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

57. Memorandum From the President’s Assistant for International Economic Affairs (Peterson) to President Nixon ¹

Washington, March 30, 1971.

SUBECT

• Coordination of the Reorganized Foreign Assistance Agencies

Summary

The reorganization of A.I.D. will result in several new bilateral development agencies

• —International Development Corporation, to administer the bilateral loan program.
• —International Development Institute, to handle the revamped technical assistance program.
• —Overseas Private Investment Corporation, to administer foreign investment guarantees.

This poses complex issues of coordination within the Executive Branch, including how we keep down the number of independent agency heads reporting directly to you, and has created concern in the Congress. You will recall that Rudy Peterson reported widespread Congressional interest in having a single coordinator for foreign assistance operationally responsible for the program and accountable to the Congress.

We have four choices:

1. Establish independent agencies—policy coordination through the Council on International Economic Policy.

2. Establish independent agencies—coordination in the Department of State.

3. Establish a U.S. Development Administrator, who would be Chairman of the Board of all three institutions. Each agency would have a President; the three Presidents would constitute an Executive Committee, chaired by the Administrator, to assure operational coordination.

4. Establish independent agencies—coordinated through a U.S. International Development Board, established by statute, in the Executive Office. (The Board would consist of the heads of the aid agencies plus representatives from State, Treasury and Agriculture.)

Under any of the options foreign policy guidance will come from the National Security Council, foreign policy coordination will be assured by having a representative of the Department of State on the Board of each agency, and foreign economic policy coordination will take place through the Council on International Economic Policy.

The advantages and disadvantages of these choices are spelled out in the attached memorandum.² After extensive discussion I have concluded that Option 3 best meets your objectives and Congressional requirements. George Shultz concurs.

We have reviewed Option 3 with Rudy Peterson, and after checking it with three of his task force members, he said they all feel it is “an ingenious response to the Congressional concern.” He feels strongly, however, that the Administrator (i.e., the joint Chairman) should become a full member of the Council on International Economic Policy, instead of being invited to participate only when development issues are being discussed. We can consider this question later, and I promised Rudy he would have a full hearing when it is necessary to face this issue.

The Secretary of State prefers Option 2. The Secretary’s memorandum is attached at Tab A, of the detailed memorandum.³

I recommend you approve Option 3.⁴

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 195, AID 1/1/71-12/31/71. Confidential. Attached to an April 1 memorandum from Bergsten to Kissinger that reviewed Peterson’s options. Bergsten recommended Option 4 rather than Option 3.
2. Dated March 30; not printed.
3. See footnote 8, Document 51.
4. Neither the Approve nor Disapprove option is checked, but see Document 58.