243. Telegram From the Department of State to the Embassy in Belgium1
3406. Re Léopoldville’s 29572—Congo Financial Crisis. Paraphrase of Mladek report was delivered Department by IMF. Understand copy also handed U Thant who intended pass GOB and other Europeans. Situation appears grave and we concur with IMF appraisal that either radical cut back of imports or major devaluation and resulting inflation would be political disaster. We also concur additional comment made by Mladek to IMF that unless foreign exchange requirements met soonest prospects current Katanga negotiations will be impaired. Dept therefore seeking sources additional funds on priority basis.
For Brussels:
Spaak has repeatedly expressed his desire to attack Congo economic problems without waiting for a political settlement. Present situation sufficiently grave jeopardize possibility Tshombe-Adoula agreement and we would expect Belgian cooperation.
Ambassador requested seek meeting with Spaak soonest, describe situation as reported reftel, and strongly urge Belgian credit or grant to GOC equivalent 10 million dollars for essential imports and services. Spaak fully aware US balance of payments difficulties but, despite this, we are making serious effort provide additional funds. Under present circumstances very difficult offer grants for third-country purchases, especially as it is well known that Europe and especially Belgium would benefit almost exclusively from this trade. Congo situation critical and US will do its part, but we believe Belgium must share burden by providing additional funds for Belgian franc expenditures; also, it would facilitate US efforts if we could point to fact that interested Europeans doing their share in face of emergency situation.
Belgian assistance this effort would also provide expression Belgian determination support Adoula government. This could have [Page 472] salutory effect on Tshombe during current negotiations. Department considers present emergency aid measures as separate from economic development program but essential to create basis for latter. Ambassador may inform Spaak that we are preparing positive response to his suggestion for long-range economic program organized on basis effective planning and coordination under UN umbrella, including aid from all sources.
- Source: Department of State, Central Files, 870G.10/5–3162. Confidential. Drafted by William C. Harrop of the Office of Central African Affairs and Beaudry; cleared by Fredericks and Harlan Cleveland, in draft by Tyler, and in substance by Hutchinson; and approved by McGhee. Repeated to Léopoldville, London, Paris, and USUN.↩
- Telegraph 2957, May 31, stated that Acting Director of the African Department at the International Monetary Fund J.V. Mladek, who was heading an IMF delegation visiting the Congo, was sending a message to IMF headquarters reporting a grave financial crisis in the Congo far more serious than had been previously reported. Usable foreign exchange reserves had fallen to about $2.5 million, while the foreign exchange deficit was currently about $15 million per month. Mladek proposed that the United States provide $55 million in aid during the next 4 months, with waivers permitting the use of $20 million for non-dollar procurement. (Ibid.)↩