Foreign Relations of the United States, 1969–1976, Volume II, Organization and Management of U.S. Foreign Policy, 1969–1972

132. Memorandum From the Director of the Program Analysis Staff, National Security Council (Smith) to the President’s Assistant for National Security Affairs (Kissinger)¹

Washington, January 12, 1971.

SUBJECT

• Country Programming

The Problem

In my judgment, some major programming problems have arisen that need resolution if we are to have a comprehensive picture of the government’s programming activities in selected countries and ensure adequate White House control over the government’s activities.

• —(1) The full harmonization of our policies and programs in key countries and regions requires that our efforts be viewed in their totality and systematically analyzed. You commented on this requirement in your memorandum to the President on Secretary Laird’s “Strategy of Realistic Deterrence.”²

  “My view of a national security strategy encompasses a different set of issues than Secretary Laird’s. A true national security strategy should include our diplomatic posture, our economic assistance and trade policies, and our cultural and educational programs as well as our military posture.

  “If all of these instruments are brought to bear in an integrated fashion, we will establish a broader and more lasting basis for national security than that obtainable by forces alone. There must be an overall design. Then the policies of our allies and friends will enhance our interests, and the options open to our potential enemies will be minimized.”

• —(2) Program management and administration, already diffuse, are becoming even further fragmented. The NSC system is designed to strengthen attention given to our various programs and policies in order to broaden the range of choice for the President and other high-level decision makers. The NSC system is also intended to facilitate the integration of our entire program effort in key countries and regions.

  Yet, in fact, the JCS, OSD, and State operate almost as independently as before, and none exercises overall control. Further fragmentation of our programs is clearly visible. The “new approach to foreign assistance” will divide AID into three separate entities: one for developing lending, one for most technical assistance, and one for supporting assistance. However, this particular fragmentation could help our effort. AID is responsible for country programming of some of our programs now, but does them inadequately and does not have a sufficiently broad scope. By destroying a responsible but inadequate present mechanism, we are creating a new vacuum which we could exploit.

  OMB has little control over these diverse programs, no inclination to adopt a country programming approach, a strong budgetary bias on all program issues, and a proclivity to view their function as being technicians. I was shocked at the recent FY 1972 OMB budget review of assistance programs at the lack of analysis. Alternative country assistance levels were bandied about without any substantive basis for evaluation. Decisions were made on the most arbitrary basis. Basic information such as a country-by-country presentation of our lending through international institutions was not available.

  The point is that if our programs are to serve foreign policy goals, program decisions must be made in a foreign policy context. While this is being done on an ad hoc basis through the SRG, DPRC, and WSAG, it is not being done in a systematic way for all programs in key countries and regions.

• —(3) There are gross inefficiencies in the allocation of our resources in selected countries and regions. International lending is a case in point. We do not always know how it serves our interests. In Vietnam we spend over half our resources for air activities while ground forces are only sparsely supported. Commenting recently on the capability of ARVN to deploy into Cambodia and at the same time continue operations against base areas within South Vietnam, the Chief of the JGS Combat Operations Division said:

  “Additional [ground]³ units are needed and an expansion of the army is necessary, but there are not enough funds to support any more units. The JGS is seriously concerned about the problems and conditions of the soldiers it already has on its payroll.”

  We recently expanded military assistance to Jordan without looking at the requirement for additional economic assistance to allow the economy to sustain higher force levels.

  We have made a decision on force levels and economic support for Cambodia (NSSM 99/NSDM 89)⁴ but there is no forum for insuring that the force levels and pay rates the GKR has opted for and our economic and military assistance plans are consistent. We have no way of knowing whether CINCPAC and the Mission even are adhering to NSDM 89’s guidelines. State has voiced concern over the absence of coordination of these programs.

  I believe the trade-offs between development assistance, supporting assistance, and military assistance and the relation of all three to our overall political goals lie at the heart of the Nixon Doctrine. Yet, our decision-making apparatus still reflects the naive belief that when we give hardware support to a country, e.g., Indonesia, Cambodia, or Thailand, we get military capability. We treat force levels and military pay on the one hand and supporting assistance on the other as if they were two separate factors, when, in fact, they are intimately connected. We place development on a pedestal above other goals, when, in fact, it is closely linked to military and economic strength and involves basic questions of political commitment to undertake reforms. These, in turn, as has been demonstrated in Korea and Taiwan and in a different way by Brazil, are related to foreign policies of the U.S. and the country in question.

  The lesson of these examples is not that we need a comprehensive country mechanism for all countries. Rather, it is that in key countries such as Jordan, Vietnam, Cambodia, we need to insure that our program efforts are not counter-productive and that they make the most efficient use possible of the total resources we have.

• —(4) Another difficulty is bureaucratic. State and Defense are already moving to pre-empt White House control of country programming. They can see a vacuum as well as we can. Motivated in particular by the security assistance review both agencies have recognized the need for country programming which by itself is desirable—but it needs to be integrated with our other programs as well. The Under Secretaries Committee’s report⁵ (Fred Bergsten is providing you with a separate memo on this) cited as common to all of its organizational options the requirement that “a single policy document covering all aspects of security assistance be prepared annually to guide program development.”

State is considering letting a research contract to a team of systems analysts to help them devise such a country programming system. In his report to you on the outcome of the security assistance deliberations, Under Secretary Irwin noted that:

“The Committee concludes that the present respective statutory responsibilities of the Secretaries of State and Defense for direction, supervision and administration of these programs should be maintained. However, there must be improved coordination and liaison between the two Departments to ensure that these programs are integrated in as effective a manner as possible with U.S. defense plans and programs and U.S. foreign policy. The two Departments are now reviewing their internal organizations to determine what changes should be made toward this end.”

This is fine, but past history shows that “improved coordination and liaison between the two Departments” usually means a negotiated compromise not alternatives based on analysis.

Your Alternatives

Any solution to this problem must overcome two obstacles. The first obstacle to a country programming approach has been the lack of agreed analytical techniques for integrated analysis and planning. The second is the requirement that the responsibility for country programming reside at a level that is close enough to the White House to (a) insure adequate White House control and (b) provide the leverage necessary to force State, DOD, and CIA to take integrated country programming seriously.

OMB and NSC are the likely candidates for this latter task. My reservations on having OMB do it are stated above. The key consideration, however, is the program budget.

The methodological arguments used by AID at the SRG meeting on Brazil notwithstanding, I believe we have developed the capability to do good country programming on a limited number of countries. This capability has been demonstrated in the following studies:⁶

• —Cambodia (NSSM 99 Phase I—NSDM 89)
• —Korea (NSSM 27—NSDM 48)
• —Vietnam (NSSM 77, NSSM 99)
• —Thailand (NSSM 51)

We now have a firm analytical foundation for these countries. They also are countries for which annual budget decisions inevitably involve major policy issues, a point amply demonstrated this year by OMB’s attempt to arbitrarily cut supporting assistance for Vietnam.

Other countries—for example, Jordan, Indonesia, and India— could be added. The determinants of how many countries would be addressed in a country programming exercise would depend on (a) the number of countries for which major program decisions have an important impact on our overall policy, and (b) the number of individuals on the NSC staff you would want to devote to this project, and (c) the support we receive from the agencies.

How Country Programming Would Work

If we were to formalize what has to date been an ad hoc country programming effort, it should be designed to accomplish the following objectives:

(1) Influence the development of program issues and alternatives before final budget decisions are made.

(2) Provide a substantative basis for final budget deliberations either between you and George Shultz or by the SRG, and final decision by the President if necessary.

(3) Provide for at least some monitoring of the execution of White House decisions before and during the fiscal year.

For example, country programming might proceed as follows for FY 1973:

• —In January or February, in cooperation with OMB, guidance would be issued to the agencies and the field for the development of program issues and analysis for FY 1973. This would be followed by an interagency meeting at my level. The meeting would initiate the development of a Country Program Memorandum (CPM) that would be the final decision-making document for the FY 1973 budget.
• —In the late summer of 1971 we would hold an initial program review at the working level to consider draft FY 1973 CPM’s. The NSC staff would devise a format for the CPM’s and provide technical direction for their development. Primary responsibility for drafting each CPM would be assigned to selected agencies (most likely those which have major programs in the country) or to the NSC or OMB staff. For example, India might be handled by AID, Korea by DOD, Jordan by State, Thailand by OMB and Vietnam by NSC. While one agency would be assigned primary responsibility, the final CPM would be an inter-agency document.
• —The CPM’s would then be forwarded to you as Chairman of the SRG and to OMB Director Shultz by mid-October. You could decide to hold a meeting on one or several of them, to consider the issues raised in a meeting with Shultz, and/or forward them to the President.

Setting Up the CPM System

Two current NSDM’s relate to the procedure I have outlined above. NSDM 4, as revised September 4, 1969, (at Tab B)⁷ is the charter for detailed country studies that are undertaken on an ad hoc basis. I believe NSDM 4 should remain in effect. We need to retain the option of exploring at great depth selected problem areas without being locked into the budget cycle.

NSDM 10 (at Tab C)⁸ is the other decision document that bears on country programming. It directs the Secretary of State to submit annually “a country memorandum setting forth the total economic assistance program, including AID and PL 480, for major countries.” The AID Administrator initiates the memoranda.

I have reviewed the NSDM 10 submissions. They have three serious drawbacks:

• —all U.S. country programs are not included. The NSDM 10 requirement covers only PL 480 and AID programs, not military assistance, U.S. multi-lateral lending, direct U.S. involvement, trade, etc.
• —in most cases no alternatives are presented. Instead the agency view is forwarded for Presidential endorsement. In the few cases where alternatives are presented they are of the “high,” “intermediate,” and “low,” variety with the middle option inevitably being selected.
• —very little analysis is provided. How are our interests served by what is proposed? What trade-offs are possible and what alternatives do they suggest (e.g., indigenous forces for U.S. forces, indigenous ground forces versus air forces, economic versus military support). On what issues does one’s choice of the options turn? These questions are simply not addressed. Moreover, there is no program budget or other basis for analysis.

The Drawbacks

There are drawbacks to embarking on an integrated country programming effort under NSC direction:

• —OMB’s support would be mandatory. Shultz would have to be willing to expose his budget arguments to substantive scrutiny by the SRG or by you. I believe Shultz is committed to decision-making based on analysis and thus would be receptive to a country programming approach.
• —You would have to obtain firm Presidential backing in order to convince the agencies that NSC direction is a workable solution to our country programming problems. State and DOD see a role for themselves. While the approach outlined above gives them a major role in the preparation of the CPM’s, it would be clear that overall direction would be an NSC responsibility. I have no firm basis for predicting State, DOD or CIA’s reaction to a country programming NSDM. It is possible that if the groundwork were carefully laid, we could pull the whole thing off with little pain. But a major bureaucratic battle cannot be ruled out.
• —A new factor is the pending creation of the International Economic Policy Council. Its policy making and coordinating mandate on all foreign economic policy will certainly include trade, but also— within the general policy guidance of the NSC—may include foreign aid (presumably only of the economic variety). Trade should not be much of a problem, because we can’t really include it very meaningfully into country programs anyway. Aid would seem to be the main potential source of difficulty. Even here, the new Council should restrict itself to broad policy issues and not try to get into individual country situations—and it probably will not if the present plan to keep it without its own staff survives. However, this development does raise one more issue which you may have to iron out with Shultz.
• —Additional NSC manpower would be required to guarantee the necessary bureaucratic and quality control of the CPM effort. For example, if my office were given this additional responsibility, I estimate that at least 1 and probably 2 more people would be needed. And I think this would be true for other offices (e.g., Bergsten’s) which you might want to give this responsibility.

Recommendation

I strongly believe that the advantages of a country programming effort far out-weigh its bureaucratic drawbacks, that it represents an area where we can add greatly to our existing intellectual capital stock and that the Administration should embark on a country programming effort of limited scope for FY 1973. Seven countries—South Vietnam, Cambodia, Thailand, Korea, India, Jordan, and Indonesia—are prime candidates to be covered in the first year.

I have prepared a memorandum for the President (at Tab A) to obtain his approval of the country programming effort and an implementing NSDM (attached to his memorandum).

I recommend that you sign the memorandum for the President at Tab A,⁹ and upon receipt of his approval, sign the attached NSDM.

Fred Bergsten concurs in this memorandum.

1. Source: National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–209, National Security Decision Memoranda, NSDM 4. Confidential. Sent for action.
2. Laird’s paper on “The National Security Strategy of Realistic Deterrence” and Kissinger’s memorandum are in the National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 236, DPRC & DEF Budget.
3. Brackets in the source text.
4. See footnotes 2 and 3, Document 126.
5. A copy of the draft report dated December 5, 1970, is in the National Archives, RG 59, Office of the Deputy Under Secretary of State for Management, Management Subject Files: Lot 76 D 235, Security Assistance, 1970–1971. A copy of the final report dated February 5, 1971, is ibid., Management Subject Files: Lot 76 D 210, Security Assistance— Key Papers.
6. NSSMs and follow up studies, organized by NSSM number are in the National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Boxes H–163, H–138, H–173, and H–149–H–150; NSDMs and supporting material are ibid.; Boxes H–219, H–215, and H–222.
7. Document 71.
8. Dated April 11, 1969. Attached but not printed.
9. Not printed. Kissinger did not sign the memorandum. Instead, he wrote on page 1 of Smith’s memorandum: “Arrange a meeting with Schultz [sic] & then let’s do a jt. [joint] memo.” Beneath his note the date “Jan 20 1971” is stamped. In a March 27 memorandum to Kissinger, Smith reported that he had met with Shultz, who strongly supported Smith’s proposal but suggested two modifications in the proposed NSDM, which Smith incorporated. Smith drafted a joint memorandum to the President which Shultz signed and Smith forwarded for Kissinger’s signature under cover of his March 27 memorandum. (National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–290, National Security Decision Memoranda, NSDM 112.) See Documents 149 and 150.