this year. In the absence of progress our holdings could increase to the equivalent of $3.5-$5 billion by the year 2000.

PAKISTAN

Three events overshadowed others in Pakistan during 1969 and 1970: the disturbances in early 1969 resulting in the resignation of President Ayub Khan and the succession of President Yahya Khan, the massive cyclonic storm disaster in East Pakistan in November 1970, and the first direct national elections in the country's history in December.

Following his assumption of office President Yahya proclaimed martial law. At the same time he announced his intention to return Pakistan to civilian, democratic rule as quickly as possible. During the next year he moved steadily in that direction, and in the middle of 1970 called for national elections in December 1970 to choose a constitution-making body. The elections resulted in heavy victories for two parties, the Awami League in East Pakistan and the People's Party in West Pakistan.

The United States continued to demonstrate its interest in keeping friendly relations with this nation of over 130 million people. It recognized the problems Pakistan was facing during this period and respected its desire to follow an independent course in its foreign relations.

In May 1969 the Secretary of State visited Pakistan and in July President Nixon did so as well. In October 1970, in response to Pakistani requests for supplies for their largely U.S.-equipped army, we offered to sell Pakistan a limited amount of arms, mainly replacements for U.S. equipment previously supplied. In doing so we indicated that it was a one-time exception to our policy of not selling lethal equipment in South Asia.

When East Pakistan suffered the largest number of deaths in any single natural disaster in the 20th century as a result of the storms and flooding in November 1970, we moved quickly and extensively to help provide food and other relief. With estimated deaths of more than 200,000, the disaster totally disrupted supply routes, destroyed available stocks, and quickly brought hunger and physical hardship to the survivors. As part of a massive international relief effort, we dispatched helicopters to aid in food and relief distribution and flew in more than $2 million worth of supplies. U.S. aid is continuing in

1971, with the emphasis shifting to long-term rehabilitation and reconstruction.

We have continued to provide support to Pakistan's economic development-through A.I.D. programs of $104 million in fiscal 1969 and $124 million in 1970, and through Public Law 480, under which two agreements were signed in 1970 totaling $127 million. We are also seeking to improve our bilateral educational and cultural exchange links.

OTHER SOUTH ASIAN COUNTRIES

Afghanistan

In 1969 Afghanistan held its second national parliamentary election under the Constitution promulgated by the King in 1964. The Secretary of State conferred with the King and the Prime Minister in Afghanistan in 1969 as did the Vice President in 1970. We have continued to provide moderate amounts of technical assistance totaling $6.8 million in 1970. We plan a substantial program in fiscal 1971, chiefly for education, agriculture, management, and family planning. We also maintain a relatively high level of educational and cultural exchange with Afghanistan.

Ceylon

A shift to the left in both domestic and international orientation took place in Ceylon in May 1970 as a result of an election victory by a United Front Left coalition led by former Prime Minister Mrs. Sirimavo Bandaranaike. Ceylon recognized North Korea, North Vietnam, East Germany, and the Viet Cong in South Vietnam, and terminated the Peace Corps program in Ceylon. Public criticism of the United States by government officials also markedly increased.

Toward the end of the year the Ceylonese Government appeared to be directing its energies more toward solving difficult economic problems. Criticism of the United States subsided, though it has not ceased, and the Ceylonese posture in international meetings appeared to be more moderate. In spite of the increased difficulties in our relations we continued Public Law 480 food programs with Ceylon, at a $7.5 million level for calendar year 1970. We also provided 10,000 tons of wheat flour as a flood relief grant.

Nepal

While Nepalese relations with Communist China are good, relations with India have deteriorated as a result of the failure of the two countries to agree on a new trade and transit treaty to replace the 10year agreement which expired in October 1970. Our relations with Nepal, however, were unaffected, and we have continued to provide it with moderate amounts of assistance ($7.7 million in fiscal 1969 and $6.9 in fiscal 1970), most of which was in the form of Indian rupees to which we hold title.

Maldives and Bhutan

The Republic of the Maldives, the U.N.'s smallest member, was forced to close its Embassy in Washington in 1969 for administrative reasons. It now maintains relations with us through the U.S. Ambassador in Ceylon, who is accredited to both countries.

Bhutan, with which we have no formal relations, applied for membership in the United Nations in late 1970 and hopes to become its 128th member at the opening of the General Assembly in 1971.

The Americas

At the beginning of 1969, the close historical relationships between the United States and the other nations of the Western Hemisphere needed honest and candid examination with fresh eyes.

New concepts were needed to address the ferment and tensions in the developing societies of the hemisphere that were affecting their relations with us. The Latin American countries aspired to the ambitious economic, social, and political goals of the Alliance for Progress, but they were frustrated by the slow pace of progress, and important sectors of opinion in the hemisphere were beginning to demand radical changes in economic and social structures.

A significant component of the ferment and unrest was a growing spirit of nationalism, which in its positive form was an affirmation of national identity and an expression of unity in confronting the great problems of modernization. In its negative form it represented an uncritical hostility to external influences. Although there was in the hemisphere a great reservoir of friendship toward the United States, the rise of the nationalist spirit was often accompanied by strong expressions of "anti-imperialism" and "anti-Americanism." These sentiments were the result of conscious political manipulation, an emotional search for an external scapegoat, and an honest and laudable desire to demonstrate independence from the sometimes overwhelming influence of the United States. Whatever the motivation, expressions of anti-Americanism when translated into action complicated the always difficult process of adjustment to change, both in Latin America and in the United States.

Frustration and disillusionment with the rate and scope of economic and social advance had contributed to a growing tendency in some countries of the hemisphere to question the value of democratic, open systems of government as political vehicles for development. This attitude facilitated the exercise or assumption of power in some countries by military elements which, appealing to nationalist sentiments, proclaimed a dedication to far-reaching reform and promised more efficiency than had been shown by the civilian governments they replaced. In these cases, the military instituted varying