Foreign Relations of the United States, 1981–1988, Volume XXXVIII, International Economic Development; International Debt; Foreign Assistance

119. Telegram From the Department of State to the Embassy in India¹

166763.

Washington, June 7, 1984, 0228Z

SUBJECT

• London Economic Summit and North-South Dialogue (S/S 8416315). Ref: State 153687.²

1. Please deliver the following letter dated June 5 from President Reagan to Prime Minister Gandhi, in response to her letter of May 22 (reftel).

2. Quote:

Dear Madame Prime Minister:

Thank you for your letter of May 16, 1984, and for sending an emissary of Ambassador Jha’s high stature to explain, in greater detail, your thoughts on revitalizing the North-South dialogue.³ It is extremely useful, I think, that we maintain an open line of communication on matters of central importance to the world economy.

Let me outline for you the perspective that the United States brings to bear on the specific issues of changes to the international monetary and financial system.

First, we are open to new ideas; indeed, our own nation’s history is one of continual innovation in the face of changing circumstances. At the same time, we try to take a very realistic view of what will work and what will not, concentrating our efforts on policy measures which are based upon sound economic analysis, and likely to yield lasting benefits.

At this time, the United States continues to have reservations about the utility of an international conference on money and finance, principally because we do not yet perceive a consensus on practical, concrete proposals for improving the system now in place.⁴ For all of its imperfections, the Bretton Woods structure has served us well through very difficult periods. Before considering changes, I think we should have a clear idea of where we want to go, and that means more basic groundwork to develop specific, realistic approaches to deal with specific problems. Indeed, most of the ideas surfaced to date can be dealt with in existing forums such as the Interim Committee or the Development Committee of the IMF and the World Bank, which are specialized agencies of the United Nations.

Please be assured, Madame Prime Minister, that the United States will be prepared to discuss your proposals at the London Summit, and we remain open to constructive dialogue. I value the contact we have maintained over the years, both directly and through emissaries such as Ambassador Jha. Upon his return from New Delhi, George Bush briefed me thoroughly on your discussions ranging from global to bilateral issues.⁵ Allow me to thank you, on his behalf, for your warm reception and to express the wish for a continued frank and friendly exchange of views in the future.

Sincerely,

Ronald Reagan

End quote

Dam

1. Source: Reagan Library, Executive Secretariat, NSC Trip File, [London] Summit—May–June 1984; NLR–755–19–9–4–0. Limited Official Use; Immediate. Sent for information to Bonn, London, USUN, Ottawa, Paris, Rome, and Tokyo.
2. Telegram 153687 to Bonn, London, and Ottawa, May 24, transmitted the text of Gandhi’s letter to Reagan, in which Gandhi advocated for reviving the North-South dialogue. (Department of State, Central Foreign Policy File, Electronic Telegrams, D840340–0873)
3. Telegram 157702 to multiple diplomatic posts, May 30, reported on the visit of Gandhi’s economic adviser, L.K. Jha. Jha met with Dam, Wallis, and members of the NSC in meetings May 22 and May 26 to outline the Non-Aligned Movement proposal (also referred to as the Indian proposal) for an international conference on money and finance. Jha reported that the NAM perceived opposition to the idea of Global Negotiations was strong, but sought to advance one aspect of the GN idea—the international conference on money and finance—as a practical first step toward a constructive North-South dialogue. Jha advocated that the London Summit participants approve the creation of a “steering committee” which would undertake the preparatory work leading to such a conference. (Department of State, Central Foreign Policy File, Electronic Telegrams, D840348–0224)
4. The United States held this position at UNCTAD VI, where the G–77 attempted unsuccessfully to promote the idea of an international monetary conference. See Documents 114 and 115.
5. Bush visited India May 12–15. Telegram 11386 from New Delhi, May 18, reported on the visit. (Department of State, Central Foreign Policy File, Electronic Telegrams, D840324–0959)