26. Memorandum of conversation, June 2, between Barall and Chargé Soto1
SUBJECT
- Difficulties in Programming U.S. Assistance for Chilean Reconstruction
PARTICIPANTS
- Deputy Assistant Secretary Barall, ARA
- Chilean Chargé d’Affaires Fausto Soto
- Mr. Jorge Burr, Minister Counselor, Chilean Embassy
- Mr. Jose Zabala, Attaché, Chilean Embassy
- Mr. Joseph Carwell, Acting Director, WST
- Robert M. Phillips, WST
After expressing his Government’s warm appreciation for the generosity of the U.S. in appropriating the $100 million for Chilean reconstruction and rehabilitation, Mr. Soto asked Mr. Zabala to explain some of the difficulties which had arisen between representatives of the Chilean Government and the United States Operations Mission concerning the proposed utilization of this assistance. Mr. Zabala said the GOC was having a hard time adjusting to the views of the USOM that “rehabilitation” should be narrowly defined and that emphasis should be placed on the concentration of projects in order to achieve maximum public impact. He also feared that the strict administrative requirements of the USOM might delay the execution of agreed projects.
Mr. Barall pointed out that the USOM’s position was not necessarily an unreasonable one. In the interest of our aid programs in Chile and elsewhere, ICA had to be guided by the intent of Congress as established not only in the law but also in the legislative history. We [Typeset Page 64] expected, nevertheless, to be fairly flexible with regard to defining “rehabilitation,” so long as it could be shown that effective use was being made of the money and that it was not diverted to unrelated projects outside the devastated area. Concerning the concentration of projects, past experience had demonstrated that our Congress wanted our development assistance devoted to durable, easily identifiable projects rather than to a number of scattered, small projects which might involve funds from various sources. Basically, what the USOM wanted, in the interest of Chile and other aid-recipient countries, was to be able to show our Congress that our assistance was being effectively utilized.
[Facsimile Page 2]Mr. Barall went on to state that we expected to know within the next week the terms and conditions to be offered to the GOC for this loan, and we hoped that these would be considered advantageous. We intended to do everything possible to expedite the necessary administrative procedures, and for this purpose ICA was appointing a well-qualified man who would work full time on this program. Being a separate piece of legislation, the loan was not subject to the administrative requirements of the Mutual Security Act, and this should expedite matters.
Mr. Carwell stated that our Ambassador at Santiago would be instructed to negotiate the corresponding bilateral agreement.
Mr. Soto expressed appreciation for this information and said he would leave with us an aide memoire. [Attached to this aide memoire, dated June 2, are copies of a memorandum of a meeting held on May 5 between representatives of the GOC and USOM, and a letter from the USOM Housing Division to the Ministry of Public Works dated May 16. These documents were cited by the Chileans as illustrating the difficulties mentioned by Mr. Zabala.]
- Difficulties in programming U.S. assistance for Chilean reconstruction. Official Use Only. 2 pp. DOS, CF, 725.5–MSP/6–261.↩