Foreign Relations, 1977–1980, Volume XXIII, Mexico, Cuba, and the Caribbean

342. Memorandum of Conversation¹

Washington, June 5, 1979

SUBJECT

• Suriname, Cuba, NAM and the Caribbean; Surinamese Request for U.S. Support of IBRD Loan

PARTICIPANTS

• U.S.

  • Secretary Vance
  • John A. Bushnell, ARA
  • Richard A. McCoy, ARA/CAR (Notetaker)

• Suriname

  • Roel F. Karamat, Surinamese Ambassador

I. Suriname, Cuba, NAM and the Caribbean

Ambassador Karamat opened the conversation by mentioning recent Surinamese decisions to establish diplomatic relations with Cuba and join the Non-Aligned Movement.² He stated that these decisions do not indicate a change in Suriname’s foreign policy, which will continue to be low key, moderate, and pro-U.S. He said Prime Minister Arron would have assured the Secretary personally, had he seen him, that these moves are merely part of a new country establishing contacts and do not change Suriname’s pro-Western, democratic stance.

Ambassador Karamat then expressed his concern about efforts of the Department to link Suriname with the Caribbean. He explained at length that Suriname’s primary interests were not served at this time by linkage with the Caribbean, but rather with countries in Suriname’s immediate region. Secretary Vance responded that he looks on each country as an independent entity with its own individual culture. It is not our intent to force any country into a regional group, although from time to time a situation may arise where it would be advantageous to do so. Nevertheless, it is not our policy to pressure any country to become involved where it does not wish to be.

II. Suriname’s Request for U.S. Support of IBRD Loan

Ambassador Karamat then stated that he wished to ask the Secretary for his support for a World Bank loan for the Devis Falls Hydroelectric Dam in Western Suriname. Karamat then reviewed the project in detail. He indicated that he had received negative information from World Bank sources that disturbed him, that the Bank might be reluctant to approve the loan because of Suriname’s high per capita income.³ Karamat thought that such criteria were unfair since this project would develop energy that could assist not only Suriname but also Guyana and Brazil. The Secretary acknowledged that the Bank has followed a policy that the poorest nations should receive the bulk of available loans. He added that there are also other needs to be considered.

Karamat stated that this project will have a tremendous impact on his country’s development. He commented that traces of oil have been found in the country that may fulfill energy needs. However, hydroelectric power is there to provide the necessary energy for development, and Suriname would be deeply disappointed and hurt if the United States would not support it on this issue.

The Secretary responded that we have indicated we would support the loan, if it meets the usual criteria and the Bank moves forward on it. Karamat answered you will support the loan, if it meets the Bank’s criteria, but can we meet the Bank’s criteria, if our per capita income is too high. We removed one obstacle to the loan, he continued, when Prime Minister Burnham of Guyana agreed, at a recent summit meeting with Prime Minister Arron, not to object to the project on environmental grounds.⁴

The Secretary acknowledged Karamat’s remarks and commented that the U.S. has excellent relations with Suriname that we do not take lightly. He asked Karamat what assistance he specifically wanted. The Ambassador replied that he hoped that, with U.S. support, the World Bank would reconsider the criteria it applies to this type of project. The Bank asks questions, such as will we be able to sell the aluminum that will be produced with the new dam, as if it was thinking for Suriname. Actually, companies have expressed interest in this project, and Brazil has indicated it would finance the project, but Suriname would prefer to deal with the World Bank rather than place its future in the hands of the Brazilians and is worried that the Bank will not approve the loan.

Secretary Vance remarked that Karamat appeared to be assuming the worst. Karamat replied that he expected the worst, based upon the negative comments he was receiving from his contacts at the Bank. The Secretary asked “who do you hear this from?” Karamat’s reply was vague. He complained that his inability to get an appointment with Nicolas Barletta, Chief of the Latin American Division of the Bank, until the end of June was indicative of the Bank’s attitude.

Mr. Bushnell interjected that Mr. Barletta probably wanted to hold off on the appointment until the World Bank team going to Suriname this month had an opportunity to review the situation and report to him. Mr. Bushnell said he was aware that the Bank might consider more favorably loans for projects that had more social impact on Suriname than the project being discussed. Karamat challenged that view, pointing out that no project would have greater impact on Suriname than the hydro-power project.

Secretary Vance indicated he understood the Surinamese position and believed the Bank would take a serious look at the project. Mr. Bushnell mentioned that the U.S. was pressing the Bank to do more on energy.

The Secretary agreed that one of the major priorities of the Bank was to help countries develop energy sources other than fossil fuel. The Secretary remarked that he was seeing Mr. McNamara Sunday and would ask him about the project and tell the Ambassador what McNamara thought. The Secretary said that Mr. McNamara might say that he would have to wait until his people in the field submitted their report before he could comment on the project. Ambassador Karamat thanked the Secretary for his offer and expressed appreciation for his interest.

1. Source: Department of State, Records of Cyrus Vance, 1977–1980, Lot 84D241, Box 9, Vance Nodis Memcons 1979. Limited Official Use. Drafted by McCoy on June 14; cleared by Bushnell. The meeting was held in Vance’s office.
2. Cuba and Suriname established diplomatic relations on May 31. Suriname joined the Non-Aligned Movement in July.
3. On August 10, World Bank officials announced that they would not be providing additional funding for the Devis Falls dam. (Telegram 208499 to Paramaribo, August 10; National Archives, RG 59, Central Foreign Policy File, D790364–0332)
4. In telegram 1827 from Georgetown, April 23, the Embassy reported that Burnham and Arron held their summit in Barbados from April 11 to April 14, and discussed smuggling, immigration, cooperation across the Caribbean, sanctions against South Africa, and a ferry service to link the two nations. (National Archives, RG 59, Central Foreign Policy File, D790185–1198)