322. Memorandum From the President’s Special Assistant (Rostow) to President Johnson1
- Program Loan for Colombia for 1967
AID and BOB request, under the new commitment procedures, your authorization to negotiate a $100 million program loan for Colombia for the balance of CY 1966 and CY 1967. Joe Fowler raises no objections on balance of payments grounds although he maintains his reservations on program as against project lending.2[Page 702]
The amount is $35 million more than you approved for 1966:
- —$20 million to support Lleras and his vigorous development program.
- —$15 million to cover the balance of 1966 (our loan went only to October).
As last year, we will coordinate our loan negotiations with the IMF and the IBRD-led Consultative Group for maximum leverage on self-help commitments. They are expected to furnish $65 and $100 million respectively.
A loan of this magnitude is justified because:
- —Lleras needs this amount to launch his development program while continuing stabilization measures.
- —Colombia’s self-help performance this year has for the most part been highly satisfactory, and should be better under Lleras, a sophisticated economist and more able political leader than his predecessor.
- —The self-help requirements and tying procedures are well conceived to maximize our interests.
- —Lleras belongs to the new generation of democratic, progressive Latin American leaders whom we wish to see succeed.
- —Lleras has already taken the leadership in promoting accelerated Latin American economic integration—the cornerstone of our summit package.
I am satisfied with the soundness of the proposed loan and join in the recommendation that you approve it.
Later this month we will seek your approval of CY 1967 program loans to Brazil and Chile, both in considerably lesser amounts than you approved for this year.
Speak to Me3
- Source: Johnson Library, National Security File, Country File, Colombia, Vol. III, 10/66–11/68. Confidential. Forwarded to the President under cover of a November 15 note in which Rostow reported: “Because of the urgency in getting on with loan negotiations with Colombia, Secretary Rusk will raise at the luncheon meeting today the attached authorization request.”↩
- Attached, but not printed, are memoranda to the President from Schultze (November 5), Fowler (undated), and Gaud (October 31).↩
- Although none of the options is checked, the issue was decided at the Tuesday luncheon on November 15. According to a record of the meeting Johnson cleared the negotiations, but asked “if we really want to blow that much on Colombia.” (Johnson Library, National Security File, Files of Walt W. Rostow, Meetings with the President, April–December 1966) Rostow answered this question in telegram CAP 661074 to the President, November 27: “The Colombia loan was calculated within a plan to live with the FY 1967 appropriation for Latin America. The object was to give Colombia the kind of lift we have given at a critical stage to Brazil and Chile in the past two years. Now Brazil and Chile are moving, aid is on the way down.” (Ibid., Country File, Colombia, Vol. III, 10/66–11/68) President Johnson subsequently approved signing the loan as negotiated. (Memorandum from Rostow to the President, April 26, 1967; ibid.)↩