264. Telegram From the Embassy in Yugoslavia to the Department of State1
3453. Subj: Yugoslav Earthquake: Reconstruction Assistance. Ref: State 111949.2
1. C-entire text
2. It was not too many years ago that I too was struggling with tight budgets and cursing Ambassadors for their inflated clientitis. Thus, I have been uncharacteristically reluctant to weigh in on the debate over what, if any, reconstruction assistance the USG should provide in the wake of the Montenegrin earthquake. But further silence only means I am not doing my job.
3. Certain facts are clear:
A. The consequences to the Yugoslav economy of the earthquake, while not disastrous, will be severe. And this comes at a time when the Yugoslav economy is already under heavy pressure, with a serious trade imbalance for the year inevitable, inflationary pressures intense, investment funds shrinking, and hard currency availabilities greatly reduced.
B. The earthquake’s effect on Montenegro (Yugoslavia’s poorest republic), on the other hand, is close to disastrous. Tens of thousands are, and will remain for months, in temporary shelter; much of the Republic’s infrastructure (highways, hospitals, schools, water systems, etc.) has been destroyed or damaged; tourist facilities along the Montenegrin Adriatic coast are a shambles; industrial facilities throughout much of the republic have been put out of commission for months to come.
C. The quick and effective emergency aid provided by the USG was widely and gratefully noted by people throughout Montenegro and Yugoslavia. We were compared favorably with others (particularly the USSR) who reacted slowly or not at all during the emergency phase.
[Page 870]D. The Kennedy Amendment received widespread publicity throughout the country and triggered a second wave of grateful public and private comment. As a result, substantial US reconstruction assistance is considered by most Yugoslavs, despite our best efforts to the contrary, to be virtually a fait accompli.
4. These then are the circumstances in which we find ourselves. Failure to provide any reconstruction assistance in the face of these facts would inevitably entail some consequences. But I do not want to exaggerate. If we do no more:
A. It will not mean an immediate deterioration in our bilateral relationship. The GOY’s interest, at least for now, in close ties with the US is based on factors of such importance that it will not be seriously affected by what we do about earthquake assistance.
B. It will not much affect the economic difficulties the Yugoslavs will face this year, or the rapidity of Montenegrin recovery. Whatever we might have done would have been so small in comparison with total needs that the economic impact would have been minimal.
5. The case for providing some help, then, must rest on other grounds. And most of those grounds are so well known in Washington that they need not be dwelt on here. They range from the political arguments about the importance of Yugoslav-US relations in the sensitive period prior to Tito’s passing, through the humanitarian considerations that are so much a part of our makeup, and the fact (well known here) that Yugoslavia’s neighbors Romania and Italy have been recent recipients of major US earthquake assistance, to the fact that Yugoslavs of every variety will simply not understand, after the Kennedy Amendment publicity, what led the USG to oppose (and that is how it will be seen) giving aid to Montenegro.3
6. But, important as I believe all those arguments to be, there is an additional factor that I worry about, and Washington ought to worry about. It is the question of confidence, which is, I recognize, a nebulous quality. But it will probably prove to be the single most important element in the minds of the Yugoslav leadership both now and after Tito as they chart their future course. I find it difficult to believe that Yugoslav confidence in our ability or willingness to put our money where our mouth is when the chips are really down will be much [Page 871] enhanced if we refuse now to help in a small way when we have helped so many others so many other times.
7. I recognize budgetary considerations are an overwhelming problem and admit that I can do no more than argue that important as they are, this is more important. While I cannot pull money out of a hat, I can wonder what ever became of the 35 million dollars in aid funds previously programmed for Pakistan and suggest that—if a supplemental is not possible—reprogramming from less essential programs (there must be some) should at least be considered.
8. Of one thing I am certain. We are presently in the worst possible posture. We have refused to take a position “pending review of Yugoslavia’s needs,” yet, so far as I am aware, no review is underway. Nor do I believe we should be conducting a review—at least with the Yugoslavs—so long as there is any question about our willingness to seek funds when the review is completed. Once we go to the Yugoslavs for information on their needs they will inevitably assume that we intend to do something.4
9. So, much as I fear the Department may take me up on it, I recommend that if we are not going to do anything we tell the Yugoslavs precisely that, and soon and in Washington.
- Source: National Archives, RG 59, Central Foreign Policy File, D790211–1130. Confidential; Immediate; Limdis.↩
- In telegram 111949 to Belgrade, May 2, the Department informed the Embassy of Senator Pell’s introduction of the Kennedy amendment to the FY80 Aid Authorization Bill and the discussions on the amendment that ensued including the position of the administration that it took no position pending a review of Yugoslav needs. The Department informed the Embassy that the SFRC concluded discussion on the amendment with an agreement to wait for the administration’s position, and that “Committee now considers the ball to be in the administration’s court and that although Kennedy is prepared to propose amendment on Senate floor, he will not do so without administration support.” (National Archives, RG 59, Central Foreign Policy File, D790201–0097)↩
- In telegram 123994 to Belgrade, May 15, the Department notified the Embassy that the administration’s official position with respect to Senator Kennedy’s amendment was that while the issue had been closely examined in the Department of State and the administration remained sympathetic to the needs of Yugoslavia and had examined various alternatives, “none of them seem currently feasible because of budgetary restrictions. We will therefore not send up any proposal of our own, but we will not oppose the initiative of Senator Kennedy.” (National Archives, RG 59, Central Foreign Policy File, D790220–0092)↩
- On May 16, Eagleburger met with Pesic to discuss possible U.S. long-term reconstruction assistance. Reporting the conversation in telegram 3697 from Belgrade, May 18, the Embassy noted Pesic’s emphasis on expectations of the Yugoslav public, fueled by press reports of Senator Kennedy’s amendment, that aid would be made available. The Embassy reported: “Pesic pointed out great importance of an affirmative U.S. administration position on aid issue, not only in providing badly needed assistance, but also in ‘creating the atmosphere’ in which other countries would be making similar decisions.” (National Archives, RG 59, Central Foreign Policy File, D790229–1230)↩