711.379/2–2349
The Secretary of State to the Ambassador in Cuba (Butler)
No. 43
Sir: Sr. Carlos Hevia, Cuban Minister of State, during his recent visit in Washington expressed the desire of his Government for a comprehensive program for the development of Cuba involving economic and technical assistance from the United States and measures to be taken by Cuba to encourage private foreign investment. He expressed the opinion that his Government would be able to ratify a treaty satisfactory to the United States if this were part of an over-all program. He recognized the problems with which United States business has had to contend in Cuba but believes that the trend of public opinion and labor there has passed its peak of extremes and that conditions now permit more favorable treatment of foreign business.
A draft of a new treaty entitled Convention of Establishment and Economic Development2 was handed informally to the Minister on January 18, 1949. Copies of this have been sent to the Embassy. The Convention is shorter and simpler than the draft treaty presented to Cuba in January 1947,3 and contains strengthened provisions on investment. The new draft does not necessarily represent final United States views and this Government reserves the right to make changes.
In regard to an over-all program, this Government is desirous of cooperating with Cuba in economic development and is prepared to discuss the matter with Cuban officials. As indicated by the President in his inaugural address on January 20,4 this Government places special emphasis upon the advantages to be gained from technical assistance, and is prepared to make this type of aid available to Cuba within the limits of available personnel. The United States is concerned that its technical assistance be as effective as possible and therefore urges [Page 624] that countries requesting technical assistance undertake the domestic measures necessary to use such assistance effectively and other measures necessary for their economic development. These measures include fiscal and administrative measures designed to stabilize economic and financial conditions, measures to attract foreign private capital and to encourage local capital accumulation and investment.
The Department envisages the essential parts of a Cuban program as consisting of, (1) technical assistance from the United States to Cuba, the precise nature of which would be determined after discussion of Cuba’s specific needs and in harmony with whatever arrangements may be adopted to implement the President’s proposal. (Such assistance might include attention to over-all development problems, including the implementation of studies already made, the supplying of technical experts covering various fields such as fiscal matters, government administration, education, health, agriculture, industrial techniques and airport development; in the case of industrial techniques and engineering surveys the services of private firms would probably be required); (2) measures to be taken by Cuba to assure effective utilization of technical assistance and otherwise to facilitate economic development; these would include among other things encouragement to private investment and ratification of a treaty along the lines of that handed the Minister; (3) consideration by the United States of economically justifiable credits by the Export-Import Bank, or United States support for such credits by the International Bank. Cuba should not be led to believe, however, that this Government is committed to the extension of credits since no commitment is being made. Applications for Export-Import Bank credits, which in any case should be for specific projects rather than for a global sum, will be reviewed carefully at the appropriate time, as will possible United States support for International Bank credits.
The Embassy will note that it might be possible to misinterpret the program outlined above as an arrangement under which the Cuban Government undertakes, in return for a valuable quid pro quo, to aid United States investors and ratify a treaty which this Government considers Cuba should freely ratify in its own interest. The Department considers it desirable that such a possible misinterpretation be avoided, particularly from the point of view of appearing to establish a precedent for over-all bilateral economic arrangements which this Government might enter into with other countries. The program should be considered as consisting of several parts, all of which are clearly in Cuba’s interest. The Department recognizes that the Minister of State [Page 625] will doubtless find it desirable or essential to emphasize the benefits which Cuba may expect to receive but would regard it especially unfortunate if the program were to become distorted and thought of in terms of favors bestowed by the United States in return for encouragement to United States private investment, and if these favors were regarded as including possible credits from this Government, to be shortly forthcoming. Emphasis in discussions with Cuban officials and in the presentation by Cuba to the public should be placed on the benefits from technical assistance, which in the light of the President’s speech the United States is prepared to make available to many countries, and the benefits to Cuban development from private investment. Unless technical assistance is accompanied by investment it cannot yield its greatest benefits. Similarly investment without technical assistance is less effective than if the two are integrated. United States programming of kinds and amounts of technical assistance would take into account actual investment projects.
The Department understands that the Minister of State desires to make rapid progress in the formulation and implementation of plans as outlined above. The Department shares this desire for rapid progress and is prepared to discuss the matter, including a preliminary review of the draft convention, at the Minister’s convenience either in Habana or Washington.
A supplementary instruction on commercial policy aspects of the matters proposed for discussion will be sent the Embassy shortly for its guidance.5
Very truly yours,
- Not printed.↩
- Not printed; for information on the draft treaty, see Foreign Relations, 1947, vol. viii, p. 608 and footnote 16.↩
- Text in Department of State Bulletin, January 30, 1949, p. 123. Documentation on the Point Four program is contained in volume i.↩
- Not printed.↩
- Deputy to the Assistant Secretary of State for Economic Affairs (Thorp).↩