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

24. Telegram From the Department of State to the Embassies in Algeria, Bangladesh, Saudi Arabia, and the Liaison Office in Riyadh¹

179142.

Washington, July 10, 1981, 0540Z

SUBJECT

• Indian Approach on the Cancun Summit.

1. Following his meeting with the Secretary (being reported septel),² Government of India (GOI) special emissary, Ambassador L.K. Jha, also met on July 2, 1981 with Under Secretary Myer Rashish for further discussions on North/South issues and preparations for the Cancun Summit. Ambassador Narayanan and Econ Counselor Misra from the Indian Embassy accompanied Jha. Ambassador Barnes and Waterman of NEA/INS also participated. This message reports on the conversation.

2. Ambassador Jha said it was view of his government that the Cancun Summit on North/South issues must succeed. Purpose of this call was to sound out U.S. attitudes toward Summit & U.S. willingness to do some joint planning with India to ensure its success. Jha said he was pleased by the Secretary’s encouraging and positive comments made earlier that day, and he would inform Prime Minister Gandhi that impressions conveyed in the press and public debate of the U.S. are not accurate reflections of USG thinking on economic relations between developed and developing countries.

3. Mr. Rashish commented that such a report would be correct. After praising Mrs. Gandhi’s recent letter to President Reagan³—“the spirit was just right, it struck a warm and responsive chord”—Mr. Rashish elaborated on the misperceptions about this administration’s approach toward economic relations with LDC’s. While stating that thinking and attitudes within the USG are evolving and subject to change, Mr. Rashish emphasized that President Reagan’s decision to attend Cancun was a very positive symbol of U.S. attitude toward North/South issues. He pointed out that our skepticism about Global Negotiations should not be interpreted to mean U.S. was indifferent to the problems of developing nations; rather, that we believe the problems are too important to be relegated to sterile debate. Similarly, while at the margin the U.S. intends to place more emphasis on bilateral assistance for foreign policy reasons, the administration is committed to the multilateral development banks (including IDA VI) and does not think restructuring them would be useful.

4. Regarding the Cancun Summit, Mr. Rashish noted that the topics are broad and we are still in the process of developing government-wide consensus. He said that it is important Cancun be a good beginning. It should be a candid, sympathetic discussion and solid diagnosis. We do not expect any specific results from the Summit, but want it to build a sure and correct foundation for the future. This approach, he said, may require patience on the part of others.

5. Ambassador Jha replied that India is also trying to crystallize its approach. He said that the Summit is too important to rely on extemporaneous proceedings, and therefore GOI thinks it would be useful to do some joint thinking and preparing with the “more mature” countries—those like the U.S. which have a certain global responsibility. Mr. Rashish assured Amb. Jha that the U.S. feels a responsibility to be constructive. (Comment—We read Jha’s remarks as a request for bilateral collaboration, but specifics were never worked out.)

6. Picking up on that note, Amb. Jha said India was concerned and disappointed that the U.S. seems to stand apart from even generally agreed positions of the industrialized countries on such issues as IDA replenishment and the IBRD energy affiliate, with result that other “Northern” countries retreat or straddle the fence.

7. Mr. Rashish explained that the U.S. and its six economic summit partners influence each other, and that they have already helped shape our policy through the valuable exchanges in the preparatory process for the coming annual summit. He said that others all along had reservations about the energy affiliate, for the same reasons we have articulated. The U.S. considers it critical for non-oil LDC’s to expand all energy sources, because energy related problems, such as debt, overshadow all others as drags on development. It is a question, he said, of optimum means to generate the additional resources needed, including from the private sector. Mr. Rashish stressed the administration’s high level efforts to secure passage of IDA VI replenishment legislation.

8. Mr. Rashish had to leave then for a meeting with the President. In closing moments, Amb. Jha noted the similarity of views toward Cancun by the U.S. and India and reiterated the value of working together to plan the Summit. Amb. Jha agreed that the sessions should avoid details about institutions, etc., and instead focus on recognition of global problems, such as food and energy, that must be tackled by improving production and that will require resource transfers.

9. After the call on Mr. Rashish, there was an opportunity for the other participants to discuss informally the role of the GOI’s recently established Economic Administration Reforms Commission. Amb. Jha remarked that aside from the four specific areas assigned to the commission, he had leeway to raise any issue directly with Mrs. Gandhi.

Haig

1. Source: Department of State, Central Foreign Policy File, Electronic Telegrams, D810320–0373. Confidential. Sent for information. A repeat of telegram 179142 to New Delhi and repeated to Mexico City, Vienna, and USUN, July 9. Drafted by Eli Bizic (NEA/ECON); cleared by Daniel Waterman (NEA/INS); approved by Bizic.
2. See Document 27.
3. See footnote 5, Document 27.