NSC 5405 (SOUTHEAST ASIA) - OPERATING PLAN ON SALE OF ARMS AND WAR MATERIALS TO BURMA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01731R002900480008-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 13
• Document Creation Date: December 16, 2016
• Document Release Date: March 30, 2005
• Sequence Number: 8
• Publication Date: October 27, 1954
• Content Type: MF

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TOP SECRET DATE October 27, 2.954
COPY NO.
OPERATIONS COORDINATING BOARD
Washington, D. Co
OPERATING PLAN ON SALE OF ARMS AND WAR
MATERIALS TO BLTMA
REFERENCE: Board Meeting) July 21, 1951,
Item 3, Report Item 3c and d,
OCB FILE NO. 4.1.
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This document contains information affecting the national defense of the
United States, within the meaning of the espionage laws, Title 18, Sec-
tions 793 and 794, U.S.C., the transmission or revelations of which in
any manner to an unauthorized person is prohibited by law.
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TOP SECRET
OPERATIONS COORDINATING BOARD
Washington 25, D. C.
October 27, 1954
NMS ORANDUM FOR THE OPERATIONS COORDINATING BOARD
SL]BJECT: NSC 5405 (Southeast Asia) - Operating Plan on Sale
of Arms and War Materials to Burma
The attached paper, prepared in response to the Board's
Minute of the July 21, 1954. Meeting (Agenda Item 3, Report
Item 3c and d), was approved, as revised., by the Board at its
meeting on October 27, 1951+..
A previous draft of this paper dated October 5, 1954 is
obsolete and may be destroyed in accordance with security
regulations of your agency.
1
;t1.L1 / .:>:
Elmer B. Staats
Executive Officer
Operating Plan on Sale of Arms and War Materials to Burma with
Annex A - Summary of "Approved List" of War Materials Offered
for Sale to Burma by the U.S., dated October 27, 1954:
OCB File No. 141 TOP SECRET
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OPERATIONS COORDINATING BOARD
Washington 25, D. C.
October 27, 1
OPtRAT f ' G P T ON `r. or MIS AND t 741 JdATER ALS TO BURMA
PROBLEM
In pursuance of NSC's 54,05, 5l22/2 and 51+29/2, and recognizing
the need to strengthen Burma's internal security forces--in a manner
politically and financially acceptable to the Burmese Government?
against anticipated Communist expansion and trans-bordsr subversion:
(a) to establish the desirability of supplying arms and war materials
to Burma on bases---intermediate.-between full-price purchase and-out-
right gift; and (b) if this is established, to recommend courses of
action for so doing.
BACKGROUND
1. NSC Directives
NSC 5405 calls for prompt and effective implementation of
the reimbursable military-aid. agreement with Burma, and, without
desiring to supplant the U.K., to make clear that a British monopoly
over Burmese arms supply is not desirable (items 35 and 38a). Item 38b
also recommends urging the British to expand their military mission,
but this has been overtaken by events with the' termination of that
mission as of January 1+, 1951+., by the Burmese.
NEC 51+22/2, in recommending that the U.S. exert its leadership
in the Pacific to block._ ion, notes that in this role
the U.S. should be less influenced by Europe~ allies---than in respect
to Atlantic affairs (II, 18); also that a new U.S. initiative should
be undertaken to strengthen the uncommitted and underdeveloped._.free
world areas, particularly in Asia, by seeking their cooperation on a
basis of mutual self-respect and without attempting to make allies of
those not so inclined (IV, 22). Item 27 furthermore recommends a
review of aid policies to develop more flexible over-all procedures
to meet changing world conditions.
NSC 51+29/2 calls for increased efforts to develop .the political,
economic and military strength of non-Communist Asian countries
(I, 1-b); for continued limited military assistance and training wher-
ever possible to assist Southeast Asian states in stabilizing legal
governments and controlling subversion (IV, 8); and for the restoration
of U.S. prestige in the Far East by a new initiative in Southeast Asia;
to stabilize the situation against further losses to Communism.
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2. Summary History
Burma became eligible for Reimbursable Military Assistance
in June, 1953, after having given the assurances requisite under the
then Sec. 406(e) of the MDAA Act as amended (now Sec.. 106(b), MS Act
of 1954). An "approved list" of items available for purchase in the
U.S., concurred in by the U.K., was handed the Burmese Government by
Embassy Rangoon on March ~''?~, 1954 (see Annex A), but to date the
Burmese have made no formal request to buy.
Negotiations insofar as U.S. and U.K. supply is concerned have
been unsatisfactory.' The Burmese Government is seeking a steady
source of military equipment and training from free world sources,
.at a price it can afford but under an arrangement which would in no
way interfere with Burmese control over military policy.
To this end Burma has despatched military missions to several
free nations, negotiated the Reimbursable Military Assistance agreement
with the United States, and discussed at length with Great Britain the
establishment of British supply and training on a new basis. These
efforts have been in the main unsuccessful to date because: (a) the
free nations other than the U.S. and the U.K. cannot provide the
steadiness of supply, width of choice nor expertise which the Burmese
desire; (b) U.S. purchase prices are considered beyond the means of
slender Burmese dollar resources; the choice offered by the U.S. has
moreover been drastically limited by subjection to U.K. screening;
(d) the U.K. itself is apparently not prepared to furnish military
equipment and services irithout exerting what the Burmese consider undue
influence over their military policies.
The Burmese, however, still hope for an arrangement whereby they
can purchase U.S. materiel on a more extensive basis than the very
limited "approved Iist," and. also "at a very reasonable price". An
approach on these lines was made informally by the Acting Burmese
Foreign Minister in July, 1954; and the Foreign Minister has more
recently indicated that if this approach were encouraged Burma would
formally request to send a military purchasing mission to the U.S.
At the OCB meeting of July 21, 1954, the following was recorded
in the Minutes, Report Teem 3(c): "With regard to Burma, noted a
statement by FOA of the desirability of introducing more flexibility
whereby the U.S. could supply MDAP material on some basis intermediate
between cash purchase at full market price and outright gift."
DISCUSSION
1. Political Factors
a. The Burmese Government's internal control has progressed
to the point of firmness and the Government has given increasing
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indication, with changing conditions in Southeast Asia, of its resolve
to combat external Communist aggression to the best of its ability.
While Burmese leaders have no illusions regarding the permanency of
the U Nu-Chou En-lai statement of June 29, 1954, they believe it may
give them several years' reprieve from Chinese aggression; but they
believe it almost inevitable that Burma will eventually become a
target for Chinese attack.
b. It is United States policy to strengthen the free nations
of Asia against Communist subversion. Intensified Red subversive
efforts against Thailand and Burma are now to be expected: for instance,
the Communists are developing in Yunnan (in areas bordering on Burma
and Thailand) not only the Thai Autonomous State of Sibsongpanna but
also a "Free Kachin and Shan State Movement" with headquarters at Man
Yok. There have been reported Red Chinese infiltration gambits in
both the Shan and Kachin states of Burma, and while still on a small
scale these gambits have the Burmese leaders worried.
e. Although Burmese leaders realize that it would be possible
to obtain grant military assistance from the U.S. through an MDAP agree-
ment, they are unwilling to take this course because they consider that
Burmese public opinion at this time would not permit the radical depart-
ure from the popular "neutral" foreign policy which such an arrangeut
would entail. These leaders wish to obtain free world.. assistance, and
do not intend'to seek Communist military aid; but they must pay for
what they get, for political reasons, and cannot pay more than a nominal
price, for budgetary reasons.
d. Great Britain, which in the past has been Burmats only
supplier, has evidently spoiled its chances of continuing in an exclu-
sive role by its efforts to cling to a most favored position--and
thereby to protect the considerable economic investment which it still
has in Burma--through a supply policy designed to exert influence over
Burmese military policy. The U.K. is reportedly attempting to negotiate
a new British Services Mission agreement which still stipulates U.K.
exclusivity as supplier of arms and training to Burma. The Burmese
have made it clear that they consider such a stipulation unacceptable,
especially as it would in their view perpetuate some aspects of
Colonialism.
U.S.-Burmese negotiations for the sale of arms to Burma under
1.08(e) have failed not only because of the price factor but also
because of the long delays in time and the limitations in availability
occasioned by the British attitude during our prescribed consultations
with them. The "approved list" finally handed the Burmese in March,
1951?, contained very few items that they really wanted. This situation
gave rise to a conclusion on the part of the Burmese, unfortunately
firm and widespread, that we were acquiescing in U.K. ambitions for a
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"sphere of influence" in Burma. It is in the U.S. interest that we
dissociate ourselves from the U.K. in this context, Such dissocia-
tion, however, shall be carried out so as to avoid a break with the
U.K. over our Burma policy.
2. Basis for Negotiation
As me,,%tioned above the Burmese are anxious to buy U.S.
arms if prices can be put within their means, and they are ready to
make a formal request if encouraged to do so. But they would not
wish to re-open negotiations solely on the limited basis of the "approved
list" finally concurred in by the British and offered to Burma last
March. A glance at this list, summarized in Annex A, will show that
its scope leaves much to be desired.
The British assert they can adequately supply Burma's military
needs, but the Burmese consistently maintain that the U.K. is not doing
so--a position concurred in by our attaches at Rangoon. And although
it appears not unlikely that the U.K. will be able to remain the prin-
cipal, if no longer the sole, supplier of Burmese arms, the U.K. supply
situation has been most uncertain since the British Services Mission
was terminated last January. While the U.S. should undertake no more
than a limited supply role, any U.S. effort to be effective and worth-
while should be on a basis of more latitude and flexibility than is
afforded by the present "approved list". In line with current NSC
directives, and especially NSC 5422/2 with respect to the degree of
influence of European allies, it is believed in the U.S.'interest to
extend the scope of.our supply to Burma beyond present limitations, on a
relatively modest but practicable and useable basis.
The Department of Defense has suggested as a possible course of
action that negotiations be reopened on the basis of supplying equip-
ment for complete military units rather than continue with the present
piecemeal offer. While such a course would have to be studied by
Defense in the iigbt of availability and training considerations, as
well as of Burmese s?ta id.arc1s, capabilities and desires, some such
practical approach tho