CABLEGRAM FROM GORDON WALKER TO AUSTRALIAN GOVERNMENT

London, 26 April 1951

1. IMMEDIATE SECRET

Your telegram No. 58, 13th April.¹

Colombo Plan

We too have been studying possible steps to keep up the momentum of the plan though our particular anxiety is centred as much on availabilities as on finanee. It seems to us that action called for at present can be considered under three headings:—

(a) Technical skills. In this connection you will have noted our telegram E5² supporting the Ceylon suggestion that a director should now be appointed to stimulate demand.

(b) Availabilities. With rearmament and the shortages which it will induce this problem is bound to grow and we are at present studying its implications.

(c) External Finance.

1. As regards (c) we note your suggestions with interest and are grateful for opportunity of commenting. As you say United States appropriation is unlikely to be through until August or September and Kennedy who has just passed through London on his way back to America has given us a broad hint that his government will be unwilling to take part in any former³ discussions until the appropriation is safely through. Our Ambassador in Washington⁴ who has been consulted thinks that United States Authorities would refuse to take part in such talks at this stage. Even if they accepted the proposition that the purpose of the talks was solely to seek advice on Commonwealth contributions the probability of a press leakage c.f. Para 5 would be decisive against the proposal from their point of view.

2. Our own financial contribution to India, Pakistan and Ceylon takes the form of sterling releases whose size and rate have already been agreed bilaterally. Similarly our assistance to the British Territories in the area 1s also being .arranged on a bilateral basis and the finance necessary to carry out the planned development is available. The question of allocation does not therefore present a difficulty for us at present though if any other non-Commonwealth countries in the area join the plan we shall consider their needs sympathetically.

3. We do not know the views of the Canadian and New Zealand Governments but our present inclination is to doubt whether any useful purpose would be served at the present time by the meeting you propose. Whilst we should be quite ready to participate in such talks if the United States and the other countries concerned are agreeable we would suggest that points arising on your paragraph 2 and 5 could be discussed by donor countries concerned through the normal diplomatic channel.

4. We have one other hesitation. It seems to us almost inevitable that the recipient countries would find out at some stage that such a meeting had been held. Whilst it would be easy to explain and justify such a meeting it would not sound so well after the event and would we feel run the risk of undermining the overall cooperative nature of the plan.

[NAA: A1838, 951/18/8 part 3]