365. Letter from the President’s Assistant for National Security Affairs (Poindexter) to Senator Jesse Helms1
Your letters of March 312 and April 143 regarding the new P.L. 480 Title I local currency program were extremely timely and much appreciated. My staff has used the intervening weeks to work with representatives of responsible agencies to assure that the objective of promoting free enterprise economies in the developing world—which I strongly share—is served by this new program. I am pleased to pass on the outlines of an implementation plan that I believe is faithful to this objective.
In devising the implementation plan we were guided by the principle that loan decisions should be made by intermediate financial institutions (IFI’s) on the basis of business-like assessments of loan applications from the private firms in developing countries. This means that the role of the U.S. Government should be limited to (1) identifying and lending to capable IFI’s, and (2) follow-up to assure that IFI’s adhere to the criteria and that they repay the funds on schedule. Almost by definition, this is not a Washington-based program.
After considering a wide range of options, we have decided to focus decision-making for this program on the U.S. Embassy country team in the recipient country, expanded to include economic and commercial counselors. The country team will have responsibility for selecting the IFI’s in the recipient country. The Washington role will be limited to establishing guidelines and determining the total loan allocations for individual countries. Concerning your suggestion of a possible role for OPIC, the country teams will be instructed to take OPIC experience and competence fully into account.
An innovative program such as this will bear close watching and undoubtedly some fine-tuning. I would appreciate very much your observations as we move to the implementation phase.
Sincerely,