74. Despatch 442 from San Jose, March 51
REF: CERP D–18. SUBJECT: United States Efforts to Encourage Economic Planning in Costa Rica.
In line with the emphasis being placed on economic planning under the Alliance for Progress, the Ambassador has been active in his efforts to increase the interest of the Government of Costa Rica in the preparation of a comprehensive long-range economic plan. In the years that it has been working in Costa Rica, the United States Aid Mission, as a major part of the projects that it has undertaken, has cooperated with the Government of Costa Rica in working toward planned development in the various fields in which it has been active. In the fields of agricul [Typeset Page 192] ture, public health, education, housing, public administration, industry, and labor, much has been done that can serve as ground-work for the preparation of an over-all plan for balanced, effective use of the country’s human and natural resources. On several occasions the Ambassador has discussed the matter of planning with President Echandi, who has said he is very much in favor of a planning commission.
As a step toward making comprehensive economic planning a reality in Costa Rica, the Legislative Assembly, in December of last year, commissioned the University of Costa Rica to undertake comprehensive economic development planning in accordance with the Alliance for Progress (Emb Desp 315, December 21, 1961). The head of this planning group, Lic. Raúl HESS Estrada, has recently been designated to serve in the incoming (May 8) Orlich administration as Minister of Economy and Finance, a post he previously held in the latter part of the Figueres Administration (1954–58). It is therefore anticipated that the change of administration will not cause a break in continuity in the activities of the planning commission. On the contrary, with the head of the commission in the government’s chief economic post, it can be expected that the commission’s activities will be strongly reinforced.
[Facsimile Page 2]When the Ambassador visited Washington on consultation in December 1961, he had several discussions with AID officials on the best way to encourage the Government of Costa Rica to proceed. When he expressed to Alliance for Progress Director Teodoro Moscoso his desire to encourage and assist the Government of Costa Rica to initiate and work on their economic development plan, Mr. Moscoso suggested that he get in touch with Mr. Harvey S. Perloff of Resources for the Future, Inc., to seek his advice and assistance. The Ambassador was unable to contact Mr. Perloff while in Washington but since returning to San Jose has corresponded with Mr. Perloff in the hope of obtaining his advice and assistance. (Enclosures 1, 2, 3 and 4.)
In the course of conversations with the Inter-American Development Bank in Washington last December the Ambassador was informed that the IDB expected to play a positive role in planning. It was his impression that the Bank was in the process of formulating the contributions it would be able to make in this field.
Also during his visit to Washington in December, the Ambassador discussed with Mr. J. Burke Knapp, Vice President of IBRD, the possibility of that institution providing technical assistance to the Government of Costa Rica (Enclosure 5). This conversation was followed by the visit to Costa Rica in February of Feliks Bochenski, IBRD Loan Officer. Embassy discussions with Mr. Bochenski are detailed in the attached memorandums of conversation (Enclosures 6 and 7). He directed his efforts toward representatives of the new administration that will take office on May 8, and met with a favorable response to the idea of the [Typeset Page 193] IBRD assisting Costa Rica in its planning effort. There was, however, some difference of opinion as to timing and he encountered a feeling of uncertainty as to technique.
When Mr. Bochenski outlined his proposals either for 1) a survey team to make a planning study, 2) a resident IBRD representative to advise on planning, or 3) a combination of the two approaches, President-Elect Orlich said he would like to think it over in order to decide on the best approach. Economy and Finance Minister-Designate Raúl Hess said he wishes to get under way with planning, but wants a month to consider technique. Central Bank officials, as well as Jaime Solera (former Central Bank President and currently financial counselor to Mr. Orlich), would like the IBRD to begin planning work in Costa Rica immediately.
Apparently Raúl Hess, who is expected to be the key figure in Costa Rica’s planning effort after May 8, is the only person who has significant reservations about the IBRD assuming a major advisory role in Costa Rican planning. As an economist who is just now completing a work at the University on planning, and as a partisan of ECLA, with which IBRD’s relations have sometimes been strained, Hess’s lukewarm attitude may stem from a reluctance to agree to something that may make it more difficult for him to act in accordance with his own ideas.
The Embassy is convinced that the new administration will accept the idea that an economic plan is needed and will cooperate in the preparation of such a plan. The matter will be pursued with President-Elect Orlich in [Facsimile Page 3] order to enlist his full support. The Ambassador has recently reiterated to Mr. Moscoso (Enclosure 8) his desire to obtain suggestions and advice that will help toward the initiation of a planning program by the GOCR as soon as possible.
FOR THE AMBASSADOR:
Enclosures:
1. Letter to Mr. Perloff from Ambassador 12/21/61 (5 copies)
2. Letter to the Ambassador from Mr. Perloff 1/8/62 (5 copies)
3. Letter to Mr. Perloff from the Ambassador 1/24/62 (5 copies)
4. Letter to the Ambassador from Mr. Perloff 2/2/62 (5 copies)
5. Letter to the Ambassador from Mr. Knapp 12/29/61 (5 copies)
6. Memo of Conversation with Mr. Bochenski 2/8/62 (5 copies)
7. Memo of Conversation with Mr. Bochenski 2/16/62 (5 copies)
8. Letter to Mr. Moscoso from the Ambassador 2/6/62 (5 copies)
- U.S. efforts to encourage economic planning in Costa Rica. Official Use Only. 3 pp. DOS, CF, 818.00/3–562.↩