32. Memorandum From Secretary of the Treasury Dillon to President Kennedy1
Washington,
August 25,
1961.
SUBJECT
- Immediate Steps in Furthering the Alliance for Progress
In order to maintain the momentum of the Alliance for Progress created at Punta del Este, and also to make good on the commitments which were made to act promptly on emergency and short-term projects, I believe there are several steps which should be taken so that we can exercise the necessary leadership over the next few months while the new aid agency is being established. These recommendations reflect not only my views but also those of Secretary Rusk and ICA Director Labouisse.
- 1.
- It is of primary importance that the quality of U.S. personnel working on our aid programs in Washington and in the field be [Page 62] improved, starting with the selection of an imaginative, knowledgeable and energetic person to serve as the head of the Latin American Bureau of the new aid agency. Meanwhile, I believe that the actions outlined below should serve to maintain the momentum which is required.
- 2.
- We should immediately inform all our missions in the participating Latin American countries of the understandings reached at Punta del Este so that they can effectively work with the other governments, especially in the field of emergency and short-term measures. The draft of a circular message is now under discussion between State, Treasury, and ICA/AID. When the aid legislation has been enacted, there should probably be a regional meeting of senior Washington and field personnel involved in carrying out the Alliance for Progress so that our objectives and methods can be fully explained and considered.
- 3.
- We should begin immediately to press the Secretary General of the OAS, the President of the Inter-American Development Bank and the Executive Secretary of ECLA to prepare the list of experts on the basis of which IA-ECOSOC will elect the new 9-man committee of development experts, which is to evaluate and make recommendations on long-term development programs. I believe it would be very helpful if the process of reviewing long-term programs could be started within the next two or three months for one or two countries where such programs are well advanced. I suggest that Mr. Labouisse, Assistant Secretary Woodward, and Ambassador Morrison might give this matter their personal attention.
- 4.
- The Charter of Punta del Este states that the United States stands ready to act promptly on applications for emergency financial assistance and urges the Latin Americans to make their applications for such assistance, to meet existing situations, within the next 60 days. There is already a temporary inter-agency committee under the chairmanship of Assist-ant Secretary Martin to coordinate views on requests for assistance, pending establishment of the aid agency. This committee should be retained, with the addition of the U.S. Executive Director of the IDB, Mr. Cutler. To assure that applications for assistance are given appropriate political consideration and that bureaucratic delays will be overcome as rapidly as possible, the group should be supplemented by a policy committee under the chairmanship of Under Secretary Ball, including Messrs. Woodward, Leddy, Linder, Martin, Coffin and Goodwin.
- 5.
- These emergency needs will have to be met out of Contingency Funds unless the applications meet the legislative criteria for Development Loans or Development Grants or qualify for Export-Import Bank loans.
- 6.
- A directive should be issued requiring that this committee be informed of all Latin American aid requests of any kind to U.S. officials.
- 7.
- I suggest that the Martin group should make a prompt survey of basic projects in a few of the smaller countries which might be moved quite rapidly.
- 8.
- We should inform the U.S. Executive Director of the Inter-American Development Bank that the U.S. will strongly support the large-scale self-help housing program, of the order of perhaps as much as $100 million, which the Bank’s staff is now considering. We should support a promotional effort by the Bank to secure good applications and prompt arrangements to expand technical assistance for the carrying out of such projects.
- 9.
- Within the next few weeks we should negotiate with the Secretary General of the OAS an over-all agreement enabling us to finance, with the $6 million social progress money earmarked for OAS activities, the various task forces on education, health, land reform and other self-help measures which were provided for in one of the resolutions adopted at Punta del Este. Ambassador Morrison, with the assistance of ICA and ARA, should be requested to take the lead in this matter, under the general guidance of the Martin Committee.
- 10.
- We should request our missions to report on the status of self-help measures in the participating Latin American countries as well as long-term development programs which may be approaching the stage of financing. I suggest that the Martin Committee be asked to take the lead in preparing the necessary questionnaire and in keeping one up-to-date record of actions in this field. Meanwhile, the interested agencies must continue work already started so that we can most effectively relate our aid to progress in self-help and reform measures in the recipient countries.
- 11.
- The introduction of self-help measures, such as taxes and land reform, will be an extended process requiring continuous representational efforts and negotiations by our field personnel. This will require reorienting field staffs from the purely Point IV approach that has largely characterized our Latin American missions by increasing their competence in broad economic and social problems and policies. It will mean recruiting people with new kinds of skills and making more efficient use of officers with a capacity for this effort.
Douglas
Dillon2