Foreign Relations of the United States, 1961–1963, Volume XXI, Africa

196. Paper Prepared by the Policy Planning Council⁰

PPC 61-7

Washington, July 24, 1961.

SELECTED ASPECTS OF U.S. ECONOMIC AID POLICY FOR AFRICA

Summary and Conclusions

This paper attempts to develop a general framework to help guide our future African aid efforts in four of its aspects: (1) East-West competition; (2) aid coordination; (3) regional vs. country programs; and (4) economic development planning and multi-year aid commitments.

1. Despite our repeated affirmation that the task of US economic assistance “is not to negatively fight communism,” our present African aid policies appear in practice to have an unnecessarily defensive cast. Although we slowly are beginning to recognize the limitations of bloc aid as an instrument of political influence, we continue to be overly concerned with maneuvers to outbid bloc aid offers or to keep the newly independent African states from accepting bloc aid. As a result, we are in danger of undermining the effectiveness of our aid effort for short-term political considerations, and thereby jeopardizing our longer term goals of promoting African economic development.

Aside from the questionable assumptions underlying preoccupation with precluding or containing bloc aid to Africa, we should recognize that such a policy, even if we were prepared to shoulder the costs involved, will be self-defeating. It seems quite clear that the newly independent African states, with few exceptions, are prepared to accept economic aid regardless of the source, provided no strings are attached. At the same time the bloc seems bound and determined to expand the scale of its economic activities in Africa. We no longer can expect to keep Africa as an almost exclusive Western preserve. Therefore, instead of futilely trying to outbid bloc aid offers, we should concentrate on trying to limit their political impact. This calls for the carrying out of a more vigorous and imaginative aid effort in Africa responsive to the peoples’ fundamental needs to demonstrate that “economic growth and political democracy can develop hand in hand.”

Of equal if not greater importance than economic aid in countering bloc influence in Africa, particularly in the years immediately ahead, is the need to demonstrate to Africans that the United States is truly a disinterested friend and that we genuinely and fully support their aspirations to run their own affairs free from outside interference.

2. We need to intensify our present efforts to develop closer aid coordination with other aid donors in Africa. At the present time more than a dozen Western countries and multilateral aid organizations are providing Africa well over one billion dollars of aid annually. The effectiveness of this substantial aid effort could be increased materially through closer coordination and consultation among these many donors. We should press actively to make the Development Assistance Committee (DAC) in OECD a really effective instrument for this purpose.

Among other things, we should seek to develop in the DAC a Western consensus regarding aid objectives and aid criteria for Africa; and to ensure that all bilateral and multilateral assistance efforts are fitted into carefully prepared long-range country or regional economic development plans.

At the same time we should continue our efforts through offers of financial assistance and other means to encourage Africans to take more initiative and assume greater responsibility in planning their economic development. To minimize the risks of being accused of meddling in their internal affairs we should seek to provide whatever assistance African countries may need in formulating and executing their development plans through international organizations or private foundations. In addition, we might encourage the creation of an Inter-African board of experts, such as is now being considered for Latin America, to review these plans and provide assistance in seeking out the necessary external financing. Arrangements also should be made for regular consultation between representatives of the DAC and the Economic Commission for Africa as is the case of the Colombo Plan mechanism for Asia.

3. As a result of extreme political fragmentation, among other things, few African states possess the human and natural resources required to satisfy their leaders’ aspirations for economic development. In recognition of this fact most African leaders have spoken out in favor of larger regional economic groupings. We should continue our efforts to encourage such arrangements without, however, making it appear they are merely tools of the West.

Among other things, the West should make known that it is prepared to provide substantial aid funds for investment in basic fields of infrastructure to regional associations large enough to offer the prospect of satisfactory economic growth. Some sort of regional African Economic Development Banks or aid consortia might be useful instruments for this purpose. In addition, we and other Western industrialized countries should investigate the possibilities of providing African regional economic groupings as well as other less developed areas significant one-way trade concessions for their exports. This will help demonstrate that the West is not trying to perpetuate the old colonial system through imperial preferences and like arrangements and at the same time will help keep the newly independent African countries in the Western system.

4. Finally, the US should be cautious about making multi-year aid commitments to African states. Once such commitments are made, it will be difficult to hold back on them because of unsatisfactory performance by the aid recipient without causing serious political friction and ill-will. In addition, we should guard against creating the impression, as a result of our emphasis on planning, desirable as it may be, that if a country comes forward with a well-thought-out economic development plan we are prepared to provide all of the required external financing.

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0. Source: Department of State, Central Files, 770.5-MSP/8-261. Confidential. The source text was transmitted to Secretary Rusk under cover of an August 2 memorandum from George McGhee, Chairman of the Policy Planning Council, that reads: “The attached paper entitled ‘Selected Aspects of US Economic Aid Policy Toward Africa’ was initiated and prepared in S/P. After review in S/P it was circulated to the interested Bureaus and Offices of the Department and ICA for information and comment. An earlier version of this study was discussed at your Thursday policy planing meeting on June 29, presided over by Under Secretary Bowles. The revised version is now sent to you for your consideration.”