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

140. Memorandum of Conversation¹

Washington, November 13, 1967.

SUBJECT

• Mr. Stikker’s report for UNCTAD on the role of private investment in the developing countries (LDCs)

PARTICIPANTS

• Mr. Dirk Stikker, former Secretary General of NATO, UNCTAD consultant
• Mr. Joseph A. Greenwald, Deputy Assistant Secretary for International Trade Policy (E/ITP)
• Mr. Felix S. Bloch, EUR/RPE
• Mr. Chadwick Johnson, E/ITP/OT/GCP

Mr. Stikker said his report, advance copies of which he had circulated, has been well received.² Dr. Prebisch and the UNCTAD Secretariat have also given the report their blessing, subject to some minor wording changes. (Mr. Stikker handed Mr. Greenwald an UNCTAD Secretariat memorandum of his conversation with Dr. Prebisch and Secretariat officials, noting that we should treat the memorandum as confidential.)³

Mr. Greenwald said he also thought the report was very good. He asked if Mr. Stikker had given any thought as to how the report’s recommendations might be implemented. He noted our interest in directing attention at UNCTAD-II to the OECD draft Convention on the Protection of Foreign Property.

Mr. Stikker replied that his job was finished and that it was up to others to follow up on the report. In recent discussions at the UN with Prebisch, Lachmann (Chief, Fiscal and Financial Branch, Department of Economic and Social Affairs), Hoffman (Administrator of the UNDP), and De Seynes (Under Secretary for Economic and Social Affairs), it was agreed that the dialogue between the DCs and the LDCs on the role of private investment should be continued after UNCTAD-II. Mr. Stikker mentioned the UN Secretariat’s recommendation (E/4293/Add.2) for the establishment of a panel of government and private persons to consider how to follow up on the ECOSOC “Summary and Conclusions” (E/4293) of a report (still in preparation) on the promotion of private foreign investment in the LDCs. He noted that the U.S. had “not given a very good reception” to a similar recommendation made at last summer’s ECOSOC. He said that the UN Secretariat’s recommendation for a panel was, in his view, deficient in two major respects. First, the panel members should be responsible to governments and parent organizations rather than participate—as the Secretariat suggests—in their personal capacity only. Second, it is not possible to “evolve a set of commonly acceptable terms” (page 3 of E/4293/Add.2) for the widely disparate situations in which private investment might be involved in LDCs. He said that Dr. Prebisch was wondering whether it would be possible to make both the ECOSOC report and his (Stikker) report the subjects of a resolution proposing the setting up of a panel to see which recommendations in the reports could be acted upon. Mr. Stikker said Hoffman, De Seynes, and Lachmann all favored such a resolution. Mr. Stikker hoped that the U.S. could use its influence to improve the resolution now before ECOSOC.

As for the OECD Property Convention, Stikker said there was no chance at all of getting UNCTAD-II to endorse it. He doubted whether the Convention should even be discussed at the Conference. Perhaps it would be better to leave it to the panel to consider how the Convention might be used.

Mr. Greenwald asked under which UNCTAD-II agenda item the report would be considered. Mr. Stikker said he did not know how the Secretariat planned to use the report. He noted, however, that the report dealt with many of the UNCTAD-II agenda subjects, e.g., flow of private capital, transfer of technology, preferences, regional integration.

In response to a question, Mr. Stikker said he did not know whether the UNCTAD Secretariat would circulate the report under a covering note. Stikker said he had prepared, at Prebisch’s request, a 30-page summary, which he thought UNCTAD would be circulating soon. (Mr. Stikker handed Mr. Greenwald a copy.)⁴ Prebisch plans to have the report itself mimeographed for the Conference, and printed thereafter. De Seynes and Hoffman want the report printed now, fearing that a bulky mimeographed version would not be read.

Mr. Stikker said that the reaction of the business community to the report had been quite favorable to date. James Linen of Time-Life wanted to use parts of it at a meeting in Geneva of American and European business leaders (e.g., David Rockefeller, Eugene Black, Herman Abst) and high-level Indonesian officials (Stikker said he understood Suharto himself would be there, along with Malik and the Sultan). Mr. Stikker said he had OK’d the use of the report, noting that it as yet had no official status. He said George Moore, Chairman of the Board of the First National City Bank of N.Y., had also asked to use the report for some Mexican talks he was having.

Mr. Greenwald said we would be seeking the reactions of U.S. business groups, e.g., U.S. Chamber of Commerce, N.A.M., to the Stikker report. At a later stage, they might also be consulted on how the report should be handled at UNCTAD-II.

In response to Mr. Greenwald’s question, Mr. Stikker said he had no desire to attend UNCTAD-II. However, if Prebisch asked him to introduce the report, he might be persuaded to come.

Mr. Stikker reported that Miller of the UNCTAD Secretariat ventured the opinion that the Stikker report might “save the Conference” from failure. Mr. Stikker and Mr. Greenwald agreed that Muller’s view was rather unrealistic, and that the most that could be expected was that the report would keep the dialogue on private investment going in the permanent machinery of UNCTAD.

Mr. Greenwald thanked Mr. Stikker for keeping us posted on the status of the report, and said we would try to carry on from here.

1. Source: Washington National Records Center, RG 286, DAC Material: FRC 70 A 5922, Private Investment 1967. Limited Official Use. Drafted by Chadwick Johnson (E/ITP/OT/GCP) on November 13.
2. The full text of Dirk U. Stikker’s 336-page typewritten report, The Role of Private Enterprise in Investment and Promotion of Exports in Developing Countries, has not been found, but the conclusions and 63 recommendations (pp. 268–285) are ibid. The full report was subsequently published with the same title, by the United Nations in 1968.
3. Not found.
4. Not found.