Foreign Relations of the United States, 1977–1980, Volume II, Human Rights and Humanitarian Affairs

145. Memorandum From the Assistant Secretary of State for Human Rights and Humanitarian Affairs (Derian) and the Director of the Policy Planning Staff (Lake) to the Deputy Secretary of State (Christopher)¹

Washington, May 16, 1978

SUBJECT

• Human Rights and the IFIs

Two issues which surfaced at your lunch with Tony Solomon and Fred Bergsten deserve further attention: the allegation of inconsistency between our bilateral assistance programs and our voting record in IFIs; and the question of whether we should ever oppose IFI loans which meet the basic human needs criteria.

The record to date on the “inconsistency” charge is attached for your use in future such conversations, or perhaps distribution to the Interagency Group. You will note that the best possible face is put on things, especially military transfers. Nonetheless the overall record is a good one and we should call attention to it.

The question of whether we ever should oppose basic human needs loans is more difficult, and controversial within this building. All agree that we usually should support such loans. But HA believes that we should leave ourselves the option of sometimes opposing them. This might sometimes be done to disassociate ourselves from the inhumane excesses of a particular regime (e.g., Argentina) or because of our past identification with a major human rights violator (e.g., Chile). HA makes a distinction between abstaining and voting no on IFI loans, pointing out that abstention is a method of distancing ourselves from a repressive regime, while not actually voting no on aid for the needy. The abstention option does not exist for bilateral assistance.

More often, however, opposition to a needy loan would be for tactical reasons: because it seemed the course most likely to produce improvements in a particular human rights situation. This approach is supported by individuals in other Bureaus. At the moment, for instance, our Ambassadors in Chile and Uruguay are recommending that we oppose all loans to those countries, whether or not they meet the needy standard. Each believes that our hard line policy may be beginning to show results, and thinks we should keep up the pressure. Ambassador White in Paraguay recently urged opposition to all loans there, not because the hard line is beginning to pay off but because he feels that the GOP does not appreciate the distinction between needy and non-needy loans and so is getting confusing “signals” from us which make human rights improvements less likely.

S/P believes we should always support IFI loans which would serve basic human needs. If the political situation in a country is such that the benefits of an assistance program would not actually reach the needy, the proposal should not reach the Interagency Group; if it does, that Group should oppose it. But we should have a clear and consistent record of support for programs which we believe would actually meet the basic human needs criteria.

S/P believes that to preserve our credibility in the IFIs, we need to be able to demonstrate that the only difference in our attitude to their loans and to bilateral programs has to do with the kinds of loans brought forward. Such nuances as a reduction in some bilateral programs, or a decision not to begin further new ones, are likely to be lost on those who see some bilateral programs continuing while we oppose similar programs in international institutions. (The statement in the attached talking points that “we have signed no new bilateral AID agreements” in Ethiopia may be a useful debating point; but the reason is Ethiopia’s unwillingness to sign agreements with us. We have been trying to continue bilateral aid programs in order to preserve some links with the country, despite our opposition to its basic human needs loans in the IDA.)

A more consistent record of support for humanitarian loans in the IFIs might also help encourage other donor countries to factor human rights considerations into IFI operations; several of the European governments already consulted have suggested that the IFIs are too much the cutting edge of our human rights advocacy.

S/P further believes that consistent support for humanitarian loans in the IFIs is important to our longer-range human rights efforts. We need to be able to demonstrate that our quarrel is not with any people (whatever our differences with their government). In some cases humanitarian assistance will be the only practical human rights help the international community can give to people living under a repressive regime. Finally, it is important to make clear that economic human rights are as important to us as any other category, and that we are not sacrificing their promotion in pursuit of others. When we oppose a genuinely basic human needs loan in an IFI, we give ammunition to those (in LDC governments generally as well as the particular applicant country) who charge that we are trying to impose Western-style political values on them at the expense of their economic needs.²

P.S. Fred Bergsten has read this memo and supports S/P’s position.

Attachment

Talking Points Prepared in the Department of State³

Washington, undated

TALKING POINTS ON HUMAN RIGHTS AND FOREIGN ASSISTANCE: THE CONSISTENCY QUESTION

We have a good record of consistency in application of human rights considerations to bilateral assistance programs on the one hand, and our role in the IFIs on the other.

—We almost always support economic assistance programs which serve basic human needs, whether bilateral or multilateral. We define “basic human needs” as food; shelter; health care; and education. We also consider that assistance programs with major job-creating potential in areas of high unemployment meet the basic human needs standard, since we would rather put people in a position to purchase essential goods and services for themselves.

—When applying the basic human needs standard, we look closely at the specific situations. Will a construction loan build hotels for the tourist industry, or housing for the poor? How many jobs will an industrial or mineral development loan create? Will an energy loan increase the number of households that have electricity, or increase crop yields of poor farmers by providing irrigation? Will an animal health loan improve nutritional standards in a country, or only help prosperous beef exporters? Will a road building loan do more to help farmers get their crops to market, or the military to tighten its control over the population? Will a loan to an intermediate lending institution ultimately reach small businessmen, or the already prosperous? Such questions as these, applied on a case-by-case basis, are more important in our decisions than rigid guidelines.

—Any apparent inconsistency between our attitude toward IFI loans, and toward bilateral aid programs, stems from our ability to design the latter to ensure they meet the basic human needs criteria. We must react to IFI loans, on the other hand, as they are presented to us.

—Our support of loans which directly benefit the needy, even in human rights problem countries, is reflected in our record in the IFIs. We have, for instance, opposed loans to Paraguay for highway development in the IDB and IBRD, but supported loans to it for agricultural education (IDB) and rural water supply (World Bank). Similarly, we have opposed IFI loans to the Philippines which would not serve basic human needs (ADB loans for hydropower development and to the Philippine Development Bank, and a World Bank loan to the Philippine Investment Services Organization) but supported those which met the needy criteria (a World Bank loan for tree farming, and IBRD loans for educational radio, irrigation, and to the Philippine Development Corporation). We opposed an IDB loan to Uruguay for coastal roads, but will support one on May 30 for vocational training. We are supporting a World Bank vocational training loan to El Salvador, but will oppose a World Bank telecommunications loan and an IDB loan for cattle development, if they come to a vote absent human rights improvements.

—On rare occasions we have opposed IFI loans which met the needy criteria, to express extreme concern about a human rights situation. But we have never done so when bilateral programs remained unchanged. We abstained on an AfDf education loan to the Central African Empire, but are making no new bilateral AID agreements with it either. We voted against an IDB rural public health loan to Chile, but it has been eliminated from bilateral programming. We abstained on an AfDf loan to Guinea for hemp production, but also reduced its proposed PL 480 allocation. We abstained on IDA loans to Ethiopia for irrigation and rural roads, but during the same period have signed no new bilateral AID agreements there. We voted against an IDA agricultural loan to the Peoples’ Democratic Republic of Yemen, but have no bilateral relations with it. (We also were uncertain that any assistance, however described, actually would reach needy people in Ethiopia or the PDRY.)

—Human rights considerations are affecting bilateral economic aid more than our role in the IFIs. This is because AID itself is factoring such considerations into its country allocations. In 1978 the Central African Empire and Uruguay were deleted entirely; levels for Paraguay were lowered; and allocations to Costa Rica and India were increased, all on human rights grounds. Human rights concerns are likely to show up even more in AID allocations in the future, since PD/NSC–30 directs us to intensify efforts to channel assistance to countries with good or improving human rights records. This will mean reduced assistance to human rights problem countries, even though assistance could be designed to benefit needy people there. But these shifts will not be reflected in interagency group decisions, because fewer assistance proposals for human rights problem countries will be forwarded by AID to that group.

—If asked we are working on ways to better factor human rights considerations into military assistance and sales, and to integrate our decisions on military and economic assistance. This is difficult, because important military relationships have been designed to serve our own security interests as well as that of the recipient country. But even here, the record already is better than it sometimes is made to seem. Of the twelve countries whose loans we have opposed in IFIs, we either had no security assistance programs, or have eliminated or sharply reduced them, to all but three: South Korea; the Philippines; and Zaire. South Korea faces an active external threat, and our military assistance is designed to enable it to defend itself without the presence of American combat troops. Zaire also faces an external threat, from Cuban-assisted guerillas operating from Angola. Because of human rights and other considerations, however, our military assistance to it is limited to non-lethal materiel. And military assistance to the Philippines is important to our security interests in the Pacific. The human rights policy, moreover, has ended or reduced security assistance programs to some countries whose IFI loans (including non-needy loans) we routinely support (e.g., Brazil and Guatemala).

1. Source: National Archives, RG 59, Policy and Planning Staff—Office of the Director, Records of Anthony Lake, 1977–1981, Lot 82D298, Box 3, TL 5/16–31/78. No classification marking. Drafted by Walker on May 11. Walker initialed for Derian.
2. Lake added the following handwritten notation: “(In addition, I believe strongly that it is simply wrong to harm (or fail to help) the immediate economic prospects of needy people for the sake of possible gains with their governments regarding political human rights.) TL.”
3. No classification marking. No drafting information appears on the talking points.