310. Letter From the Ambassador to Colombia (Oliver) to the Assistant Secretary of State for Inter-American Affairs (Mann)1
We are not yet reporting officially what I am going to sketch for you here, because we want to check on the principal source of information, Dr. Harold Dunkerly of the Harvard Advisory Group to the Ministry of Finance.
On Monday last2 Dr. Dunkerly had a meeting with Fowler and got a general picture of the thinking that developed in Washington regarding the future of the AID program for Colombia. In generalized terms, Fowler left Dunkerly with the impression that the program for the future would be based on the success of the fiscal and budgetary program that at the time of our departure for Washington seemed well on its way through Congress as a result of the political consensus that Lleras Restrepo was supposed to have achieved.
Yesterday Dunkerly asked to see me (with Fowler). He said that he had had a long conversation Monday afternoon with Calle. Without linking his visit to any request from Calle, Dunkerly nonetheless managed to communicate the impression that he was speaking Calle’s mind. Dunkerly said that the Government’s program was “in jeopardy” and that the situation for the future was “highly dangerous.” He explained that Carlos Lleras Restrepo had turned out, so far, to be a “damp squib” (“wet firecracker” in American English). The expected consensus had not been achieved. Calle, who has no political power of his own and had staked everything on Lleras’ effectiveness, now foresaw not only a net loss of a half billion pesos in expected increased revenues but the fearful prospect of heavy political demands from the Coffee Federation on the present fisc. At maximum, the Federation could pressure for drain of another half billion from the Central Bank and have already asked for drawing rights for 150 billion for the current month. We are getting together a complete analysis on the details of the immediately foregoing. The details will come later and officially.[Page 677]
The big point is that the economists on the GOC side, including Calle, foresee that, if an effective political turnaround does not take place, this country will be in galloping inflation by next March. This will present not only a severe economic setback but have very grave political repercussions.
What Dunkerly wants me to do is to get in touch with Lleras Restrepo and seek to induce him to take an active leadership role on the economic front. Dunkerly’s idea is that I should use the lever of possible loss of program aid, which is running about one-fourth of the Colombian budget on present projections. My own feeling is that Lleras is too sophisticated for this gambit to be credible. My inclination is simply to go over with him the very serious consequences for Colombia and for the Alianza as a whole if this situation is not corrected. We have much more reflection to do here before the Country Team makes recommendations through official channels.
I have had a request in to see the President ever since my return from Washington, and I would like to get to talk to him before I see Lleras Restrepo. If the President does not give me an interview today, I cannot see him until next Monday, at the earliest, because of my official visit to Operations UNITAS at Barranquilla–Cartagena.3
I am very sorry to have to report this situation. Dunkerly is true to his profession, that is, he is somewhat of a crepe hanger, and that is one of the reasons we are checking out his conclusions before reporting officially.
Time is not helping. The Chinese Ambassador told me he thought the piece in the issue of November 13 was absolutely outrageous.4 There has, to my way of thinking, been a continuous Time line building up Ruiz and turning down the legitimate Government of Colombia. I noticed the Ruiz build-up even before you rang me up about this assignment. It seems to go on steadily.[Page 678]
Ambassador Stewart’s telegram quoting the views of President Leoni is also very much in my mind.5
I am convinced that we have got to do everything we can to uphold constitutional government in Colombia. This may even require us to consider AID assistance on a bail-out basis, although I certainly hope it never comes to that. Be assured that I will do everything I can to help Colombia remain a country of law and a worth-while model of economic development.6
- Source: National Archives and Records Administration, RG 59, ARA/LA Files: Lot 66 D 65, Colombia 1964. Secret; Official–Informal. A copy was sent to ARA/CV.↩
- November 16.↩
- In a meeting with Valencia on November 25 Oliver outlined the difficulties involved in completing the 1964 program loan, including marine insurance and forward procurement. Valencia suggested that Oliver discuss the details with Calle. (Telegram 530 from Bogotá, November 27; National Archives and Records Administration, RG 59, Central Files 1964–66, AID(US) 9 COL)↩
- Reference is to a brief report on the anti-guerrilla campaign in Colombia, which, according to Time magazine did not progress “until two years ago when Major General Alberto Ruiz Novoa became War Minister.” (Time, November 13, 1964, p. 61)↩
- Leoni suggested that the United States “move cautiously” before recognizing the new regime in Bolivia. Any precipitate action by the United States, he argued, “might have direct bearing on Colombia and the political ambitions” of General Ruiz. (Telegram 712 from Caracas, November 16; National Archives and Records Administration, RG 59, Central Files 1964–66, POL 16 BOL)↩
- In his reply Mann instructed Oliver to disabuse anyone with “doubts about our full support constitutional government and fact that American public and official opinion would react adversely to a military movement in Colombia.” (Telegram 356 to Bogotá, November 27; ibid., AID(US) 9 COL)↩