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

28. Instructions for Moscoso Mission, undated¹

undated

INSTRUCTIONS FOR THE MOSCOSO MISSION

In response to requests made by the Government of Chile for U.S. assistance to meet its current foreign exchange crisis and support its Ten-Year Economic Development Plan, Deputy Assistant Secretary of State Goodwin is authorized to commit the United States to a two-phased proposal of conditional U.S. financial assistance set forth below.

First, an offer of $80 million for development and capital projects partly within the Government of Chile’s budget, conditional on Chile’s putting into effective operation a stabilization plan agreed with the IMF and supported by IMF standby credits. These project loans would be provided by AID in the amount of $50 million and by the EXIM Bank in the amount of $30 million.

Second, an offer to help establish and through a long-term commitment of U.S. funds provide substantial financial assistance for a consortium organized to make available the external resource requirements of Chile’s Ten-Year Economic Development Plan contingent on Chile’s acceptance of the following conditions:

—acceptance and effective operation of a stabilization plan as outlined in the first phase of the U.S. assistance proposal.

—agreement with the U.S. or other mutually acceptable consortium manager on the plan as it may be modified in IBRD and Wise Men review.

—enactment of tax reform legislation to minimally increase public revenue to 16% of GNP.

—enactment of agrarian reform legislation that fulfills the pledge of Article 6, Title I of the Charter of Punta del Este.

If the Chileans indicate that they will not be able to accept the conditions without some indications of the amount of funds the United States would be willing to commit to their long term development plan, Mr. Goodwin will—at that time—inform them that funds in the rough order of magnitude of approximately 50% of the needed external resources can probably be provided by the U.S. if the rest is obtained from other countries and financing institutions.

If the Government of Chile accepts this two-phased offer of conditional U.S. assistance, Mr. Goodwin is authorized to invite the Government to send to Washington as soon as possible a Chilean financial delegation to develop and agree with the IMF on a stabilization plan.

1. Two-phased proposal of conditional U.S. financial assistance to Chile. Confidential. 1 p. Kennedy Library, National Security Files, Countries Series, Chile, January–June, 1962.