568. Decision Memorandum 65 Prepared by the NSC Interdepartmental Group for Inter-American Affairs1 2

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  • Paraguay CASP

On March 17, 1970, the NSC–IG/ARA reviewed and approved the FY 72 Paraguay CASP as modified by the following decisions. DOD/ISA dissented on the decision concerning MAP in III B2.

I. U.S. Assistance Posture

A. U.S. policy in Paraguay with respect to development assistance will be based on the principles that multilateral assistance will be the preferred instrument, and that bilateral ending will be utilized only in cases of priority objectives which demonstrably cannot be served through multilateral means.

It is not intended that the level of external developmental resource transfers should be reduced as a result of this policy, but rather that these transfers should flow principally through multilateral channels. This statement should be elaborated in the CASP to indicate that:

as greater reliance is placed upon the multilateral organizations to assume a larger role in capital assistance, the U.S. capital assistance program should be commensurately phased down;
PL 480 Title I would probably remain as a significant bilateral program;
greater reliance should be placed on technical assistance by multilateral organizations. The U.S. should continue to be responsive to Paraguayan technical assistance [Page 2] requests which aim at overcoming CIAP-identified impediments to development and which complement and are in harmony with those technical efforts provided by other donors.

B. As part of the implementation of this policy, the Country Team should make clear to the GOP that Paraguay is in no sense being penalized. The CT should emphasize that the USG 1) recognizes its obligation within the inter-American system to assist Paraguay’s development efforts and 2) believes that the most effective means for meeting Paraguay’s needs is via USG-assisted multilateral lending-agencies. Informing the GOP of U.S. policy regarding multilateral assistance to Paraguay should be timed and formulated so as to minimize possible Paraguayan disappointment over the phase-down of bilateral assistance. The CASP should be revised to take account of the probable strain on bilateral relations which will arise from implementing this assistance policy.

Action Responsibility: ARA/APU, ARA–LA/DP, Country Team

II. U.S. Role in the Church-State Dispute

A. The IG determined that the U.S. should not attempt to lend assistance in resolving the present dispute between the Paraguayan Catholic Church and the GOP. The IG agreed that the CT should detach itself from the dispute while maintaining its present acceptability to both sides as a friendly, objective, but neutral interlocutor. Language to reflect this decision will be inserted into the CASP.

Action Responsibility: ARA/APU

B. The IG identified the Church-State conflict as the most significant political problem facing Paraguay, and recognized the difficulty of predicting the long-range effects on Paraguayan politics. The IG, nonetheless, determined that studies in depth should be undertaken to analyze the impact of the Church-State dispute on the [Page 3] traditional political parties, especially those in opposition to the Stroessner regime.

Action Responsibility: ARA/APU, INR/RAR, CIA, Country Team

III. U.S. Military Posture

A. The IG determined that overall U.S. policy in Paraguay required the continuation of a modest but declining U.S. military presence in the country. This presence was justified primarily by the need to maintain effective lines of communication to the Paraguayan military as the country’s chief political arbiter, and, given the threat level and current Paraguayan capabilities, is not based on internal security considerations.

B. As a result, the IC determined that:

The reduction in the size of the U.S. Milgroup by the end of FY 71 foreseen in the guidelines approved by the NSC Under Secretaries Committee in NSC–U/SM–32G is consistent with our policy posture in Paraguay.
MAP grant materiel assistance will be programmed at $150,000 in FY 72 and at a lesser amount in FY 73, then terminated at the end of FY 73. To minimize disruption of ongoing programs, the nature of materiel provided may go beyond the strict definition of follow-on-spares (FOS).
MAP grant training levels will be $400,000 for each year of the CASP period.
The course of action for replacement of C–47 aircraft with C–119s or C–123s under MAP grant or FMS credit sale was disapproved. Any Paraguayan request for aircraft will be considered only on a commercial sale basis.

Action Responsibility: ARA/APU, DOD/JCS, DOD/ISA

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IV. Textual Revisions

The CASP is to be revised in such a manner that the sense of the foregoing decisions, as well as other minor textual changes proposed by the Country Director, are incorporated into the text.

Action Responsibility: ARA/APU

V. In its review of the CASP, the IG examined with particular care and took special note of the degree to which the CASP responded to the over-arching policy principles of the Administration’s new approach to our relationships with the other nations of the hemisphere.

John Hugh Crimmins
Acting Executive Chairman
  1. Source: National Archives, RG 59, Office of Policy and Coordination, Subject Files: Lot 74 D 267, Country Analysis and Strategy Paper—Paraguay 1973. Secret. The CASP is published as Document 566.
  2. The NSC–IG/ARA reviewed and modified three aspects of the FY 1972 CASP for Paraguay: emphasizing the importance of increasing multilateral assistance, recommending that the United States would stay out of the Church-State dispute, and suggesting reduced military assistance to Paraguay.