Office of the Historian

188. Letter From the Deputy Secretary of the Treasury (Darman) to the Deputy Secretary of State (Whitehead)1

Washington, September 25, 1985
Dear Mr. Whitehead:2

Pursuant to our meeting last week,3 enclosed is a revised proposal for an IMF/World Bank Joint Facility.4 It includes a program description, discussion of funding and a game plan for selling the proposal to other donors and the Congress. The plan incorporates points made in our earlier discussions, including our last meeting.

With regard to funding, the approach would involve U.S. demonstration of support for the Facility by providing $75 million in bilateral assistance in close cooperation with the Facility’s operations in FY 1986, and direct contributions in FY 1987–91 ($75 million annually), provided other donors contribute an equitable share.

As regards the balance required for FY 1987–91, we have agreed that it would not be possible to obtain congressional support for a specific budget request for additional U.S. resources for the Facility. Therefore, if we are to proceed with a credible plan, U.S. participation would have to be funded by reallocating bilateral assistance for this purpose in FY 1987–91, and making clear to Congress that funding for the new Joint Facility does not mean an increase in what would otherwise be our total requests for foreign assistance during this period.

I know that you appreciate the potential of this plan to catalyze other sources of financing for Africa. In return for the United States’ $450 million, we believe this could generate a total Facility of perhaps $5 billion. As you know, if we are to lay the groundwork for a favorable reception to our proposal in Seoul and to consult with the Hill, we will have to move quickly. Before doing so, however, we must agree on an understanding for Administration funding of the Facility for FY 1987–91. If you find the above plan acceptable, we must consult immediately with the White House, before beginning our broader consultations.

I look forward to hearing from you at your earliest convenience.

Sincerely,

Richard G. Darman5
  1. Source: Department of State, Executive Secretariat, S/S–I Records, The Executive Secretariat’s Special Caption Documents, Lot 92D630: Not For The System: September 1985. No classification marking.↩
  2. Darman crossed out “Mr. Whitehead” and wrote “John” above it.↩
  3. No record of the meeting has been found.↩
  4. The proposal, entitled “U.S. Proposal for a Joint IMF/World Bank Facility for Comprehensive Economic Reform,” is attached but not printed.↩
  5. Darman signed “Dick” above his typed signature.↩