We recommend that you authorize us to negotiate a PL 480 sales agreement with Guyana to provide approximately
1,500 tons of edible vegetable oil, 2,000 tons of wheat/wheat flour, 100
tons of tobacco and 3,000 tons of potatoes for which the current export
market value (including applicable ocean transportation costs) is
approximately $1.0 million. The proposed terms are payment in dollars of
5 percent on delivery and the balance in approximately equal
installments over 20 years; interest will be 2 percent per annum during
a two-year grace period and 2.5 percent thereafter. The Departments of
State and Treasury concur in this recommendation.
Need for Program
The Guyana (Burnham) Government
has undertaken with help from the United States Agency for International
Development and the British and Canadian Governments an ambitious
economic development program over the past three years. We have given
particular priority to assisting this government in its effort to
demonstrate what a democratic government can achieve following the years
of difficulties under the rule of communist-oriented Cheddi Jagan. The Burnham government is making a special
effort to accelerate its development projects, particularly for
agriculture, but local currency costs for development have placed a
substantial strain on the Burnham government's budget.
This agreement would assist the Burnham Government to sustain its record of economic
achievement and progress, which is important at this time since national
elections will be held in Guyana prior to March 31, 1969, with Jagan again opposing Burnham.
In negotiating this agreement, we will seek the following commitments
from the Government of Guyana:
The local currency generated from the sale of the commodities in the
importing country shall be made available for development of agriculture
1. For the construction and improvement of roads connecting rural areas
with the market cities and also for planning and construction of access
roads in the Atkinson/McKenzie land settlement project.
2. For the modernization of agriculture through the expansion of adaptive
research and extension and increasing the means for storage, processing
and distribution of basic food crops and for land development and water
control in farming areas along the coast.
3. For the improvement of facilities and operation of the government
maternity and child health centers, especially for projected family
planning, and including vaccinations for polio, etc.
4. For strengthening systems of collection, computation and analysis of
statistics to better measure the availability of agricultural inputs and
progress in expanding production and marketing of agricultural
5. For other improvements in the agricultural sector to be agreed upon by
the USAID Mission and the Government
Military Expenditures Review
With respect to Section 620(S) of the Foreign Assistance Act,
State/AID has concluded that U.S.
developmental assistance is not being diverted to military expenditures
and that Guyana's resources are not being diverted to military expenditures to a degree
which materially interferes with Guyana's development. A summary of
State/AID conclusion is
attached.22. Attached but not
That you authorize US to proceed with this
PL 480 sales agreement.
Orville L. Freeman William S. Gaud
1 Source: Johnson Library,
National Security File, Country File, Guyana, Vol. I, Memos.
Forwarded as Tab B to the President under a July 11 memorandum from
Johnson's approval. Tab A to Rostow's memorandum was a July 8
memorandum from Director of the Bureau of the Budget Zwick
concurring with Gaud and
Freeman's recommendation. Johnson checked the
approve options on Rostow and
Zwick's memoranda. (Ibid., Guyana (Brit. G.), Vol. I, Cables, Memos,
and Misc., 5/66–11/68)