VE–37. Despatch from the Chargé in Venezuela (Burrows) to the Department of State1
REF
- Circular 1492
SUBJECT
- MUTUAL SECURITY AND RELATED PROGRAMS
1. Objectives
As seen from the Embassy point of view, the principal U.S. objectives in Venezuela would seem to be:
- 1.
- To strengthen and support the present freely-elected democratic government as an ally of the Free World.
- 2.
- To cooperate in the maintenance of a well trained military force capable of, and devoted to, defending the interests of the Free World in this Hemisphere.
- 3.
- To strengthen Venezuelan economic stability and assist in the development of economically feasible industrialization so as to achieve independence from the almost sole reliance on its petroleum and mineral industries.
- 4.
- To assure strong Venezuelan petroleum and iron ore industries whose resources would be available to the United States in times of national emergency.
- 5.
- To maintain in Venezuela a political and economic climate favorable to the investment of foreign capital, to foreign commerce, and to the use of foreign technical know-how in order to foster free enterprise, free trade, and the development of the country and its resources.
- 6.
- To promote recognition by Venezuela of the dangers of Communism.
II. Role of MSP
The MSP offers an opportunity to demonstrate to Venezuela our interest in her well-being and her development. It supplements the work of the technical missions of the UN and such of its specialized agencies as the FAO, the World Bank, etc. Most important, the MSP is concrete evidence of our continued interest in and support for, Venezuela in these critical years of her democratic development [Typeset Page 1288] following the overthrow of the dictatorship. Venezuela is a target of the communists who are quick to point out failures and difficulties of the present Government as indicative of the weaknesses of capitalism and who are as quick to allege American disinterest in the needs of the people and our intent to maintain Venezuela in a position of economic independence. The importance of Venezuela in the Caribbean and the South American [Facsimile Page 2] political and economic picture, as well as its importance as a field of U.S. private investment points up the necessity of the United States making every reasonable effort to keep Venezuela friendly, politically stable, and economically prosperous.
III. Technical AID
A. MSP Present Program
Mutual Security Program projects in Venezuela at present are limited to a small Technical Cooperation Program administered by USOM Caracas in fields related to public health. A modest TCA program operating since 1942 was substantially reduced as of June 30, 1959, as a result of a request by the Government of Venezuela to transfer rural water supply program of the Cooperative Health Service to Ministry of Health. This leaves only consultants in occupational health and vital statistics as the total program at present with several other consultants requested. While the costs of the Inter-American Geodetic Survey activities in Venezuela are partially reimbursed from MSP funds, this essentially military program is not commented upon in this airgram. With exception of changes in the rural water program noted above the basic need with respect to aid, including loans, has not changed substantially since Embtel 109 of August 29, 1958. This does not mean that the Government has not been making progress but the Constitutional Government has confined itself to basic planning for the next four to five years and as yet has not executed any extensive implementation of this planning.
B. Non-U.S. Programs
Since the revolution, the Venezuelan Government has stepped up the program of requesting and obtaining through the UN an additional number of technicians, about 30 of whom fall into the technical assistance class. Specialties of these experts are: steel, coal, forestry, veterinary medicine, soils, cattle fences, fisheries, general industrial development, telephones, governmental organization, budget, personnel, tariffs, education, sociology, industrial health and safety (OIT), labor training and legislation, nurses training, and econometrics. It is expected that about 30 more technicians in different fields complementing the present group will be requested from the UN.
A ten-man mission from the IBRD is now engaged in a study of the Venezuelan economic situation with a view to recommending any needed revisions of government economic and fiscal policy.
[Typeset Page 1289]There have been and are private technical groups here on government contract to study various phases of the economy including transportation, public administration, etc., to assist in the more orderly development of governmental processes and policies.
IV. Loans
The Government of Venezuela continues to reiterate its reluctance to borrow [Facsimile Page 3] from foreign sources. The proposed extraordinary budget will require about Bs. 1.1 billion if passed in full by the Congress. The Government hopes to raise this amount from local sources.
Some capital requirements for specific projects might lead to borrowing from such organizations as the IBRD, the International Finance Corporation, the Export Import Bank, and the Development Loan Fund.
V. Coordination of Programs
The coordination of technical and economic assistance programs is by government order the responsibility of the Oficina Central de Coordinación y Planificacion in the President’s office. In the past there has been no particular problem for Embassy in field of coordination because of very special nature of USOM and IAGS activities here. There has been no duplication of U.S.-UN aid efforts in the past.
VI. Future AID and Loan Programs
Although it is easy to comment on future policy when there are existing programs or studied projects in being, we are troubled here with the fact that the needs, probable utilization of aid and loan programs, and the possible desires of the Venezuelan Government cannot be based upon either any historical concept or known present planning. As noted, the demands in the past have been small, with the exception of the UN technical and program; there has been no history of foreign loans from international organizations and only a minor amount of loans from private banking. Thus we must comment upon possibilities which are still in the minds of the Venezuelan Government officials and we will not know how the program can develop until it is revealed to us through requests. We do know that on the technical aid front, in addition to the expected request for more UN technicians, the President himself in an exchange of letters with Assistant Secretary Rubottom expressed deep interest in the present health program and in its expansion. It is expected that further technical assistance in other fields will very probably be the subject of future requests. Also, apart from strict technical aid, we know the Government is interested in acquiring arms at token cost. Another field in which some interest has been shown is that which is covered in other countries by the ICA Labor program.
With respect to loans it is felt that it may not be possible to meet the financial needs from private local sources and therefore the facilities of [Typeset Page 1290] the Export-Import Bank, the Development Loan Fund, the International Finance Corporation and the IBRD may well be utilized.
VII. Recommendation
I feel that the United States aid program and those in which it cooperates, through the United Nations, can make a very definite contribution to the economic development of this country and thus to its political stability; nothing should be done at the present time to make more difficult the request for or the granting of such aid or for loans where needed.
[Facsimile Page 4]Technical assistance and/or financing given to Venezuela during this formative period of its first democracy in many years will be well repaid in both political and economic results.
I believe that the Government is desirous of taking advantage of technical aid and certain types of financing that it can profitably use and 1s appreciative of our interest in cooperating.
I believe that the present MSP program should be continued as our minimum contribution to the orderly development of Venezuela and as a demonstration of our continued interest and good will, and that we should hold ourselves receptive to new proposals for technical aid and financing.