84. Memorandum From the Deputy Director for Operations (FitzGerald) to the Director of the International Cooperation Administration (Hollister)1

SUBJECT

  • Replies to your Questions on the Latin American Program
1.
Dominican Republic. I recommend that we discontinue our Technical Cooperation Program in the Dominican Republic as rapidly as possible. The country is under complete dictatorship in which, from all I can gather, the dictator clique is feathering its own nest at the expense of the people. Through the Agricultural Servicio, we may have had a chance to work with a reasonable number of the rank and file and leave with them some impression of U.S. interest and concern in their welfare. With this program being liquidated at the request of the Dominican Government, I see little prospect of influencing the course of events on the Island or contributing to the betterment of the lot of the people. The balance of the program would not be large, some $250,000, but I feel sure we are not getting our money’s worth in the Dominican Republic and it would be much better to save it—(or even spend it in British Honduras where both the Government and the people would like our help!).
2.
Servicio Problem. I believe in general the United States does dominate the Servicios in Latin America. I am convinced that almost without exception they do pay better, in some instances much better, salaries than the Government departments. I am asking Mr. Atwood to put together some information on Servicio wage scales compared to those in Government departments.

There is little doubt that the Servicio arrangement has gotten more done and got it done more efficiently and quickly than would the regular government departments. Through the device, the U.S. [Page 376]has been able to maintain control over funds which has greatly reduced, if not eliminated, wasteful and illegal uses; it has established non-political standards for the employment of personnel and provision of much greater security of tenure.

As desirable and necessary as the Servicio arrangement may have been twelve years ago, I have felt for sometime that we need to take a good long look at it today. If, instead of setting up separate administrative organizations of the Servicio type, we had started initially to strengthen regular government departments, improve their administrative and fiscal practices, push for civil service system providing reasonable security of tenure, and reasonable wage rates (it is undoubtedly true that in many government departments, wages are far too low to permit retention of competent personnel), we might be just as far ahead now in actual results and a good deal further ahead in developing the administrative competence of the government departments.

The reluctance to transfer Servicios back into the control of the regular departments of government is not limited to American personnel who may have administrative assignments in the Servicios themselves, but exists also in the local staff who, in many instances, rightly fear the reappearance of a political henchman employment system and a reduction in wages to below subsistence levels. I do not believe that this necessarily has to result, since, as long as we are contributing some resources in the carrying forward of a joint program, we should be able to insist on minimum standards of conduct as a condition of our assistance.

In all fairness, I should say that my views are not held by the majority of Mission Directors or I suspect by the majority of the staff of O/LA. I am, therefore, asking Mr. Atwood to comment on the above.

3. Uruguay. I don’t have very many constructive ideas as to what might be done about our program in Uruguay. Uruguay is one of the most democratic countries in the world, certainly the most democratic in Latin America. It is also one of the most socialistic. Its Government is operated along Swiss lines with the Presidency changing hands every six months or a year. Over a third of the population of the country lives in the Capital, Montevideo. More and more of its production is getting into the hands of the government. Subsidies are general, social benefits are too high for the country to carry indefinitely. All in all, the future prospects look pretty depressing.

I am inclined to feel we should probably continue our existing program at least pending further consideration thereof. Certain minor matters of emphasis might be changed. For example, it appears that we are giving quite a little bit of help in the public [Page 377]administration field. Are we at the same time expressing our doubts about the ability of the government to operate all kinds of businesses which should be in private hands? I don’t know. We have no program in the field of education, and, in view of the generally satisfactory literacy situation, the standard type is probably unwarranted even if it were to be accepted by the Uruguayans. But are we doing anything at the university level or in senior government circles to influence the present trends in social thinking.

Perhaps a good hard-nosed businessman-economist (if there is any such combination) who had sufficient savvy to influence the financial and economic thinking in the country might be worth the gamble. He could not, of course, be sent down to Montevideo as an economic or financial adviser. The IBRD has had some missions in the country and I believe has made some loans to Uruguay. Their views in this general area should be sought.

Finally, if ever we have our evaluation staff set up, Uruguay might be an interesting country for them to cut their teeth on.

4. Venezuela. I believe we definitely should make no more contributions to the health servicio, and this program should become wholly Venezuelan operated and financed. We should, however, continue to provide technical advisers on the program to the appropriate ministry if the Venezuelans so desire. I am strongly in favor of financing the necessary overhead, both in Venezuela and in the United States, to service self-financed training programs in the United States. Finally, I believe we should be prepared to provide a limited number of technicians, particularly short-time consultants in any field in which the Venezuelans ask for such consultants. This would be my program for Venezuela—probable cost $100 to 150,000.

  1. Source: Washington National Records Center, ICA Director’s Files, FRC 61 A 32, Box 309, Latin America. Official Use Only.