565. Paper Prepared by the NSC Interdepartmental Group for Inter-American Affairs for the National Security Council1 2

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FY 1971 CASP

I. Security Issue

Issue: Shall we continue the policy of eliminating all MAP materiel grant aid in FY 1971 or approve $250,000 in grant aid for Paraguay for follow-on spares?

Discussion: The Country Team has recommended that Paraguay be provided assistance in FY 1971 to maintain and replace essential equipment already given the Paraguayans under MAP. The CASP indicates that our political, economic, and security objectives in Paraguay would be prejudiced if such assistance were not provided.

II. Assistance Issue

Issue: Should education be emphasized as a priority development item for Paraguay?

Discussion: The CASP recommends that substantial and increasing amounts of U.S. assistance be devoted to education in Paraguay ($3.9 million in FY–71, $6.0 million in FY–72, and $6.1 million in FY–73). It appears that most of this aid would be for educational facilities. The questions have been raised, however, as to whether education is presently a major bottleneck to development in Paraguay and whether the small Paraguayan economy can appropriately accommodate an increased number of educated job seekers. Given the limited economic opportunities in Paraguay and the country’s limited growth potential, there is the possibility that heavy emphasis on education could result in the creation of an unemployed mass of demi-intellectuals.

  1. Source: National Archives, RG 59, NSC Interdepartmental Group, Subject and Country Files: Lot 71 D 224, NSC–IRG/ARA Information Memorandums, 1969. Secret. The CASP for Paraguay is Document 564.
  2. In its evaluation of the Country Analysis and Strategy Paper (CASP) for Paraguay, the NSC–IG/ARA highlighted two key issues in United States-Paraguayan relations: military aid and whether increased assistance should be devoted to education.