179. Memorandum From the Assistant Secretary of State for Economic Affairs (Solomon) to President Johnson1

SUBJECT

  • Dominican Republic

You asked me for my personal evaluation of:

(1)
past and recent events in the Dominican Republic as compared to our national interest objectives and
(2)
where we go from here.

[Page 419]

I.

What We Have Done

Since April 1965 we have pursued four central objectives in United States policy toward the Dominican Republic.

  • First Objective. With the outbreak and spread of violence in Santo Domingo in April, 1965, the United States acted to protect the lives of U.S. citizens and to evacuate those wishing to depart. The U.S. also gave protection to and evacuated the nationals of other countries.

    Evaluation. Some 6,500 men, women and children from 46 different countries were evacuated without loss of life.

  • Second Objective. With the complete breakdown of all governmental authority, including the rebel Molina Urena regime, and the filling of the power vacuum by extremists dominated by trained Communists, the U.S. acted to prevent the takeover of the Dominican Republic by these extremist groups. In accomplishing this objective it was the policy of the U.S. first, to preserve the opportunity for the OAS to function and, second, to work within the framework of the OAS to permit the Dominican people to exercise self-determination.

    Evaluation. The OAS, through collective action approved by the Tenth Meeting of Foreign Ministers, established the first Inter-American Peace Force (approved May 6 and organized May 23) and established, on June 2, the “Ad Hoc Committee for the Restoration of Democratic Order in the Dominican Republic”.

    The U.S. forces, and subsequently the IAPF forces, stopped the increasing chaos and bloodshed, primarily by separating contending forces with the “Line of Communication”. This action and the work of the Ad Hoc Committee in helping the Dominicans to establish a provisional government frustrated the efforts of the Communists to seize control of the Dominican Republic by force. (At the same time this objective was being accomplished, the U.S. and the OAS did not permit control of the Dominican Republic to fall into the hands of the military or rightist groups.)

  • Third Objective. With the re-establishment of relative stability under Provisional Government, the U.S., within the OAS framework, worked to help bring about free and fair elections through which the will of the Dominican people could be expressed.

    Evaluation. On June 1 elections were held and judged by competent OAS and private observers to be free and fair. Results now available show Joaquin Balaguer receiving 57.07% and Juan Bosch 39.17% of the vote. (Bonnelly received 3.41%.)

    U.S. intelligence indicated in March 1965 and in the months prior to the June 1966 election that Joaquin Balaguer was overwhelmingly the choice of the Dominican people for President. This intelligence plus the decisive results of the election are conclusive evidence that the [Page 420] timely action of the United States permitted rather than frustrated democratic expression of the will of the Dominican people.

  • Fourth Objective. Beginning in the second week of the revolt, the U.S. had as a corollary objective keeping the Dominican economy afloat and preventing widespread hunger and hardship.

    Evaluation. The small sector of Santo Domingo under rebel control represented the financial and commercial heart of the Dominican Republic and included the banks, major governmental offices, and important private commercial institutions. While the revolt caused an economic suspension in the Dominican Republic, the U.S., by helping to organize and finance basic civic services and by enabling the banks to open branches outside the rebel area, prevented the suspension from drifting into economic collapse. Outside of the capital city, there was a minimum disruption of economic patterns.

    Hunger and extreme hardship were avoided by a large scale feeding and relief program organized by the U.S. within days after the revolt. By utilizing U.S. forces on the Line of Communication as one of the means to distribute food, the U.S. not only increased the rapidity of distribution but also dissipated much of the hostility toward the presence of U.S. troops.

    During the 13-month period between the revolt and the elections the U.S. distributed directly and through voluntary agencies over $16 million in food (final figures are not available). In other assistance, the U.S. obligated over $118 million (excluding U.S. military expenditures) mostly used to keep the economy and the government sector afloat. About $57 million of this was nominally administered through the OAS.

II

Where We Go From Here

You already have memoranda from Lincoln Gordon2 and Ellsworth Bunker3 which deal with the probable size of the aid program [Page 421] needed for next year and with the difficult question of the timing of a devaluation of the Dominican peso. Not having the operational responsibilities of Link and Ellsworth, I should like to offer some views from a different perspective without giving detailed action recommendations.

Internal Security. Central to the question of political stability in the Dominican Republic is the capability of the Dominican police and military to maintain security once the Inter-American Peace Force is withdrawn (presumably within 90 days of the July 1 inauguration). While the decisive election of Balaguer has taken some of the steam out of the extreme left, the Communists, after their baptism of fire, are better organized for violence (as opposed to political action) than ever before. They and the “tigres” still have large quantities of arms obtained during the revolt.

It is therefore a first order of business to assure that the Dominican security forces are properly equipped, trained and led. As our military forces are being withdrawn, consideration might be given to quietly leaving behind certain equipment, especially soft goods and riot control matériel, which we might find politically difficult to supply to the Dominicans at a later date.4

Secondly, the Dominican Military must be modernized, professionalized and taken out of politics. The integrity of the military must not be undermined but at the same time, and important to its capability to maintain security, the military must improve its image in the eyes of the Dominican people who aspire to a reduction in both its size and role. It should be dissuaded from seeking vengeance against Boschʼs PRD and other antagonists and it should be oriented away from politics and “golpista” tendencies. Over a period of time, the armed forces should be substantially reduced in number, consequently reducing the tremendous drain it represents in the Government budget.5

Sense of Progress.” It is important to the maintenance of stability for the Dominican people to have a “sense of progress”. They must feel that there is a year to year improvement in their economic life and believe that their childrenʼs lives will be better than their own. Given the best of circumstances, only relatively meager gains in the Dominican living standard can be achieved in the next few years. Therefore, this psychological “sense of progress” can only be achieved in ways that are in addition to important but long-run economic development objectives. (The long-run objectives which can be realistically achieved in the Dominican Republic are mainly self-sufficiency in food; export [Page 422] competitiveness in cash crops such as sugar, fresh vegetables and produce; food processing for consumption and export; and tourism.)

Even Balaguerʼs economic orthodoxy probably will not overcome the apprehensions of Dominican and foreign investors to the point where private sector investment will provide the immediate economic push needed. Therefore a sense of progress will depend largely on government attitudes and projects.

As a first step, Balaguer should organize his government to reflect the urgency of the economic job to be done. He should name an economic “czar”, responsible only to him and with ample powers to overcome political and bureaucratic obstacles. Julian Perez, the head of Balaguerʼs Economic Commission, may be the right man.

As in Mexico, rapid land distribution could be a major element in creating a sense of progress. Large properties held over from the Trujillo days are available and their distribution, with clear titles, should be begun. Some of the past Mexican mistakes should be avoided such as communal ownership, distribution of non-viable parcels and failure to provide for the other elements such as credit, roads, etc., which make agrarian reform meaningful.6

The AID Mission should not be over expanded with “technical assistance” employees. We should operate to a larger extent through contracts with action-oriented organizations on highly visible regional projects. For immediate action we have the Yuma Valley project and in the longer run, there are the World Bankʼs regional projects for the Yaqui Valley.

Special emphasis should be given to the use of our resources in technical and vocational education so that Dominicans now filling menial jobs can feel that their children will be able to move a notch higher in the economic and social scale.

Finally, in creating a sense of progress it is essential to avoid creating unreasonable expectations, which if frustrated, could contribute to another round of violence.

Tony
  1. Source: Johnson Library, National Security File, Country File, Dominican Republic, Vol. XVI. Confidential. This memorandum responds to a June 14 memorandum to Bell and Gordon in which Rostow wrote “The President wants a concise and lucid description of: 1. Where we stand in our economic talks with Balaguer. 2. What we are proposing to him by way of an economic recovery program, including self help and external assistance. 3. The resources that we have earmarked for assistance to the new government in the coming fiscal year.” The President wants to ensure adequate assistance allocations for the Dominican Republic and a “strong self-help line with Balaguer, but does not want to see the political and economic consolidation of the Balaguer government stall for lack of necessary U.S. support.” Rostow asked that a response be prepared in time for Bunkerʼs meeting with the President on June 16. (National Archives and Records Administration, RG 59, ARA Files: Lot 68 D 93, Dominican Republic) On June 16 Bowdler, Rostow, Bunker, and President Johnson met at the White House from 5:50 to 6:32 p.m. to discuss the electoral outcome in the Dominican Republic. (Johnson Library, Presidentʼs Daily Diary) No other record of this meeting has been found.
  2. In this June 16 memorandum Gordon and Gaud summarized the economic discussions begun on June 7 among Bunker, Crimmins, and President Balaguer in Santo Domingo. They informed Balaguer that a total assistance package of $70 million for FY 1966 and 1967 had been authorized, and an additional $10 to $25 million in supporting assistance may be required from the Contingency Fund in FYߝ1967. (National Archives and Records Administration, RG 59, ARA Files: Lot 68 D 93, Dominican Republic)
  3. In this June 16 memorandum entitled “Need for Continuing Supporting Assistance in the Dominican Republic,” Bunker seconded the recommendation of Gordon and Gaud in their June 16 memorandum for more supporting assistance (see footnote 2 above). Bunker also supported a devaluation of the Dominican peso, but warned that such a measure would take coaxing on the part of the Dominicans because they are “generally afraid of devaluation.” (National Archives and Records Administration, RG 59, ARA Files: Lot 68 D 93, Dominican Republic)
  4. The President wrote: “Pursue good” next to this paragraph.
  5. The President wrote “I agree” next to this paragraph.
  6. Next to this paragraph the President wrote: “Take up with Bunker and Crimmins. L.”