270. Memorandum From Roger Hansen of the National Security Council Staff to the President’s Assistant for National Security Affairs (Brzezinski) and the President’s Deputy Assistant for National Security Affairs (Aaron)1

SUBJECT

  • A Summary Analysis of PRM–8 Second Stage Process and the Issues for Resolution

A. Process of Work Group

1. You will recall that the Second Stage was constituted after the EPG had focused quite narrowly on several key North-South economic issues for which the Administration needed to take a position at the UNCTAD-sponsored Common Fund meetings (March), the London [Page 822]Summit (May), and the CIEC Ministerial (May 29–June 2). The two PRMs themselves are attached for your convenience under Tab C.2

2. The crucial wording of the PRM 8 Second Stage instructions is the following: “Since the negotiating calendar has of necessity forced the EPG to concentrate virtually all its attention on short-term economic issues, a decision has been made to constitute a PRC Working Group to examine the longer term and essentially political aspects of North-South relations concerning which the President requested analysis and the presentation of options in the initial PRM 8 instructions.”

3. The working Group (membership listed in Tab D)3 consisted in great part of officials at the assistant secretary and deputy assistant secretary level; the official membership was kept at no more than twenty; and the Group held only six 2-hour meetings. The conscious trade-off was: fewer meetings and less demanding paper work in exchange for high level representation. The rationale, throughout the entire process, ran as follows in my mind:

a) The numbers of bureaucratic actors involved in key decisions on North-South relations is very small, and consists almost entirely of line economic officers.

b) These economic officers’ major concerns are short-term “system maintenance”. Therefore, except in the case of an OPEC, they will never focus on North-South issues because in general developing countries cannot cause major systemic problems. Even when they might, as in the case of massive debt default, the economic line officers will look for short-term solutions with a major focus on the most-developed LDCs, since they are the LDCs strong enough (in sheer economic terms) to cause systemic problems. Therefore little serious attention is paid to economic development per se, or the “lower tier” LDCs.

c) The North-South issues, while most often cast in economic terms, are far more complex. They are issues of status, identity, autonomy, relative deprivation, etc. These issues in turn present problems and possibilities for the achievement of all US foreign policy goals—economic, political, security, humanitarian, etc.

d) Finally, the North-South agenda is loaded with “global agenda” or “world order” problems, e.g., food production, population growth, the food/population balance, global “commons” issue, ecological problems, proliferation, etc. All these issues in turn raise the fundamental question of international institutional innovation for global management.

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e) Therefore, the most important single advancement which could be made by the PRM 8 Second Stage process was to widen the group of key bureaucratic actors who would be involved from the start in the “making” of North-South policy defined in this broader sense.

4. The attendance of people like Tony Lake, Bill Maynes, Joe Nye and several others went far to accomplish this purpose. If the President approves PRM Issue #1, a group representative of this broad range of concerns and now familiar with the issues which are central to North-South relations want and will have a legitimate role in the formulation of a North-South strategy and policies for as long as you find them helpful in the process of broadening our understanding of the necessities of North-South relations (and capacity to respond in policy terms with appropriate insights).

5. As you read parts IV and V of the PRM response,4 the general level at which they are cast and the lack of hard “either/or” options for the President may well disappoint you. Right or wrong, this was the price I had to pay to “legitimize” a broader inter-agency group and key set of individuals on these issues, and to give you and the President far more room to make and implement policies in this arena without the bureaucracy (read Treasury, E Bureau, etc.) fighting you subtly every step of the way. Now Secretary Vance is aware of his own Departmental problems; Lake, Maynes and Nye have access to all North-South issues, and the E Bureau is on the defensive. Less has been accomplished at Treasury. With absolutely no pejorative connotation intended, Bergsten and crew remain, I fear, very much “system maintenance” oriented, and unwilling to think very far ahead about North-South issues. The CIA has proved a surprising and articulate ally; US/UN is an ally without intellectual ammunition on this set of issues.

6. I remind you that DOD was given four out of some 20 seats on the Group, and all were encouraged to comment in detail on the Agenda and all papers, and submit their own papers when they deemed it helpful. DOD (ISA and JCS) contributed nothing, and only the two alternates showed up for the bulk of the meetings. Davis made 1½, and General Winger made two meetings.5

7. A summary of PRM 8 findings can be found in Part IV of the PRM, pp. 37–40 (Tab E).6 I will repeat only one short section here:

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“Conceptually, our overall strategy will be composed of four categories of policies:

1. Those dynamic changes to which the Administration has already committed itself in the areas of trade, aid, international monetary arrangements, international food reserves, and increased support for international development institutions.

2. Policies which relate more directly to the politically, economically and militarily strong LDCs, where our immediate economic and security interests are most obvious.

3. Basic human needs policies which directly attack the problem of “absolute poverty” throughout the world.

4. Policies which analyze, advocate and implement systemic changes in those international arrangements which reveal increasingly limited capacity to manage old problems or cope with new ones.

“There is little argument that efforts should be devoted to each category of policies. The difficult choices are the degree to which each is pursued relative to other US goals (e.g., human rights, non-proliferation), and relative to one another; and the mechanisms to be used in implementing each set of policies.

“In short, an appropriate US strategy will be one which starts from the Administration policies already adopted and incorporates the insights of each of the three focuses on North-South relations examined by this Working Group. It will need the bilateral finesse suggested by the focus on the ‘upper tier’ of developing countries; it will need a program to rapidly increase the standards of living of the world’s poorest people—a program incorporating many ideas relevant to the fulfillment of basic human needs; and it will need to build upon some of the most suggestive insights which the global systemic reform approach brings to the linkages between major problems on the ‘global politics’ agenda for the coming eight years. The leadtime needed to make progress on a problem like population control is so extensive that the United States can no longer afford to relegate such problems to the lower echelons typical in past Administrations.

“Finally, and fundamentally, an appropriate US strategy will be one which continues movement toward trade liberalization; a global food reserve program; substantially increased foreign assistance; augmented resources for such crucial international organizations as the IMF and the IBRD; and altered norms for the operation of and representation in these key organizations that meet Southern desires in ways that gradually strengthen the operation of the international economic system. It is difficult to overestimate the importance of progress along these lines to which the Administration is already committed. Indeed, one of the major reasons that this PRM response has not focused on the so-called ‘middle-tier’ developing countries in any discrete way is that these countries in the aggregate should find the economic policies already enunciated by the Administration very congenial to their economic aims and development pol[Page 825]icies. Without crucial progress in these areas where the US is already committed, the problems analyzed in this PRM 8 response will be immeasurably more difficult to manage, and new initiatives will be undermined by a continuing Southern bitterness over ‘unfulfilled pledges of good faith.’”

The remainder of the Summary and Section V will give you the flavor of the analysis and argumentation which was accepted by almost the entire group.

B. Issues for Resolution

This section of the PRM (pp. 40–54) contains five major issues, for Presidential guidance, and five follow-up issues attached to specific major issues.

I will list the issues in the order they appear, explaining briefly my view of the importance of the issue and adding comments on other divergent views which seem predictable at this time.

Issue #1—The Bureaucratic Framework for Consideration of North-South Issues

Earlier parts of this memo indicate why I give so much importance to this issue, and why I strongly hope that you and the President will support a continuation of the process begun by the PRM 8 Second Stage Work Group. State and CIA will be strongly supportive, both seeing this as an opportunity to overcome the singular, narrow focus brought to North-South issues by most of the Treasury line officers and State’s E Bureau.

The rationale for placing this issue first is that all the remaining issues have work programs attached to them. An interagency group, along the lines of the PRM 8 Work Group, described in Issue #1 (p. 43) would have direct responsibility for tasking and overseeing all the follow-on work, reporting to the PRC, you and the President as directed on each major issue.

My overriding concern is that if this bureaucratic framework is not blessed here and now, all “the action” will fall back into the hands of the line economic officers (or the EPG). That’s why this issue is placed first, and the PRM emphasizes that we are at the beginning of a process.

One last word. Such a group is not “stacked” in any direction. Its make-up simply forces differing bureaucratic perspectives to join issue; the winner is the President and US foreign policy. But watch Treasury and perhaps AID and OMB; they may try to defend “bureaucratic turf”. Van Dyk, incidentally, feels that the DCC should get this job. He can’t see that aid is but one very small piece of a very large puzzle. He may make a pitch for the DCC taking over the job at the PRC meeting.

Issue #2—US Strategy and Policies Toward the “Upper-Tier” of Developing Countries

This issue was given great emphasis by Treasury and the E Bureau of State: their reasons are very briefly summarized in both Sections IV [Page 826]and V of the PRM response. The LDCs being considered here are two types of Sam’s7 “regional influentials”—the oil rich (Saudi Arabia) and the industrialized (Brazil). The concern is how to “bring them into the system” so that they will cooperate when so many US policies are presently creating problems with many of them (proliferation, human rights, arms sales, trade protectionism, etc.).

While some group members carried this particular concern to extremes, all recognized the validity of the policy problem posed. Since State (IO) let us down sadly on a paper for this problem, the Group can do no better than to call for a specific type of follow-on study (for 8–12 countries) if the President is concerned enough about the problem to approve further review. As described on page 45 of the PRM response, a major focus of the country studies would be how these “local Leviathans” can be better integrated into existing and new regional and international institutions.

Issue #3—The “Absolute Poverty” Problem and the Concept of Fulfilling Basic Human Needs

There have been three major ways of trying to undercut placing an option before the President which would allow him to support a “significant increase” in US efforts and resources consonant with a BHN strategy, despite manifest agreement by all working group members that, at the least, steady movement in the BHN direction was highly desirable.

The first attempt to undercut the option takes the form (Bergsten, Boeker, etc.) of claiming this really isn’t an issue (“we’re all for it—its a false issue”) and at the same time requesting that no figures be discussed and no new mechanisms to administer such a program be discussed (“this problem can easily be handled incrementally”). My personal view, elaborated in Appendix Paper #6, is that incremental moves and no new institutions will quite probably lead to another Alliance for Progress fiasco in the BHN area.

The second attempt to undercut the option is to focus on the obvious opposition which an emphasis on the approach will initially evoke from LDC elite groups which are doing just fine the way things are. Sometimes the economic “incrementalists” use this line because they do not want any major shifts in emphasis in present US policies; sometimes the political analysts (CIA) press it because their concern is that we should respond more to the demands of LDC governing groups. And BHN surely is not at the head of any list of LDC demands.

The final attempt to undercut the BHN approach has come singularly from Ted Van Dyk. It takes the form of argument that there should [Page 827]be no focus on the “absolute poverty” problem (and therefore a BHN strategy to get at the one billion living in absolute poverty conditions); rather the focus should be on “the poor majority”. I have not been able to convince Ted that the entire US aid effort (save military assistance) is already supposed to be concentrated on the “poor majority” (a term with so many conceptual and operational problems that it is useless as a policy guideline). I cannot get him to see that a BHN strategy has a specific target group, and requires a specific set of policies to raise the standard of living of this group; and would be a novel and important political/developmental ingredient of a Carter foreign policy.

Van Dyk will surely bring this issue up; I have addressed it directly in the PRM response (p. 26, top paragraph).

In meeting these arguments I have tried to build into the PRM 8 paper (pp. 20–30) two countervailing ideas:

(1) Despite LDC elite demands for a lot of free resource transfers via NIEO, BHN is an appropriate US counter-proposal in perfect continuity with the President’s ideas and one which will give the Human Rights emphasis the broadening it needs.

(2) The BHN approach is not meant to substitute for other responses to LDC needs; it is a particular policy aimed at a particular problem which the US feels is deserving of priority attention. We are willing to take all the nasty and predictable Argentinian speeches that may come our way for this new emphasis.

In all, the group ranged from lukewarm (especially Treasury) to very supportive (S/P, parts of AID—not Van Dyk, but hopefully Gilligan). Cooper told me he was all for it, “but you will have trouble with the E Bureau”. Vance, of course, is strongly on record already.

Here again my hope would be that you and the President would strongly endorse Issue #3 (“increase significantly US support”) for a BHN effort.

If this approval is given, the Group (proposed in Issue #1) would owe the President a full-scale set of options on a major BHN approach by November 15 (as called for in follow-up pp. 47–48). Additionally, I would hope the President would approve follow-up issue b, which would settle an awful lot of inter-agency squabbling quickly by approving the view that basic human needs as defined in this PRM Response is “an integral element of human rights”. (S/P made this specific proposal for Presidential decision.) Finally, approval of follow-up issue c will serve to beef up the Vance effort to get OECD endorsement for a BHN emphasis in all DAC member programs.

Again, the opponents will argue that “this isn’t what the LDC’s are asking for”. These people suffer from bad logic. They are the first to scream about the need for “reciprocity” in the narrow sense, but cannot view our placing BHN on the North-South agenda as the reciprocal of [Page 828]the LDCs placing the Common Fund on the agenda. “They” want more Northern resources and other forms of assistance; “we” want to make sure that some of that assistance reaches a specific strata of people living in the LDCs. This concept is not all that difficult to grasp, if one wants to understand it.

Secondly, those same opponents are never willing to give the LDCs what they ask for anyway, so why the hell do they worry that proposing BHN isn’t being “responsive”? This is the same crew that brought you the 6th Special Session of the UNGA 8 and CIEC . . .

Issue #4—The Potential Trade-off Between an “Upper Echelon” Emphasis and a “Basic Human Needs Emphasis”

Putting the issue somewhat cynically, Treasury wanted this option in to make the point that BHN can easily get out of hand if anyone (like the President or Congress) jumps on it too hard. The E Bureau wanted it out, I suspect, because they feared that, if forced to choose between emphases, the President might “tilt” toward BHN. At any rate, most Group Members (including me) see little chance that a trade-off area will ever be reached unless one pushes either a BHN or an “upper echelon” set of policies very far beyond reasonable bounds. Therefore I would suggest that you support option a under Issue #4.

Issue #5—Global Reforms and North-South Relations

I am personally very disappointed not to be able to offer more of a concrete nature for your consideration (and the President’s consideration) here. The Group simply lost its collective voice or went to sleep when this set of issues was raised.

Yet, as pp. 51–54 demonstrate, voices from both the State Department and the CIA spoke up in favor of doing far more systematic thinking in a longer-term time frame once they read, in the first draft, how little the Group had accomplished.

If you feel it will be impossible to get the bureaucracy to focus on such issue linkage (e.g., the food/population/basic human needs/development set of linkages), you may not even wish to bring the issue to the President’s attention.

On the other hand, his major interest in the problem of global hunger suggests to me that thinking systematically about some of these crucial “global agenda” issues—most of which have deep North-South roots—would be very appealing to the President, and would complete the bureaucratic shake-up that the President’s “approval” of Issue #1 and its follow-up could begin: in other words, Presidential approval on Issues #1, #3 and #5 would produce (1) a much broader set of actors [Page 829]with divergent (and thus healthy) focuses and value judgments on North-South issues; (2) a BHN emphasis on which a full set of specific options would be due by November 15; and (3) a Presidential stamp of approval on a kind of thinking about “global issues” which would encourage all parts of the bureaucracy to engage in it. Without that thinking, no matter what we do for Mexico, we will have about 120 million Mexicans on our doorstep in 20 years, and so many of them will be unemployed that we will need neutron bombs rather than radar along the border.

The hyperbole is used to make a very simple point. The Phase Two exercise of PRM 8 has made a start. It is too limited to stop here. The message from this PRC meeting and the following PD should be “We are not giving anything away, but we have got so many problems which cannot be solved without Southern cooperation that we had better change our modes of thinking about these issues in a hurry”. The message is not what we are going to do for them, but what we have to do together. And the first thing, whether it is popular with South elites or not (BHN) is to indicate what we believe to be the appropriate set of policies to start to move in the right direction.

  1. Source: Carter Library, National Security Council, Institutional Files, Box 63, PRC 028 North/South Issues [1] 7/27/77. Confidential.
  2. Printed as Document 254 and Document 261.
  3. Not attached.
  4. Dodson forwarded the response to the second stage of the PRM–8 process, an undated paper entitled “North/South Strategy,” to Mondale, Vance, Blumenthal, Brown, Turner, Young, Lance, and Gilligan under cover of a July 18 memorandum. (Carter Library, National Security Council, Institutional Files, Box 26, PRM–08 2 of 3 [1])
  5. Neither Davis nor General Winger has been identified.
  6. Not attached; see footnote 4 above.
  7. Possibly Samuel Huntington of the NSC Staff.
  8. The focus of the Sixth Special Session of the UN General Assembly, which met in New York April 9–May 2, 1974, was raw materials and development issues.