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

358. Telegram From the Department of State to Certain Diplomatic Posts¹

Washington, January 19, 1979, 0154Z

14491. Ambassador and AID Mission Director. Subject: Discussion Paper: U.S. Policy Towards the Caribbean. Ref: State 012375.² Guatemala for ROCAP.

1. (C) Complete text.

2. This telegram transmits the text of a paper designed to form the basis for discussion at the forthcoming Chiefs of Mission meeting in Santo Domingo. The paper has received limited circulation in Washington and reflects the ideas and views of those who have read it. However, it is not a cleared document and does not necessarily constitute U.S. Government policy.

3. Begin text:

Basic U.S. interests and objectives in the Caribbean are familiar to all of us and we need not go into details here. It is clear, however, that the Caribbean is passing through a period of very rapid change, both political and economic, creating major strains and serious adjustment problems for its governments and its peoples. The Caribbean was recognized as a major challenge early in the present administration because of the potential impact of these strains and problems on our interests in the area and because the Caribbean is in many ways our third border. As a result a high priority has been attached to initiatives in the Caribbean; the Caribbean Group and the Caribbean Development Facility were the first fruits of these initiatives. We look now to carrying the process a stage further. The purpose of this meeting is to come to grips with the major policy concepts and dilemmas that face us and to chart future strategies in the region.

4. Question: Assuming the Caribbean should rank fairly high in our political and assistance priorities, why shouldn’t we concentrate on traditional, largely bilateral means and mechanisms?

Discussion:

There were strong arguments which persuaded the administration to opt for a regional and multilateral approach to assistance in the Caribbean. First, our goals are to increase the long-term viability of the region rather than seek short-term advantages. A more regional approach promises economy of scale. Indeed, some of the smaller newly independent states will be unable to provide even basic governmental services by themselves. In addition, treating the Caribbean as a whole allows a stronger case to be made to potential donors of economic assistance including some distant donors who have not been traditionally involved in the area. The same argument can be made to apply internally in the U.S., and it is unlikely that assistance funds at an adequate level can be obtained while treating potential recipients as individuals. Lastly, it should be noted that the Caribbean countries themselves, and especially the Commonwealth Caribbean countries, have opted for regional approaches in several economic and social areas.

Tentative Conclusion:

Bilateral assistance has an important role to play and will continue to do so. Some kinds of projects simply do not lend themselves to a multilateral approach. In addition, we have commitments which we intend to honor. However, the case for a more regional approach to assistance policy in the Caribbean is persuasive. If we are to obtain additional resources for the Caribbean it will almost certainly be on the basis of the case for regionalism, and these resources will have to be devoted largely to regional programs. Also, we should look for ways to make our bilateral programs and projects serve regional purposes, in addition to achieving their bilateral goals.

5. Question: Assuming that we should focus our efforts on the Caribbean as a region, what region or regions are we talking about?

Discussion:

In the first part of his paper on the Caribbean Development Bank, Ambassador King gives a good description of the different perceptions of the Caribbean.³ Both the peoples of the English-speaking Caribbean and the major European powers see the Caribbean as including only the English-, French-, and Dutch-speaking territories. We on the other hand, tend to regard Hispaniola as the center of the Caribbean because of our historical involvement with its two republics; because the island contains two-thirds of the entire population of the Caribbean, excluding Cuba; and because the island simply is the center of the Caribbean geographically. Given these facts together with our new interest in the English-, French-, and Dutch-speaking Caribbean as the metropoles withdraw, seems to consitute a strong argument for trying to combine Hispaniola and the smaller entities of the Caribbean into a single definition of the Caribbean, at least for purposes of future development and trade.

Some observers urge an even broader definition of the Caribbean embracing the entire Caribbean Basin including northern South America, Central America, and Mexico, and the United States. Others, however, have warned against carrying regional definitions too far, pointing to deep historical, linguistic, cultural, and political differences. Some of these observers warn that trying to include Hispaniola and the smaller entities in a single approach is so chancy that it threatens the entire regional concept. They note, however, that there are some subregional units which make some sense both economically and politically and which may be willing to work with one another more closely than in the past on a broad range of problems.

Tentative Conclusion:

We should continue to advance the concept of regionalism and seek support for it as broadly as possible. However, we should avoid appearing to impose any particular definition of regionalism and, indeed, concentrate on seeking workable solutions to real problems and avoid geographic and political arguments which are likely to be sterile. However, we should, in cooperation with others, actively look for potential building blocks—that is, subregional units or groupings which seem anxious to work with one another either in particular fields or in general. We should do what we can to encourage and support these tendencies on the theory that in the long run these building blocks will tend to draw together and, in any event, their sum will add up to more than the various parts. Such subregional groupings might include Barbados with St. Vincent and St. Lucia; Martinique with Guadeloupe and Dominica; Antigua with St. Kitts-Nevis, Montserrat and Anguilla; Grenada with Trinidad and Tobago; Haiti and the Dominican Republic; and, for some purposes at least, Jamaica, Guyana, and Trinidad and Tobago. A larger sub-group might be the current Eastern Caribbean Common Market (ECCM), or CARICOM or perhaps the Caribbean Group recipient countries.

6. Question: What can be done to improve the political environment for intra-regional cooperation and development in the Caribbean?

Discussion:

Internal cleavages and rivalries of a political nature are among the most serious obstacles to increased regionalism in the Caribbean. These cleavages and rivalries are based on history, ideologies, economics, and, to a considerable extent, personalities. Two major political tendencies can be discerned in the Caribbean. One is liberal, democratic socialism inclined towards Western values, including acceptance and encouragement on some terms of free enterprise and private investment. The other is Marxist-Leninist, inclined towards the Socialist bloc and increasingly authoritarian in its tendencies. Included in the first group are the Bahamas, Trinidad and Barbados and the small states of the Eastern Caribbean. Guyana is clearly an example of the second tendency. Jamaica stands on a borderline between the two. For a time it seemed inclined in the direction of Marxist-Socialism, but now it appears to be moving in the opposite direction. Both Haiti and the Dominican Republic have long traditions of rightist authoritarianism, but currently at least the Dominican Republic can be placed firmly in the democratic socialist camp.

Underlying this fundamental cleavage, are strong and sometimes bitter rivalries between Prime Ministers Manley, Burnham, Williams and Adams in the English-speaking Caribbean, conflicts which often frustrate regional initiatives even within that linguistically and culturally homogenous subregion. Even the leaders of the small Eastern Caribbean states have strong personalities and are frequently in conflict with one another.

On the other hand, a number of important Caribbean leaders are firmly committed to the concept of regionalism, including Henry Forde, Foreign Minister of Barbados, who served as spokesman for CARICOM at the first meeting of the Caribbean Group. After a hiatus, CARICOM has appointed a new and able Secretary General.⁴ And finally, the Eastern Caribbean Common Market remains committed to the idea of common services in the area as expressed by St. Kitts’ Paul Southwell in the first Caribbean Group meeting.⁵

Tentative Conclusion:

Obviously, dealing with the political environment in the region and hopefully making it more receptive to regional approaches is going to be both serious and a tricky problem. Clearly, we should attempt to keep the political content of our suggestions and initiatives to a minimum, and should take pains to consult with key leaders both collectively and individually at every stage. We should be careful not to impose, or even appear to impose, our own views or solutions, and make sure potential programs and projects are genuinely needed and wanted in the area. Finally, we should be careful not to bruise sensitivities of the leaders of the region with respect both to us and to one another.

7. Question: Other than geographically, what is the meaning of regionalism?

Discussion

Regionalism in the Caribbean is easy to accept as a guiding concept, but it has proven extraordinarily difficult to give it concrete effect. This is because we ourselves have been none too clear about what we meant except in a geographical sense. Regionalism can be given concrete expression in a number of ways. One is through regional institutions, either those that already exist or new ones created for specific purposes. Regional institutions, moreover, may be governmental or may be private. Early in the Caribbean regional effort, it was agreed among both donors and recipients that no new institutions with expensive budgets and elaborate bureaucracies should be created. On the other hand, in the long run regional policies can only be given effect through institutions. Most of the existing institutions, both public and private, exist for special purposes and are not necessarily well suited to be vehicles for seeking broader purposes. In addition, they tend to either overlap geographically or functionally, or to leave serious gaps between their areas of coverage.

Another way of giving expression to regional policies is by programs which may seek to combine or coordinate the work of existing institutions or projects. The Caribbean Development Facility under the Caribbean Group is essentially a program or coordinating mechanism using existing institutions and existing projects. The CDF met a pressing need and has enjoyed a fair amount of success. However, as has been frequently pointed out, while the CDF itself is regional, there is nothing at all regional about the projects it supports nor are they coordinated in such a way so that each forms a coherent part of a regional whole.

A third way of giving effect to regional initiatives is to find projects which are themselves regional in nature. Examples might be a regional shipping line, which already exists, or a regional air transportation system, which does not. A number of other regional projects, such as research in tropical agriculture, can easily be conceived of. However, it is not easy to come up with truly regional projects which would have a major effect on the future cohesion and viability of the region. This is less true when considering subregional units and, indeed, success in developing common services in the Eastern Caribbean may be the cornerstone of assuring the economic viability and continued independence of the micro-states.

Finally, regionalism can be given expression by coordinating individual development programs and bilateral assistance efforts so that they fit into a coherent regional whole. CARICOM has made some effort to do this already. The Caribbean Food Plan is an example.⁶ However, mechanisms do not now exist to do this in an extensive or coherent way and there are no regional or subregional development plans or planning bodies which could successfully play this role.

Tentative Conclusion:

The reluctance to create new and expensive institutions is easy to understand. However, existing institutions may be inadequate to achieve the level of planning and coordination that will be required by genuinely regional development efforts and assistance flows. Some, such as CARICOM, may serve as a foundation for greater regionalism, and might even be persuaded to stretch to accommodate the needs of non-English speaking areas. Other planning and coordinating mechanisms will probably evolve over time as the need for them becomes apparent, but we should encourage and support movement in this direction as much as we can.

8. Question: How can we introduce new dimensions into our regional initiatives in the Caribbean?

Discussion:

Thus far, the Caribbean Group has been a mechanism for the conduct of government-to-government relations. In fact, it has been even narrower than that, engaging principally Foreign Ministries and Ministries of Finance of the various participating countries almost exclusively. Moreover, the focus of the Caribbean Group has been almost entirely on the management of concessional assistance flows. This has been an essential beginning point, especially in view of the critical balance of payments problems which had to be addressed immediately. However, to focus Caribbean cooperation entirely on concessional assistance flows is to ignore three potential levels of activity which may be of much greater long-run significance to intra-regional cooperation and viability. The first level consists of non-concessional forms of public assistance, such as reimbursable aid, housing investment guarantees, and the activities of the Overseas Private Investment Corporation (OPIC), and the Export-Import Bank (EXIM). Other countries have similar mechanisms.

A second level which would be particularly important for fostering intra-regional cooperation is the field of non-governmental organizations (NGOs). There are already a fairly large number of NGOs operating regionally in the Caribbean, embracing the area as a whole or significant parts of it. Organizations such as the Caribbean Tourism Association, and the Caribbean Hotel Association, are examples. There are others in the professional, labor, academic, economic, and voluntary sphere. These organizations constitute a valuable reservoir of experience in regional cooperation.

The third and perhaps the most important level is that of private investment. All of the countries in the Caribbean desperately need private investment. In fact, increased private investment flows are the only real long-run answer to the problem of economic viability and growth in the region. Investment flows might be increased if investors could be given the assurance that particular investment areas or projects have been reviewed and approved by multilateral groups. It is possible that a system of investment guarantees involving donor governments (in our case, OPIC), recipient governments and the IFI’s could be worked out.

For some countries the problem of stimulating and channeling private investment is the immediate one. This certainly applies to the Bahamas and Trinidad, and could also be said of Barbados, the Dominican Republic, and even Jamaica. We may wish to suggest to the World Bank that the individual country subgroup meetings under the Caribbean Group for countries in these categories consciously develop linkages with representatives of the international investment banking community in addition to representatives of donor governments and the IFI’s.

Tentative Conclusion:

Government-to-government arrangements were the essential starting point in seeking to stimulate greater cooperation in economic development in the Caribbean. However, newly independent governments jealous of their sovereignty may be slow to embrace truly regional policies. Moreover, generally high levels of per capita income in the Caribbean place constraints on the use of concessional assistance to the area on the part of ourselves and other donors. Finally, public assistance cannot and probably should not meet the full demand for capital inflows in the Caribbean. Therefore our Caribbean strategy should find ways to build parallel tracks to the government-to-government effort in the Caribbean Group, and to link these various tracks to one another.⁷ End text.

Vance

1. Source: National Archives, RG 59, Central Foreign Policy File, D790037–0908. Confidential; Immediate. Sent to Bridgetown, Georgetown, Kingston, Caracas, Port au Prince, Santo Domingo, Port of Spain, and Nassau. Repeated for information to Paramaribo, Guatemala City, Belize, Curacao, and Martinique. Drafted by Hewitt; cleared by Grove, Bushnell, Einaudi, Feinberg, and in AID/LAC; approved by Vaky.
2. In telegram 12375 to the same posts, January 17, the Department circulated the schedule for the Caribbean Chiefs of Mission Conference held five days later in Santo Domingo. (National Archives, RG 59, Central Foreign Policy File, D790023–0651)
3. Not further identified. Ambassador Burke met with Kurleigh King, CARICOM Secretary General, on January 12 to elicit his views on Caribbean regionalism and the role of the CARICOM Secretariat in promoting regional cooperation. (Telegram 215 from Georgetown, January 16; National Archives, RG 59, Central Foreign Policy File, D790022–0555)
4. King was appointed in November 1978.
5. Paul Southwell, Premier of St. Kitts-Nevis, at the first regular meeting of the Caribbean Group for Cooperation in Economic Development in June 1978, suggested broadened and strengthened common services in the Eastern Caribbean, a proposal supported by the region’s less developed countries. (Telegram 162574 to Bridgetown, June 26, 1978; National Archives, RG 59, Central Foreign Policy File, D780182–0824)
6. The Caribbean Food Plan was designed to promote agriculture and reduce the exchange drain caused by food imports. (Telegram 6153 to Kingston, August 4, 1978; National Archives, RG 59, Central Foreign Policy File, D780326–1143)
7. Minutes of the Caribbean Chiefs of Mission Conference, which met in Santo Domingo on January 23, are in the Carter Library, National Security Affairs, Staff Material, North/South, Pastor, Country, Box 4, Folder, Caribbean, 1–9/79. Telegram 530 from Santo Domingo, January 25, summarized the proceedings. (National Archives, RG 59, Central Foreign Policy File, D790040–0304)