Lot 53 D 26: Folder “Policy”

Memorandum by the Assistant Secretary of State for Inter-American Affairs (Miller) to the Director of the Policy Planning Staff ( Nitze )

top secret
for departmental use only

There is no disposition on the part of ARA to challenge the proposed U.S. aid program to South Asia1 simply on the grounds that it leaves our neighbors to the South as the one area not subject to large-scale U.S. assistance.

Our ability to explain and defend this new program before the Latin Americans is gravely impeded, however, by two minor segments of the program, as follows:

The extension, directly or indirectly, of U.S. grant aid to the Arab states, irrespective of their individual dollar and foreign exchange position.
How is it possible to justify on either moral or logical grounds the extension of U.S. grants to a heavy dollar and gold earner such as Saudi Arabia, when similar assistance is not available to such poverty-stricken, dollar-short countries as Paraguay and Ecuador?
The use of a certain amount of U.S. grants for technical assistance and financing of African development.
A segment of this program is, I understand, designated to expand production of crops competitive to those traditionally produced by Latin America for the European market. This aspect of the African program creates frictions in Latin America out of all proportion to its magnitude or intrinsic importance.