Foreign Relations of the United States, 1958–1960, Volume V, Microfiche Supplement, American Republics

HA–27. Telegram from the Secretary of State to the Embassy in Haiti¹

Washington, October 18, 1960, 8:13 p.m.

124. For Ambassador Newbegin.²

Following for your information and guidance in discussing current Haiti economic and financial problems. Following presentation credentials and initial discussions, your recommendations requested regards implementation balance of payments and budgetary support programs and U.S.-financed economic development. Primary objective is preservation close cooperative relations based on mutual confidence and traditional Haitian-U.S. political alignment. U.S. assistance should contribute directly this objective in addition to advancing economic development Haiti and relieving critical financial problems.

Mutual Security Coordinator has made following decisions: 1) commit $5 million from Contingency Fund for support Haitian budget during period October 1, 1960 September 30, 1961: 2) approve $4.5 million Special Assistance funds from FY1961 MSP appropriations for balance payments support and economic development projects (this in addition $ 1.0 million FY61 grant aid previously approved for budget support); 3) earmark $3 million from Contingency Fund to finance additional development projects in Haiti.

Separate instructions will follow concerning negotiation agreements governing utilization budget support, balance payments support and economic development assistance. In preliminary discussions you authorized refer $5 million maximum for budget support and $ 4.5 million for economic development. You also authorized inform Haitian authorities that additional moderate amount assistance may be available for economic development under certain mutually satisfactory conditions. However specific amount of $3 million for this purpose should not repeat not be mentioned at this time, pending your further assessment of prospects for effective utilization thereof in achieving U.S. objectives. Actual commitment and use these funds would be subject to restoration satisfactory working relationship with GOH and agreement on specific projects.

In discussions you should emphasize U.S. earnest intention to continue efforts to help overcome problems of Haitian people. At some time you authorized discuss in frank constructive vein problems which have impeded assistance program in past. Re budget support program, you may inform President Duvalier we anticipate that portion funds available this purpose will be earmarked for some of specific items Haitian budget he requested in July 1960. While budget support funds cannot be used for debt repayment, U.S. expects GOH will promptly meet budget commitments for debt repayment utilizing domestic revenues that purpose (in this connection would be appropriate express concern over arrearages in payments due ExImBank which budgeted in Haitian FY1960 not yet paid). Should be made clear budget and balance payments support made available on understanding Haiti will continue adhere IMF standby agreement and will seek and follow to maximum possible extent advice of IMF and ICA financial and administrative advisers with respects improved budgetary management and fiscal operations.

You may inform President Duvalier that Mr. Atwood of ICA probably accompanied by new USOM Director³ plans visit Haiti in near future to assist you in more detailed discussion FY 1961 assistance program.

Re President Duvalier’s request for moratorium on payments to ExImBank, you may state ExImBank carefully studying this request and you expect receive detailed instructions soon this subject.

ICA concurs this message and request Ambassador discuss with Acting Director USOM.

Herter

1. Source: Department of State, Central Files, 738.5-MSP/10–1860. Confidential. Drafted by Warner; cleared in draft with Atwood, in substance with W. Ellory Dension, of the Loan Division of the Export-Import Bank, and with Hebert N. Higgins of the Office of the Special Assistance for Mutual Security Affairs; and signed by Deputy Assistant Secretary of State for Inter-American Affairs Milton Barall.
2. Ambassador Newbegin presented his credentials to the Haitian Government on November 4.
3. Earl. O. Finnie.