103. Letter From the Administrator of the Agency for International Development (Bell) to the Permanent Representative to the Development Assistance Committee (Coffin)1
I appreciate the full analyses of the role of the DAC and related problems which you have given us in your October airgram and your letter of January 8th.2 I am in general agreement with your assessment. I feel that we have made considerable progress in the past two months in clarifying our own ideas in discussions here and in Paris and in communicating them to the DAC and the IBRD. The following summary represents a consensus on where we stand, which was reached in a recent meeting I had with Gaud, Schaetzel, Leddy, Chenery and Harvey.
Functions of the DAC and the IBRD . The principal U.S. objective for the DAC is to make it an effective body for the evaluation and resolution of general questions of aid policy. While decisions about aid levels, terms, self-help performance, development strategies, et al. will be made in the national capitals, the DAC is the best forum in which to get countries to face the issues involved, to carry on mutual education based on experience, to influence national policies, and where possible, to secure agreement on common policies and development strategies. Therefore, we need a strong chairman, good representation, active collaboration of major members on policy issues, and imaginative use of techniques such as working groups of experts that can pave the way for governmental discussion and consensus.
We regard the IBRD as the principal multilateral operating agency in the aid field and the principal source for the evaluation of individual [Page 294] country programs and performance. We count on the Bank to provide leadership and economic analysis for an increased number of consultative groups. We also look to the Bank for analysis of general economic and financial problems, in some cases in support of policy discussions in the DAC.
Within our broad objective for the DAC I feel we need to establish more clearly our short term work priorities with a view to concentrating our efforts to achieve specific results. I gather from a recent cable that you share this view.3 I hope we can discuss this matter when I come to Paris. Meanwhile, I am asking the Office of Program Coordination to begin an exchange of views with you on this question. I believe greater concentration of effort is our best answer in DAC to the lack of political agreement on aid objectives.
Another important need at this time is to obtain a consensus on the respective roles of the DAC and the Bank and to develop a better working relationship between them. This should be done through agreement in principle at the top levels followed by extensive staff discussions which would involve A.I.D. and Treasury as well as the DAC and the IBRD.
I feel that as a result of a series of meetings involving George Woods, our senior staff members and myself, we have reached a satisfactory agreement on an expanded role for the IBRD. The last such meeting took place on December 21 at which Woods directed DeMuth and Friedman to go over the list of countries that are candidates for coordination of some sort by the Bank and to expand the Bank’s analytical capabilities for country studies.3 Since then Friedman has been made responsible for all economic work of the Bank and has been given a mandate to expand his analytical staff quite substantially. (On this matter I enclose a memo on a lunch conversation between Irving Friedman and Bart Harvey and others.)4
Coordination. The U.S. position on coordination was outlined in the papers prepared for the DAC meeting on this subject which followed our discussions here. I understand that at the conclusion of the DAC meeting on coordination, Thorp received a mandate to explore the possibilities of cooperation and an agreed division of labor between the IBRD staff and the OECD. We are exploring internally and with the Bank our priorities for expanded country coordination which we hope shortly to be able to communicate to you. Since the IBRD seems to be moving in the direction which they were urged to take at this meeting and in our discussions here, the next step should be a meeting between Thorp and Woods which [Page 295] would firm up this understanding. After that there should be sufficient staff contact between the two institutions to work out the necessary analysis on a country basis or to show the gaps which cannot be adequately filled in this way. I should think that A.I.D. should continue to promote this type of collaboration informally both in Paris and Washington.
The Office of Program Coordination has expanded its contacts with the Bank staff and should be able to give you a more detailed report on their analytical activities in the near future. I think that we need to see how far the Bank is willing to go in meeting the analytical requirements of the DAC before deciding how much country analysis the DAC should be prepared to carry out. I agree, however, that the DAC’s principal function of providing a general framework for the aid effort would be greatly facilitated by a solid basis of country analysis being provided to it from some source.
Procedural Matters. We agree with virtually all of your comments on procedural and organizational questions. I certainly want to strengthen Willard’s position as chairman of DAC and will take this up personally with Kristensen during my Paris visit. It seems clear that Willard’s chairmanship has been one of DAC’s few strengths. Its weaknesses have stemmed more from lack of desire and effort by member countries. We should seek to strengthen its performance through means such as the ones which you suggest and most particularly by concentration of effort on a smaller number of priority issues and by advance consultation in key donor capitals.
We will do our best to provide the best possible replacement for Fine. Leddy feels that the Fine position would be a much better one if it could be designated as deputy to Giretti, either formally or informally. Leddy can give you further comments on this subject.
Representation at DAC Meetings. I agree entirely with your emphasis on this question. Hollis and I discussed it with Seers at some length while he was here and I think that we may be able to develop some effective coordination with the British on this score. Perhaps our next target should be a better understanding with the Germans and more bilateral discussions with them and other delegations.
- Source: Washington National Records Center, RG 286, DAC Material: FRC 70 A 5922, Letters and Memoranda to and from Coffin. Confidential. Attached to this letter are several memoranda. One is a February 9 action memorandum from Bartlett Harvey, Acting Assistant Administrator for Program (AID), to Bell, summarizing the contents and recommending that Bell sign the letter to Coffin, which Schaetzel and Hirschtritt (Treasury) had cleared. Another is a February 4 memorandum from Schaetzel to Chenery, in which Schaetzel said that he would have emphasized more strongly EUR’s firm commitment to support AID in the future on DAC matters and concluded: “At the risk of stating the obvious I wanted to make the foregoing comments but not to propose that there should be any change at this end in the letter itself.” In an attached February 8 note to Harvey, Bell wrote concerning Schaetzel’s memorandum: “Good point. Let’s reflect in letter.” In a February 13 memorandum to Bell, also attached, Harvey reported that he had asked EUR to redraft the letter. No changes were made in the letter, however, first because the EUR officer assigned to revise it fell sick, and then because Ruth Phillips, the OECD desk officer in EUR, pointed out that Schaetzel in his memorandum had said to send the letter as is. (Ibid.; and attached memorandum from Richard B. Palmer to Harvey and Aliber, February 13)↩
- Documents 92 and 99.↩
- Not further identified.↩
- The attached January 23 memorandum from Palmer to Chenery, which summarized this January 21 luncheon conversation, is not printed.↩
- Printed from a copy that bears this typed signature.↩