301. Memorandum From Viron P. Vaky of the National Security Council Staff, to the President’s Assistant for National Security Affairs (Kissinger)1 2
SUBJECT:
- Governor Rockefeller’s Recommendations Re Ecuador
Attached for your signature at Tab A is a letter to Governor Rockefeller responding to his letter of November 13 regarding Ecuador. You may recall that we asked State to consider and take action on Governor Rockefeller’s suggestion that we help the Government of Ecuador with its financial problem, possibly by using the “Woods Plan” for debt renegotiation. (Tab C)
State reports (Tab D) that debt renegotiation would be of very limited value to Ecuador because Ecuador’s debt payments schedule over the next few years are very modest (about 9% of exports).
There is no emergency situation now, but Ecuador does face serious fiscal problems if remedial measures are not taken. The World Bank, IMF, and CIAP are advising the Ecuadorean Government on a fiscal program. State and AID are working closely with those agencies and with the new Ecuadorean Finance Minister. However, the GOE’s ability to carry out a strong fiscal reform is limited by internal political factors. The Finance Minister wants to move in the right direction, and I agree with Ambassador Sessions, who recently recommended that the US should provide support to the GOE, even if its performance is not ideal, so that the present government can continue and try to make further progress.
The State memorandum is pretty vague about what form or amount of support it would be prepared to provide, indicating only that it is watching the situation “sympathetically”. This is probably due to AID’s reluctance to commit itself. I, therefore, think it would be useful to jog State for a specific description of the assistance it would be prepared to provide under alternative conditions of GOE performance. A Watts—Eliot memorandum calling for such a report, and for continuing status reports, is at Tab B for your approval.
[Page 2]RECOMMENDATION
1. That you sign the letter to Governor Rockefeller at Tab A.
2. That you approve the Watts-Eliot memorandum at Tab B.
- Source: National Archives, Nixon Presidential Materials, NSC Files, Box 784, Country Files, Latin America, Ecuador, Vol. I, 1969–1970. Confidential. Sent for action. Neither approved nor disapprove was checked. Although Kissinger signed the letter to Rockefeller, he wrote on the front of the memorandum: “I think we better forget this.” Attached but not published are Tabs A–D. Tab A, undated, is a letter to Governor Rockefeller; Tab B is a December 11, 1969, memorandum from Watts to Eliot; Tab C is a December 3, 1969, memorandum from Vaky to Kissinger; Tab D is a January 16 memorandum from Eliot to Kissinger. Rockefeller’s letter to Kissinger, November 13, 1969, is referenced in Document 300, footnote 1.↩
- After describing Ecuador’s fiscal problems, Vaky suggested Kissinger ask the Department of State to write a specific description of the assistance it would be prepared to provide and continuing status reports on Ecuador.↩