You will be aware of the reports which we have received recently from our own High Commissioner and from the United Kingdom High Commissioner in Pakistan concerning the serious food prospect which that country is again facing this year. I understand that Sir Zafrullah Khan has also brought this situation to the attention of the United States Government and that the United States authorities also take a very serious view of the prospect.

2. I am attaching a copy of a telegram which arrived yesterday from our High Commissioner in Karachi reporting an urgent request from the Pakistan authorities that Canada should provide the balance of the tentative allocation of Colombo Plan funds to Pakistan? (approximately $9,000,000) in the form of wheat. I am also attaching an informal record of a conversation which Mr. Ritchie of the Economic Division had yesterday afternoon with the Pakistan High Commissioner? We shall no doubt be receiving formal representations to the same effect from the Pakistan High Commissioner here during the course of the day.

3. You will recall that Cabinet decided on September 13, 1952, after a careful consideration of alternative possibilities, that Pakistan should be permitted to devote $5,000,000 of its portion of our Colombo Plan funds to the purchase of wheat "during the fiscal year 1952-53". In view of the fact that considerable time has elapsed since this offer was made, I would suggest that Cabinet be asked, if necessary, to confirm that this offer is still open. I would hope that you would have an opportunity to discuss this matter with the Prime Minister before your departure.²⁴

4. The desire of the Pakistan Government to finance its necessary wheat purchases without encroaching on Colombo Plan funds is evident from the fact that it has spent some $17,000,000 from its own limited resources during the past six weeks or so in procurement of wheat from Canada. This evidence of the effort which Pakistan has made to meet its own needs, combined with the seriousness of the food prospect, would seem to warrant at least this measure of assistance.

5. On political grounds it would seem most desirable to do what we can.²⁵ The present Government is not strong. It is subject to internal political pressures, notably from the mullahs and their followers and as a result of provincial jealousies and some communist agitation. The Karachi riots and continued inaction regarding the Constitution are symptoms of popular dissatisfaction. Nevertheless, it is by far the best government in sight from our point of view. Another government would probably look with disfavour on the Commonwealth; and, if a change took place as the result of a military coup, the future shape of Pakistan would be difficult to predict.

6. I would not think it wise that we should agree at this stage to permit the whole of our Colombo Plan contribution to Pakistan in respect to 1952-53 to take the form of wheat. In the first place, this would run the risk of criticism from India to which we were prepared to allocate only $5,000,000 for wheat last year although she had requested a much more substantial amount. Secondly, to use the whole of our 1952-53 contribution for wheat would prevent us from contributing towards worthwhile longer term development projects on which we are now working. Thirdly, while $5,000,000 would by no means cover Pakistan wheat needs, it would seem to be a sufficient amount to encourage other countries which may be in a position to help. Last year the United States made a grant of $15,000,000 for this purpose and it might be prepared to go further this time if there is this evidence of our readiness to assist Pakistan. If assistance from other sources turns out to be inadequate to meet the situation, it might then be necessary to consider further the possibility of using additional Colombo Plan funds for wheat purchases.

7. As indicated in the message from Karachi, if this wheat is supplied to Pakistan, counterpart funds will be established for financing the local currency part of future capital development projects.

L.D. W[ILGRESS]