessary to inspire Indian development efforts within the context of democratic values. Outside assistance contributed toward the fulfillment of Indian objectives and programs could have the result of strengthening Indian confidence by

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demonstrations of Western esteem and respect. Finally, the West could gain significant long-term advantages from an Indian aid program of sizeable proportions as a counter to the image of militarism that has grown up about us in the Afro-Asian world and as demonstrable evidence of our constructive aims and和平主义values.

C O P Y

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13A Ware Street
Cambridge 38, Mass.
7 September 1959

Mr. John B. Lawson
3003 "O" Street N.W.
Washington 7, D.C.

Dear Mr. Lawson:

Again I must emphasize my apologies for tardiness in answering your searching letter of last month; I hope my inability to reply to your request at an earlier date has not jinxedized the relevancy of what I might say. Your questions about WIEG and my year's employment in Washington are as difficult to answer as they are significant for me, and I must therefore prepare you with a further apology for the degree to which my response may reflect faulty analysis or excessively personal feelings..

At the outset of these jottings, it is important for me to set the perspective of my experiences—i.e., my background, my expectations at the beginning of my employment with WIEG and today, and a skeletal outline of my experiences with the organization. When I came to work for WIEG I was 21 years old, possessing a bachelor's degree from Harvard in government, some flattering recommendations, and the tolerance and indulgence (mixed with some dubiousness) of my employers. I had rather unexpectedly been offered employment on a year's trial basis, and since such an occupation offered both excitement and the opportunity of self-assessment in a working environment, I was eager to take the job.

Meanwhile, I had adopted a somewhat lukewarm attitude toward law as a career, which I hoped a year of employment would help to clarify. In fact, I had made the decision to attend Law School before I left Harvard College, and I was largely determined not to be dissuaded by any pleasant successes in Washington. My pleasures and successes there far exceeded my prior expectations, so when the time came for me to adhere to my earlier schedule, the strain was great indeed. I have, as you may know, taken an indefinite leave of absence for educational purposes so that both the strains and the temptations will continue until more familiarity with the law aids me in making a final choice.

Because of the temporary nature of my employment—a fact that was always thoroughly clear to myself and which I assume my employers understood—I was enabled to enjoy an exceptionally diverse and interesting year. With WIEG I first worked on a paper of my own devising which represented an attempt to acclimate myself to the organization's problems while making best use of my own time during a period when the opportunities for fruitful employment in other projects were limited.

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My next assignment placed me with a very technical study group, in which I first thought I would be totally incapable. By early blunders in physical terminology soon seemed to confirm this, but before a week was out I had been assigned my own section of the project's work—one that certainly was not integral to the design of a weapons system, but was important in validating its mission. I found this mixed staff of physics, statistics, economics, public opinion, logic, and military, logistics immensely intriguing. In this, and in an additional more "political" paper, I found distinct opportunities for the exercise of a trained and critical intelligence and an ability to write imaginat dav ely, as well as discovering fields beyond the strictly physical that bore with major significance on the problems we were studying.

In retrospect, I must say that although these papers were rather well received, they did not come to affect the outcome of the project significantly, since our task was by its nature confined to rather "technical" questions. Yet my ideas had been received and understood, and I was further called on to prepare much of the project's final report. In short, instead of being ignored for want of applicable background, I was accepted once it was clear that I could offer a fresh and relevant approach.

This study occupied about six months, after which I was enabled by IDA's peculiarly fluid and influential structure to be called on to serve as an economist with the Draper Committee (The President's Committee on the US Military Assistance Program). While my background in economics had not been expensive, the same faculties that made me useful at WEEG enabled me to keep my balance and make what I hope was a worthwhile contribution in fields far removed from weapons technology. Finally, on 1 July of this year, I returned to the Pentagon to participate in the closing stages of a project that was largely "political" in its orientation. Here I found myself even more acceptable, being among "friends", and being able in the short month I was associated with this study to present my ideas and have them argued and discussed by like-minded people.

All this was in part colored by the temporary nature of my employment, but I found it distinctly possible to make important contributions to the work in which I was engaged. Whether or not my experience can have any correspondence for others, particularly for one with more stable and defined long-term interests than mine, I cannot determine. However, I can insist that WEEG has a tremendous requirement for imaginative and articulate people, that the organization is in a position of potential major influence if this requirement is properly served, and that the application of energy and insight to WEEG's problems can be a very fruitful and satisfying undertaking. The organization is sufficiently small for talent to be recognized and given responsibility. It is located in the national security structure in a position of respect and access to the best resources of the government, and its problems are so crucial for the nation that wise heads are listened to once they become apparent.

This situation holds as well for the political scientist, a man who by the nature of his anachronous structure of his training is not used to bearing so prominent a label as that with which he is affixable sometimes, affixed by WEEG's scientists and military men. It has been my experience that these latter individuals as found in WEEG normally manifest beausement at the meanderings of

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the "soft scientist" whose profession they sometimes dismiss as imprecise, non-quantitative, and little more than what everybody knows from the newspapers. For a sensitive and defensive man, such attacks might be hard to take; I found them quite unsubstantial and watched them disbing diminish with demonstration, not only in the political dimension, but in the political dimension, not only in the political dimension, but that the "humanist", so-called, has some intellectual equipment that can be highly relevant to weapons problems, but only once it is discovered that a political scientist can think well and write well, his accountability is measurably improved.

I have spoken of this process in personal terms partly because such are my most vivid recollections, but also because I feel that every employee in WMD, particularly one with backgrounds such as ours, has an imperative obligation to win his own way. Some discharge of this task less well than others, and by their reticence, I think, tend to bring on such dubiousness of their usefulness as may have been painted to you. But so much as some fail, so can others succeed, provided they are energetic and enterprising (on my years I am afraid such boldness sometimes sets as brightness, though I often feel I was not energetic enough). I would place emphasis on two further and somewhat contradictory qualities that contribute to the model of performance that I think works to the dual advantage of both WMD and its individual employees.

The first is that he have a firm foundation of commitment, based on solid information, to a set of moral and political beliefs; I cannot end this point on a generalized plane beyond stating that such commitment is essential—or ought to be—for any man who works with problems so significant as those of national defense.

The second point is that a man must fully understand the ambiguities of staff work that encourage both overly conservative and overly ambitious discharge of responsibilities; I have come to think that, while it may be a bit too cautious in its fulfillment of the staff role and that improvement in its functioning will depend on a more courageous approach in the future.

Beyond these somewhat antiseptic concepts, I am afraid that I can offer little further counsel, save to place the whole of the above in perspective. This is that a political scientist must in all probability expect to be limited in his prerogatives and influence in WMD since the group is primarily concerned with operations analysis of weapons and since it represents, as well, a three-service triunvirate of which the centers of gravity lie elsewhere. At the same time, I must emphasize the wide range of important problems that come before WMD and require diligence of many nonscientific attributes. One recent reference to such a problem was made by the chief US negotiator on the surprise attack issue, in telling the Senate Disarmament Subcommittee that he thought the Weapons Systems Evaluation Group was the logical instrument for projections and analyses of model inspection systems in studies that would integrate many elements of advanced knowledge.

I hope this rambling discussion has been helpful. I would be glad to answer any further questions you may have, although you may understand that I myself still have for more questions than answers on many of these subjects.