June 30, 1953, a total of $23 million had been allocated to Pakistan. Less than $3.5 million had been actually expended. It may be worth noting also that as of June 30, 1953 $11 million was not subobligated.

As a matter of fact, the aid program in Pakistan did not actually get under way until sometime early in the 1953 calendar year. The project agreements which committed and obligated United States funds for the 1952 fiscal year were all signed in the closing months of the fiscal year, many of them on June 30, 1952, the last day of the fiscal year. The bulk of the mission staff apparently did not arrive in Pakistan until the late fall of 1952.

On the basis of this date, it appears that the 1952 program for Pakistan was larger than could be administered and this may also have been true of the 1953 program. Much of the difficulty with the inauguration of the program apparently arose from the situation in Pakistan, where the lack of trained personnel in the Government made program planning difficult and slow. In addition, the Pakistan Government apparently desired a big, monumental aid program in the industrial field, in contrast to the view of the United States mission which felt that the needs for increased agricultural productivity were overwhelming.

General Nature of Program

Through the end of the 1954 fiscal year, FOA and the Government of Pakistan had entered into project agreements for 32 projects, some of which included one or more subprojects.

The following chart lists the project agreements and the United States funds committed as well as the Pakistan contribution for the project. The Pakistan contributions in the aggregate do at least equal the value of United States contributions, although this was true only in 14 of the 32 individual project agreements.

347789-55- -46

711

1 Pakistan rupees converted into dollars at the rate of 3.3 rupees to the dollar.

A brief discussion of some of the specific projects which go to make up the United States program in Pakistan might define more clearly the type of operations conducted there.

As has been noted, agriculture and natural resources (principally water) has received the major emphasis, and FOA has undertaken a variety of programs in this field.

Fertilizer

Prior to 1951, fertilizer had been used in Pakistan only to a very limited degree, but the shortage of food and the "grow more food" program resulted in a campaign by the Government to increase the use of fertilizer. The Government decided to subsidize the cost of fertilizer to the farmer and FOA agreed to provide the fertilizer. Under the first agreement, signed June 30, 1952, FOA provided 10,000 tons which was distributed to farmers at 40 percent of its actual cost. FOA on April 1, 1953, agreed to supply 75,000 tons which was sold at one-third the actual cost. Under fiscal year 1954 agreements signed September 10, 1953, and January 15, 1954, FOA apparently obligated $4 million for an additional 65,000 tons of ammonium sulphate, which will be distributed at half the actual price. In each case the cost of the fertilizer was collected from the farmer at the time he paid his land taxes.

The 85,000 tons of fertilizer supplied by FOA in fiscal year 1953 were purchased out of funds appropriated for technical assistance "on a demonstration basis" (according to Mr. Norman Paul, of FOA, testifying before the House Foreign Affairs Committee on the fiscal year 1954 program).

At the same time, the Pakistan Government and FOA sought to solve the long-range problem by building a fertilizer plant in Pakistan. Construction of such plant was undertaken by the Pakistan Industrial Development Corporation and FOA "so far" has committed $10.5 million for its construction. The plant will have a capacity of 50,000 tons of ammonium sulphate a year and is expected to go into production in 1956. The National Research Council and the United States Bureau of Mines reviewed the project for FOA before funds were committed. The total cost of the plant is $19 million, of which the external cost is $11.7 million. As of September 1954, $4.47 million had been expended on the project. Thus it appears that FOA is providing about 90 percent of the external costs of the plant and slightly more than 50 percent of the total cost. (Source: Progress of Economic Development in Pakistan, published by the Ministry of Economic Affairs, GOP, December 10. 1954.)

Another facet of the program to increase the food production in Pakistan has been the emphasis on development of new lands and new irrigation systems. FOA has assisted a number of projects of this type which include land reclamation, irrigation and multipurpose dams. Examples of this type of project include:

Ganges-Kobadek Project, Phase I

This is an irrigation project on the Ganges River in East Bengal. When completed it will improve 250,000 acres and is expected to increase food production by 66,000 tons by double and triple cropping. The project was approved by the Pakistan Government a year ago and work started recently. The total cost of the project is estimated at $5.88 million, of which $1.95 million is the external cost. FOA has committed $1.67 million for the procurement of supplies and equipment and other project costs, in addition to paying salaries, allowances, and expenses of the technical advisors furnished for the project. It is scheduled for completion in 1955-56.

The Pakistan Government has requested United States aid for at least two other extensive irrigation and multipurpose dams.

Erosion

Erosion is a problem of considerable proportions in parts of West Pakistan and the United States is assisting with several projects to develop sound programs of soil conservation and range development. One such project in Baluchistan calls for control and ground storage of excess surface water through use of water spreading, construction of low bunds, contour cultivation, and moisture conserving tillage practices. This project involves an expenditure of $130,000 by the United States and $42,000 by Pakistan.

Another similar but broader project in Baluchistan States Union arose out of a U. N./FOA preliminary economic survey which recommended an overall development program involving soil and water conservation, range restoration, afforestation, livestock improvement, development of communications and expansion of fisheries. According to the project agreement, the United States is to make available $300,000 for external expenditures and the Government of the Buluchistan States Union the equivalent of $240,000. Of the $300,000, FOA authorities have set aside $245,000 for engineering work.

Contracts

A large share of the technical and economic assistance projects in Pakistan have been carried out by means of contracts between FOA and American firms or institutions. There were at least 13 such contracts outstanding as of July 1954, ranging from contracts with individual technicians to the State of Massachusetts and several American universities.

The contracts in force as of mid-1954 are set forth in the table below:

Because of the increasing use of contracts in technical cooperation and economic development programs, it seemed desirable to examine some of them in greater detail.

The contract between FOA and the Ralph M. Parsons Co., of Los Angeles, Calif., was signed December 2, 1953, for a basic amount of $540,000, of which $75,000 may be paid in rupees. Under the contract, the Parsons Co. was to supply engineering services of a professional, advisory, and consulting nature, to review preproject engineering as to feasibility, costs and time schedules, and to carry out specific engineering services. The contractor was to provide the services of 7 persons in Pakistan for 2 years, 6 of them to be senior engineers or other technicians. The Parsons Co. initially was directly to review and make recommendations relative to the preproject engineering on five projects covered by bilateral project agreements: Karachi fish harbor, Bolan Dam, Makhi Dhand reclamation project, test tubewells, and the Baluchistan States Union development project. In general, it appears that Parsons was to provide technical services to the United States operations mission in Pakistan.

A later amendment to the contract called for the Parsons Co. to provide the services of a senior engineer, a construction superintendent, and a tunnel foreman in connection with the Karachi water supply project (project agreement 24) for an additional amount of $114,387. In this case, the contractor's personnel were to directly assist in the design and supervision of the construction of the project.

This project agreement contains specific provisions for the training of Pakistani "in respect to the techniques and practices encompassed by the project." The Parsons contract and amendment contains only one brief reference to this type of close cooperation between United States and Pakistan personnel in requiring the Parsons Co. to "coordinate activities with agencies of the Government of Pakistan des