Foreign Relations of the United States, 1969–1976, Volume IV, Foreign Assistance, International Development, Trade Policies, 1969–1972

133. Memorandum From Secretary of State Rogers to President Nixon¹

Washington, April 17, 1970.

SUBJECT

• State Department Position on Foreign Assistance Review

We have studied the many issues involved in the reappraisal of our foreign assistance programs. I welcome the opportunity to discuss these matters with you and my NSC colleagues in our meeting on April 21. I feel it would be useful, however, if I set out very briefly in written form the details of my position on what our new foreign assistance program should be.

A. Policy Guidelines

1. The United States should commit itself to a continued foreign assistance program for LDC’s on a higher scale than now prevailing.

2. The U.S. has previously supported a level of aid target of 1 per cent of GNP for public plus private flows. For tactical reasons, we should not reverse this position but, in supporting the target, we should stress that recipient as well as donor countries have important responsibilities for achieving higher levels of development progress.

3. Foreign policy and practical reasons dictate the maintenance of an important bilateral program while at the same time we give support to an increasing utilization of multilateral agencies for aid purposes.

B. Organization of Development Assistance

1. We should organize our long-term development assistance programs in a bank-type institution. The Bank should be responsible for technical assistance related to its lending, and for certain categories of grant technical assistance to other governments.

2. Coordination of development aid with other foreign affairs activities of the U.S. Government should be achieved by virtue of the Board membership of the Bank. Such representation should include the appropriate Departments and Agencies, with the Secretary of State as Chairman in order to ensure foreign policy guidance, coordination with security assistance, and coordination in field implementation.

3. We should create a separate International Scientific and Social Development Institute. This Institute would keep some distance from the more operational foreign assistance programs and concentrate on research directed toward the transfer of scientific and technological knowledge to LDC’s and on social development activities (Title IX, among others). Relations between the Institute and the LDC’s would be, insofar as possible, on a non-governmental plane: foundations, universities, private research organizations, etc.

4. OPIC should be continued in its present form as an independent entity in encouraging private investment flows to the LDC’s.

C. Security Assistance

There should be established under State Department authority in a single piece of legislation a single security program to include MAP, military sales (administered by DOD) and the present supporting assistance and public safety program (administered by State). Coordination between development assistance, as carried out in the proposed Bank, and security assistance would be achieved through State chairmanship of the Bank Board and State policy and operational control over the security assistance program.

D. Contingency Fund

A substantial Contingency Fund should be available for varied foreign policy uses, such as emergency disaster assistance, unforeseen public order or military assistance requirements. This Fund would be appropriated to you and then assigned to the Secretary of State for such other disposition as appropriate.

E. Latin America

The above views are not entirely consistent with the “one window” concept for Latin America enunciated in your October 31 speech.² This difference can be reconciled by providing for a sub-committee of the NSC (parallel to the Under Secretaries Committee) to deal with all Latin American matters and by the Assistant Secretary (or new Under Secretary for Hemisphere Affairs) sitting as a member of the Bank Board when Latin American matters are discussed.

F. Relation to Peterson Committee Recommendations

The above position is by and large consistent with the Peterson recommendations, except on four important points:

1. On targets, Peterson proposes that we scrap our support of the 1 per cent of GNP target which the United States Government has consistently supported since 1965. I see nothing to be gained, and much to lose, in this suggested departure, particularly in the UN context. The 1 per cent target contains no specific timetable and thus is not a definite commitment for U.S. action. It is, however, considered helpful by other donor countries in terms of their public opinion and, of course, it has a great symbolic importance to the LDC’s.³

2. The Peterson recommendation tends to treat bilateral development assistance as a diminishing and residual part of our contribution to international development programs. I strongly disagree. It seems to me that the United States has special foreign policy interests and relationships (for example, in Latin America, Indonesia, Southeast Asia) or special functional interests (private sector promotion, population, agricultural productivity, etc.) which can only be supported by an effective bilateral effort. Peterson appears to recognize this when he suggests setting up a development bank but I believe that the rationale has got to be presented in a much more straight-forward and convincing fashion. We need a bilateral development program as an integral part of our foreign affairs establishment. There is no other way of assuring that vital U.S. foreign policy and security interests can be met through the use of a development tool.

3. I have suggested that the Bank take on most of the government-to-government technical assistance activities and leave to the Institute the more innovative, and perhaps more risky from a foreign policy point of view, people-to-people programs suggested by Peterson. I agree with most of our development experts who feel very strongly that development lending and technical assistance to other governments should not be separated. I accept, however, the need for an institution oriented toward problem-solving, research and technology along the lines of the Fascell Institute now incorporated in our foreign assistance legislation.

4. Finally, on the subject of coordination, Peterson recommends a White House Coordinator and a Development Council. I do not believe that such a structure would serve your purposes well. If we have learned anything over the last twenty years, it is that there should not be a fragmentation and proliferation of programs and controls but rather a firm coordination, both here in Washington and in our missions in the field. We have adequate means through the NSC and the NAC to bring policy issues and differences to you for decision without adding a whole new structure of machinery. I have suggested that the Bank Board under State chairmanship is the way to assure the coordination and unity of purpose that you wish to see in our development efforts and in our more general foreign policy and security programs.

If you feel that it is desirable to have additional independent advice on development matters, I suggest that you may wish to consider the establishment of an Advisory Council on Development Assistance in the Executive Offices. Such a council could be made up, for example, of three distinguished citizens who could provide advice on aid policies generally and report directly to you. But this body should have no operational responsibilities.

G. Your Message to the Congress

As we all recognize, the Congress will play a crucial role in the final shaping of our new program. I recommend that your message focus clearly on new directions and operating principles, while leaving some flexibility with respect to the specifics of institutions. These specifics, which we will be embodying in a piece of legislation next fall, may look very different to us after reflecting on our Congressional consultations. The important thing is to obtain, through discussion with the appropriate Congressional Committees and among the general public, a new American commitment to development and security programs for the 70’s.

William P. Rogers

1. Source: National Archives, RG 59, S/S Files: Lot 80 D 212, NSSM 45. Confidential. Attached to an April 20 memorandum from Arthur Hartman (S/PC) providing copies to interested State Department offices and informing them that the NSC meeting scheduled for April 21 had been postponed indefinitely. The State Department’s views on the foreign assistance program were not sent to the President until mid-July; see Document 134.
2. See Document 122.
3. Regarding these targets, see Documents 26 and 38.