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

214. Memorandum From Edward Hamilton of the National Security Council Staff to the President’s Special Assistant (Rostow)¹

Washington, July 13, 1966.

WWR

SUBJECT

• Progress Report on African Initiatives

As you know, the key to the action program announced in the President’s speech is the report of Ed Korry’s task force.² Korry says he will have the report for us early next week. As of yesterday, he was beating the recommendations into shape, out had quite a lot left to do. But the fundamental recommendations are clear. I would summarize them as follows:

1. U.S. policy and aid activities in Africa are severely hampered and dissipated by the sheer number of independent bilateral activities. Duplication, overlapping, inability and unwillingness of donors to work together, etc., have confused issues and diluted aid benefits. Thus, Korry’s basic conclusion—which he has discussed at length with George Woods—is that the U.S. and other donors should put the great bulk of their African chips behind the World Bank. Specifically:

• —The Bank should create a standing group on Africa, with general responsibility for planning and organizing the financing of transport, communication, and power projects. This could be an adaptation of the existing Bank consultative groups on Nigeria and Tunisia. Its first job would be to bring some order to the rash of existing and projected feasibility studies in this area.
• —The Bank should set up a Rural Research and Development Institute for Africa as a central organ for studying agricultural problems, developing projects, organizing financing, and generally dealing with the overwhelming African problem—agricultural backwardness.
• —The Bank should create a special fund for Africa, either by earmarking part of the IDA replenishment (as you know, Woods is pushing for a quadrupling of the IDA), or through a private arrangement with the donors that a certain percentage of IDA money would go to Africa.

2. In our bilateral programs, AID should pay relatively more attention to the functional problems of sub-regions (e.g. post-primary education, dry land agriculture, etc.), and relatively less to individual programs in each country.

3. In addition, Korry will have some things to say about the rules which govern AID, the major issues of U.S. commercial policy toward Africa (commodity agreements, trade preferences, etc. ) and the various proposals to expand U.S. private investment in the region. This is not his professional cup of tea, and it looks now as though he will confine himself to passing statements on most of these subjects, with perhaps a stronger pitch on the restrictions which our balance of payments program puts on AID operations.

The key to the suggestions involving the World Bank is getting the other major donors—France, Germany, U. S., Belgium, the African Development Bank, the UN Economic Commission for Africa, and the UN Development Program—to agree to use the Bank as the central funnel of aid and source of leverage on local economic policy. There are three basic problems to be dealt with:

(1) The tendency of donors to flounder around independently— applying different economic criteria, refusing to accept each others feasibility studies. etc.,

(2) The resulting tendency of the Africans to play the donors off against one another, and

(3) The extreme scarcity of reasonable projects and African capacity to develop them.

In my view, the Bank is the most competent organization to take on these problems and Korry’s is not a bad blueprint. Chances of the French joining the crowd are not particularly good, but even a union of everybody else would be a great step forward. The critical element will be getting Woods out in front with our clear backing, but his clear leadership. Involvement of the President will almost certainly be required and it will probably cost us a large increase in contributions to IDA (though no new appropriations until FY 1969).

The recommendation on bilateral programs is the fuzziest of Korry’s points, primarily because he has not really made up his mind where he wants to draw the bilateral-multilateral line. His position may reduce to a simple repetition of the new emphasis on health, education and agriculture. I have been pushing him to go further and identify priority areas within sectors (e.g. what kind of agriculture, what level of education, etc. ), to set the stage for multi-country programs which make administrative and economic sense and promote a basis for political regionalism. He seems to be moving in this direction. If he does a thorough job, we will have a basis for levering AID out of its current rut. (None of this denies the fundamental proposition of AID country programming that there are basic differences in cultures, economies, and political tradition which should be reflected in AID policy. It does reflect a belief that in Africa the similarities between four or five countries are frequently greater than the differences, and that a common approach often better serves our political objectives than disparate individual ones.)

I have told Korry that—and perhaps eventually the President—will want to meet with him after you have read the report. He will, of course, stay in town as long as he is needed. If the report is on time, I would suggest a Rostow-Korry session the middle of next week, for which I will furnish you a suggested action timetable.

Beyond the Korry exercise, AID is pushing ahead with other things the President referred to—measles/smallpox eradication, communications satellite ground stations, and centers of excellence in higher education—as well as the usual run of projects (e.g., last week’s Finchaa Dam, our largest project)—and the largest dam—in Ethiopia. I can give you specific reports on those fronts whenever you like.

EH

1. Source: Johnson Library, National Security File, Country File, Africa, General, Vol. V, 6/66–1/69. No classification marking.
2. President Johnson announced the formation of the task force, under the chairmanship of Edward Korry, Ambassador to Ethiopia, during his May 26 address (see Document 211). The task force was to review U.S. development policies and programs in Africa.