Office of the Historian

189. Memorandum From the Deputy Secretary of State (Whitehead) to the Deputy Secretary of the Treasury (Darman)1

Washington, September 30, 1985
Dear Dick:

We share your view that capturing Trust Fund reflows and other new monies for a Fund/Bank joint facility for the poorest developing countries is an opportunity we can’t let pass. Such a facility, which would establish a formal institutional basis for Fund/Bank cooperation, would be a major step forward in meeting the evolving needs of the world economic and financial situation, and also in providing the means for these countries to undertake structural adjustment and provide the basis for long-term growth and development.

As to the proposal in your letter of September 25,2 we agree that, for FY 1986, the monies allocated to the African Economic Policy Initiative from ESF funds will be closely associated with the operations of the new Fund/Bank facility. For FY 1987 and the out years, State/AID agree that an appropriate U.S. contribution is necessary. However, the FY 1987 budget is far from final approval, and the out year budgets are still in planning stages. Thus, it is too early to specify as to how this necessary contribution will be funded, but together I am confident that we can seek and find the necessary funds for an appropriate contribution to the new facility. This is, of course, contingent on other donors contributing, and the character and level of their contributions.

I would like to hear back from you on the language that Secretary Baker would use at Seoul regarding this initiative.3 We believe he should announce and define a U.S. proposal and say the U.S. will contribute if other donors do. I believe our principals should approach the White House on this before Seoul.

We are pleased to work closely with you and your Treasury associates in establishing this exciting new facility. We look forward to working with Treasury in establishing the U.S. Government positions and guidance for its future operations.

Sincerely,

John C. Whitehead4
  1. Source: National Archives, RG 56, Records of the Office of the Secretary of the Treasury, Official Files of the Executive Secretariat, 1985, UD–11W, 56–88–79, Box 65, Classified Document Receipt, Sept ’85. Confidential.↩
  2. See Document 188.↩
  3. See Document 190.↩
  4. Whitehead signed “John” above his typed signature.↩