GT–9. Despatch from the Ambassador in Guatemala (Mallory) to the Department of State1
REF
SUBJECT
- FY 1960 Program Presentation (MSP and ICA).
[Here follows an analysis of aid programs in Guatemala for FY 1960.]
VI. The above having been submitted, I should like to make some observations and recommendations about which I feel more definitely and strongly than about the details above and which refer more to how the money is spent than in the amount of expenditure.
A. U.N. Agencies. It can be stated without fear of contradiction that in Guatemala the United States receives no recognition, no credit and generally there is complete unawareness of our contributions to organizations of the U.N., such as World Health, UNESCO, ICAITI, UNICEF, FAO, etc. During Fiscal 1958 there were 27 UN technicians with a U.N. contribution of $238,000. (See EmbDespatch No. 50, August 1, 1958).4 While their purposes may be desirable, it is to be doubted they are going to assist in the major struggle against communism. I recommend strong [Facsimile Page 2] de-emphasis of the many UN organizations doing a multiplicity of things mostly by other nationals often unsympathetic to us.
B. American Companies. Not within the direct question of budget presentation, but, nevertheless, impinging upon it as damaging to our policies is the attitude of certain American companies. Within the industry section of ICA/W and in so far as consultation and advice may be given to American companies abroad, it is hoped that advice and counsel may be furnished to the end that the work done in the field [Typeset Page 669] and the money being expended by the U.S. Government be not negated by private American activities. ICA and the Government as a whole undoubtedly have a right to speak in fairly decided terms in this matter to those companies which seek assistance from the U.S. Government in the form of investment guarantees.
Two American companies in Guatemala have been objects of continued and effective public attack: The international Railway and the Empresa Eléctrica, a property of American and Foreign Power. A third major company, United Fruit, saw the light and improved its public relations.
Compared with the job done by public utilities in the United States of building public acceptance or confidence, it can be said with truth that here nothing is done. Rather, continued refuge in a “legal” position has served to convince labor and the public of the validity of charges hurled.
The companies’ attitudes and lack of action seriously counter efforts to improve relations or advance our cause. The subject has been raised with them here with negative results.
The problem is serious in Guatemala and must exist elsewhere. It is hoped the question can be attacked positively on a base broader and more effective than can be done locally. I recommend that companies involved in the various countries be invited to send senior representatives to a conference where policies of the United States may be explained, the role of American companies emphasized, and the benefits of positive public relations made clear. (In the case of Guatemala, as matters now stand, our position would be better were the companies owned in some other nation.)
At the suggested conference a strong effort should be made to make American companies operating in this area understand and cooperate with our labor policy. Even the United Fruit Company, whose public and personnel relations have greatly improved, has a dangerous short-sighted attitude toward unions.5
[Facsimile Page 3]C. Unfair Charge of Development Aid Supervision to TCA. The TCA budget for Guatemala contains a heavy amount for supervision of Development Aid. Not only development aid, but likewise it is understood supervision of Development Loan Funds are chargeable to TCA. It would be possible to have a considerable TCA budget in a country and no technical assistance at all. The distortion to the general aspect, of this is bad enough but more important, it would appear, is the disruption within field organization and a proper askance by Congress. Moreover, there should be no covering up of the total cost of [Typeset Page 670] Development Aid or Loan Funds by charging part of the cost to TCA—let their supervision be included in their own budget. See also Sheet 5 of Annual Introduction to the 1960 Program Submission.6
D. U.S. Posture and Attitude. We are making a serious error in our approach to the use of aid as an instrument to further the foreign policy of the United States—which is supposed to be its object. The uselessness of much of our expenditures is perhaps not so serious as are the lost opportunities, the loss of face, the contempt earned and the wounded pride of the recipients. This grows out of the assumption that persons of other cultures, other backgrounds, other faiths and other political beliefs hold the same attitudes that we do. They don’t. Most Americans would agree in principle that we should utilize aid abroad in such manner as to best fit the local scene. This we find almost impossible because to do so goes against the very warp and woof of our beliefs. Beginning with Congress, and especially there, is a whole chain of justification finally down to the sincere technician in the field who goes abroad because it is a “good” thing. Much of our ICA program appears motivated by a kind of do-gooding charity to help our distant brothers. This is wonderful for us at home. It is a magnificent way to feed our individual and collective egos—often at the expense of wounding the pride of the recipient—but it wins low battles abroad. This broad American legacy of New England Protestantism I can question because I was born in Maine of a long line of hard-shelled Baptists. While our struggle with the forces of Communism may be very important 25 or even 20 years away and when the increased productivity, the better education and well-being of these countries might through our help be better able to withstand subversive forces, it is to be recalled that the danger is not 25 years away. It is now.
I imagine that at every budget hearing before Congress the items must be justified as to whether or not they are worthwhile, whether they will do good, etc., etc. Whenever there is a Congressional visit abroad, either by member of the House of Representatives or the Senate, a first consideration is not whether we are getting any mileage in our struggle against Communism, but rather whether the program is proof against any criticism that it is not doing good, that it isn’t of benefit, etc.
[Facsimile Page 4]This same motivation appears to exist in the Executive Branch of Government. It exists to a lesser degree, but still strongly in the field.
[Typeset Page 671]I submit we should look at the whole question as those in the other country do. If they feel they are really getting something because they must bargain for it—then let us bargain. The Russians apparently don’t make the mistake of free-handed gifts in Asia—they attach some condition and are thereby respected. We in much of the area are looked on as easy marks, often with contempt.
Here in Guatemala, and, as I understand it, from persons with whom I have spoken in other similar countries, it is recognized that we have engendered a very substantial feeling that we should support Guatemala out of some sort of undefined duty to the people and that if we do not do so, political blackmail will result. This I submit is not the purpose for which the aid was started. It is a very unhappy result.
To counter this situation, there are two remedies. First, we need to forget our charity a little and adopt a pragmatic attitude, and, second, we should get away from grant aid and emphasize loans. The size of the loans, the freedom with which they are given and the rate of interest would appear less important than in having the purposes understood. Fostering the idea of some self help, some local pulling of the boot straps, some honesty and responsibility are important. Getting acceptance of the concept of the United States as a helper or partner is important—getting away from the idea of Uncle Sam as someone to work as an easy mark is equally so. The latter sparks no effort at all to work against Communism—it just lays us open to propaganda attack.
If U.S. policy towards the underdeveloped countries were reduced to its bare bones, it could be defined as preventing the entrance of or to reduce the presence of Communism. As soon as we try to make that frame carry other burdens, or obscure its simple design by soft-hearted accretions, we start to lose. Let’s keep it simple and direct; let’s work for our survival and not our conscience.
The announcement of a possible Inter-American Development Institution may be the way out of our present approach in Latin America. It is to be hoped it can be framed in partnership and not paternalism.
- Source: Department of State, Central Files, 714.5-MSP/8–1158. Official Use Only.↩
- It requested an analysis by the Chief of Mission of the objectives and role of aid programs for fiscal year 1960. (120.171/5–558)↩
- It reported a delay in the submission of this report. (120.171/7–2458)↩
- It concerned the approved program of technical assistance by the United Nations for Guatemala during 1959. (340.3114/8–1558)↩
- Documents on UFCO Guatemalan labor policy are in files 814.06 and 814.237.↩
- Not found in Department of State files.↩