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

195. Airgram From the Mission to the United Nations to the Department of State⁰

Washington, February 28, 1962.

A-206. Subject: Special Fund Project in Cuba. Ref: Department’s A-84;¹ USUN 2906.² In its numerous discussions with Special Fund officials on the Cuban project, USUN has included the four points cited in refairgram. The Department will recall that in his statement to the Governing Council in May 1961, in which the four points cited in refairgram were made, Ambassador Klutznick concluded by saying: “We are confident that the project will not proceed until the staff has satisfied itself (emphasis supplied) about the questions we have raised and is certain that the project can be completed successfully to the ultimate benefit of the Cuban people.”

Following this statement, the Governing Council approved the project, despite reservations by the US and several other members on the technical matters cited by Ambassador Klutznick. Subsequently, the staffs of the Special Fund and FAO made a thorough examination of the questions we raised and concluded that there are no technical, administrative or economic obstacles to successful implementation of this project. The Special Fund has assured USUN, however, that the project would be discontinued if new circumstances arise which would make its successful implementation appear doubtful. The carefully drafted operations agreement includes safeguards to give the Special Fund the authority to do this.

With respect to the four specific points raised by the Department, USUN has the following comments:

1. The Special Fund is convinced that the Cuban Government will cooperate in implementation of this project (despite their attitudes toward IAIAS) because they have cooperated fully to date and appear anxious to see this project proceed expeditiously. As noted in USUN A-157,³ the FAO is likewise convinced of this point.

2. The Special Fund feels that the aftermath of a revolution invariably brings about important personnel changes in any government. Both the Special Fund and FAO are convinced, however, that the Cuban Government will assign the qualified personnel needed by this project.

3. With respect to the question of livestock slaughter and other misuse of resources, the Special Fund reviews each project request on its merits and in relation to other requests received. Whatever the completely accurate facts were it is the judgment of Fund and FAO they do not justify failing to go ahead with long run project calculated to benefit Cuban people.

4. The Special Fund and FAO are convinced that this project will not overlap or otherwise be inconsistent with any other activities underway in Cuba. As noted above, the question of whether there is a real need for this project and whether this need is more urgent than the needs of other countries interested in Special Fund assistance was assessed by the FAO and the Special Fund on the basis of a careful on-the-spot study of the project request and a solid review on the one hand, and an examination of other project requests received, on the other. The existence of needs generally not pertinent this matter. Special Fund can only act upon requests of governments.

USUN is fully aware of the issues raised by this project and shares the Department’s view that in terms of our present policy toward Cuba, it would be desirable to eliminate it. However, this project was properly processed in accordance with the regulations of the Special Fund, to which the US is committed, and there is no legitimate way of stopping it. If we go much further in attempting to eliminate this project, the standing of the Special Fund as a truly international institution will be compromised. Moreover, we would destroy Paul Hoffman as an international figure who enjoys the full confidence of the SYG and of the underdeveloped countries. It must be remembered that FAO has complete record of completing all preliminary work necessary this project. It must also be remembered other countries have interest and are not uninformed. Any unaccountable delay or failure to act reasonable time before Governing Council meeting May can set stage for developments that could be tragically counterproductive US objectives.

Furthermore, Hoffman is now responsible for working out the program for the UN Development Decade, a proposal originating with President Kennedy, which may have a profound effect on the future economic and social work of the UN and its specialized agencies. If we damage Hoffman’s standing, we destroy one of the greatest assets we have in the United Nations and in our relations with Asian, African and Latin American countries. Consequently, USUN is convinced US should not push this matter further.

Stevenson

0. Source: Department of State, Central Files, 398.051/2-2862. Confidential. Drafted by Klutznick, Seymour M. Finger, and David Tilson and cleared by Klutznick and Hefner.
1. Airgram A-84, February 22, noted with concern USUN’s position set forth in airgram A-157 (see footnote 3 below) and offered several arguments for urging Hoffman to delay signing the Cuban project. (Department of State, Central Files, 398.051/1-3162)
2. Telegram 2906 from USUN, February 27, argued that the Cuban project could not be delayed beyond early May. It also urged the Department to try to accelerate the hearings on the bond issue and get them out of the way as soon as possible, and asked it to consider utilization of an Italian firm for execution of the Cuban project, including Italian lira for payment. (Ibid., 398.051/2-2762)
3. Dated January 31. (Ibid., 398.051/2-2862)