Foreign Relations, 1977–1980, Volume XXIII, Mexico, Cuba, and the Caribbean

365. Memorandum From Secretary of State Vance to
President Carter¹

Washington, September 28, 1979

SUBJECT

• Support for U.S. Foreign Policy Objectives: Caribbean Supplemental

I have forwarded to you a supplemental budget request of $145 million for Central America. Every cent of this funding is needed to give a reasonable chance of success with our political strategy in that region which is designed to respond to the Cuban challenge, support moderate political elements and political liberalization.

Recent developments in the Caribbean lead me to conclude that we also require additional resources to meet foreign policy needs in that region. I therefore recommend that we increase the supplemental by $30.6 million to address immediate and urgent requirements in the Caribbean.

—$5 million in Economic Support Fund grants to address balance of payments problems in the Eastern Caribbean. This would in part offset reductions in British budget assistance.

—$10 million in Foreign Military Sales financing to purchase three boats by Barbados for an Eastern Caribbean regional coast guard and to purchase aircraft, helicopters and reconditioned ships for the Dominican Republic and Haiti.

—A one time grant Military Assistance Program of $5 million to St. Lucia and St. Vincent to permit the immediate acquisition of three boats for the regional coast guard.

—A $600,000 International Military Education and Training (IMET) program to begin to train the regional coast guard and to provide additional training for the Dominican Republic and Haiti.

—$10 million in developmental assistance to address the problems of unemployment, in part through the Basic Needs Trust Fund of the Caribbean Development Bank.

The combined Central American/Caribbean supplemental package would consist of:

$120 million ESF for Nicaragua, Commodity Import Program

13 million ESF for Honduras, rural development

12 million ESF for El Salvador, urban development

5 million ESF for Eastern Caribbean, balance of payments support

10 million FMS for Barbados, Dominican Republic and Haiti

5 million in one time MAP for St. Lucia, St. Vincent

.6 million IMET for Eastern Caribbean, the Dominican Republic and Haiti

10 million in developmental assistance to address unemployment, in part through the Caribbean Development Bank

$175.6 million

Given the relatively small size of the Caribbean package, Congress might view the sums involved as sufficiently small to be absorbed in our FY 80 budget. In view of the budgetary restraints, this is not so, but it does highlight the desirability of linking the Caribbean supplemental with the Central American request.

Discussion

In the Caribbean we face challenges similar but distinct from those in Central America. In the Eastern Caribbean, the southern island nations of Barbados, St. Vincent, St. Lucia and Grenada are of particular immediate concern. Additionally, we have an urgent need to assist the Dominican Republic, hard hit by hurricane damage.² The democratic government there faces both economic and political crises. Restoration of the economy and replacement of damaged or destroyed equipment and facilities will severely strain a relatively weak economy.

The economic problems of the newly independent mini-states in the Eastern Caribbean are causing political radicalization, a trend that can be checked ultimately only by economic and political development. The situation has been made worse by the higher price of imported oil, problems ESF and Developmental Assistance could help address.

There is a sense of vulnerability among the governments which results from the continuing UK withdrawal from the area. The ensuing vacuum needs to be filled by an effective Western presence, principally the U.S. which has the major security interest in the area. The urgency is heightened by the challenge of Cuba whose leaders are not hesitant to exploit every target of opportunity, e.g. Grenada.

We require additional resources to deal effectively with the situation. We are proposing increased security assistance levels for the region in FY 81 but we need additional resources sooner lest we be too late to turn around several situations. Massive amounts are not required nor could they be absorbed into a limited program which serves our purposes. In addition, the British have indicated they would be willing to help fund the cost of a regional coast guard. We will be meeting with them next month for futher discussions on this matter.

In presenting this supplemental to the public and the Congress, we will signal U.S. interest and concern in Central America and the Caribbean. However, we should avoid portraying our actions only as anti-Cuban and should emphasize the contribution to long-term economic development needs and the strengthening of democratic institutions.

An additional consideration is the eligibility of the states involved to purchase defense articles and services from the U.S. or to acquire them under MAP. Currently, only the Dominican Republic, Haiti and Barbados are eligible. Establishment of new FMS or MAP programs will require recipient country agreement on matters relating to the use and transfer of USG-origin defense articles and providing (in the case of MAP) for a USG role in monitoring such use. This will be the subject of a subsequent memorandum.

IDCA Position

IDCA does not support inclusion of the $10 million Developmental Assistance component. IDCA notes that DA Caribbean programs have risen significantly in the last years and that additional funding is not justified given world-wide priorities. If a decision is made to provide such funds on policy grounds, IDCA believes it should be included in ESF which exists for that purpose.

I believe that Congress expects a balanced approach in terms of both economic and security assistance and that not to include a moderate amount of developmental assistance would tend to imply a shift to a security emphasis. Moreover, given cuts made by Congress in the FY 80 budget request, this DA funding would do no more than restore cuts.

Recommendation:

That you include a $30.6 million Caribbean package with the Central American proposal, making a total supplemental request of $175.6 million.³

1. Source: Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 15, Folder: Cuba, Soviet Brigade, 9/19–30/79. Secret.
2. See Document 240.
3. There is no indication of approval or disapproval of the recommendation. In a separate memorandum to Carter on September 29, McIntyre countered, “We have just seen Cy’s $30M Caribbean supplemental sent over as an addition to State’s earlier $145M Central American request. As you know, Henry Owen and I feel strongly that only the first $75M for Nicaragua merits your approval. As for this Caribbean request, I find it to be even less justifiable than the Central American request.” McIntyre concluded, “The Nicaragua emergency is the only item which justifies a supplemental, and we should not commit more than $75M.” (Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 45, Latin America, 1–9/79)