312. Memorandum From the Administrator of the Agency for International Development (Gilligan) to the President’s Assistant for National Security Affairs (Brzezinski)1
SUBJECT
- The Quid for Military Installations and A.I.D.-Assisted Philippine Projects
This is in response to your January 20 memorandum.2
I am sensitive to the need to satisfy President Marcos’ desires in order to stabilize our access to key military facilities in the Philippines. However, if the A.I.D. program were to be used as part of a base rights compensation package, we are concerned that we would pay too high a price in terms of its negative impact on other U.S. foreign policy objectives—both global and specific—to the Philippines. It is particularly important to consider the general issue of using economic assistance as payment for base rights in terms of its potential impact on the President’s decision to seek substantial increases in foreign aid funds. If effectively executed, the President’s decision should help persuade the South of the seriousness of U.S. concern about worldwide basic human needs. On the other hand, if a substantial portion of aid funds is used to buy access to military facilities, our credibility will suffer.
A. A.I.D. Development Assistance Projects
A.I.D. can play a positive and constructive role in supporting U.S. foreign policy objectives in the Philippines. Based on my recent visit to the Philippines, I am confident that we can make a significant contribution to alleviating the miserable social and economic conditions of the population living adjacent to Clark Air Force Base and Subic Bay and help alleviate a serious irritant in U.S.-Philippines relations. We are now actively engaged in programs benefiting the population of those areas within the structure of A.I.D.’s current development assistance strategy. Furthermore, we see opportunities to direct greater resources to those areas over the next five years without damaging the [Page 1020] integrity of our development assistance program. Some of the activities we foresee undertaking include:
—a new Housing Investment Guarantee program to provide low income housing and related services to the area;
—an integrated health, family planning program for the entire area;
—a substantial increase in small-scale community development services under the auspices of U.S. and Philippine private voluntary agencies (PVOs) but financed by A.I.D.;
—local government administration which would include, for example, the provision of small-scale potable water systems and feeder roads.
I believe this geographic focus would be supported by the Government of the Philippines.
B. An A.I.D. Quid for Base Rights
It is A.I.D’s position that economic assistance should not be used in a manner which would link it to U.S. base rights. Accordingly, I believe it would be a serious mistake to move to a Security Supporting Assistance program in the Philippines. In the first place, as a general policy, we believe that economic assistance should not be used to pay for military bases or other related facilities. From a budget standpoint, it is easier to weigh the costs and benefits of related requirements—in this case military requirements—when they are in the same budget account. Now that the Congressional budget process has been established, inclusion of this military item in the International Affairs category makes it more difficult than in the past to prevent funds for base rights from being appropriated at the expense of, for example, contributions to international financial institutions, or some other International Affairs purpose. The International Affairs category is relatively small, without the elbow room that the National Security category has to accommodate such items.
In addition to the budget problem, it seems anomalous for A.I.D. to defend before the Congress and administer a program that is intended to meet military objectives. The Department of Defense is in the best position to calculate realistically, and convey to the Congress the true value of the facility to the United States—including the increased security to the area in which the base is located because of its association with the United States and the nature of mutual military obligations if an alliance is involved.
Furthermore, there is a serious question as to whether Congress would agree to the continuation of the Development Assistance program in the Philippines if it accedes to the use of SSA funds as a quid for base rights. While the legislative prohibition restricting the use of DA and SSA funds in the same country has been somewhat eased, we [Page 1021] would have to seek explicit approval of the Congress at a time when Congressional attitudes relating to the Marcos regime are largely negative.
Finally, a U.S. multi-year commitment to an economic assistance package would undermine whatever leverage the U.S. has in carrying out development assistance strategy for the benefit of the poor. If A.I.D. gets locked into a commitment to provide a predetermined amount of resources, there would be little opportunity to encourage the GOP to take the policy actions required to give the poor majority a more equitable share of the development benefits. Predetermined aid commitments also would diminish U.S. influence on improving GOP human rights performance.
For all of these reasons, I strongly recommend that whatever leverage we need for the base rights negotiations be divorced from any A.I.D.-administered account. If economic incentives are needed as part of an arrangement for military facilities, the cost should be calculated as part of the U.S. military budget, and the Department of Defense should make and defend the request for funds.
As you know, an Interagency Task Force has been examining the general question of payments for overseas military facilities. I suggest that the Philippine base rights issue represents an appropriate occasion to bring this broader issue forward for Presidential resolution.
We are aware that State and DOD do not fully share our views on the SSA question. In the interest of time, we have asked State and DOD to submit their comments separately.
- Source: Carter Library, National Security Affairs, Staff Material, Far East, Armacost Chron File, Box 6, 2/13–22/78. Secret.↩
- In his January 20 memorandum, “Aid Projects in the Philippines,” Brzezinski asked Gilligan to provide recommendations concerning aid that could be offered as compensation in the base negotiations, with particular emphasis on an assistance program for the areas next to Clark and Subic Bay and the provision of Security Supporting Assistance. (Carter Library, National Security Affairs, Brzezinski Material, Brzezinski Office File, Country Chron File, Box 39, Philippines, 1978)↩