Foreign Relations of the United States, 1961–1963, Volumes VII, VIII, IX, Arms Control; National Security Policy; Foreign Economic Policy, Microfiche Supplement

393. Letter from Tetro to Gardner, October 6¹

October 6, 1961

Dear Mr. Gardner:

Regardless of how we deal with this difficult subject in our positions for the forthcoming international meetings, I would like to place before you and others in the U.S. Government some of the thoughts we are considering in USDA with respect to jurisdictional problems of multilateralized economic aid.

First, I would like to say that the concern some of us feel with respect to such jurisdictional aspects of the problem of multilateral “food aid for economic development” is perhaps not fully justified. The one real goal we should strive for is the proper coordination and integration of all resource availabilities within a country’s total investment or development program. All foreign aid, including food aid should thus be subject to the rule that all types of financial and commodity assistance a country receives from abroad, including such assistance through international channels, must be fully integrated with each other and with the domestic resources devoted to current investment within the total investment program of each receiving country.

This is the overriding requirement. It is a requirement for any kind of aid, food aid or financial aid, bilateral aid or multilateral aid. But surely such integration cannot be done by FAO. Neither can it be done by the U.N. Special Fund. It cannot be done by any other international agency, nor by the United States through bilateral program machinery, nor by the IMF or the IBRD, or the IDA, without special arrangements that call for a great deal of cooperation on the part of other governments or agencies.

It is true, of course, that at times some of these givers may have had much leverage for compelling receiving countries to yield on an integrated total investment program. But if there was such leverage it was because of the great importance of the aid given by such an agency or country. Obviously, even an expanded initial program of multilateral food aid for any one country would be too small to carry such a leverage—quite apart from the fact that neither the U.N. nor the U.S. may want to rely on this type of compulsion.

The point I am trying to make is that proper integration can only be carried out at the country level by the country’s own government. And what we ought to seek is machinery and procedures that would assure such integration. Perhaps each receiving country could be made to agree that it would appoint an experienced economist (acceptable to all those giving aid) as international advisor for its total investment program. The advisor would help in the process of integration and would report to all aid-giving countries and agencies concerned. In such efforts an effective role for the U.N. resident representative might be highly valuable, particularly in the case of countries that do not have an effective government. In other cases a different approach might be more promising, for example, in a country where IBRD assistance is especially important and where an IBRD economist might be called upon to give that help.

We have been wondering for some time whether it may be feasible to pursue this approach. Personally, I favor a United States position calling for arrangements that acknowledge the necessity of integration of all resources devoted to investment; and we did put a specific reference to this into our positions for FAO earlier this year. Beyond that, our suggestion could perhaps call for the appointment of overall advisors, one in each country, to help governments towards such integration. In this activity they might as much represent the United Nations as they might represent other sources of outside aid—including countries giving bilateral aid. It is also my personal view that the United States might even offer to consider such an arrangement for its own bilateral programs so far as legal requirements permit. I raise all these questions without prejudice to a final official position of my Department. But I think it would be useful to have some preliminary exchange of views.

If the approach I mention were to be found constructive and feasible, it would focus not on a formal problem but on the essence of the question. We could still call for a U.N. role in the development of multilateral programs for economic and social development. But as FAO and as any other individual source of aid it would have to subordinate itself to the total integration effort at the country level. Needless to say, that similar integration at the country level seems desirable for technical assistance from all sources. And indeed there should also be integration of technical and educational assistance with economic aid. Perhaps this would be asking too much. But I believe it should be our goal and should be openly proclaimed, even if we have to approach it in stages.

With kind regards,

Sincerely yours,

Robert C. Tetro

Administrator

Attachment

October 18, 1961

Dear Bob:

I want to thank you for your letter of October 6 which reflects some of the thoughts you are considering in USDA with respect to jurisdictional problems of multilateral economic aid. Your letter opens up an exchange of views which I warmly welcome.

There is much in what you say with which I fully agree. As a matter of fact, I believe we see eye to eye on most of the basic issues raised. In particular, I strongly endorse your emphasis on integration on the country level, possibly by way of the appointment of experienced economists as international advisers to less developed countries for their total investment programs, and certainly by way of strengthening the position of the Resident Representatives. It may well be that we shall need both such top-level advisers to individual governments and stronger Resident Representatives. The task of the latter would be to help pull together the views and programs of the various international agencies operating in a given country and to assist them in the implementation of country development plans. The Resident Representatives should also have the important function of consulting with the country directors of bilateral technical assistance programs. This kind of coordination on the country level will, as I see it, require slower cooperation at the center, i.e., the headquarters of the participating agencies. I do believe that in this context a special role should be assigned to the management of the Special Fund.

I am very much looking forward to discussing these and related matters when we meet for luncheon.

With warm regards.

Sincerely,

Richard N. Gardner

Deputy Assistant Secretary
for International Organization Affairs

1. USDA and jurisdictional problems of multilateral economic aid. No classification marking. Attached is an October 18 reply from Gardner to Tetro. 3 pp. Department of State, Central Files, 811.0000/10–661.