121. Memorandum of Conversation1

PARTICIPANTS

  • Members and Staff of the Peterson Task Force on Aid
  • Dr. Henry A. Kissinger
  • C. Fred Bergsten

SUBJECT

  • U.S. Foreign Policy and Aid

Dr. Kissinger spoke informally with the Task Force on overall U.S. foreign policy and its possible relationship to the future of our aid program.

He first described the procedures followed by the new Administration on foreign policy. He asked where we wanted to be in four or five years and then worked back to present policy. Dr. Kissinger noted that one of the toughest aspects of this approach is to get Government agencies to submit valid choices to the President rather than only their own preferences. This process was based on a willingness to look at fundamentals. The President’s forthcoming speech on Latin America, for example, would reflect such a willingness.

By contrast, Vietnam was not now a major conceptual issue—the problem was whether we should just get out unilaterally or seek a reasonable settlement. All else was demagoguery and there was nothing in present policy to warrant the type of demonstrations seen yesterday. Vietnam takes much less time, for example, than our preparations for strategic arms limitation talks—even though they are not presently taking place. In that case, we have developed building blocks upon which to base a response to any conceivable position taken by the USSR. The same approach has been adopted regarding Latin America: philosophy first with specifics following.

Turning more specifically to foreign aid, Dr. Kissinger commented that we were near the end of the Marshall Plan period in which the rest of the world could be shaped by U.S. programs. During this period, our contribution to progress had been our energy and our detailed proposals.

President Nixon had already begun to express a new direction for aid in his round-the-world trip, particularly in Asia.2 His thrust was [Page 287]that others should begin to assume an increasing share in shaping their own progress, especially in terms of its intellectual foundations. The United States would certainly contribute where it could help. We would encourage regional groupings. We would seek to reduce the military component of the U.S. role, especially with regard to internal subversion and even with respect to external aggression.

Even in the 1950s, we had the erroneous view that U.S. commitments could be expressed legally. In fact, our policy is determined by U.S. interests based on our perceptions of what is required for international stability. No precise legal framework can catch this. The key to the new approach is the degree of cooperative relationship that can be developed between the U.S. and the LDCs. Both have a stake in world order and organization. It is not necessary or even best to express this relationship legally.

Dr. Kissinger recalled that the President had spoken to Mr. Peterson at great length in San Clemente, far beyond the time budgeted for the meeting.3 He had noted that groups such as this one often begin on the assumption that foreign aid is good and then seek to justify the present program. This Administration also assumes that foreign assistance is desirable but recognizes that the case for aid made in the 50s and 60s is no longer relevant. Simple comparison of the share of aid in national GNPs is irrelevant, for example, if a majority cannot be persuaded that any aid program is in the national interest.

We thus need a rationale in which we ourselves can believe and thus be able to sell to the Congress. The President feels that the present approach leads only to a rearguard action whose goal is to minimize budget cuts and whose only issue is the tactics used to that end.

Our aid rationale must relate to the U.S. national interest, for example, in a peaceful and developing world. The President has a major interest in this program as he told Mr. Peterson and he plans to meet with the Task Force at an early occasion. His primary objective is to achieve a rationale for aid related to broad U.S. foreign policy goals and to political stability if, in fact, we can define that illusory term. Dr. Kissinger assured the group that the President was a great reader and would address their report with great interest.

Mr. Peterson asked Dr. Kissinger to comment on whether the President was interested in regionalism among developing countries. Dr. Kissinger replied that this relates to the issue of concentrating our aid effort. He noted that our preference is in favor of concentrating and against dribbling out small amounts to many countries without making significant differences in them. We felt that we could let other industrialized [Page 288]countries take care of particular LDCs where they have strong historical interests.

Mr. Fried asked about the multilateral-bilateral issue and whether increased multilateral aid was politically feasible and/or useful. Dr. Kissinger replied that there had been no occasion yet requiring a general decision on this issue. Where specific issues have come up, the President had opted for the multilateral approach in contrast to the entrenched bias in favor of bilateralism. He thought the bias would in general be toward increased multilateralism.

Mr. Countryman asked whether this bias would lead to a reduction in U.S. aid to Latin America. Dr. Kissinger replied that multilateralism was a way to express our interest in Latin America. We would certainly not intend for Latin America to suffer from such a shift. On the contrary, a definite effort was underway to give effect to a special relationship with Latin America. The U.S. interest in the area was definitely ascending.

Mr. Haas asked about the relationship between trade and aid. He observed that protectionism was increasing and that the Administration seemed receptive to such pressure in cases such as textiles and steel. Dr. Kissinger replied that the textile industry had a special history with respect to this Administration. The President had made a firm campaign commitment which put it into a special category.4 No one should generalize from this case. We wanted to avoid taking on trade issues one at a time and preferred to wrap trade up more generally. He expected modest progress on trade liberalization, saw a good possibility to continue that trend, and noted that we will send up a trade message soon.

Professor Mason noted that the White House had dragged its feet in getting this Task Force underway. There was thus no chance to get out a rounded report to meet its deadline. Would the President be satisfied if the Committee limited itself to specific issues and the analysis of the possibilities for each? Dr. Kissinger replied that the President prefers sharp statements of conflicting views rather than a waffled consensus. He suggested that the group cover the most important issue first. We could then see if the life of the group should be extended. A good statement on the key issues was the most urgent need.

Ex-Congressman Curtis raised the issue of lack of coordination of aid-related programs, both in the Administration and in Congress. Dr. Kissinger fully agreed with the need to pull aid-related programs together. He thought it was important for the Task Force to call attention [Page 289]to this issue. It would be desirable for the group to evaluate each program although it might not have time to do so in view of its deadline. He also noted that the NSC staff was, for the first time anywhere in the Government, putting together program budgets for key countries to try to effect just such coordination of programs.

Professor Huntington asked whether the group should focus on economic development, which would imply consideration of more than just AID-type programs, or whether it should focus on the U.S. foreign assistance program, which would include military assistance in addition to economic assistance. Dr. Kissinger leaned toward the latter. As he saw it, the question was one of balance between our various types of assistance activities. What was the purpose of our various development programs: stability, pliability, pure development?

Mr. Fried asked to what extent the President looked toward this report for next year as opposed to the decade ahead. Dr. Kissinger replied that ideally it should be ready for next year’s program although the old approach could stagger through one more time. If a choice must be made, the report should be geared to the next five years. It should provide a charter for the middle run future.

Mr. Peterson asked Dr. Kissinger whether we should extend aid to countries which have political stability or whether our aid should seek to create political stability. Dr. Kissinger replied that the President would like to have an answer to that question. Perhaps we should help where it exists and try to create it if, in fact, we can define stability.

Dr. Kissinger concluded that the group might wish to agree on two or three different basic approaches which would then affect specific decisions in different ways. We do not need a presentation of complete opposites and there is no need to include an option of a complete abolition of our aid effort.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Presidential/HAK Memcons, Box 1026, June to December 1969. Confidential.
  2. President Nixon traveled to Asia July 25-August 1 before continuing on to Europe. See Public Papers of the Presidents of the United States: Richard Nixon, 1969, pp. 543-603, for his remarks, particularly his meeting with the press on Guam on July 25, pp. 544-556.
  3. See Document 120.
  4. See Document 184.