CO–20. Telegram from the Ambassador in Colombia (Cabot) to the Department of State1
40. President today pointed fact two years since overthrow dictatorship had been ones of austerity and economic pressures on populace. Colombia inherited many burdens from dictatorship but has nevertheless met its obligations and repaid all it could on outstanding indebtedness. Serious danger exists that if austerity too long continued Colombian people will lose faith in democracy. Under these circumstances President asked what I thought prospects were that Colombia could secure large development credit (he mentioned $200 million) for economically justified projects. He mentioned one difficulty this connection which is Colombia’s inability within budget to provide pesos for Colombian share of projects, and he naturally does not want to print them. He said government is now drawing up broad plan to present in Washington if atmosphere favorable.
I said I knew high prestige Colombia enjoyed in Washington due excellent financial record post-dictatorship government. Under circumstances I thought possibilities getting development loan fairly promising provided Colombian representations convinced loan agencies Washington that plan is economically sound and loan can be serviced. I suggested that when plan elaborated in sufficient detail it be informally discussed in Washington.
- Source: Department of State, Central Files, 821.10/7–1359. Confidential.↩