261. Memorandum From the President’s Special Assistant (Schlesinger) to President Kennedy1
- British Guiana
On January 11, State and AID representatives met with George Ball to decide on British Guiana policy.
At this meeting, State and AID agreed (a) that technical assistance be expanded immediately to approximately $1.5 million; (b) that an economic mission be sent to Georgetown by February 15; and (c) that the Jagan Government be informed of these steps. The remaining question was whether, in addition, we undertake to finance the construction of a road from Atkinson Field to Mackenzie at the cost of $5 million over a couple of years. (George Ball, by the way, is going to make one more effort to draw the Canadians in by asking them to assume part of the cost of the road, if we eventually decide to go ahead on it; Mackenzie is an important ALCAN center.)[Page 541]
State advocated this project on the ground that the key element in the British Guiana action program (as approved by you on September 4) was an across-the-board, wholehearted effort to work with Jagan; that the delay in starting the economic program has given rise to the impression in Georgetown that we are not interested in helping; that this has substantially increased the risk that our action program may not achieve its objectives; that some dramatic commitment is necessary to reestablish credibility and confidence; that expanded technical assistance will not do it, since British Guiana has had a technical assistance program for seven years; that the acid test from their viewpoint is in the field of economic development; and that therefore if we are to recover the momentum achieved at the time of Jagan’s visit in October and have a reasonable prospect of achieving the objectives of our policy, we should make an immediate commitment to build the road.
AID opposed the road because (a) the AID statute says that (except in case of waiver) no commitments to such projects be undertaken until feasibility studies are completed, (b) AID doubts that we shoot so much of our wad on a single project, (c) AID is still reluctant to expose itself to congressional criticism or to strengthen Jagan by making early demonstrations of support to his government.
Undersecretary Ball took the AID position, and the road project has been deferred until feasibility studies are completed.
While State/EUR will of course loyally carry out the decision, I believe that it regards the program as, in effect, a reversal of the September policy of a wholehearted try. Their feeling, I think, is that knocking out the road (or some comparable demonstration that we mean business in aiding British Guiana development) means the evisceration of the British Guiana action program and virtually guarantees its failure. They also feel that this will create serious difficulties with the British who have [1 line of source text not declassified] assurance on our part that we were serious about providing economic assistance to British Guiana.
I agree with State/EUR that the decision against the road increases the chance that our action program will fail. On the other hand, I do not believe that it makes failure certain. I believe that other steps, if taken with adequate speed and conviction, will do much to restore our credibility; and that, so far as the road is concerned, if our mission recommends it, the commitment of funds to the road may be postponed only from January to June.
However, further delay in the other steps will certainly doom our program in British Guiana. So, in order to make sure that these other steps are taken immediately, I recommend that you send the attached memorandum to Fowler Hamilton.2