Foreign Relations of the United States, 1964–1968, Volume IX, International Development and Economic Defense Policy; Commodities

106. Record of Executive Staff Meeting, Agency for International Development¹

ES/RD–35

Washington, March 2, 1965.

[Here follows a list of the 37 attendees.]

SUBJECT

• Report by the Administrator on His Visit to Paris, Bonn and London, February 21–27, 1965²

This meeting reviewed Mr. Bell’s recently completed trip to Paris, Bonn and London which is described in summary in the Administrator’s memorandum of March 1, 1965.³ During the course of the meeting the Administrator asked for specific actions to be taken as a result of his trip. These include the following:

Germany

First priority attention to bilateral coordination at the country level should be given to the situation in Afghanistan. There should be set up in Washington or Bonn a meeting which would follow up and carry forward Mr. Bell’s initial discussions on this subject. (Action: NESA)

The Germans also have a keen interest in Chile as well as Latin America generally. A specific discussion in either Bonn or Washington needs to be set up to permit staff level discussions on these subjects. (Action: LA)

The Germans also are interested in further discussions on Korea. Timing of these discussions is not urgent at the moment since they probably should not take place until after a Korea-Japan settlement has moved further. (Action: FE)

The Germans are particularly concerned that we have a bilateral exchange of views in advance of consortium meetings. They are particularly interested in talking in advance of forthcoming meetings on India, Pakistan and the Keban Dam. (Action: NESA)

Mr. Bell had agreed that the Germans and we should send reciprocal instructions to our embassies and field missions concerning field level coordination. These instructions should be prepared as soon as possible.⁴ (Action: PC in conjunction with U.S. Embassy at Bonn)

UK

Mr. Bell emphasized that it was clear that the UK desires to enlarge its aid program and improve the terms of its aid as soon as possible. He also mentioned that Mrs. Castle, Minister of Overseas Development, hopes to visit the United States in the future.

The UK is sending a special mission to Malawi. They urged that we participate in assistance to Malawi. We agreed that we would be willing to work with the UK group after the completed study and assist Malawi as appropriate, although we consider UK as having the primary responsibility. (Action: AFR)

The UK also asked us to consider assistance to the High Commission Territories. Although Mr. Bell indicated that we would look at this case on its merits, it did not now seem appropriate for us to take any significant role in the HCTs. (Monitoring Action: AFR)

The UK concurred in an IBRD consultative group for East Africa. We agreed that this was generally desirable. East Africa is one of the countries on the IBRD list of more likely candidates for additional consultative groups. If the Bank moves ahead there would need to be careful effort to make a smooth transition from the DAC working group to IBRD sponsorship. (Action: AFR and PC)

France

The French authorities had indicated to Mr. Bell that French assistance would soon regain 1961 levels. GOF expects to have greater dispersion of its development aid based largely on redirecting funds previously made available for colon repatriation and similar costs in Algeria and Morocco. The French do not expect a reduction in assistance south of the Sahara, although they do look to continued shifts from budgetary support to development programs.

DAC

Paris, Bonn and London all agreed that we should seek to develop some kind of informal Big Four steering committee within DAC which would seek to get Big Four agreement on what DAC should do and how it should go about doing it. Other countries could join in an ad hoc basis as appropriate. Mr. Coffin and Mr. Thorp will be working on this in Paris. (Monitoring Action: PC)

In discussion with the Germans we agreed we should work through DAC in helping to develop better data on debt of the LDCs and on credit flows they receive. Our major problem in this area will be improving data on unguaranteed private debts. (Action: PC)

Representatives of the French, British and Germans all agree on the desirability of re-emphasizing the matter of terms of aid at the July Ministerial Level DAC meeting. (Action: PC)

Other General Items

There was general agreement in the three capitals that the IBRD should set up five or six new consultative groups. While there was no particular agreement on a priority list of countries to be so treated there did seem to be room for the Bank to obtain an acceptable consensus.

Mr. Bell had also discussed IDA replenishment in the three capitals. The French are now talking about replenishment at an annual level of $400 million (against the current rate of $250 million). The Germans appeared somewhat less forthcoming. The UK on the other hand sees the situation much as we do—i.e., we should push for as high a replenishment as possible with donor ratios not too different from those at present. (Monitoring Action: PC)

In all three capitals there was recognition that there is need to find an acceptable multilateral framework in which aid recipients can make general financial and fiscal commitments similar to those that Brazil and Chile made to CIAP in connection with their current development efforts. There was general discussion in the staff meeting about the use of IBRD consortia and consultative groups for this purpose. It was recognized that this would substantially increase the role and largely change the focus of the Bank in these groups. There was also agreement that IMF might serve as the “sponsor” of such commitments in certain circumstances. It was agreed that there was need for further study and discussion with the Bank on this matter. (Action: PC)

During the discussion of Mr. Bell’s talks with the Germans and others on Turkish debt rollover problems, it was noted that the terms we are now recommending for Turkey are different from those that were proposed and accepted in the case of Chile. It was agreed that we should seek to establish standard patterns for negotiation of debt rollovers in all areas and that we should deviate from these standards only after full discussion and justification of a reason for such deviation. (Action is studying standard patterns: PC)

In this connection Mr. Bell noted the need to be prepared for the July high-level DAC meeting to report on and analyze our experience in the relationship between debt rollovers and the development process. (Action: PC)

In conclusion, Mr. Bell commented favorably on our AID staffs in Paris and London. He suggested that we should consider whether we should have somebody assigned directly to Bonn to maintain a close relationship with German development agencies. (Action: PC)

Donald S. Brown
Deputy Executive Secretary

1. Source: Washington National Records Center, RG 286, DAC Material: FRC 70 A 5922, Trip—Administrator David Bell, Paris, Bonn, London, February 21–27, 1965. Confidential. Regarding the several attachments to the source text, see footnote 1, Document 105.
2. Regarding this trip, see Document 104.
3. Document 105.
4. Not further identified.