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

304. Memorandum From the Associate Director for National Security and International Affairs of the Office of Management and Budget (Keel) to the President’s Assistant for National Security Affairs (McFarlane)¹

Washington, December 2, 1983

SUBJECT

• Seventh Replenishment of the International Development Association (IDA–VII)

This is in response to your request for comments on Secretary Regan’s memo to the President of November 30 on IDA.² OMB strongly supports Treasury’s recommendation for a $750 million annual funding level for IDA–VII, a recommendation recently affirmed by an overwhelming majority on the SIG–IEP. OMB believes that this final negotiating position merits the President’s approval.

○ The $750 million level is no breach of faith. It simply confirms longstanding U.S. plans for IDA funding and the repeated statements of U.S. negotiators of the firm intention of the United States to go no higher.

○ This level represents little change from U.S. contributions to the last two replenishments over the last seven years. The United States provided $800 million annually under IDA–V (1978–80), and has provided $772 million on average under IDA–VI (1981–84).

○ This level is entirely consistent with U.S. development assistance strategy in which the development banks play a secondary role to a bilateral aid program which has grown substantially since 1981.

○ Given likely tough funding decisions on domestic programs in the 1985 budget process, an IDA increase would be inappropriate. The Congress is unlikely to provide the higher levels, and the increment over $750 million would simply be applied to domestic programs in the congressional budget process.

If the NSC staff proposes to recommend an increase to the President,³ OMB believes that the issue should first be presented to the Budget Review Board in the context of the 1985 budget decision making process.

1. Source: Reagan Library, Roger Robinson Files, Subject File, International Finance: 11/09/1983–12/31/1983. No classification marking. Keel crossed out McFarlane’s typewritten name and wrote: “Bud—”. Keel also crossed out his own typewritten name and wrote: “Al—”.
2. See Document 302.
3. See Document 306.