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

99. Letter From the Permanent Representative to the Development Assistance Committee (Coffin) to the Administrator of the Agency for International Development (Bell)¹

Paris, January 8, 1965.

Dear Dave:

The immediate occasion for this letter is the report of your conversation with Secretary General Kristensen about the organization of the DAC and your scheduled discussion of the general question with Bart Harvey, Bob Schaetzel and others. It would have had to be written in any event as a follow-up on our previous messages on the role of DAC in order to take account of developments since my trip to Washington in mid-November, and to point out certain problems which still need to be addressed. (The earlier messages are attached for your convenience.)²

Behind the Secretary General’s suggestion to you about personnel and the reorganization of the Committee there lay undoubtedly the same basic concern which has troubled you and others in Washington, and has produced pretty wide criticism here in Paris; a feeling that the DAC has not been achieving adequate results. When most critics talk in these terms, they are thinking of the objective of promoting an increased flow of aid. That was the one generally accepted objective for establishing the DAC in the first place (though it was never explicitly stated), and it is certainly disquieting to note that there has been a decrease in the flow of assistance during the past three years. Since this has happened, the critics conclude that DAC has failed.

Anyone who reaches this conclusion feels impelled to seek an explanation for it, and these explanations have been numerous and diverse. They include the following: (a) The DAC is too large (12 members) and unwieldy; (b) its organization under a permanent international chairman is not appropriate; (c) it holds too many meetings, which are inadequately prepared; (d) the rule of unanimity reduces forward action to the lowest common denominator, or the expressed views of the most negative member; (e) the staff serving it is second rate; (f) the calibre of permanent representatives is uneven and they are largely composed of people not experienced or deeply interested in aid matters; (g) its meetings do not attract the attendance of policy-making officials.

These observations range from partially correct to totally incorrect. They have one thing in common: they miss the core of the problem.

The basic difficulty about DAC is the lack of political agreement on the basic objectives to be served by the aid programs of the various DAC members, on the criteria which should govern the allocation of aid funds, and on the role which DAC should play in helping achieve these objectives. In the absence of these, it is largely meaningless to talk about amounts, and thus the sole generally accepted objective of the DAC has tended to exist in a vacuum, and arguments about the need for “doing more” lack point and realism. Any discussion of the adequacy of DAC operations, it seems to us, must start with the questions, “What is the DAC attempting to do?” and if, as we believe, it has not been attempting to do enough that is meaningful or realistic, the question becomes— “What should the DAC attempt to do?”

We discussed this problem at some length in our CEDTO A–293 (Attachment B)³ where we proposed a program and set of objectives for the DAC which, if accepted, would give point, direction and impetus to the Committee’s activity. We have not yet received a statement of Washington’s position on these proposals. I know that there was some feeling initially that we were proposing that DAC take over the job of assessing individual countries which properly belongs to the World Bank. I hope this misapprehension was removed during the course of my Washington discussions in November. We certainly have no ambition to see the DAC take over the functions which the Bank is performing or can be expected to perform. Our position was simply that DAC should survey the field, determine what needs to be done which is not being done, and attempt to see to it that gaps are filled—in the final extremity filling them itself. Perhaps more fundamentally, we urge that the DAC should attempt to develop a doctrine for assistance, criteria for its allocation and implementing procedures—in other words, an over-all strategy for development which would maximize returns.

Before we can make progress in defining DAC’s objectives and area of operation, we have got to obtain further clarification of the respective roles of the Bank and DAC based on complementary, non-competitive and close cooperation. The DAC meeting on coordination which took place here shortly after my return from my Washington consultation indicated that the Bank by no means accepted the general line which we agreed upon in AID. During the course of this meeting it was made clear that there was no disposition on the part of DAC to assume the appropriate functions of the Bank; on the contrary, the whole thrust of statements made by country representatives was to encourage the Bank to do its utmost. It was apparent that DAC considered itself an important potential user of materials and expertise of the Bank, and efforts were made to elicit a statement of the Bank’s willingness to provide information, to make country studies and experts available and perhaps to undertake country appraisals specifically at DAC’s suggestion. Geoffrey Wilson evaded any positive response to these overtures. A recent message from Washington (TOCED 517, December 31)⁴ in which DeMuth is quoted as having refused to provide DAC the Bank’s country studies of debt burden raises some disturbing questions concerning what kind of arrangements can be worked out.

I judge from Wilson’s statements here, and from comments made by other members of the Bank’s staff that they are very apprehensive of possible adverse reactions from their Part II members if they should become involved in a joint enterprise, or too closely identified with the donor’s club. This attitude is understandable, but it is not helpful to the DAC, nor, I would suggest, to the general cause of economic development of the less developed countries. If we can assume the kind of cooperation between the Bank and DAC which we agreed in AID was reasonable and desirable, this means that with a minimum strengthening of staff, the DAC can move effectively into the area of country performance, debt problems, and an allocation strategy calculated to produce maximum results in economic development. If we are not to have this cooperation, it will probably mean that either the DAC will itself have to increase its staff very substantially, or limit itself to the role which our friend Hardy, the U.K. representative, sees for it: donor contributions and terms considered in vacuo, which we believe has by now become a pretty sterile exercise.

It seems to me that basic to any consideration of the question of DAC’s function, which in turn must affect considerations of organization, procedure and personnel, is the need for a resolution of the question of the degree to which the Bank will be willing to cooperate with the DAC. I personally see no reason why, with tact and ingenuity, procedures cannot be worked out whereby the Bank can work with its Part I members on development problems without jeopardizing its position with its Part II members. An equally basic requirement for an orderly consideration of these questions is the development of a United States position on what we would like to see the DAC do.

These seem to us to be the real problems of the DAC, and, viewed against this background, the various criticisms recounted in the opening paragraphs of this letter appear for what they are: secondary or peripheral. Having established this point to my own satisfaction, at least, I will now move on to a more detailed consideration of these secondary points, and will make some suggestions concerning them, on the assumption that progress can be made toward solving the central problems.

1. Size, Organization and Procedures

As to the size of the body, the full committee is admittedly of dimensions which inhibit frank and informal discussion. What is more, some of the smaller members have no real interest in a considerable range of the matters discussed, and make only a minimal contribution to the discussion. As Ambassador Leddy points out, this can also be said about other OECD Committees, with even greater emphasis as to some of them. We are now confronted with an additional applicant for membership—Austria—and indications are that Switzerland and Sweden may follow. If the committee now were of optimum size, a case might be made for attempting to hold the line against these additions. As it is, the addition of two, three, or four new members will probably not significantly affect the nature of the organization, which must, in any event, look to measures other than a policy of exclusion to improve its efficiency. Moreover, there would probably be a real gain in the adherence of three neutralist countries: the DAC would cease to be a meeting of the NATO bloc, and would take on a character more representative of the developed, aid-giving world.

There would seem to be no inherent reason why DAC cannot become more effective in its deliberations with a larger membership, if proper steps are taken. We suggest the following:

a. Building on present practice, arrange to conduct an increasing amount of DAC business in working parties, tailoring the membership of these parties to the problem at hand.

b. Adopting the convention of meetings on various subjects restricted to parties with a real interest. We are proposing that the meetings for Liberia and Guinea be called with the specific caveat that only countries with a particular interest should attend.

c. Encouraging the Chairman to call monthly sessions of the major donors and several others (which latter group need not always be the same) to discuss the planning of future meetings, scheduling, new initiatives, policy matters. This in effect would be a steering group (or a de facto division between classes of members) without being called such.

Perhaps there are additional techniques, such as in increased resort to limited groups of experts, and a continuing increase in the use of the Chairman’s prerogatives of summarizing and making proposals which convey the sense of the meeting unless objected to.

2. Full-time Chairman

The suggestion that we could solve DAC problems and strengthen its operations by eliminating the full-time international chairman and conforming the committee to the others of the OECD is the most unsatisfactory of all those put forward. I have found no one who can explain how the change proposed would contribute to the end indicated. The motives are understandable, but are likely to lessen rather than enhance the development effort. In the case of the Secretary General, it may be noted that he is a strong-willed man, with a considerable interest in development, which is frustrated by Willard’s existence as an international chairman. It is clear that he would like to play a much larger role in development assistance matters. I cannot escape the conclusion that his proposal to make the DAC into something like the Trade Committee is related to these factors. I say this not out of disrespect to the Secretary General, whom I admire as a man, but in an attempt to shed some light on the chairman question.

The suggestion that Willard has somehow failed in guiding the DAC to a significant record of accomplishment and that a change in personality (or in organizational structure) would change failure to success I regard as showing a fundamental lack of knowledge of the situation here, and an equally fundamental unfairness to Willard. In appraising the work of the DAC, one has to begin with the basic point I have emphasized in this letter and elsewhere: the lack of agreed objectives—of political will—among the country members of the DAC. I take it that the Secretary General of NATO is not held to be primarily responsible for the divisive tendencies currently displayed in that organization. No more can the Chairman of the DAC supply a will and purpose otherwise lacking in the national governments which form his committee.

I believe that a fair appraisal which takes adequate account of the various factors I have mentioned would accord to Willard very high marks for what he has achieved. He has, we believe, gotten the maximum performance from meetings of representatives of widely varying levels, ability, and interest, and seldom sharing common positive views. His skillful summaries have always made the most of the discussions. He has initiated the practice of sending his summary evaluation of country performance to member governments, which is the maximum pressure of which a chairman is capable, and this practice may account for some of the criticism which masks behind professions of concern about making the DAC more effective.

What the DAC needs, in our opinion, is not a national chairman, but a strengthened international chairman, who has the self-confidence and courage to speak plainly when the situation demands it. We believe that Willard has been doing some of this; if we want him to do more, we must make it very clear that he has at least the full and sympathetic support of the United States Government. If the role and activities of the DAC are extended in the manner we advocate, this is bound to add to the importance of the Committee, and, indirectly, to the influence and authority of the chairman.

If the foregoing analysis is correct, it follows that the Secretary General should not be left in any doubt of our confidence in Willard and our desire to see him continue as chairman, and I would hope that you would write him promptly in these terms.

3. Meetings

The criticism that there are too many meetings seems to bear little relation to the facts. Aside from those sessions devoted to the annual review of donor country programs—about the necessity of which on an annual basis for every country I am prepared to concede there is legitimate ground for debate—a quick check of the calendar indicates there were only some eight or ten substantive meetings in either 1963 or 1964. In simple terms of number, this does not seem excessive. (A complete list of these meetings is attached as Annex C.)⁵ An appraisal of the subjects covered and the results achieved, however, reinforces the point I have already made: that DAC lacks a focus and a plausible set of objectives.

I have come to the conclusion that a disproportionate amount of the time of the DAC and the energy of the Secretariat goes into the Annual Review, and that in this area significant savings of both commodities could be made, which might be more profitably invested in other activities. The suggestion has been made that more of the Annual Review might be handled in written form, that the examinations could be shortened if they were more effectively focussed on significant problems, and that in the case of the smaller countries, the DAC discussion of the program might be placed on a biennial basis without loss. All of these ideas are plausible, and I am personally inclined to press for their adoption—particularly if we can expect to use the time saved in furtherance of the objectives we have sketched in Annex B.⁶

4. The Unanimity Rule

This rule exists formally, and, formally, there is nothing we can do about it. DAC cannot legislate by a majority vote—however large—and its recommendations depend for their effectiveness in the last resort on the willingness of Governments to accept them.

This problem is real, but it can be easily exaggerated. It is probably correct to say that unanimity rule or no, any proposal which has the full support of the U.S., the U.K., France and Germany will be accepted by the DAC. In practice, any proposal which has the vigorous support of the U.S. and any two of the others will probably be accepted—though perhaps in a modified form. No country wishes to accept the onus of vetoing alone a course of action favored by all the others. Witness, for example, the U.K. capitulation on the proposal to establish a link between the DAC and the CIAP.

The phrase “unanimity rule” probably conveys an erroneous impression of the DAC method of operations. As a matter of fact, formal voting never takes place. There is discussion, guided by the chairman, which is followed by the chairman’s summary of the “sense of the meeting.” This summary stands as the DAC decision on the matter in the absence of dissent. This procedure can be employed very effectively by a skillful chairman, and Willard has been signally effective in using it to extract the maximum positive elements from discussions.

These considerations, I believe, point to the importance of keeping Willard on as chairman. They also point to the need for a determined effort on our part to persuade the U.K. and Germany to any program we wish to advance in the DAC. Moreover, they provide a rationale for the proposal I make in section 3 above for the establishment of an informal steering group, with the Big Four as regular members.

5. Staff

It is difficult to make a fair and meaningful appraisal of the Development Staff. I am personally convinced, however, that the staff here has been unfairly maligned. It compares reasonably well with the rest of the OECD staff, and should do so, since it was formed in the first place by raiding the rest of the OECD, and those who conducted the raids consider that they got most of the men who would be useful. Our own man, Richard Benedick, who is well regarded in AID, told me that in his judgment the people with whom he works compare very favorably with the program officers he has known in AID Missions.

Staffing needs of the development directorate have not received favorable attention, partly because of the uncertainty over the role of DAC and partly because of the opinion that existing staff was not being well used. What is needed, after the role and function of DAC are clarified, is a presentation by the Secretariat to one of the monthly meetings of the informal steering group we propose. The presentation and discussion should aim at the minimum staff structure necessary to serve the essential purposes of the DAC. With a rationale and discussion (and, presumably, the support of major delegations) behind it, the budget request for next year ought to receive much more sympathetic consideration.

The OECD hierarchy as it relates to DAC also merits attention. The Secretary General has so far limited his attention to the lower echelons, stating that he is unable to remove Giretti, the Assistant Secretary General. However, if the United States is being asked to remove Fine (after having already agreed to remove Stettner), we should be in a position to inquire why personnel improvements involving other countries cannot be considered. Ambassador Leddy, with whom I have discussed this letter, is of course intimately acquainted with such problems. He is in the process of preparing his own letter to the Department on the broader aspects of OECD, which will be germane to your discussions.

6. Representation at DAC Meetings

The calibre of the permanent representatives varies widely, but there is nothing which we can do directly about that. It is reasonable to believe that if we can commit the DAC to a more meaningful program, those governments which have inadequate representatives will in time feel impelled to change them. It may be of some interest to you to have a thumb-nail sketch of the cast of characters who gather around the DAC conference table. The U.K. has intelligent but often opinionated and negative high level representation in Harding; France has competent lower level representation in Sauvel, who is given little latitude; FRG has [less than 1 line of source text not declassified] von Bismarck, who has no latitude at all. Of the smaller countries Canada has a young, interested and able new representative in Smith; the Dutch have an able and knowledgeable, though lower level, man in Kupers; the Belgians have an articulate and often negative spokesman in Mme. Tenser; occasionally EEC sends Segre, a competent economist; Italy has in Trotta a well-meaning man of little influence; Denmark, Norway and Japan seldom intervene, although the new Japanese representative may be more active. Of these representatives only Smith of Canada, I believe, comes from an aid background or expects to be assigned to an aid position in the future.

There remains the problem of involving policy makers in DAC discussions. Our conviction is that the implementation of the new role would attract such officials. At present, a series of graduate seminars with a potpourri of miscellany can hardly be expected to attract them. To the extent that aid centralization can be encouraged, opposite numbers will emerge, among whom useful talks will be generated. Indeed, with the British now providing a centralized organization, part of the high-level meeting could be set aside for free discussion of matters not on the agenda.

This has been a long discussion, but, I hope, not an academic one. I believe it points to the desirability of a series of actions, most of which will need to be taken in Washington. These actions are listed below:

1. Decision on U.S. objectives with respect to the DAC, including:

a. our proposals regarding substance set forth in Annex B,

b. our proposals regarding organization and procedures set forth in this letter.

It would be most useful to us here to have guidance in writing on these matters.

2. Exploration with the IBRD of the extent to which that institution will be prepared to cooperate with the DAC, and tentative agreement on a division of functions which will enable both institutions to make their full contribution to economic development. This problem is so critical and will so condition all the matters referred to in “1” that you may feel disposed to discuss it yourself with George Woods. Obviously, we are in no position to commit the DAC, but the meeting on coordination gave a pretty clear indication of the committee’s position, and some informal discussion of the Bank’s attitude would be timely.

3. A letter from you to Kristensen endorsing the continuation of a full-time international chairman for DAC and stating full support for Willard in this role. This would be most useful if it went forward promptly after a decision is taken on replacing Fine, and if it were accompanied by some of our proposals for increasing the effectiveness of the DAC, to indicate that the whole problem is receiving our serious attention.

4. An effort in bilateral discussions to line up support for our DAC proposals, as ultimately developed (“1” above). I believe we should concentrate on the British, the Germans and the Canadians and that these three Governments should be approached directly, and not through their Paris delegations. It is obvious that a fresh breeze is blowing in Whitehall, and developments in the last meeting on supply and requirements suggest that once more we may find the British our best allies—but it would not be helpful to treat through Harding here at this junction. The Germans will not be easy, but there are significant areas of common interest and they can be influenced by high-level representatives—but it would not be useful to hold discussions with von Bismarck in Paris. The Canadians are not only sympathetic but also, in Jim Langley, have an extremely able Chief of Economic Affairs in their External Affairs Ministry who is fully conversant with the inner workings of the DAC. I suggest that you make our proposals for DAC a central element in the discussions you hold during your forthcoming visit to London and Bonn, and that these proposals be discussed informally with the Canadian Embassy in Washington with a request for Canadian views which, when formulated, would certainly bear the Langley imprint.

5. When we get our line established, I would propose to invite our Economic Counselors and AID liaison officers in the key capitals to meet in Paris for a general discussion of strategy and tactics.

After these measures, it will be time to take stock of the situation and decide on further moves. Perhaps it will seem desirable to circulate a paper to delegations as the basis for a special meeting on the role of DAC, or, if this is not proven practicable, for consideration at the July high level meeting. Indeed, a possible sequence might be a special meeting on the role of DAC in March or April (which would signal its fifth anniversary). This could prepare the groundwork for further work and discussion and more definitive action at the July high level meeting.

All of this is written neither to make our bureaucratic life here easier, nor even to try to make an international unit more effective. It goes to the very heart of one of our major objectives: to help stimulate a free world aid effort, more equitable in its demands on donors, more likely to sustain continuing and increasing support in DAC countries, and more responsive to the legitimate needs of the developing countries. Measurable success in giving a new sense of direction and conviction to this task can be one of the most helpful developments in sustaining our own program in the United States.

I wish you and your colleagues in Washington a most fruitful review session. All of us here stand ready to do all that we can to help.

With best personal wishes,

Frank

1. Source: Washington National Records Center, RG 286, DAC Material: FRC 70 A 5922, Letters and Memoranda to and from Coffin. Personal &Confidential. An attached undated, unsigned handwritten note reads: “This ltr, I believe was answered. I have note about answer being put in Bell briefing book.” For this reply, see Document 103.
2. Not attached. The reference may be to two letters from Coffin to Bell, December 28, 1964, and January 5, 1965, primarily on DAC personnel and staffing matters. Both letters are in Washington National Records Center, RG 286, AID Administrator Files: FRC 68 A 2148, PRM 7–1, Development Assistance Committee, FY 1965.
3. Not attached but printed as Document 92.
4. Not printed. (Department of State, Central Files, AID 1)
5. Not attached to the source text but to a copy in the Washington National Records Center, RG 286, AID Administrator Files: FRC 68 A 2148, PRM 7–1, Development Assistance Committee, FY 1965.
6. Presumably the reference is to Attachment B; see footnote 3 above.