Foreign Relations of the United States, 1981–1988, Volume I, Foundations of Foreign Policy

39. Statement by Secretary of State Haig Before the Senate Foreign Relations Committee¹

Washington, March 19, 1981

Security and Development Assistance

It is a great honor to appear before the Senate Foreign Relations Committee as Secretary of State. As members of this committee, you are aware that the conduct of foreign policy and exercise of influence requires many tools. It is the role and purpose of one of these tools—security and development assistance—that is the subject for discussion today.

Security and development assistance should be seen in the context of the international challenges that confront us and the foreign policy we have devised to overcome them. Today’s world presents the United States with three prominent trends. First, power is diffused widely among many nations and some are prepared to use violence to advance their ends. Second, we and our allies are now more vulnerable to international unrest and violent change. Third and most dangerous, the growth of Soviet military power is now capable of supporting an imperial foreign policy.

The last trend is most alarming. Soviet adventurism in the Horn, in South Asia, in the Persian Gulf, and in Southwest Africa appears to conform to a basic and ominous objective: to strike at countries on or near the vital resource lines of the West.

The depressed world economic condition is equally familiar to you. The spiraling cost of oil has been a punishing blow to all nations. It has been particularly crippling to the developing nations. It is estimated that developing countries paid $50 to $60 billion in 1980 for their oil imports. Adding to this burden is another $50 to $60 billion in trade deficits. All of this comes at a time when world population will increase by half in just the next 20 years—from 4.4 billion in 1979 to over 6.3 billion by the end of the century, with 90% of this increase in the poorest countries. Economic dislocations of this magnitude create conditions for violent disruptions, with dangerous political consequences.

U.S. Response

Our response to these challenges must incorporate several elements if we are to advance our international objectives. We require:

• A strong, prosperous, and productive American economy, because we can do little to help others if we are disabled ourselves;
• An American defense posture that restores the confidence and determination of friends and that deters adversaries from pursuing adventures; and
• The resources to protect our international security interests and to promote peace and prosperity abroad.

The President has proposed a far-reaching and dynamic program to restore the health of the American economy.² I fully support his proposals. The revised defense budget which the Congress will review in a short time is designed to revitalize our Armed Forces and rebuild our capacity to defend our vital interests.

The third element, resources to promote our security and economic interests, is the reason for my appearance before this committee today. Before going into the details of the Administration’s foreign assistance request, let me say a few words about the general directions of our economic policy and how we will shape assistance programs to complement these policies.

First, in the formulation of economic policy, in the allocation of our resources, in decisions on international economic issues, a major determinant will be the need to protect and advance our security.

Second, we shall continue to work with other countries to maintain an open and accessible international economic system. This will include efforts to engage the U.S. private sector more fully in the economic development process.

Third, the United States will not forsake its traditional assistance to the needy of this world: the undernourished, the sick, the desperate refugee.

Fourth, there will be neither abrupt nor radical redirection of our international economic policies. Where necessary, policy will be changed in an evolutionary fashion, with minimal disruption and uncertainty.

Fifth, the United States will not abandon institutions and agreements devoted to global economic and political stability. The United States will continue to bear a fair share of the cost to maintain and operate international organizations.

I have asked Jim Buckley [James L. Buckley, Under Secretary for Security Assistance, Science and Technology] to coordinate the allocations of all types of foreign assistance in which the Department is involved. Let me give you an example of what Jim undertook for me in recent days. We wanted to allocate additional assistance to El Salvador, and Jim worked with the various offices to put together the package of economic support funds, development assistance, PL 480, etc.³ I see this as entirely consistent with my responsibility, under the President, for overall supervision and direction of our foreign assistance effort.

Security Assistance

I referred a moment ago to the President’s proposals for reconstituting America’s defense capabilities. Our security assistance program goes hand-in-hand with this effort and must enjoy equal priority. This is because the friendly states we support can themselves help us assure our most vital national interests.

For example, many of our security assistance partners enjoy a geographic proximity to the resources our economy demands. Others possess timely knowledge of complex regional events and are best suited to understand these events and assure that they do not slip beyond responsible control. Finally, many of our partners have military forces trained and experienced in operating in different areas.

As we strengthen these states, we strengthen ourselves and, for the reasons just mentioned, we do so more effectively and at less cost. Friendly states can help to deter threats before they escalate into world-shaking crises. The issue is not whether a local state can singlehandedly resist a Soviet assault. Rather, it is whether it can make that assault more costly, more complicated, and, therefore, potentially less likely to occur.

In practical terms, this means that the air defense system we help a friendly state develop could one day serve as a prepositioned shield under which Western relief forces would move. We hope that day never comes, and all of our efforts are aimed at preventing it. However, in judging the economic value of these programs it is necessary to recognize the connection that frequently exists between today’s assistance and tomorrow’s needs.

In examining our overall security and defense needs, we have tried to balance the requirement for budgetary stringency with the need to revitalize our international position. From this review we concluded that our national interests demand a significant funding increase for our security assistance programs and at increased levels above fiscal year 1981. The President is requesting that the Congress approve $4.27 billion in budget authority to finance a total $6.87 billion security assistance program for FY 1982.

[Omitted here is information concerning the levels of proposed security and development assistance, in addition to information concerning multilateral development banks, international organizations and programs, and the Department of State budget.]

Conclusion

The program presented to you today represents our best judgment of the resources required to carry out our activities in these austere times. Cuts were made in the development assistance programs totaling over $1 billion, a 26% reduction from the previous budget—equaling if not exceeding reductions proposed for the domestic agencies.

For the past 2 years Congress has failed to enact a foreign aid appropriations bill. This has caused us substantial difficulties. We have been forced to neglect vital aspects of our assistance programs; U.S. foreign policy interests have been undermined. We should work together in the authorization and appropriation of these FY 1982 foreign aid requests to assure a U.S. partnership with the nations that strengthen our common economic and security interests.

1. Source: Department of State Bulletin, April 1981, pp. A–C. All brackets except those citing omitted material are in the original. In a March 19 memorandum to the President, Haig indicated that his testimony “concerned the foreign assistance budget, but the questions covered numerous foreign policy issues and El Salvador was not the center of attention. Nearly every Senator in the Committee was present and there was full media coverage. Senators Baker, Lugar, and Hayakawa were particularly helpful.” (Reagan Library, Executive Secretariat, NSC Agency File, Secretary Haig’s Evening Report (03/03/81–03/25/81)) Haig provided a similar overview in his testimony before the House Foreign Affairs Committee on March 18. For his statement, see Foreign Assistance Legislation For Fiscal Year 1982 (Part 1), Hearings Before the Committee on Foreign Affairs, House of Representatives, Ninety-Seventh Congress, First Session, March 13, 18, 19, and 28, 1981 (Washington: Government Printing Office, 1981), pp. 152–157.
2. The President outlined his program for economic recovery in a February 18 address before a joint session of Congress, broadcast live on nationwide television and radio networks. For the text of the address, see Public Papers: Reagan, 1981, pp. 108–115. The President’s February 18 message to Congress, which transmitted the proposed package on the economic recovery program, is ibid., p. 115. The White House report on the economic recovery program is also ibid., pp. 116–132. In his personal diary entry for February 18, the President wrote: “This was the big night—the speech to Cong. on our ec. plan. I’ve seen Presidents over the years enter the House chamber without ever thinking I would one day be doing it. The reception was more than I’d anticipated—most of it of course from one side of the aisle. Still it was a thrill and something I’ll long remember.” (Brinkley, ed., The Reagan Diaries, vol. I, January 1981–October 1985, p. 20) On March 10, the administration submitted the FY 1982 budget proposals to Congress. For the text of Reagan’s message to Congress transmitting the budget, his message to Congress reporting budget rescissions and deferrals, and his letter to O’Neill transmitting proposed supplemental appropriations and amendments, see Public Papers: Reagan, 1981, pp. 221–223.
3. On March 24, the Department issued a statement on additional economic aid to El Salvador, which read, in part: “The Administration has approved proceeding with reprogramming of an additional $63.5 million in economic assistance to the Government of El Salvador for FY 1981. This assistance is urgently needed to help the government deal with the economic situation, especially to finance essential imports of food and of agricultural chemicals and industrial materials for the private sector.” (Department of State Bulletin, May 1981, p. 72)