213. Memorandum From the Ambassador to Madagascar (Keating) to the President’s Deputy Assistant for National Security Affairs (Poindexter)1
SUBJECT
- AID and the Next Reagan Administration
1. AID has an unfocussed and ineffective approach to the problems of Third World development. It has spread its resources too thinly. The main need is concentration of efforts on agricultural development, policy reform, and private investment. At present, these objectives seem no more important than a host of other objectives that AID is pursuing (e.g., mother-child health care, the role of women in development, oral rehydration, and other social welfare programs). The current AID strategy may be described as broad-based social and economic development from the bottom-rung up. Since the resources for undertaking such an ambitious program on a global scale are limited, what we’re getting from AID is a kind of hit or miss do-goodism, but not the growth of income and employment which is what development mostly requires. Admittedly, AID will argue that it is emphasizing policy reform and private initiative, but these have been tacked onto a development strategy and objectives inherited from the social welfare programs of the previous administration. Until some of these Carterite-inherited objectives are shed, and AID’s mission simplified, the Agency will not be able to implement effectively the approach that the Reagan Administration favors.
2. Because of the way AID has been structured, and the social-need orientation of its people, the Agency has a strong inclination to pursue diffuse social welfare priorities rather than our strategic and trade interests. Fortunately, the International Development Cooperation Agency (IDCA) has been suspended.2 This limits AID’s power to allocate [Page 918] foreign assistance resources to countries according to its perception of need and worth and compels it to follow State’s guidelines for the integrated foreign assistance budget. However, State often sacrifices our foreign commercial interests to other objectives and doesn’t curb AID’s penchant to pursue multiple objectives in the countries where it is assigned to work. In sum, the State lead is not sufficient to make AID adhere strictly to the priorities of the Reagan Administration.
3. In its first term, the Reagan Administration missed an opportunity to clarify and invigorate AID’s mission. This is evident from the continuing public antipathy to foreign aid and Congressional reversion to not acting on foreign assistance appropriations except by Continuing Resolutions. However, the success of the Reagan Administration’s economic policies gives us a new opportunity and enhanced credibility to initiate a foreign assistance program that will be comprehensible to the American public and consistent with our beliefs. Just as here in the United States, emphasis has to be placed on providing incentives for work and support for investment if economic growth and social well-being are to be realized. No Third World problem troubles the American people more than Third World hunger, and no form of foreign assistance has more support than food aid. Third World food emergencies have been taken care of through the President’s actions on Part One of our NSC-directed study.3 I am now working on “Food for Progress” as a theme for a coherent approach in support of policy reform in key countries to the benefit of our strategic and trade interests.
- Source: Reagan Library, Executive Secretariat, NSC Agency File, Agency for International Development (03/12/1982–11/06/1983). Confidential. A stamped notation in the top right-hand corner of the memorandum reads: “RCM HAS SEEN.” Poindexter initialed the memorandum and wrote “BUD__” in the top right-hand corner; McFarlane initialed “M” on the line beside his nickname. Also scheduled for publication in Foreign Relations, 1981–1988, vol. XXXVIII, International Economic Development; International Debt; Foreign Assistance.↩
- In his “Inside: State Department” column for June 12, John Goshko described the IDCA as “the ghost ship of the federal bureaucracy.” He noted that AID Director McPherson had served as the Acting Director of IDCA for 3 years, adding: “It has no funds nor separate staff nor even a telephone number of its own. Instead, someone wanting to reach the IDCA has to call McPherson’s office in the State Department building. AID officials say the IDCA still has some functions, but when asked what they were, the officials seemed hard put to describe them.” (John M. Goshko, “Inside: State Department,” June 12, 1984, Washington Post, p. A15)↩
- See footnote 6, Document 200.↩