354. Briefing Memorandum From the Assistant Secretary of State for Inter-American Affairs (Todman) to Secretary of State Vance1

FY 79 Budget—Caribbean

I am happy to report that the December 14–15 Conference on Caribbean Development was highly successful.2 The discussions were conducted in a friendly, cooperative atmosphere, with agreement reached to establish a Caribbean Group for Cooperation in Economic Development. There was no North/South confrontation whatever but [Page 877] rather a spirit of donors and recipients wanting to work together. The first plenary meeting of the new group will be held in the Spring.3

The conference was attended, generally at ministerial level, by thirty-one donor and recipient countries along with twelve international lending institutions. Trinidad was represented by its Ambassador to Washington. Our delegation was, of course, headed by Ambassador Young and Governor Gilligan. Ambassador Young stressed our concern with the area, our preference for a regional approach to development and the need for the most efficient use of resources. Governor Gilligan mentioned a number of areas where we would be prepared to help and stated that the Administration is prepared to ask Congress for additional development assistance for the area. The Caribbean countries agreed both that efficiency should be improved and that they should cooperate among themselves.

While we are pleased that the conference achieved its primary purpose of obtaining agreement to move ahead with the Caribbean Group, we are now more convinced than ever that a substantial increase in our aid to the region is necessary if this cooperative exercise is to succeed. The main theme stressed by all the Caribbean delegations was the need for substantial additional assistance. Barbadian Foreign Minister Forde summed it up for the Commonwealth Caribbean by stating that “additionality of aid is an essential feature of this whole effort”. The World Bank chairman, Dr. Krieger, estimated in his opening address that the region would need about $600 million per annum in development assistance over the next five years, representing more than a doubling of assistance on a per capita basis. The Commonwealth Caribbean put it in terms of “greatly in excess of $1 billion in additional assistance over the next five years”. Since great stress was also placed on the urgent need for balance of payments and budget support by countries such as Jamaica and Guyana, any shortfall of development assistance will be doubly disappointing.

The British and Dutch stated that their governments are prepared to increase their assistance. The World Bank, for its part, promised to double its assistance over the next five years. We ourselves obviously could not be very forthcoming given the large Presidential cut in our proposed FY–79 budget. However, we will be expected to be responsive at the Spring meeting of the group, in terms of helping to finance Caribbean proposals expected to be tabled at that time.

We will not be able to respond adequately if funds for this purpose are not included in the FY–79 budget. If we wait for the traditional [Page 878] detailed presentation of projects for regional cooperation and productive enterprise, as OMB wants, we would not be able to provide funding for almost two years. To the extent Caribbean countries respond early next year to your mid-1977 suggestion that they develop regional projects, we would be able to provide funding only in October of 1979.

The point that we must get across to the President is that this Administration is politically and publicly committed to a turn-around of our policy toward the Caribbean. We must bring our budget levels into balance with our rhetoric. We are convinced that it is essential to our political objectives in the Caribbean, and in particular to the success of the Caribbean Group, to restore the $36 million cut in the proposed Caribbean funding to the level of $123 million.

We are deeply concerned that, if our FY–79 budget request—the first prepared by this Administration—becomes public in early 1978 showing only $87 million for the Caribbean, the multilateral effort will die before becoming operational. We urge the restoration of the full $123 million recommended by State and AID for the Caribbean. That sum provides only $30 million for new initiatives, with the other $93 million representing essentially a return to normal AID funding following years of low programming for Jamaica and Guyana under the previous Administration. The funds for new initiatives will go into support for productive enterprise and regional cooperation, areas which must have the highest priority in attacking the region’s stagnant economies, high unemployment and pockets of extreme poverty.

We would like also to stress the positive human rights aspects of a substantial increase in our Caribbean aid request. So far we have given the Caribbean only a little more aid while appearing to hit these countries hard on sugar. The $123 million is a minimum to maintain credibility for our initiatives. To OMB’s objection that this is a doubling of the aid level, the response is that nothing less would fit with a commitment of this Administration to help actively an area where the previous policy had essentially been one of neglect.

  1. Source: National Archives, RG 59, Central Foreign Policy File, P780051–1846. Confidential. Drafted by Dozier and Bushnell on December 16; cleared by Hewitt and Shelton. Vance initialed at the bottom of the first page.
  2. In telegram 301445 to certain diplomatic posts, December 17, the Department transmitted an account of the conference. (National Archives, RG 59, Central Foreign Policy File, D770471–0328) Tarnoff’s January 10, 1978, memorandum to Brzezinski also summarized the conference and stated that only $15 million was allocated for new Caribbean initiatives. (Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 45, Folder: Latin America, 12/77–7/78)
  3. See footnote 2, Document 356.