156. Memorandum From the Assistant Secretary of the Treasury for International Affairs (Bergsten) to the Deputy Secretary of State (Christopher)1

SUBJECT

  • Procedures for Handling Human Rights

This is a follow-up to your discussions of this subject with Under Secretary Solomon and me in May.2 Our executive directors have again reviewed ways of obtaining from bank managements information on prospective loans far in advance of their consideration by the Board so that there is ample time to consider human rights objectives. Based on their views, I suggest the following procedure as a means of making more effective use of our voice and vote in the international development banks.

Treasury will provide for each of the banks a list of projects likely to be presented to the Board during the coming year, accompanied by brief project descriptions to provide a general idea of the nature of the proposed project.

Such a list will be provided for each problem country—currently 13 whose loans we have been opposing. See the attachment for a sample.3 We would be prepared, however, to obtain similar information whenever it is decided that a country should be shifted from the “watch list” to the “active list.”

With lead time of up to a year, we would have ample time to consult with like-minded governments to seek support for parallel actions on their part. This is what the Secretary suggested to Chancellor Denis Healey in his recent letter.4 We would then be in a better position to in[Page 506]fluence the human rights policies of the governments concerned and the lending policies of the banks.

The Interagency Group should consider our policy toward problem countries in terms of an entire year’s pipeline of MDB projects. U.S. bilateral assistance programs, economic and military, and financing programs such as FMS, Exim Bank, OPIC, etc., should also be considered along with MDB loans. Such a review would decide how best we can seek to achieve defined objectives with the various policy instruments available to us, yet keeping in mind our other interests. Once the most fruitful strategy has been agreed upon for each problem country, we would then bring our influence to bear and there would be time for countries to effect improvements. Such changes would be taken into account in deciding our assistance policies to these countries.

I hope you find these suggestions useful as a way to proceed.

C. Fred Bergsten 5
  1. Source: National Archives, RG 59, Central Foreign Policy File, P780140–2031. Limited Official Use. Copies were sent to Hormats and Lake. Schneider and John Spiegel sent the memorandum to Oxman under an August 28 covering memorandum. Schneider and Speigel also transmitted a copy of a draft response from Christopher to Bergsten, which Bova had drafted on August 16, and a copy of an August 22 memorandum from Leslie Brown (T) to Bova indicating that T would not clear the draft response unless the Department of Defense and NSC also cleared. (Ibid.)
  2. See Document 145.
  3. The attached undated paper, “U.S. Opposition to MDB Loans on Human Rights Grounds and IBRD/IDA Tentative Pipeline of Projects FY 1979,” is not printed.
  4. Reference is to Blumenthal’s July 12 letter to Healey, wherein Blumenthal proposed that the United States, the United Kingdom, and “others having similar objectives” meet to “exchange information and determine where we have common concerns and how it might be feasible to seek improvements as a condition for providing continued assistance.” (Department of the Treasury, Office of the Secretary, Executive Secretariat, 1978 Files, 56–83–69)
  5. Bergsten signed “Fred” above his typed signature.