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Office of the Historian

440. Action Memorandum From the President's Special Assistant (Rostow) to President Johnson1

SUBJECT

  • Loan for Guyana Rice Industry

Bill Gaud is asking urgently for your approval of a $12.9 million loan to modernize the rice industry in Guyana (Tab B).2 Charlie Zwick [Page 965]recommends your approval (Tab A).3 Treasury has no problem on balance of payments grounds.

The critical elections in Guyana will take place December 16. Prime Minister Burnham has done a very good job of preparing the political ground to fend off Cheddi Jagan's challenge at the polls. Although the East Indian population outnumbers Burnham's predominently black following, some of Jagan's supporters have been won over by Burnham's good government record. The outlook is for a very narrow Burnham victory, barring last-minute surprises.

This rice loan project plays a key part in Burnham's electoral strategy. The government's efforts to modernize Guyana's rice industry, well publicized for over a year, will help split Jagan's almost solid political support among the small rice farmers, all of whom are East Indian. The project has been delayed for technical reasons long past the intended starting date. Nonetheless, announcement of the loan within the next few days will still have important political benefits for Burnham and help to guarantee his election.

This is a good project on its economic merits. The overriding argument, however, is that it provides important political support for Burnham at this crucial point. Ambassador Carlson urges your approval in time for an announcement to be made in Georgetown early next week.

I recommended that you approve authorization of this loan.

Approve4

Disapprove

See me

Walt
  1. Source: Johnson Library, National Security File, Country File, Guyana (Brit. G.), Vol. I, Cables, Memos, and Misc., 5/66–11/68. Secret.
  2. Reference is to a November 18 memorandum from Gaud to the President, attached but not printed.
  3. Memorandum from Zwick to the President, November 21, attached but not printed.
  4. This option is checked.