Foreign Relations of the United States, 1961–1963, American Republics; Cuba 1961–1962; Cuban Missile Crisis and Aftermath, Volumes X/XI/XII, Microfiche Supplement

121. Airgram CA–6720 from San Salvador, December 20¹

San Salvador, December 20, 1962, 3:14 p.m.

SUBJECT

• El Salvador—Plan of Action from Present to July 1, 1963

The Latin American Policy Committee met on November 28 to discuss a Plan of Action for El Salvador. The enclosed Plan incorporates recommendations made by the Committee which then approved it for the guidance of all agencies concerned with U.S. policy toward El Salvador.

Rusk

Enclosure

El Salvador—Plan of Action from the Present to July 1, 1963

I. OBJECTIVES:

A. Political

1. Further reconciliation between the business-industrial community and President Rivera and his administration in order to make it possible for the Government to move ahead vigorously with development and reform programs along the lines advocated by Rivera in his inaugural address.

2. Assertion of leadership by President Rivera in the executive and legislative branches of the Government to get action on essential, long-delayed legislation.

3. The commencement of a program aimed at developing local community consciousness of and enthusiasm about their local developmental possibilities; capability for initiative and for producing effective and democratic local leadership; and a sense of responsibility and a will to use their own local resources to meet their necessities.

4. Reduction of communist, pro-Castro, anti-government and anti-U.S. influence in the national university, and further isolation of the Salvadoran Communist Party from political life.

5. Continuation of attitudes favoring political stability and moderate social and economic reform on the part of the Salvadoran military, the only really effective organized anti-Communist force.

6. Continuing development, as rapidly as is feasible, of responsible and democratically-oriented labor unionism, though realizing that it will have to continue to be supported largely by Government subsidy for the present.

B. Economic

1. Continuation of economic development activity at a steady or increasing pace, based on external loans and on an increase of 15% to 20% in tax revenues in 1963 over 1962 through proposed tax law reform and improvement in administration.

C. Security Forces

1. Maintenance of military and police forces capable of preserving law and order, detecting and countering subversive attempts against the government, and contributing through a civic action program to social and economic development.

[Here follows section II, “Current Situation,” describing El Salvador’s recent political changes, President Rivera’s prospects, the strength of the communists, the orientation of the labor movement, the influence of the National University, prospects for economic development, and the need for government revenue.]

III. LINES OF ACTION:

A. Political

1. Continue to emphasize to both sides, especially the business community, the importance of cooperation between the government and the entrepreneurial class in the development of the country and the improvement of the condition of the individual, and the importance of adequate consultation between the Government and businessmen in preparing and carrying out forward-looking plans to accomplish these aims.

2. Continue to impress on President Rivera and members of his administration that continued failure to enact amendments to the hastily-drafted 1961 decree increasing income taxes, to make it appreciably more effective, could seriously hinder achievement of the administration’s economic and social development aims. Stress the importance of taking steps to build a public administration capability for increasing government revenues, to speed the mobilization of the country’s resources and spread the tax burden more equitably, while ensuring that private initiative will not be stifled by excessively punitive measures.

3. Stimulate President Rivera into active leadership of his administration by making disbursements on forthcoming AID loan projects contingent on the adoption of measures outlined in 2 above; and by vetoing disbursements under the existing IDB housing loan in excess of US $1 million unless the long-promised basic savings and loan legislation is enacted by the time that level of disbursements is reached.

4. To obtain Objective 3, attempt to encourage development of constructive local leadership, self-confidence among rural inhabitants, and improved conditions in rural areas. Do this through an integrated community development approach, defined as “A movement designed to promote better living for the whole community, with the active participation and, if possible, on the initiative of the community, but if this initiative is not forthcoming spontaneously, by the use of techniques for arousing and stimulating it in order to secure its active and enthusiastic response to the movement”. Assign necessary AID resources to the early development and implementation of such a program.

5. Mindful of the fact that a political opposition which believes it cannot win in elections will inevitably attempt to foment coups, encourage initiatives by the Rivera Government designed to permit non-Communist opposition elements to acquire and hold local and national elective offices.

6. Seek to encourage development of stable political parties with well-organized grass-roots structures by both the “Ins” and the “Outs”.

7. Support the IDB regional university reform program of introducing, via the Superior Council of Central American Universities, Basic Studies curricula and other measures to raise scholastic standards, eliminate politically-motivated “professional students” from the university, and direct the efforts of the country’s qualified youth toward serious study and away from politics.

Increase still further U.S. contacts with university students, and secondary school teachers and students. Special attention should also be given to contacts among normal school students and teachers.

8. Continue to assist the weak non-communist labor unions to raise the qualifications of their present and potential leaders by offering training grants, as available; arranging contacts with U.S. labor union representatives interested in helping them; and providing informational and similar services available from the U.S. Government, along with a morale-lifting show of interest in their problems and activities. Suggest to Salvadoran Government officials and to private employers where feasible the desirability of adhering to labor relations policies which will permit the democratic unions in the country to build independent strength by obtaining tangible benefits for their followers. Attempt to make clear to employers that otherwise the inevitable development of labor unions will be dominated by the communists.

9. Suggest to President Rivera and to his public security officials the importance of implementing the much-needed and stringent new anti-communist law with strong emphasis on accuracy in identifying targets so as to avoid popular discrediting of the new law and the Rivera Government as merely arbitrary and repressive. Continue training activities in intelligence as needed.

10. Discreetly promote the adoption of an Army retirement plan providing for the automatic and mandatory annual retirement of appropriate numbers of officers in the higher command and civilian government positions. The objective would be to avoid future congestion in the senior ranks and consequent discontent among younger officers, while diverting the energies of honorably retired officers to useful activity elsewhere in the society.

11. Expose fully the Castro-Communist threat to El Salvador’s future, with particular emphasis on the failure and negativism of the Communist experiment.

B. Economic

1. Urge government-business collaboration in planning economic development, as in Political Line of Action No. 1, above.

2. In recognition of the fact that the Salvadoran Government’s own resources are insufficient to match to any significant extent additional infusions of external credit for economic development, adjust, as needed, the matching requirement for AID development loans to a nominal percentage, provided the Salvadoran Government for its part adopts tax reforms which together with improvements in administration could increase tax revenues in 1963 on the order of 15% to 20% over 1962.

3. Support future Salvadoran approaches to the IMF for a judicious increase in the present Central Bank credit ceilings, provided that the Salvadoran Government takes prior or concurrent actions to increase public revenues as in 2 above. These measures would together be intended to enable the government to continue to borrow abroad and to maintain sufficient investment activity to keep up the momentum toward expansion of the economy without causing serious risk to fiscal and monetary stability and, as a consequence, to investor confidence.

Encourage maximum utilization of the available private capital on deposit in Salvadoran banks.

4. Urge the Salvadoran Government and private organizations to plan jointly with regional, national and private Central American entities to strengthen the Central American Common Market and regional development.

5. With a view towards achieving a fully operating and effective economic planning mechanism by the end of 1963, assist in the expeditious procurement, either through the consultant firm of Robert Nathan or if necessary through AID/W, of the needed additional technical staff.

6. Use our influence to help El Salvador and the other Central American countries get faster response from the Central American Bank for Economic Development on its application for loans for its segment of the regional cadastral survey, which is needed for improved land tenure, use and tax policies.

C. Security Forces

1. Make available to the Salvadoran Government, on a grant basis if necessary, the minimum military and police equipment and training needed to maintain public order and internal security.

2. Support a civic action military program through MAP and AID which would include training for literacy and technical skills.

3. Support a troop information program which would contribute to the objectives outlined in this paper.

1. Plan of Action for El Salvador to July 1, 1963. Secret. 5 pp. DOS, CF, 611.16/12–2062.