301. Memorandum of Conversation1

PARTICIPANTS

    • US
    • The Secretary
    • Mr. Habib
    • Ambassador Todman
    • Frances Armstrong, L/ARA (notetaker)
    • GRENADA
    • Prime Minister Eric Gairy

Prime Minister Gairy welcomed Secretary Vance by stating that he wanted pictures but no handshakes. He explained that the last time he had shaken hands was with President Ford who promised assistance but didn’t come through and that he had followed that experience by making a speech in the UN in which he said it was bad enough for the developed countries not to help developing nations but it was even worse for them to make promises and not keep them.

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He noted that Grenada was a small but vibrant island which made important contributions in international fora but that, as a former British colony, it needed everything from pins to airports. He mentioned he had met with Assistant Secretary Todman in Washington and given him a shopping list.2 He also noted that President Carter favored giving economic assistance to democratic countries and that Grenada surely qualified under that criterion. In his view, the way to help was not through the Caribbean Development Bank, which was full of bad bankers and bad businessmen, but through bilateral assistance. He described Grenada as the smallest and poorest of the countries in our backyard—as a special case, in which a small amount of assistance could make a big difference.

Secretary Vance then asked him to comment on the dimensions of Grenada’s fiscal problems.

Gairy responded that they were grave. He noted that after 150 years of British rule, Grenada had been left without revenue or ongoing projects. He said that each month they collected a certain amount of money from import duties, etc., but that they never had enough to pay salaries. Noting that they were strong believers in God, he lamented the fact that they were always short some EC$500,000 monthly.

He then went into the subject of development assistance. He noted that Canada had given Grenada some assistance, explaining his reference in the morning to Canada as Grenada’s bigger brother in the Western Hemisphere, and said that, while they had received some assistance from OAS countries, they had also gotten ugly comments from the OAS. He singled out the United States as the first country to say it wouldn’t give Grenada any special assistance for the OASGA as it already paid 60% of the OAS budget and couldn’t have a conference in a small place like Grenada. Gairy was quick to declare that they had met all their commitments to the OAS and had provided a conference room as good as any. He then noted that God had endowed Grenada with the natural qualifications for a tourist industry, that Grenada always voted with the United States in international fora (except on the Israeli question, which, he explained, got tangled up with women’s rights), and that Grenada was the strongest in the Caribbean against Communism. (As an example of the last point, he mentioned the problems he had with the Communist Youth movement, which had tried to close down the port, and pointed out that he had won 8 of 10 [Page 744]elections.)3 He then asked what he got for his support of the US internationally. His answer: passive resistance in the State Department. He noted that the last time he went to the Department, there had been a feeling of understanding and cordiality for the first time in twenty years, but nothing more.

Gairy then made a plea for Grenada to be considered a special case. He described all the other independent countries in the Caribbean as having substantial natural resources and being highly industrialized and he stressed again his view that Grenada would have been taken over by the Communists if his political party had not been strong. He then asked for special consideration, for some immediate economic cooperation, noting that the United States has on occasion run to the assistance of countries whose ideologies were far removed from its own. He pointed to Grenada’s bad roads and bad water facilities and commented that Canada was giving some assistance and that Great Britain was not in a position to do much.

The Secretary asked what he was doing to combat Grenada’s fiscal problems. Gairy responded that he was trying to get a loan but that it was taking some time to implement. He then spoke of his fight for the disadvantaged people. He said that when people were working in Grenada for US 16¢ a day, he put up a fight for $1.00 a day and that some questioned his wanting to raise the wage. Gairy described his long fight against the British as bitter but noted with satisfaction the wage was now up to $6 a day. He commented that what Grenada needed was a good economic shot in the arm.

The Secretary responded by saying he could not make any commitments, but that he was sympathetic and wanted to learn. He asked what Gairy was doing to solve the economic problem. Was he borrowing from the Caribbean Bank? What were the fiscal dimensions of the problem?

Gairy replied that they were borrowing but that the Caribbean Bank had not been very responsive to Grenada’s problems. He said he had asked that money in the Caribbean Development Bank be placed at the disposal of the eastern Caribbean countries, but nothing had come of this. He also mentioned that the United States has taken out money.

Gairy then briefly described Grenada’s development priorities. He began by noting that Grenada’s second industry was the tourist industry, but people couldn’t get here at night. In his view, an international [Page 745]airport is the most vital concomitant to development. He said that at one time there had been a recommendation that St. Lucia, Antigua, and Grenada have international airports, and that the first two now have them but Grenada doesn’t. He also said he was interested in developing light industry to absorb the unemployment and that Grenada’s agriculture, its first industry, needed intensification and diversification. Gairy commented that Grenada’s lands were fertile, that anything could grow here, but that they needed money.

He also made a plea for technical assistance, saying he had had a lot of promises from his Latin American brothers and from leaders in Africa, but nothing had ever come of them. He spoke of a conversation he had had with Dr. Williams of Trinidad and Tobago, who expressed the opinion that some people wanted to recolonize the Caribbean. Gairy said he had disagreed and that he believed the Latin Americans were genuinely interested in Grenada. However, he went on to describe a bad experience he had had with the Venezuelans. On one occasion, the President of Venezuela had invited him and even sent a plane for him. Perez promised to give Grenada $5 million at that time—actually $2 million in cash and $3 million from the emergency fund in the UN; but it took four months to get approximately $770,000. Gairy went up to New York to investigate and learned that there was no money left in the emergency fund. He went again the next year, and the Secretary General told him that Venezuela had earmarked funds in the emergency fund for Honduras but the UN wouldn’t accept earmarked funds and had sent them back. Later UN officials told him the fund had been converted into an agricultural fund. Consequently, Grenada never received either the $2 million or the $5 million promised.

Gairy summarized his experiences of unfulfilled promises by noting that while the grass was growing, the horse was starving. He said countries had come and made surveys, but nothing had happened, and Grenada has had difficulties in meeting its most urgent commitments. He characterized the people of Grenada as hard workers, willing to undertake self-help projects.

The Secretary then asked Asst. Secretary Todman whether he had information on all this in Washington.

Ambassador Todman replied that Gairy had presented complete details when they met, including the idea of someone coming down to Grenada.

The Secretary noted again that he was not one to make promises, that he would like to take what Gairy had said and study the details of various projects.

Ambassador Todman then suggested it would be helpful if Gairy had something in writing.

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Gairy replied that he had anticipated this request. (He presented a document4 and illustrated his point with a story about a fellow who went to a bank to borrow money but left his account number, paper, and pen at home.)

At this point, the Secretary asked Gairy what he saw as the balance between agriculture and light industry in his development program.

Gairy allowed that there was more room for light industry, but said there was little more Grenada could do in agriculture. With regard to light industry, he commented that Grenada had many young people unemployed, dexterous people, who could do things for export. He said he would definitely give thought to more light industry on the island.

The Secretary then asked if he had any idea how much it would cost to expand the airport.

Gairy replied that they had done several surveys but that costs had been increasing over the years. He remembered the last survey—for two airstrips—was in the region of US$ 17–18 million. He mentioned that the Arab League countries took a look at this and voted $14 million. Gairy said he didn’t want to go around us, that he would like assistance from us and would use this offer only as a last resort.

Ambassador Todman asked Gairy for the name of another agency outside the CDB which Grenada could use for development assistance.

Gairy said he had previously mentioned the ECCA, Eastern Caribbean Currency Agency, but that the best way to do it was bilaterally. He stressed that nothing was wrong with bilateral assistance in special cases, and Grenada was a special case.

The Secretary closed by saying he would take a hard look at what Gairy had given him and see if he needed to present anything else.

Gairy commented that Grenada had failed in the past when promises were made and not kept, but that he couldn’t see how his country could fail when no promises were made.

  1. Source: National Archives, RG 59, Central Foreign Policy File, P770138–1310. Confidential. Drafted by Armstrong; approved by Twaddell on July 12. Vance was in Grenada June 14–16 to attend the OAS General Assembly session. In telegram 14 from Grenada, June 15, the Delegation reported on the June 14 opening of the OASGA. (National Archives, RG 59, Central Foreign Policy File, D770214–0079)
  2. Gairy presented Assistant Secretary Todman with “a long shopping list” of requests for U.S. assistance. Todman offered no firm commitments. (Telegram 104270 to Bridgetown, May 7; National Archives, RG 59, Central Foreign Policy File, D770166–0222)
  3. Shortly before and immediately after Grenada achieved independence on February 7, 1974, a series of strikes shut down Grenadian ports. Prime Minister Gairy tried to link the strikes to Communist subversion efforts. The ports reopened after the government acceded to most of the workers’ demands on March 1, 1974. (Telegram 568 from Bridgetown, March 1, 1974; National Archives, RG 59, Central Foreign Policy File, D740072–0710)
  4. Not found.