Foreign Relations of the United States, 1964–1968, Volume XXIV, Africa

174. Telegram From the Department of State to the Embassy in Tunisia¹

Washington, March 1, 1968, 0021Z.²

122856. Joint State/AID message. Refs: Tunis 3202, 3223; Aidto 740; Toaid A–549.³ Subj: FY 68 Program Loan Level.

1. We recognize problem, which arises solely from reduced Congressional aid appropriations. Tunisia remains major country of concentration and total assistance level for FY 68 of $42 million compares favorably with levels of previous years. Tunisians were alerted at time of FY 67 loan to expect reduction in FY 68 and with lag in drawing down previous loans real need for high level new Program Loan at this time is difficult to justify.

2. Because of psychological effect sharp loan reduction on GOT and possible repercussions on contributions other consultative group donors, extent of reduction was discussed February 15 by Under Secretary, AID Administrator and Assistant Secretary AF who agreed to consider possibility of raising loan level to $10 million if adequate funds became available, primarily through prospect deobligations from other African programs. This was basis for Administrator’s statement to Ambassador Driss February 19 (State 118410).⁴

3. While we think there is good chance eventually of raising loan level above $5 million presently earmarked, we do not at this time want to raise Tunisian expectations unduly. You should therefore limit yourself to telling Tunisians that some deobligations elsewhere seem probable and you are confident that if additional funds do become available Tunisia will certainly be among favored candidates for receiving benefits.

4. Our impression is that Tunisian Embassy Washington understands and accepts this position in belief that if USG finds any practical way of increasing the Program Loan it will do so. Would appreciate learning whether you find this impression borne out in Tunis. You should in any event report telegraphically any significant GOT reactions to Program Loan question to assist Department in preparing position papers for Bourguiba State visit.

Rusk

1. Source: Department of State, Central Files, AID (US) 9 TUN. Confidential. Drafted by Baron in AFR/NA and by Root, McClanahan, and Post; cleared by Straus in AA/AFR, Meinecke in AFR/NA, and SIG Staff Director Arthur A. Hartman; and approved by Palmer.
2. Beginning in 1967, the dates and transmission times of all outgoing Department of State telegrams were in 6-figure date-time-groups. The “Z” refers to Greenwich mean time.
3. Telegram 3202 from Tunis, February 21, reported that the Embassy was deeply concerned over reports that serious consideration was being given in discussions of FY 1968 aid to cutting the level of the program loan for Tunisia from $15 million to $5 million, and noted that this would be a particularly bad time to announce such a sharp cutback. (Ibid., POL 7 TUN) Telegram 3223 from Tunis, February 23, is ibid. Aidto 740 and Toaid A–549 have not been found.
4. Not found.