37. Memorandum of a Conversation, Department of State, Washington, November 21, 19551


  • Guatemala: National Economic Planning Council


  • Mr. Burke Knapp, Regional Director for Latin American IBRD
  • Ambassador Sparks
  • Mr. Newbegin (MID)
  • Mr. Fisher (MID)

Mr. Knapp expressed satisfaction in the way the National Economic Planning Council in Guatemala was developing. He said that Colonel Oliva,2 a member of the Commission and Chairman of the Council of State, had not been enthusiastically supporting the Council and that there was a tendency to carry projects directly to the President for decision without reference to the Council. However, Mr. Gordon,3 IBRD representative in Guatemala, has reported an encouraging trend toward channeling important economic matters through the Council.

Mr. Knapp said that Mr. Julien Saks of Klein and Saks had recently called on him, reporting that Colonel Oliva had suggested that the Klein-Saks mission in Guatemala provide a technical staff for economic development, planning and coordination in the office of the President. Mr. Knapp said that he told Mr. Saks that in his view such a development would be undesirable and unfortunate and would undermine the Planning Council. According to Mr. Knapp, Mr. Saks agreed that the idea was unwise and that encouragement should be given to the Planning Council. Mr. Knapp said that he understood that Mr. Tewksbury of the Klein-Saks mission in Guatemala had been attending the Planning Council meetings.

[Page 108]

Ambassador Sparks said that Mr. Tewksbury had not been attending the Council meetings and that the Embassy and ICA had no observer or representative in the Council organization. Ambassador Sparks thought that this was an important shortcoming; the United States Government had a broad interest in the economic development of Guatemala; it was our objective to help foster establishment of stable economic conditions, and we were executing significant policies toward that objective. Our Government was accountable to the United States Congress, not only for the proper expenditure of United States aid funds provided, but for assurance that Guatemala was making adequate use of its own resources.

Ambassador Sparks said that, in the first place, he intended to be informed of the Planning Council’s activities insofar as they affected United States relations with Guatemala. He had been disturbed by occurrences showing lack of adequate coordination among the various entities concerned with the economic program in Guatemala. The Planning Council had suddenly released to the press late in October an elaborate five-year plan calling for expenditure of $247 million. The plan included provision for $16 million in United States grant aid, which we had not heard about before. The Ambassador disliked to be taken by surprise by such announcements. He understood that Mr. Gordon had had much to do with the economic planning of the five-year plan. Secondly, Ambassador Sparks said the Guatemalan Government suddenly announced an invitation to bid on the Pacific Slope Highway without any advance notice to the Embassy. The announcement was premature in that the Embassy had not been notified whether ICA funds could be used on projects submitted to international bidding, and the ICA had not yet announced allocation grant aid for FY 1957, from which the substantial portion of the Pacific Slope cost would be paid. Another example of lack of coordination, but one which would not concern IBRD, was the fact that the ICA Country Director came to Washington to present the FY 1957 development assistance program without even being aware that the Guatemalan Government had reported out a $5 million budget surplus for the current fiscal year. Ambassador Sparks said that his objective was to achieve maximum coordination and that to this end he desired that the Klein–Saks mission have a representative on the Planning Council to keep the Embassy informed in detail on its thinking. This representative might offer appropriate suggestions or even recommendations to the Guatemalan Government as circumstances warranted. Mr. Knapp said that he had not known of the $247 million total of the five-year plan or that it had been announced without advance knowledge by the Embassy. He was aware that Mr. Gordon had helped draft the plan but disclaimed major responsibility for it. Mr. Knapp said that he [Page 109] thoroughly agreed that the United States Government should have an observer or representative on the Planning Council. He said that he had believed all along that Mr. Tewksbury had been attending the Council meetings in this capacity, or at least to watch out for matters in which the Klein–Saks mission would have a direct interest. Mr. Knapp gave assurance that the bank had not resisted and would not resist the inclusion of a Klein–Saks representative on the Planning Council. However, he thought that if the Klein–Saks mission went into the Commission and expanded its function so as to dominate all its operations, the IBRD mission would become superfluous and would be withdrawn.

Ambassador Sparks emphasized that Mr. Gordon was an excellent man held in high regard by the Embassy as well as by the Guatemalan Government, and that he had no intention of seeking his removal.

  1. Source: Department of State, Central Files, 814.00/11–255. Limited Official Use. Drafted by Fisher.
  2. Juan Francisco Oliva, half brother of Enrique Trinidad Oliva.
  3. David Gordon.