South Asia, 1976

    Front Cover
        Page i
        Page ii
    Table of Contents
        Page iii
        Page iv
    Letter of transmittal
        Page v
        Page vi
    Pakistan
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
    India
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
    Bangladesh
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
    Back Cover
        Page 25
        Page 26

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94th Congress COMMITTEE PRINT
2d Session I









SOUTH ASIA: 1976





A REPORT

BY

Senator GEORGE MCGOVERX

*T TO THE

COMMITTEE ON FOREIGN RELATIONS


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APRIL 1976


Printed for the use of the Committee on Foreign


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WASHINGTON : 1976


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COMMITTEE ON FOREIGN RELATIONS

JOHN SPARKMAN, Alabama, Chairman


MIKE MANSFIELD, Montana
FRANK CHURCH, Idaho
STUART SYMINGTON, Missouri
CLAIBORNE PELL, Rhode Island
GALE W. McGEE, Wyoming
GEORGE S. McGOVERN, South Dakota
HUBERT H. HUMPHREY, Minnesota
DICK CLARK, Iowa
JOSEPH R. BIDEN, JR., Delaware


CLIFFORD P. CASE, New Jersey
JACOB K. JAVITS, New York
HUGH SCOTT, Pennsylvania
JAMES B. PEARSON, Kansas
CHARLES H. PERCY, Illinois
ROBERT P. GRIFFIN, Michigan


PAT M. HOLT, Chief of 8taff
ARTHUR M. KUHL, Chief Clerk

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CONTENTS

Page
Letter of transmittal--------------------------------------------- v
Pakistan -------------------------------------------------------
Foreign policy outlook----------------------------------- -------- 1
Internal situation ---------------------------------------------- 3
India ---------------------------------------------------------- 7
India and the world-------------------------------------------- 7
India and her neighbors -------------------------------- 8
India and the United States- ------------------ --- -- 9
Internal situation --------------------------------------------- 11
Summary ---------------------------------------------------- 14
Bangladesh ------------------------------------------------- 16
Foreign affairs ----------------------------------------------- 17
Internal developments ---------------------------------------18
Conclusions -------------------------------------------------- 21


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LETTER OF TRANSMITTAL


MARCH 26. 1976.
Hon. JOHN SPARKMAN,
Chah-nan, Committee on Foreign Relations, U.S. Senate, WJashing-
ton, D.C.
DEAR MNR. CHATP.MAN : Enclosed you will find a report on the trip I
undertook to South Asia in January.
I left Washington on January 1 and visited Portugal, Pakistan,
India and Bangladesh before concluding my study mission with four
days in Vietnam. I am forwarding to you separate reports on Portiugal
and Vietnam.
Accompanying me were my wife, Eleanor: George Ashworth of the
Committee staff; John Holum, my foreign affairs specialist: Robert
Shrum, staff director of the Select Committee on Nutrition and Human
Needs; and my secretary, Pat Donovan. I wish to extend special
thanks to all of them for the contribution they made to this study
mission.
We arrived in Rawalpindi January 4th and left immediately for an
inspection of the Tarbela dam complex northwest of Islamabad and
Rawalpindi. Upon our return to the capital, Islamabad, we had an
opportunity to talk at length with Mr. Aziz Ahmed, the Minister of
State for Defense and Foreign Affairs: Mohammad Yusuf Khattak,
Minister of Fuel, Power and Natural Resources: Ambassador Henry
A. Byroade, and other officials of the Foreign Ministry and the Em-
b1)assy. Several members of the party joined me in a visit with Presi-
dent Zulfikar Ali Bhutto at his retreat at Larkana. Two members of
the staff remained in Islamabad for further discussions.
The party reassembled at Lahore for discussion with Indian of-
ficials, Consul General William F. Spengler and his staff, as well as a
tour of the city. The next day we went on by car across the border and
sto)pp)ed at a village in the Punjab. After talking with villagers and
seeing the school lunch program in operation, we went on to Amnritsar,
the center of the Sikh religion. From there we flew to Delhi.
During my four days in India I conferred with Prime Minister
Indira Gandhi; Y. B. Chavan, the Minister of External Affairs: J. J.
Ram, Minister of Irrigation and Agriculture; and other Indian of-
ficials. I also had several detailed discussions with Amba:ador Wil-
liam Saxbe and his staff. From I)elhi we flew to Calcutta and spent a
very productive day seeing the conditions in Calcutta before flying on
to Dacca, Bangladesh, on January 11.
In Bangladesh I had an opportunity to talk with President and
Chief Martial Law Admiiit4-rator, A. S. M. Sayem : the Army Chief
of Staff and Deputy Chief Martial Law Administrator, \faior G('n-
eral Ziaur Rahman; Chief of Naval Staff and Deputy Chief Ialiali
Law Administrator, Mosharraf I-I snin Khan; Foreign S..eretarv







Tabarak Hussin; and the President's Advisor for Family Planning,
Dr. Mohammed Ibrahim. The staff and I also had extensive discussions
with Charge d'Affaires Irving G. Cheslaw and members of his very
able staff.
We left Dacca on Tuesday, January 13th, for Hanoi and Saigon.
As Chairman of the Subcommittee on Near East and South Asian
Affairs, I have been trying for some time to have the opportunity to
visit the subcontinent and to get a first hand look at some of the prob-
lems there as well as to discuss these problems with the officials most
directly concerned and with American experts in the field. I had very
much wanted to go also to Afghanistan, Nepal and Sri Lanka, but
time simply did not permit. I hope that in my next visit I will be able
to cover more of the subcontinent.
With only about ten days available to spend in the subcontinent,
we were clearly able to touch upon some of the more serious problems
in only a bread way. Consequently, I am reluctant to offer numerous
recommendations as to the proper American priorities and to solutions
of lingering, tenacious problems being faced in the countries we vis-
ited. I did reach some conclusions as to changes which should be con-
sidered, and you will find these suggestions outlined in the relevant
sections of my report. I expect to make further recommendations in
the context of the authorization process during the current year. There
was one matter of allowing Bangladesh to sell its agricultural prod-
ucts and raw materials to any potential customer without jeopardiz-
ing the critically important PL-480 shipments. I have already written
Secretary of State Kissinger in this regard setting forth my views
and asking that the necessary steps be taken as soon as possible.
In the course of my trip I was particularly impressed by the calibre
of people assigned to United States missions and the obvious depth
of their expertise. I found continued evidence of a pragmatic aware-
ness of the problems of South Asia and a high degree of realism as
to what should be accomplished and what the obstacles are to success.
Without exception the arrangements made by the embassies were care-
fully thought through and allowed the party to accomplish a great
deal in the limited time available.
I should note also the hard work being done by the numerous volun-
tary agencies. I saw at first hand some of the efforts of CARE. I be-
lieve all Americans would be proud of the selfless dedication of these
volunteers in extremely difficult and trying circumstances.
Sincerely,
GEORGE McGoEnRN,
Chairman, Subcommittte on Near East
and South Asian Affairs.









SOUTH ASIA: 1976


PAKISTAN
Since the difficult war in 1971 in which Pakistan lost East Pakistan
(now Bangladesh), the government of Pakistan has been be-et by
severe social, economic and political problems.
Defeat in the war and the loss of Bangladesh led to the fall of the
old government. Mr. Zulfikar Ali Bhutto assumed leadership under
martial law in the aftermath of the war. In the months after the war.
he overhauled the military, purged the civil service and moved to insti-
tute numerous reforms. In April, 1972, Pakistan's first directly elected
National Assembly was conveyened and martial law was lifted.
Mr. Bhutto was inaugurated to the presidency. Under his guidance a
consensus was achieved for a new constitution to create a govern-
mental structure which would revitalize Pakistan. The new constitu-
tion came into effect in August, 1973, and Mr. Bhutto became Prime
Minister of a strong, centralized government.
Now at the start of the fifth post-war year, Pakistan has made
impressive gains, although Americans and Pakistanis we talked with
se.e many remaining and some deepening problems.

rOREIGNx POLICY OUTLOOK
Since the war, the government of Pakistan has been trying assidu-
ouslvy to strengthen its worldwide political ties, with particular em-
phalsis on relationships with the Arab world, China and the United
States. Mr. Bhutto espouses a policy of bilateralismm", which is de-
scribed as a policy of seeking g(rood relations with all countries, without
implying full support of all the policies of any one country or side.
More recently, Pakistan has been particularly concerned with de-
veloping relationships with the lost territory, Bangladesh. When
Sheikh Mujibur Rahman was assassinated in Bangladesh last Au-
gust 15, Pakistan recognized the new military regime within a day.
Since, well aware of the risks vis-a-vis India which a too speedy
and too enthusiastic rapprochement with Bangladesh might entail,
Mr. Bhutto has adopted what observers see as a careful and judiciolus
approach to improving relations with Bangladesh. While we were in
Pakistan, the envoy from Bangladesh arrived with a warm welcome.
Later, we were in Bangladesh when the new Pakistani Ambassador
arrived with red carpet treatment.
The Pakistanis appear avw-are of the potential difficulties the new
relationship with Bangladesh might cause the government of India.
Pakistani officials claim that their intent is to maintain good relation-
slips throughout the subcontinent, and we were told that Pakistan
desires to do nothing in reward to Baiigladeshl which would jeopar idize
the relationship with India.
(1)







Many issues remain between Islamabad and New Delhi. There have
been some positive steps between the two sides since the 1971 war.
Some of the issues arising from the war, such as the detainment of
approximately 9,000 Pakistani troops and civilians by India, have
been resolved, but the relationship remains cool with tensions in many
areas. The two sides have agreed to such steps as the re-establishment
of postal and telephone lines, but bigger issues such as the basic one
of diplomatic relations remain unresolved. There is mutual fear and
mistrust. We were told in Islamabad and in Delhi that there was no
doubt that the other side was preparing for war at that moment.
This continued military fear and confrontation costs both Pakistaii
and India incredible amounts in terms of the total budget. Pakistan
has a very weak economy with a GNP of approximately $12.5 billion.
The budget is $3.5 billion. With $700 million subtracted for defense
and other $1.5 billion for recurring costs, the developmental budget
is only $1.3 billion.
Pakistan earns about $1 billion from its exports yearly. Currently,
imports are running at the level of $2.2 billion a year and going up
rapidly. Since the Middle East war in 1973, oil imports have gone
from about $60 million to more than $400 million. Without outside
help, particularly from the oil-producing countries. Pakistan would
have had to cut development programs drastically and slash the level
of imports. The oil-producing countries committed almost a billion
dollars and disbursed $500 million to Pakistan in fiscal 1975.
The United States has been providing $175 to $200 million a year,
with more than half of the assistance in the form of PL-480 wheat
and vegetable oils. Foreign debt now exceeds $6 billion, and debt
service alone takes more than one-fourth of foreign exchange earnings.
Pakistanis looking at the world around them in a geopolitical vein
express a great deal of foreboding. They are not sure that the relation-
ship with Afganistan, now characterized by a great deal of bitterness
and invective, can be softened into a gentler coexistence. While
Afganistan alone is not a military threat, Pakistanis worry about
long-term Afghan and Soviet plans. Similarly, they look at India and
count up the Indian divisions on the border and conclude that India
could pounce at any time. These concerns have led Pakistan to be dili-
gent in trying to promote solutions to continuing issues with her neigh-
bors. At the same time she looks to the West for moral and monetary
support as well as to the Arab states.
Pakistan urgently pushed for a lifting of the embargo on shipment
of non-lethal military equipment from the United States, and the
United States lifted that embargo nearly a year ago. The Pakistanis
have been discrete in their arms requests. ]Most of the purchases since
have been of nonlethal equipment and parts. The only notable excep-
tion was the purchase of some TOW anti-tank missiles and launchers.
The Pakistanis want a normal and steady arms supply from the
United States, but appear to be willing to use restraint. Sales in 1974
were $36 million and in 1975 were $46 million. However, a big problem
looms on the question of aircraft. The Pakistanis want a sophisticated
close-air-support plane. One being mentioned is the A-7. So far, the
United States Embassy says it will not encourage the Pakistanis to
plitrchase new aircraft. It seems to me the United States should con-
tinue the policy expressed when the embargo was lifted and avoid







encouraging or taking part in the potentially provocative build-up of
any armed forces in the subcontinent. The best course for the
Pakistanis is to maintain solid defensive forces which could deter an
attacker. However, the Pakistanis cannot afford to build a military
force which would threaten neighbors. The result would be increased
spending throughout the subcontinent and a building of the military
chips higher and higher to no avail.
An issue closely related to these military questions is that of
Pakistan's developing nuclear program. At present, Pakistan is con-
tenmplating a sharp expansion of its nuclear power program with the
)purchase of 12-14 light water reactors for power in the 1980's and
1990's. In addition, Pakistan intends to purchase a nuclear reprocess-
ing plant. The United States is trying to persuade the Pakistanis not
to move now to get nuclear reprocessing, which can be a key step
toward a nuclear weapons program. Not only is nuclear reprocessing
extremely expensive-an important factor for a country with con-
tinuing deficits-it is also a potentially destabilizing step.
While I sympathize very much with Pakistan's concern in regard
to the Indian program, it is in the interests of all concerned that money
not be wasted to gain a nuclear weapons option. The United States and
the other nuclear suppliers should be very firm in their efforts to keep
India and Pakistan from any further steps toward a nuclear weapons
option.
INTERNAL SITUATION
Mr. Bhutto, a forceful and erudite leader, appears to retain much
of the charisma attached to him when he came to power after the
1971 war. He assumed leadership of a shattered, bewildered and de-
moralized country and played the central role in getting the country
moving again. Perhaps his greatest achievement is the restoration
of Pakistan's self-confidence and respect and its standing in the inter-
national community following the 1971 war.
Looking beyond these impressive achievements, observers note that
Mr. Bhutto rules with a firm hand which many believe is becoming
more authoritarian. Some observers believe that the new constitution
promulgated by Mr. Bhutto, for which lie sought and received a
consensus, represented a lapse from the authoritarianism which has
characterized Pakistan since independence, rather than the beginning
of a new political structure. Few doubts that Mr. Bhutto and those he
supports have an ability and the desire to win elections-by fair or
, questionable means-and to stay in power. Mr. Bhutto can-and has-
jailed persons he believes threaten national security and deprived
them of the right to bail. Mr. Bhutto's critics point to the ominous
growth of three police units-the central intelligence bureau, the cen-
t nil police and the central security force.
Mr. Bhutto's extremely personal hold on the reins of power ha-i
allowed the fast focusing of governmental energies when Mr. Bhutto
wants to push specific programs. This has helped promote many im-
portant programs, although many observers sense that this kind of
leadership has had. upon occasion, too rapid shifts in priorities and a
sometime absence of follow-through.
So far, Mr. Bhutto appears to have done little to build political
institutions which could outlast him. There is no heir apparent.


68-715-76--2







For the elite in Pakistan. service in the federal government hlias
long been a good livelihood. This has accounted in large part for the
excellence of the Pakistani foreign service and for the concentration
of talented persons in government bureaus. However, the government
is not innovative. Mr. Bhutto prefers to keep power to himself and a
select group of advisors, leaving the other bureaucrats without clear
mandates or authority.
Local government is relatively undeveloped in Pakistan and demo-
cratic roots are frail at best. Observers believe that the Bhutto govern-
minent has done little to change this. Governmental services-suchl as
they are-are extended down from Islaminabad through the provinces
and to the districts. But the government must work on its infrastruc-
ture if it is to make substantial progress in a number of areas.
All this does not mean that there have not been big chances in the
villages. Both diet and nutritional balance are improving, although
about 60 percent of the population is considered malnourished. This
situation may improve as a result of a major world food program to be
initiated in Pakistan, but observers believe that the program may give
too much too fast without adequate preparation.
One of the major difficulties of the Pakistani government appears
to be in its long-range planning. There is some question whether the
planners have sufficient access to the leadership and whether opera-
tional decisions give sufficient weight to long-rangre plans. The govern-
Ment may be too ready to lean upon outside expertise-whether an
embassy staff or an international agency-anml thus avoid the problem
of developing a competent and effective bureaucracy.
Expertise is one pressing problem of the government. There is a con-
tinuing drain of the educators, skilled and semi-skilled, to other coun-
trie-. This has led to a lack of talent in depth throughout the adminis-
trative structure. This problem is more acute the further down the
governmental chain one goes.
Iran, Saudi Arabia and the developing nations of the Gulf are par-
ticularly happy to hire Pakistanis. A number of the air forces in the
Arab states probably could not operate without the Pakistanis. The
Moslem Pakistanis are believed by the Arab states to be more unlikely
to grrive religious offense than workers who might be imported from
elsewhere. Thus, throughout the Arab states one finds Pakistani
barbers, gardeners., metal workers, tailors and servants. In Abu Dhabi,
for instance, there may be more Pakistanis than natives.
The drain is evidence elsewhere. One observer said, partly in jest,
that the British health services would fall apart if the Pakistanis left.
The Pakistanis do not know quite what to do about this. They talk
of bringing back skilled civil servants from world institutions to help
:telngtlhen the government but no one knows quite how this would be
accomplished and attempts to discourage emigration have not snc-
ceeded. Some observers believe that Pakistan must pay more attention
to primary and middle level education and le:-s to higher education
and post-gradliiuate institutes.
Illite racy is still around 80 percent and fewer than 50 percent of
the children are in primary school. The government spends approxi-
iiitelv $16 a year per child on primary schooling for 5 million chil-
(I'en. Tiw is about one percent, of the spending for the United States.
Pkistan's next door neighbor Iran is doing about 20 times as much.





5

There is general agreement that the concept of national service to
Pakistan is not widely held. Only the military are thought to place
great weight on service to Pakistan. Pakistan remains sociologically
quite tied to the family and to the tribe. Social equality remains a dis-
tant concept.
When he came to power Mr. Bhutto nationalized about 20 percent of
the industry, which helped to break the power of the big industrialis-t-.
Nationalization did not particularly affect the rural rich. Those
powerful in trade and commerce escaped relatively unscathed, leaving
only the industrialists as a class to lose heavily. As a result, Pakistan's
industry has not developed significantly in recent years. The largce:-1t
programs are governmental. Private industry is kept small so that it
would be hard to nationalize and wealthy Pakistanis tend to keep fixed
assets small to avoid nationalization.
Agriculturally, Pakistan has reasonable hopes of self--ufficiency. In
the past. decade, annual production of wheat has risen from approxi-
mately 4 million bushels to the current 71,. million bushels, which is
still 11/2 million under the need. In order to achieve wheat self-suiffl-
ciency, we were told, the supply of irrigated water must be improved,
there must be better on-farm water control and management and fer-
tilizer must be used properly and sufficiently. Pal:i*tan spends $"0 mil-
lion annually importing fertilizer, but three big new fertilizer plants
are to be built, and they could begin production in 19". Ily 19''),
Pakistanis expect to be self-sufficient in nitrogen. Phosphate still will
be imported.
At present, Pakistan falls far below other nations in wheat yiel 1s
per acre in irri-ated area-. They are less than half the average inll
India's Punjab., 40 percent of the yields in Egypt and only one-fourth
those in the Netherlands. Other countries excel Pakistan in other
crops. Yields of the two critically important export crops-rice and
cotton-have b-en improved, but Pakistan could do much better.
Pakistan's rice yields are better than those in India's Punjab. but well
under one-half the yields in Egypt and Spain. Cotton yields are 40
percent those of Egypt. Israel, with a high degree of irrigation tech-
nology, does three times as well.
The bulk of the crop yield is on the approximately 30 million irri-
gated acres. Irrigated lands will be expanded and flow and control
improved when the Tarbela dam is functioning. That will improve
yield steadily. However, it is illustrative of the distance Pakistan has
to go that Pakistan could grow enough of its basic food crop-wheoit-
on rain-fed lands alone, allowing greater use of the irrigated acra;'e
for other crops, particularly the foreign exchange earners. Pakistan
has about 10 million cultivable rain-fed acre. Perhaps 21 to 3 million
of those acres get 20 or more inches of rain a year. In the United
State-. in sinmil;r situations, wheat fields of 60 bushels an acre ar,
common. In Pakistan, the yield is about eight bushlels an acre.
So far a-- water and electricity are concerned, much hope i.- pl:,c.. l
in the new Tarbela dam project, which we visited. It is the lalr're'c
earth-filled dam in the word. Magnificent in concept, the Tar1 'cla dalam
will be capable of providing both water and electricity. Work 1e',, ;n
in 1968, and was to provide considerable water for irrigation last year
and the year before. Unfortunately, the reservoir did not opei ;ite fully
for reasons which are still the source of considlorable controversy. Ap-







parently, the Pakistanis had not moved approximately 60,000 people
who lived within the area of approximately 100 square miles covered
by the dam reservoir, and water had to be discharged to keep the
reservoir from inundating them. This discharge had not been planned
and tunnels designed to take a water flow five miles an hour were torn
apart as waters up to 105 miles per hour coursed through. The result-
ing damage came to $65 million with the United States providing $10
million of it. The reservoir is expected to be ready to provide irrigated
water this year. The power stations are also to begin operation this
year and will produce a total of 2,100 megawatts. So far the dam
project has cost nearly one billion dollars. The Tarbela dam is the
last portion of the Indus Basin Development Project. The United
States is providing more than 30 percent of the total cost of nearly
*2.5 billion. The entire project will increase Pakistan's irrigation
water by 80 percent and quadruple the electricity-generating potential.
Tarbela and related water control projects will not be completely
successful unless the farm water management is improved. The gov-
ernment has not yet addressed this problem in any large way. There
is a tremendous need for rural electrification (less than 10 percent of
Pakistan's 40,000 villages have electricity) and for more rural roads
(only half of the villages have road access).
Clearly the green revolution has had a salutary effect upon Paki-
stan. However, a number of problems remain. For example, the under-
strength extension service, which could do much to lead the way in
improved food production, has few vehicles. Thus practically it is
hard for extension workers to reach many of the farms. And with an
illiteracy rate in Pakistan of at least 80 percent, it is hard for the
farmer in the field to relate to or to understand middle-class extension
workers.
Thus there is very low spending in a number of crucial areas such as
rural health and primary school education. In the field of rural health,
Pakistan spends roughly $12 million for 50 million people.
It has been hard for Pakistan to provide incentives for doctors to
go into the rural health field. Doctors willing to make the monetary
sacrifice find that tight budgets often leave them with little equipment,
extremely limited medication, no transport and vastly more patients
than they can treat. The country clearly needs to push training of
medics and paramedic nurses. People are dying in Pakistan of dia-
beetes, appendicitis, heart attacks and many ailments which in the West
often would be controlled or cured as a matter of course.
At present, one of every four Pakistani babies dies before the age
of five. Although small pox has been eliminated, other programs such
as that for malaria have flourished, then failed. Attempts to bring
clean water to the villages are becoming more serious and productive,
but sewage disposal is still almost unheard of in the villages. Approxi-
mately 80 percent of Pakistan, 70 million people, live in rural areas.
Mr. Bhutto seems very much in charge and lie is beginning to cope
with some of the more pressing problems of his country. As an exam-
ple, Mr. Bhutto appears to attach great priority to population plan-
ning. The country has been inundated with birth control aid available
for 21/2 cents per month. Still, only 10 percent of Pakistan's fertile
couple, appear to practice birth control. A long-standing concept in
the subcontinent is that a couple needs six children-three will be







girls and three will be boys. One of the boys will die; one will leave,
and one will stay to support the parents in their old age. In order for
birth control to work, it must be demonstrated to the rural poor and
the less well off in Pakistan that the death rate is going down and
that there is the kind of governmental concern and economic progress
which will not leave the old to starve unless they have a guarantee of
children to take care of them.
It is very hard for birth control to be achieved through edict, as it
runs counter to established beliefs and some religious views. Yet if
birth control is not successful, Pakistan will never catch up agricul-
turally, and self-sufficiency will become at best an elusive and some-
time thing. On the other hand, if the government can make steady
progress with the outside help available to it from the United States
and other nations, Pakistan can become a viable, self-sufficient nation.
I left Pakistan with the feeling that while it is beset with some
large continuing problems, Pakistan may be on the way to eventual
relative prosperity. There are danger signs, such as the growth of
authoritarianism, the paucity of bureaucratic talent in depth, and con-
siderable financial difficulties.
*
INDIA
INDIA AND THE WOPRMD
India continues to pursue a stated policy of non-alignment. Her
closest international ties are to the so-called third world countries and
India maintains a position of considerable influence among other less
developed countries. Ties to the Soviet Union are closer than to China,
the United States or to Western Europe. While there is a large Russian
presence and Russia has provided India with economic and military
backing, there is evidence that Russian support is being limited. We
were told, for instance, that the Soviets have generally not sold India
the latest Russian military equipment.
Indians in official positions tend to single out China and the United
States for criticism. Relations between India and China now are cold.
The complex reasons for this are primarily grounded in the rivalries
one might expect from two different and competing societies noea r each
other, their periodic border clashes, and India's decision to turn more
to the Soviet Union. Chinese activities in the subcontinent disturb the
Indian government. Senior Indian officials believe that China is pres-
suring its small neighbors in line with China's geo-political ambitions.
Indians cite as points of difficulty purported Chinese demands of land
from Bhutan which would give better access to India. They note that
the Chinese are helping insurgents in Burma with advice and weapons
and Indians worry that the Burmese government does not have full
control of the situation and may find itself in difficulties.
With regard to Vietnam, the Indians believe the Chinese did not
get the kind of success that they wanted and that the Soviets art,
gaining an influence there. They believe that China is now pushing in
Laos and Thailand through subversion, but will not send its own
forces. The Indian perception of China is that, in the long run, it will
promote revolution in its periphery and that China may get directly







involved only in war against the Soviet Union. The Indian leadership
believes that the Soviet Union does want peace but is frightened of
China.
This fear and foreboding in regard to China is not relentless, how-
ever. One senses that the Indians would like to get on with China, if
possible. I was told that the Indians welcome the American initiatives
toward China. One senior official said, "One cannot ignore one-sixth of
the human race whether one has difficulty with them or not."
The Indians continue to oppose American plans to develop the
British island of Diego Garcia into a major base. They maintain that
the Soviet Union has no bases in the Indian Ocean and that nobody
has offered them one. As one Indian official put it, "We are certainly
not. But if the Americans get a base, the Soviet Union will certainly
want one. We don't want to be squashed between two super-powers."'
India's military structure, while much larger than that of either
Bangladesh or Pakistan, is unlikely to be seen threatening to nations
outside the subcontinent.
India appears to have no intentions of posing a threat to any out-
side nation, although the Indian Navy is increasingly active in the
Indian Ocean area. During the last naval exercise of the Central
Treaty Organization (CENTO) ships of the Indian fleet joined Rus-
sian ships in keeping tabs on CENTO forces. This increased Indian
activity may be more directly related to Pakistan's increasing support
of and participation in CENTO than evidence of any real change in
the Indian approach to military activities.
The world is well aware that India set off a nuclear explosion nearly
two years ago. I understand that India's nuclear program is continuing
to receive heavy government support. The Indians have claimed that
the nuclear program will be peaceful, and Mrs. Gandhi indicated in
response to my questions that she will not give in to any pressure to
make the program military. I hope that Mrs. Gandhi will be able to
withstand these pressures. Many leaders of the non-nuclear world
nations are watching the Indian nuclear developments carefully to
see in what directions India will go and how the rest of the world, in
particular the superpowers, will react.
INDIA AND HER NEIGHBORS
I was surprised and disturbed to learn in the course of my visit to
the subcontinent how much the possibility of war is discussed and
even anticipated. In Pakistan I was told that India is clearly ready
for war if she perceives it in her own interests and believes that she
can defeat Pakistan. In India, I heard the reverse of the same theme
with the Indians claiming that the Pakistanis are building up for war.
One senior official said, "there is no doubt about it."
I saw no evidence of a military build-up on either side of the Paki-
stan-India border-where each side maintains about ten divisions-
but the talk of such build-ups could not be ignored, since it is a reflec-
tion of how both sides continue to view the other. I do not believe the
Indians want to go to war against Pakistan nor do I believe that they
want to move into Bangladiesh. However, the situation could de-
teriorate to a point in which India would be willing to fight. Many
observers believe that India would move in if Bangladesh had a gov-
ernment actively unfriendly to them. The Indian reaction would un-






doubtedly be very strong if any Bangladesh government moved to give
official preeminence to Moslems or to develop what the Indians would
see as dangerously clo-e ties with Pakistan or China.
Another war in the subcontinent would be an unmitigated disaster.
If territory were to change hands through military means, India would
undoubtedly be the gainer. In the extreme, India might take over
Pakistan and Bangladesh. However, since neither Bangladesh nor
Pakistan is a military threat to India, it would be a costly solution to
a non-problem and India, if victorious, would be occupying largely
Moslem territories which would be hostile forever, thus creating a
situation of perpetual tension and turmoil to no one's benefit. Many in
India realize this.
Distrust between India and Pakistan has increased in recent months
with the upheavals in Bangladesh. There have been only small ex-
amples of cooperation such as telecommunications. The Pakistanis
wish to re-establish air links with Bangladesh and have agreed to be
forthcoming on how to handle the problem. However, Pakistan's new
interest in compromise has served largely to escalate the mistrust of
the Indians as to Pakistan's intentions in regard to Bangladesh.
On balance I had the impression that whatever Pakistan's attitude
may have been in the past about issues with India, Pakistan has con-
cluded it must try to work with India. The Pakistanis have tried to
tone down their public propaganda in regard to India and are trying
more to tread lightly in direct relations with India. I was sorry to
find I did not detect the same conciliatory attitude in India. If India
will triv sincerely to ease tensions, I hope the Pakistanis will fulfill
the indications to me that they also were prepared to be forthcoming.

INDIA AND THE UNITED STATES
Although there is no bar to good relations with India, relations
are strained. It will take strong interest on both sides and a continued
effort for relations to improve in any significant and enduring way.
I hope that the effort can be made, because I detect a disturbing
change in the attitudes of Americans toward India. Some years ago.
when ties were closer and, as one American official put it, Indian food
plans were being written with an American pen, the relations with
India were closer despite periodic strains and stresses. In recent years
India has b2en inclined to keep the United States at arms length and
has been reluctant to appear to be in the position of supplicant. The
d-istance was widened by the press revelations at the time of the 1971
war over Bangladesh that the executive branch was tilting toward
Pakistan. That dark moment in our foreign policy is still well remeim-
bered in India.
Unfortunately, the Indian government has been quick to criticize
the United States. It was explained to us while we were in India that
this criticism served to kc'"p the population alert to outside threats
and influence. It was not mentioned that pnint i' to foreign devils
also Porves to take people's minds off of India's incredibly la'r1e
difficulties.
Such activities as the takeover of Sikkim, tmhe development of a
nuclear program accompz;nied by a staunch refutvl to join tlie na-
tions trying to control nuclear proliferation, count inued attacks a2ga inst






10


the United States and the draconian repressive measures inside India
have led many Americans to conclude that India can simply be written
off, that what happens in and to India does not matter to us.
I would not like to see the American people or the American govern-
ment write off India. While India remains a frustration to many out-
siders, it also contains the ingredients for meeting the hopes and
expectations of the rest of the world. India can help point the way
to solutions in birth control and agricultural and social development
which could set a standard for the rest of the world. As a less de-
veloped nation with fantastic potential, India could serve to guide
other nations with similar problems.
There is no denying that Indian officials are suspicious of the inten-
tions and the activities of the United States. Recent revelations of
CIA activities throughout the world, of assassination plots and of
various espionage activities all serve to feed the suspicions of the
United States which already exist in India. Many Indians deeply
believe that the CIA is engaged in covert operations in India. I was
told further by senior officials that recent events in Bangladesh are
proof of outside interference. I was also told, by Indian officials, that
they deliberately avoid pointing directly to the United States in the
absence of positive proof. However, the inference of possible United
States involvement is usually very clear.
As Chairman of the Subcommittee on Near Eastern and South
Asian Affairs, I have been particularly concerned over the possibility
of United States activities in India. To the best of my knowledge.
the United States has not been involved in covert operations against
India. I understand further that steps have been made carefully to
control intelligence gathering activities in India and Bangladesh so
as to avoid either the actuality of covert activities or the appearance
of covert activities. Ambassador Saxbe assured me that he knows of
no covert operations directed against India.
I asked Mrs. Gandhi, other Indian officials, and members of the
western press whether they had reason to believe that the CIA or
other United States agencies or groups were engaged in operations
involving India. No person I talked to offered any circumstantial or
direct evidence of any United States involvement.
For the relationship between the United States and India to be
improved, it seems to me that the United States should be friendly,
but somewhat distant. A close involvement with India would intensify
American losses and cause deeper problems between the two countries
when problems came again. It is far better to keep a distance and
to be willing to help when needed without pushing ourselves or our
projects on India. An aid relationship can only be viable if it is
believed in the highest levels in India that it is necessary and desirable
for India. We should not try to overcome India's misgivings about
United States programs. Rather, we should refrain from any pro-
grams which cause any misgivings at all. Projects under the joint
United States-Indian commission, for instance, should have not only
a scientific approval on both sides but a clear political approval. Pro-
.rrams in India will succeed only if the Indians are convinced that
these programs are in their own interests and will work to make them
successful. The initiative should always lie with India.








In the wake of the 1971 war, the United States suspended economic
assistance to India. AID had contemplated a resumption of the rela-
tionship this year, and was thinking of lending $75 million for ferti-
lizer and for a share of the costs of expanding fertilizer production.
The United States decided to defer talks until fiscal 1977. As of this
writing, the executive branch expected to negotiate up to about $110
million in Public Law 480 Title I credit sales for up to 600,000 tons of
wheat and rice.
In addition, the United States is providing $72 million in high pro-
tein food supplements for use by voluntary agencies in India, pri-
marily to support a school lunch program.
It should be pointed out that India, in addition to being a food aid
recipient, is also a very important food customer. During the past two
years, India purchased from the United States through commercial
channels nine million tons of food grain, mostly wlieat, for about $1.5
billion. With other sales, the United States enjoyed trade surplus in
its dealings with India of about $750 million.
I was deeply disturbed to learn in India that this school lunch pro-
gram, which is operated largely through CARE, a voluntary organi-
zation with a deservedly high reputation, is being phased out. The
Indian government, which now operates 40 percent of the program, is
to take over, while CARE is to move into a food for work and other
programs which the Agency for International Development believes
would better reach the hungriest in Indian. While this is an admirable
goal, from my experience working with food programs to the poorer
nations, it seems to me that great care should be taken in review and
evaluation before abandoning programs which work and are obviously
needed.
We were told that the Indian government is not ready organiza-
tionally and is hard-pressed financially to take over. It would be a
tragedy if this valuable program were to collapse. I intend to explore
this matter fully. In the meantime, I urge the Agency for Interna-
tional Development to re-evaluate this drastic change.

INTERNAL SITUATION
Since Mrs. Gandhi declared the emergency last year, her own role
has become the dominant political issue in India. So far, the emergency
measures have elicited widespread press criticism and widespread un-
certainty among those who have long been interested in Indian politi-
cal developments. Since I left India in mid-January, Mrs. Gandhi has
taken two major steps to consolidate her power still further. She
imposed direct rule from New Delhi in the southern state of Tamil
Nadu and in Gujarat. These two states were the only two of India's
22 which were not controlled by Mrs. Gandhi's Congress party or other
loyalists to her regime. Second, Mrs. Gandhi has had the Parliament
take the step of formally delaying national elections.
While Mrs. Gandhi enjoys a continuingly large degree of public
support, she faces a number of hard dec;.ions over the next sevei-i1
months which may jeopardize her present position. We learned in
India that opposition to the regime is not abatinz. Among the incresi-
iinilv disenchanted are the intellectual elements and many member-


r,- 715-)76---3







of her own Congress party. Although Mrs. Gandhi has gathered un-
precedented powers in Delhi, traditional centers of influence inside
and outside the Congress party at state and local levels have been
basically unchallenged. Many of India's most powerful state and local
leaders are as opposed as ever to social and economic programs Mrs.
Gandhi espouses and continue to resist them. If Mrs. Gandhi chooses
to maintain the status quo or to tighten her personal role, we were told,
she will probably feel obliged to opt for more suppression of dissent.
She could seek some reconciliation with the opposition, although this
would be at the cost of a continued restraint from forcing social and
economic reforms. This course would be very perilous for her since
failure of the emergency to produce major social and economic reforms
would probably lead to erosion of her standing among the people which
would, in the long-term, aid the opposition.
The declaration of the emergency represented a repudiation of the
old ways in India, but since Mrs. Gandhi has been in power for ten
years and has had the fairly consistent backing of Parliament, the
emergency also represents a repudiation of her own previous approach
to governing India. Few doubt that there was much wrong with
Indian government at the time the emergency was declared but it is
too early yet to see what will be accomplished in the new, more authori-
tarian period.
The traditional freedoms associated with Indian government have
been steadily diminished under the emergency. Although parliamen-
tary debate is said to be freer than before and the Parliament is claimed
to be less disorganized and unfocused, the Parliament under the
emergency is definitely under the control of Mrs. Gandhi and press
reporting of Parliament ,activities is subjected to pre-censorship. The
newspapers we read while we were in India clearly supported Mrs.
Gandhi and gave short shrift-if any attention at all-to the thoughts
and views of the opposition. Mrs. Gandhi has not handled the inter-
national press with any gentleness. Rules of conduct for the press have
been established and members of the foreign press are expected to
adhere to them or to be expelled. Mrs. Gandhi clearly believes that she
would rather bear the criticism of those who object to her expelling
or controlling the press than she would bear the criticism of the press
itself.
Tens of thousands of political prisoners are still in jail, including an
estimated 30 members of Parliament. Those jailed include most of the
leaders of any effective opposition with the result that much of the real
opposition is being driven underground. This development, of course,
can be a very perilous one in terms of long-term stability.
The emergency and the very good 1975 monsoon season leading to
record crops have given the Indian government time to plan and im-
plement the long range economic and social policies incorporated in
Mrs. Gandhi's 20-point program. However, it is too early to assess
long-term progress. There are the short-termni successes of such pro-
grams as the drive aLztinst black money activities, compilation of
voluntary tax disclosure moratorium on the departure of poorer
farmers and the establishment of some rural banl.:s. Labor problems
have been diminished, and there is increased worker productivity and
industrial production. In many areas the drive for production has been
helped by heavy unemployment and the fact that workers who quit








often can find io oilither work. The emergency has thus been kind to
ind" 1 and businessmen.
Ma ly believe cvni(.callyv that the Indian government will continue to
talk about its long social programs such as land for the landless, India
for the Indians and .o on, but. under the emergency, allow big indus-
try, big monopolies and big land owners to expand. In order to have
e,1onomic growth, India. before the emergency. would have had to have
encouraged the private sector more than the government was willing to
do. As a consequence, there was no growth. Now India appears to be
willing to allow growth at social cost.
The world-wide economic slowdown and inflation have depress ed
the demand for Indian exports and increased import costs. Although
the energy crisis has not had great impact on India's economic growth,
the oil price increase since the 1973 war in the Middle East has played
a major part in Iniidia's balance of payments situation. India had a
trade surplus of $130 million in fiscal 1972-73. With the higher oil
prices, we were told. the trade deficit came to $540 million in fiscal
1973-74 and $1.45 billion in fiscal 1974-75. The deficit is expected to
worsen this year. The deficit has been financed through further bor-
rowing and higher external assistance, including deferred payment
arrangements with the oil producers for oil imports.
The most direct impact of the oil price surge upon the Indian
populace has been in the cost of kerosene for cooking and fertilizer
for the crops. Soaring fertilizer prices have cut usage substantially
and, in turn, cut crop yields.
Other problems still affecting Indian agriculture have kept yields
below needs and agricultural growth behind population growth. In-
dian officials told us that although grain storage has been expanded
to the point that no grain is lost due to lack of storage, the loss to
rodents is still a substantial problem. For many Indians, poverty,
the high cost of better equipment and fertilizer, the tightness of credit
and the fear of risk have combined to keep agricultural progress at
a slow pace.
The Indian government has achieved considerable success in its
anti-inflationary policies. Retail prices of food have generally re-
mained steady, and the record harvest will help in keeping prices
down. The wholesale price index declined nearly 6.6 percent in a
recent 12-month period. The inflationary rate now is nearly zero which
is a dramatic drop from almost 24 percent last year. However, c re(lit
remains tight, and new investment in the private sector is virtually
non-existent. Modernization and increased capacity will largely occur
in the public sector although there may be improvement later in tlihe
private sector if businessmen regain confidence under present policies.
Consumer demand remains slack from many manufacturers, par-
ticularly manufacturers of luxiry goods. One important reason for
this is the incredibly high price in terms of salary for many consiw.-.r
goods. In Calcutta, for instance, we were told that the aver':,e port
worker makes about 400 rupees a month (about $411). An industrial
worker earns an average of 350 rupees a month, including ',c; d(1 v
of work, and there i^ Iii-lh unemployment largely ;ittril)utcd to tie
current squeeze and lack of consumer demand which means tHt'.t ,Ire
is little effective. pressure for wage increase.. Against these amounts,
a television at 3.F00 rupees is a very costly luxury, and an Indian






14


assembled compact car at a minimum of around 30,000 rupees is an
impossibility for a laborer.
Population control is the crucial element in India's future. The
government has worked with periodic spurts of intensity on the prob-
lem but population growth is still not under control. Estimates range
from 2 percent to 2.5 percent a year. If the 2 percent rate continues
the population will double in 35 years. At 2.5 percent it will double
in 28 years. Both Pakistan and Bangladesh have higher population
growth. India has been working on family planning at the official
governmental level since 1952. Sterilization has been the main focus
of Indian family planning. The program also offers conventional
contraceptive methods and devices which are distributed freely
through the rural centers. An effort is also being made to tie the
family planning program to health programs operated through the
government's understaffed network of about 5,200 rural main health
facilities and 30,000 rural sub-centers. At present about 17 million
couples are using one or the other method of family planning. In
general, the more affluent and educated states have had more success.
I was encouraged in my talk with Mrs. Gandhi to learn of her high
commitment to family planning. She told me that she is considering
drastic measures, perhaps penalties, to keep the population down. Mrs.
Gandhi maintained, "We are taking steps now that we wouldn't have
taken before" in such matters as family planning. In February, Mris.
Gandhi announced a new program, mainly affecting government em-
ployees, curtailing benefits to those having large families.
One of the greatest difficulties India faces as it tries to implement
some of its more ambitious programs is the extremely understaffed
bureaucracy. The central government has only between 5,000 and 6,000
career people. This thinness is particularly apparent in the districts.
One career officer, for instance, had four substantive people working
for him in a district of five million people. This thinness coupled with
the opposition to new programs from many quarters and the basic
fear of change which permeates much of the society all mean that
change and progress come very slowly to India in any broad way. It is
quite possible to have demonstration projects in family planning, in
agriculture and so on, but it is quite another matter to translate these
to broad and effective programs.
India remain a country beset by almost overwhelming problems and
privations. People in India still die by the millions of diseases which
have been conquered or controlled in wealthier countries. People still
live and die in the streets. An injection against disease, if not available
free, can cost as much as a day's wage. In Calcutta we were told an
estimated 48,000 people have nowhere to go but the streets. For those
better off in Calcutta the slums stretch on for miles and contain be-
tween a quarter and a third of the population. Depending upon whom
you talk to, Calcutta is perceived as a dying or recovering city. The
frustrations and privations endured in Calcutta are mirrored
thousands of times over throughout India.
SUMMARY
The declaration of a state of emergency in India last June by Prime
Minister Indira Gandhi marked a very troubling transition in the






15

course of Indian political life. To many, the declaration represented
an admission by Mrs. Gandhi that she had failed to come to grips with
India's staggering problems and was, through the emergency, chang-
ing directions drastically in her approach to government-more to
enhance her own power than to help her countrymen. Others, more
generously, believed that Mrs. Gandhi had realized that her former
adherence to democratic ideals could not work against insurmount-
able odds and that it was necessary to go to an authoritarian approach
in order to bring progress and prosperity to India.
I was somewhat surprised to find that, although there is consider-
able opposition, the measures taken by Mr. Gandhi are apparently
tolerated-and even supported-by a majority of Indians. Observers-
many of whom have been inconvenienced and frustrated themselves by
the emergency measures-told me they had found no evidence of wide-
spread resistance.
Now that strikes and work stoppages are not allowed. Indian com-
merce and industry appear to be functioning better, transportation
has improved, the government appears to be working on a more order-
ly, less corrupt basis and the servants and trains are arriving on time.
Indian officials maintain that the emergency has not weakened or
destroyed democracy but has made it more purposeful and meaningful.
Since the declaration, there has been a steady erosion of the tradi-
tional freedoms, particularly freedom from arbitrary arrest, freedom
of speech and of the press. A number of news organizations have been
harassed and foreign correspondents have been pressured and expelled.
The powers of the judiciary are being undermined. The deliberations
of the Parliament are carefully manipulated, and public reporting of
legislative affairs is uniformly supportive of Mrs. Gandhi.
Asked about these measures. Mrs. Gandhi told me, "They certainly
won't be permanent." She did not say when the restrictions would be
lifted.
Mrs. Gandhi has postponed national elections for at least a year.
Many believe this to be a very risky decision, pointing out that the
stability achieved since the emergency has won wider support among
many of her most important backers, including the large laindholder:..
industrialist and businessmen, who form the core of her Congress
party. The repressive measures associated with the emergency may
become steadily more onerous and difficult to explain and Mirs. Gandhi
will be forced to prove significant progress in getting the country on
its feet if she is not to experience a steady erosion of support.
A predicted bumper food harvest will help buy Mrs. Gandhi polit-
ical time. This apparent plenty could vanish-along with the credit
gCiined-with the next crop disaster. Industrial development and
agriculture growth cannot of themselves provide a solution to India's
perennial problems of sta ovation, malnutrition and underemployment.
The key to the solution of these other problems is success in popu-
lation control. Only 16 percent of an estimated 105 million fertile
couples are practicing birth control.
As a democrat, with a small "d",' I find it impossible to endorse
the measures Mrs. Gandhi hlas taken. All democrats must i'n-ret to
see growing repression in a demnocracv which had endured for -'j
years. However, the best way to judge Mrs. Gandhi and her pro-
grams will be the effect upon the quality of life at the bottom of







Indian society. If India can progress, and if the standard of life can
be raised measurably, and if the repressive measures can be eased and
then lifted, then Mrs. Gandhi's rather draconian measures will have
to be marked as a success, at least in material terms.
Through this difficult process, I hope that Americans will avoid
the mistake of mentally writing off India and the heavy investment
rAmerica has made in time. talent and money. We have set a high
standard for India in the past, and we should not fail her now. The
relationship between India and the United States could be steadily
improved if both sides realize that there is no basic bar to good re-
lations and if both sides would refrain from words and actions which
give needless offense.
During this difficult period, India should try her best to live in
peace with her neighbors. Fighting by India, Bangladesh or Pakis-
tan over issues which should be resolved peaceably would expend lives
and capital needlessly and add incredibly to the present misery of
the subcontinent. Against this misery the potential justifications of
war appe-ar pretentious, frivolous, insignificant, and unworthy of the
leadership in all three countries.
India should not approach her neighbors and the rest of tlhe world
with either sharpened sword or tongue. India's neighbors and the
rest of the world should, in turn, try to be understanding and sup-
portive in this terriibly difficult time for India and her 600 million
inhabitants.
*
BANGL.ADESI1
The last year in Bangladesh has been very turbulent. Sheikh Muji-
bmr Rah.naan had come to power following the achievement of in-
dependence by Bangladesh in 1971. Sheikh Mujib, who lad lbeen
imprisoned for treason in Pakistan, began his Primne Ministry with
:. solid base of popular support. In the first parliamentary elections
Sheikh Mu ujib's political party, the Bangladesh Awami League, won
all but 8 of the 315 seats. However, the popularity of the Sheikh
himself and of his party declined steadily as law and order problems,
labor, unrest, high unemployment and food shortages continued. There
was some famine in 1974 as a result of summer flooding.
By December, 1974, the situation had deteriorated to the point at
which a state of emergency was declared. In January 1975. thle judi-
cial system and the Parliament were modified and Sheikh Mujib as-
sumed the presidency of what was a new one-party state. Although
the new government had some success in restoring order to the coun-
try, promised reforms were slow in being implemented and criticism
awairist President Mujib grew in an atmosphere charged with cor-
ruption. Last August 15, President Mujib was. overthroVwn and killed
by a group of young Army officers. These officers asked a long-time
political assistant of Mujib's, Khondakar Mushtaque Ahmed, to be-
come president. Hle did so and asked all officials of the former regime
s' well as members of Parliament to remain in office. New martial
law regulations -were put into force. Twenty-six people were imme-
diately arrested, including s..ime of the most prominent associates of
Shei!.: Mujih. On November 3, Brigadier Khalid Mosharraf staged
the second coup, and the majors who had overthrown Mujib were







exiled. In the early hours of the coup, at least four of Sheikh Mujib's
former associates were murdered in jail and in the aftermath Mush-
tacie resigned. The coup leader, Moshiaruiif, named Chief Justice
A.S.M. Sayem to head an interim government. The next day Moshar-
raf was forced out and killed. President Sayem then declared himself
Chief Martial Law Ad,;i.-ri'tor and appointed the thief military
service heads as deputy chiefs. Parliament was dli-ohled with new
elections promised in a vye-ar. The Sayem government remains in power.
The first coup appen-'ed to give new vigor to Bangladesh as it
gave a new sense of sovereiit ty and national identity. It was viewed
widely to be anti-IndianV and pro-Islanmic and there were a general
feelii n_ that the coup would end subserv.ience to India and reduce
the cliance that Bangladesh would become another Sikkim. Support
quickly -'"rew behind that gcvernmeniC- byv offering few promises and
little rhetoric. .-ae administration and the economy. The new leadership was gain1in) a
firm political ba-e. The second coup was less popular. K-halid Mo"iar-
raf was the third ranking mai in the Army and hlie failed because
lihe was actively oppoSed by military elements with equal ability to
use force and because he was seen by many as pro-Indian and self-
seeking. In the aftermath, the miitarv hav-e basically become effec-
tively in control of BI-n 'adesh. General Savem is s 1".1 as the de facto
ruler. It is too early to see how thie pre':nt leadership will fare al-
though the military does have the odv.'rtage of being -.,en as an arm
of authority. Clearly, Pen__alis beset with the difficulties of the pasf
several years. would like to see some return to peace -nd progress.
,zrea, y %_ 1L A I.
If the military can provide that. Bangladesh may be on the path to
long-term stability. One of the biggest, tasks facig the Army in the
wake of the coup. we were told, is not to prove that it can govern
the nation well (the Beiin.li- are i;-: d to bad government) but that
it can govern itt.elf so that it c-n rule.
In the wake of all this the civilian buiaucraev and other centers of
power have been left somewhat battered. Government is conducted on
a very cautious 1,asis by others than thlie material law administrators.
Civil servants are showing little willingness to take action and to as-
sume the responsibility for that action. To get things moving, clear di-
rectives will be needed and with notable exceptions those clear
directives have not been forthcoming.
Decision-making is concentrated in General Zia and he may find
himsr-lf hard-pres--ed to deal with the problems of the Ai i:iyv as well as
the government. Governing is new to him.ni, and he is obviously feeling
his way. In my talks with the Genr,:il. I L,,"'ined the mp,.-ion of a
man who has the intersls' of the ,:, tion iif nind and is pushing himself
and others to overcome an of thle .-erious difieult is now confronting
Ba ng-iladesh.
FOREI',., AFF..i.-,
By far, Ban.l'desfhs L-','eatet foreil.1 affairs concc'1. i- its uia'e
next-door neighboor., India. MaN:iv 1):. ,,ilis feel that the Indi: m will
move upon them if provoked, and teyv hope tlhat they the-.l',1ves can
avoid( provid(ing that provocation. Unfortunately. L1;':. I'; :'s of ]n'li.
have I KLen exp iesd in ways that India has I received :s a p),,op .. ida
campaign again.-t it and the temper- in both capital- in regard to tie
other are tense.







As senior members of the government put it, Bangladesh is wedded
to a policy of non-alignment. They say that this is not a negative
policy, that it has positive aspects. Foreign policy issues are to be
based on the over-all needs of the maintenance of peace. All countries
are favored which support peaceful coexistence and the United Nations
charter.
Bangladesh obviously desires to have improved relations and eco-
nomic cooperation with its neighbors. Bengali officials have visited
India to reassure the Indian government on points of contention. At
the same time, the Bengalis are seeking reassurance from India on a
number of points. An example is the Bengalis claim that the Indians
are sheltering and supporting dissidents in border areas. Other issues-
including the continuing propaganda-remain stumbling blocks to
harmony.
INTERNAL DEVELOPMENTS
There were several significant economic achievements during 1975
in Bangladesh. In terms of impact upon the general public the most
significant event was the good monsoon and lack of disaster which led
to a bumper rice crop. In addition, the government beat its own goals
in fighting inflation. The target had been a reduction to 8 to 10 percent.
The actual result was a reduction to zero. The wholesale price index
for December, 1975, was about the same as the previous December.
By contrast, we were told, the wholesale price index rose 75 percent
between December 1973 and December 1974. Deficit financing has
been avoided for the second year and credit ceilings are being observed.
However, a number of problems remain. Bangladesh continues to
receive a considerable amount of economic assistance, but disburse-
ments are lagging badly, largely because of management and planning
difficulties. Development expenditures were expected to be about 45
percent of the available fiscal year total during the first six months of
the fiscal year. Actual expenditures came to only about one-third of
the resources. The pipeline stood at $1.2 billion last July 1, and it is
being drawn down very slowly.
There is no complete, consistent development strategy and what
planning there is is hampered by the brain drain and by the unwilling-
ness of the politicized bureauracy to act effectively. In financial offices
as well as in other ministries Bangladesh has a small number of very
skilled people, but they are said to be capable only of sporadic successes
and only in areas of primary concern to the regime.
At present, agricultural prospects are considered dim at best. Ban-
gladesh will grow about 13 million tons of food grain during this
bumper year but that total will still be a million tons short of the
need. With population growth now at 3 percent per year a-nd food
production increasing at about 1 percent a year, Bangladesh will re-
main a basket case unless drastic measures are taken both to develop
food grain production and to limit population.
So far. the population planning program has not been very success-
ful. The Embassy gives high marks to the officials now working in the
family planning area but nothing has been accomplished to break the
belief widespread in the population that numerous children are the
only reliable form of social security. Projects to control population
have been largely demonstrations so far. There have been such pub-
licized events as vasectomy fairs, and several thousand men have






19


come forward during such events. However, in a country with a popu-
lation of around 75 million, the showcase efforts so far have had only
minimal effects.
Agricultural development is hampered by an almost complete lack of
water control. As a result, Bangladesh, with a mean altitude above sea
level of less than 20 feet, rocks along from year to year with one disaster
after another. A certain amount of flooding during the monsoon is
necessary for the huge November crop. However, with too much water.
flooding constitutes a disaster-with too little, there is drought and
poor harvest. Officials estimate that to do complete flood control in
Bangladesh would cost in the billions of dollars.
A possibly more productive, approach is the one now being pushed,
which involves better use of the river water available for irrigation
and the digging of wells for irrigation. Wells are expected to be the
main source of irrigated water in the northern districts.
The main November crop is produced on about 14 million acres.
The second largest crop in May involves about 2.8 million acres and
is dependent largely upon irrigation. A total of 1.5 million acres are
now under controlled irrigation. A total of 42.000 low-lift wells and
19.000 deep tube wells have been installed, and the irrigated acreaOge
will expand as this program continues.
It should be noted that one of the continuing sources of contention
between Bangladesh and India is the question of water in the Ganges.
The Bengalis claim that deliberate diversions by India have lowered
the water level and created water shortages.
The poverty of Bangladesh has led to widespread corruption and
diversion of resources on behalf of the rich and well-to-do to spare
them the privations of the rural poor. who, as one observer said acidly,
"have the good grace to die quietly." For instance, it is estimated by
the Bangledesh government that 82 to 83 percent of the farmers are
basically bypassed by outside grant assistance, le-ivin" the bulk of
rural development funds going to support rich land owners.
The lot of the rural poor has been very difficult in the past. The ex-
isting" power structure in the rural areas took advantage of the
fertilizer rationing system so that the rich land owners benefited from
the availability of the fertilizer and tlhe very poor paid black market
rates for what little fertilizer they could get and afford. There is a
tremendous need for better grain and fertilizer storage. The govern-
ment estimates that it needs a fertilizer storage of 9 million tons. At
present the capacity is around 2 10.000 tons. Such organizations as AID
are now helping to ret fertilizer to the small farmer and the fertilizer
situation is said to have improved over the past several months. H-ow-
ver, substantially higher governmental support and a sound system
of supervised credit will he needed if fertilizer distribution is to work
properly. Farmers organizations are relatively undeveloped, but the
building up of such groups will probably be necessary if the small
farmer is to have necessary relief.
The embas'y and the Agency for International Development have
urged stepi to overcome some of the tremendous inequities inherent in
the food distribution promranm. As present rationed foods from the
United States and other nations are used essentially as a -overnmental
support program rather than to help the poorest of the poor. In order
to receive rationed foods one must have a card. Tle-e cards have been






20


given to government workers as a partial substitute for salary. (The
ration card system had gotten so bad that while an ordinary man could
not get one for himself and his family, wealthy merchants sometimes
had as many as 15.000).
A modified rationing system has been in operation in five urban
areas under which rationed foods are in theory widely available on
the basis of need. Until the recent harvest, rationed rice cost one fourth
as much as rice on the. free market. With the lush harvest, free market
rice was reduced to a price level about double the rationed price. I
was pleased to learn that, following our visit, the government insti-
tuted some of the suggested changes including sharp reduction of the
food subsidy, so that rationed and unrationed prices are now close, at
least for the present. These steps will help, but they do not accomplish
the basic reforms needed. Assistance should be redirected from the
middle classes to the neediest-particularly the rural poor.
The present rationing system is vulnerable to manipulation for
political advantage. The result is almost always said to be greater
hardship for the rural poor. As an example, the government decided
last year to extend the ration card system to the labor unions to ease
unrest. According to observers, this had the immediate effect of
reducing by one half the amount of rationed food available to the,
rural poor.
The United States has played a very large role in providing assist-
ance to Bangladesh since independence. Most of the assistance has been
in the form of PL-480 sales and grants. During the current fiscal year,
the United States provided 400,000 tons of wheat, 150.000 tons of rice
and 40.000 tons of edible oils. The totals during fiscal 1977 are expected
to be about 25 percent higher. Agency for International Development
programs are running at a level of around $60 million annually. The
program appears well directed toward the key problems of food and
nutrition. I was particularly impressed in my discussions with AID
people, and others in the United States mission, in finding a high de-
gree of understanding' and compassion in regard to Bangladesh, as
well as a realistic and well-informed comprehension of the problems
faced.
The United States undoubtedly will be sending food grain to
Bangladesh over the next several years at least. However, the executive
branch should not continue open ended support of the rationing sys-
tenm. To do so would constitute a sell-out to the rich and it would do
nothiing for the rural poor. To the extent that the ration system pro-
motes corruption and misuse, it will hurt the most needy in
Bangladesh. Because of the fragile situation in Bangladesh. it proba-
bly would not be wise to insist on an immediate abolition of the ration-
ing system. However, the Bangladesh government should be pressed
strenuously to reduce the difference between the price of rationed rice
and the free market price and to extend the benefits of the food assist-
ance programs to the persons needing it most.
Given tihe conditions in Bangladesh, many observers wonder why
the skilled, talented and educated can be expected to stay. Prospects in
Bangladesh are bleak and improvement is uncertain. A trained drug-
gist could leave for the United States and do better than a cabinet sec-
reta ry in Dacca. Many assess their chances here or in Bangladesh prag-
matically and leave.








Industry has not recovered since independence. Total industrial out-
put is estimated to be less than 80 percent of the 1969 level. Export of
both industry goods and raw products are down. Before independence,
for instance, jute exports were put at 550,000 tons a year. The present
level is around 400,000 tons. Total export receipts in fiscal 1969-70
were $542 million. Exports during the current year are expected to be
$350 million. Another year of export stagnation will mean that Bang-
ladesh will spend most of its foreign exchange financing oil imports.
The rest will largely go we were told to import such items as tobacco,
baby food, medicine and consumer goods for the middle classes.
The very limited ability to pay for imports has and will continue to
have tremendous impact in holding down development. Bangladesh is
very poor in the resources necessary to support economic development
outside of agriculture. As one embassy official noted, "Bangladesh even
has to import rocks."
Despite the three violent revolutions of the past year Bangladesh
remains a country in which very limited resources are used heavily to
support the relatively well-to-do property owners and politically im-
portant groups. There is not very much to go around in Bangladesh
but four years after the revolution matters have not improved greatly.
There has been not enough re-distribution of wealth nor enough appli-
cation of talent and energy to improve significantly the lot of the
poor. While there is much less starvation in Bangladesh now than in
any other year since independence, that is largely the result of good
growing conditions rather than governmental success.
The current government is generally given high marks for under-
standing a number of the problems it must address. However, except
for the success in fighting inflation-which was again attributable in
large degree to good weather and good crops-the government has yet
to make some of the hard decisions it must make if Bangladesh is to
be drawn out of its present morass.

CONCLUSIONS
The United States has joined other nations in providing food and
technical assistance to Bangladesh. These efforts should continue, but
the United States and other donors should insist upon better perform-
ance and better use of the aid provided.
The United States mission in Bangladesh has so far refrained from
getting too deeply involved in trying to oversee developmental pro-
grams in Bangladesh. I believe that an arms length arrangement is
appropriate in Bangladesh, particularly given the present interna-
tional nature of assistance to that country. The United States should
support a multilateral assistance, rather than bilateral, whenever pos-
sible and should work with other nations to apply strict standards
for outside support.
I was repeatedly queried in Bangladesh as to the possibility of a
military assistance program and I responded that I did not believe the
mood of the Congress is such that it would wish to initiate a military
a.-sistance program at this point. I expressed the hope in each capital
I visited in South Asia that all the parties would re-emphasize at-
tempts to find peaceful solutions to the remaining outstanding i--ucs.





22


Clearly any military build-up program of any size would be extremely
difficult for the fragile Bangladesh economy to bear.
To me, South Asia provides an example of a situation in which an
influx of arms would offer tremendous potential for war and do very
little to enhance prospects for peace. There is no doubt that in a war,
India could crush Bangladesh and any Bengali attempts to spend
their way to a military force which could cope for more than a few
days with India would be ruinous to the civilian economy. Any
attempt by India actually to take over Bangladesh, while successful
militarily, could be a political, social, economic and foreign policy
disaster for India, and perceptive Indians know it. I received a definite
impression while in Delhi that the Indians, while sharing blame with
the Bengalis for the virulent propaganda war which continues, abhor
the thought of an invasion of Bangladesh and fear a repetition of
difficulties that came in the wake of the 1971 war.
For India, for Bangladesh and for Pakistan, there can be no ac-
ceptable alternative to attempts to live in peace with each other.
Beyond that, it is clear that the development of peaceful commerce in
South Asia is crucial to the economic development of the region and
the betterment of the desperate lot of the less fortunate of all three
countries.













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