Foreign Relations of the United States, 1961–1963, Volume IX, Foreign Economic Policy

118. Memorandum From the President’s Deputy Special Assistant for National Security Affairs (Rostow) to President Kennedy⁰

Washington, October 4, 1961.

SUBJECT

• Neutralism and Foreign Aid

This is a short version of a longer memorandum I circulated for criticism within the White House staff.¹ I believe it represents something of a consensus.

1. It appears urgent both with respect to the workings of the government and to the world outside that we clarify the approach we shall take in foreign aid with respect to neutrals and neutralism. The issue may, in any case, arise at your next press conference. Or you might wish to find some other occasion to issue a statement; for example, as clarifying guidance to the Director of AID and other responsible government officials.

2. The policy issue is this: To what extent shall we permit our aid policy to be governed by long-term considerations governing the American interest in the underdeveloped areas; and to what extent should we try to use aid policy to achieve short-range verbal or voting shifts in alignment on world issues? To put the matter sharply, should we let our aid policy be governed by our interest in the continued independence of these nations; in their absorbing their energies on domestic problems; and in building a long-term dependence of these nations on the West; or should we permit our aid policy to be sensitively governed by the positions taken on particular international issues by neutrals?

3. In my view our general rule should be that we use our aid program to achieve the three major strategic objectives to which aid might contribute: viable independence; an increased concentration on domestic affairs; and a long-term dependence on the West. We should, however, be prepared to make exceptions; but these exceptions must be very carefully weighed, case-by-case, against their cost to the longer strategy. In making exceptions, moreover, we should measure not only the cost but the realistic possibility of achieving a significant change in a nation’s policy by the granting or withholding of aid on a short-run basis. We should also consider the technical and legal difficulties in turning aid on and off; e.g., the Volta project.

4. In short, I believe it possible for us to use aid for serious long-run American objectives with respect to neutrals and, also, occasionally and sparingly to yield a minor tactical gain. But it is crucial that we do not permit our short-term tactics to disrupt the long-term strategy; and this is notably the case because, as the accompanying appendix indicates,² there is reason to believe that the degree of long-term dependence on American or Communist aid may be one significant factor in determining how neutrals align themselves on the major world issues.

5. A possible statement of policy guidance might read something like this:

"The fundamental objective of American aid is to assist the less developed nations maintain and strengthen the foundations of their independence and to improve the welfare of their peoples. As a general rule, American aid shall be allocated on the basis of evidence that the governments and peoples concerned are making serious and sustained efforts to mobilize their own resources and to create and to implement well balanced long-term development programs. The United States government expects other independent governments to pursue their interests as they see them; and it does not expect them to agree with American views on all occasions. But when the views and actions of a government systematically run counter to vital American interests—and suggest a basic change in orientation away from a truly independent stance—this fact will be taken into account in our aid policy, on a case-by-case basis.”

6. You may find the attached Appendix of mild interest and amusement; but it is not to be taken too seriously.

0. Source: Kennedy Library, National Security Files, Meetings and Memoranda Series, Staff Memoranda, Rostow, 2/61-6/62. Confidential.
1. The longer memorandum, as described in a covering memorandum from Carl Kaysen to J. Robert Schaetzel (U), October 5, was 6 pages in length. (Department of State, Central Files, 811.0000/10-561) The memorandum is not in the file and has not been found.
2. Entitled “U.S. and Soviet Aid and the Belgrade Conference”; not attached and not found.