WORK-PLAN FOR LATIN AMERICAN POLICY

• Document Type: CREST
• Collection: Library of Congress
• Document Number (FOIA) /ESDN (CREST): LOC-HAK-3-7-10-9
• Release Decision: RIFLIM
• Original Classification: C
• Document Page Count: 13
• Document Creation Date: January 11, 2017
• Document Release Date: August 2, 2010
• Sequence Number: 10
• Publication Date: January 20, 1970
• Content Type: MEMO

S
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MEMORANDUM FOR DR. KISSINGER
FROM; Viron P V.Iky
SUBJECT: W k-Plan for Latin American Policy
ACTION
January 20, 1970
There are a number of reasons why we have not moved further than
we have in elaborating dynamic, anew programs for the hemisphere
to implement the President's policy concepts:
-- The intractable and highly complex nature of the subject
matter with which we have to deal--development, economic
policy, trade Not much changes very quickly in the it
fields.
The severity of the obstacles to new action, principally
domestic political opposition to measures one might
take, such as trade liberalisation, and limited money,
which in the final analysis we have to have for anything
with great impact.
-- The lack of imaginative' and cre&tivlty in the bureaucracy
and resistance to change.
Within the limits of the first and second factors there should neverthe-
less be room for some creative measures and an overall program
that would be both respectable and significant. Imaginative and crea-
tive programs might, conceivably, even make the problems which
they are aimed at somewhat less intractable. Ultimately, a great
deal depends upon the Pt-el/ideate willingnes, to fight for money and
to risk some domestic oolitical problems (where these are involved)
for the sake of effective and important foreign policy initiatives.
To meet the need for more energy and imagination in devising new
initiatives, I propose the following work plan:
1. We have set up a 'steering group" consisting essentially of Fred
Bergsten's staff and mine, with the addition of some BOB personnel
from the International Division.
DOS, NSS, review completed
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1111
CONFIDENTIAL
2. We have, first, tentatively outlined opportunities for new initia-
tives, e.g. IA -ECOSOC, Presidential letter, Inter-American Bank
Board of Governors Mooting, General Action. Secondly, we are
brainstorming and compiling a list of ell possible measures and pro-
grams we can think of to carry out the President's ideas (including
a recalling of the Rockefeller Report), and assessing their feasibility
and practicality.
3. We will fit these ideas into the time-frame of possible opportuni-
ties, i.e. determine which we might try to do for IA -ECOSOC, the
letter, etc., and we will daterrnine what procedure we need to staff
the ideas and bring them forward for decision or implementation. I
attach our initial effort (which Arnie drew up) as a purely illustrative
list.
4. Since most of these ideas are technical, the question of how to
staff them is important. I see several tools we can use in that
regard--do it ourselves where we have the competence; task the
bureaucracy where this is indicated; us* consultants, on contract or
otherwise; seek voluntary services of individual or group advisors
such as the Council on Latin America. We would propose to use all
at one time or another.
5. I now have a small task force under Arnim at work full time to
staff a memo to the President on LA -ECOSOC. From decisions that
will come out of that we can use some for tho President'. letter.
6. We propose next week to review all the other proposals we have
and initiate staffing on a series of thorn.
7. We plan to ask some outside consultants for additional ideas to
add to our list.
RECOMMENDATION
That you approve our hiring of consultants, subject to the availability
of money and your specific approval in each case as to identity and
task.
Approve Disapprove
Attachment
Tab A - List of ideas
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1.1.1. LS
PROPOSAL
CAPITAL MARKETS
I. Undertake study of how U.S. can help
Latin Americans establish national and
regional capital markets, encourage
local savings and investment--including
devices to lure back L.A. capital out-
side the area.
2. Offer to provide high-level expert
assistance where requested; offer
training in U.S.
EXPORT PROMOTION
1. Assist in setting up export credit
financing institutions- -a la Ex-Im.
Bank in L.A. countries
2. Offer technical assistance of Ex-Irn
Bank
3. Assist in setting up credit mechanism
to finance development, expansion of
export industries, either new Ex-Im
type institution or other
BILATERAL AID - FY-70
I. Earmark $50-100 million for new
initiatives- -capital markets, export
promotion, strengthening multilateral
framework, etc--from FY 70 aid
SUGGESTED ACTION
I. Advisory Council (e.g. Head of SEC, President of
NYSE, Investment Bankers,
Mutual Fund Specialists.)
Advisory Council
1. Task Force Staff Recommendation
2. Directive to President of Ex-hn Bank
I. Task Force Staff Recommendation
2. Directive to President of Ex-Irn Bank
1. Consultant
a. Task Force Recommendation
b. Directive to BOB/AID
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PROPOSAL
2. Cite special new initiatives request
in FY-71 budget
SUGGESTED ACTION
URBAN DEVELOPMENT/ENVIRONMENTAL
IMPROVEMENT
1. Include in any new President initiative on a. Task Force Recommendation
domestic environmental programs an offer b. Directive to ageicies
1.c) extend services of USG agencies to L.A.
governments and regional agencies which
work to apply or adopt such programs
2. Prpose technical level hemisphere (R.11.*)11
conference on system's approach to
urban development and environmental
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B. IA-ECOSOC
PROPOSAL SUGGESTED ACTION
EXPORT PROMOTION
I. Assist LAs to set up trade
association, marketing offices in
U. S./Europe /Japan/LA- -finance
technical assistance
MULTILATERAL FRAMEWORK
I. Offer grant to CIAP/IDB to build
up staff, improve capabilities,
establish field missions
2. Offer grant to CIAP/IDB for feasi-
bility study - project development
fund
3. Propose specific procedures for
involving CLAP in AID program
decision process
DEBT SERVICE
I. Propose alternative action plan for
-
joint action with irter-Amer. institu-
tions (CIAP, IDB) to encourage IMF/
IBRD, other creditors to study prob-
lem, establish criteria, recommend
remedies
Z. Offer to cooperate fully in effort and
participate in remedies
a. Consultant?marketing specialists
a. Task Force Recommendation
b. Directive to USDEL/AID
a. Task Force Recommendation
b. Directive to IA/ECOSOC Del.
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PROPOSAL SUGGESTED ACTION
? IDB-IAFC
I. Offer to support IAFC if LAB wish
to establish--possibly cite specific
amount-range
TRADE STANDSTILL/A COMPENSATORY
MECHANISM
I. Propose alternative standstill formu-
lation and continue to study ways to
devise compensatory mechanism
AID UNTYING
I. Authorize local currency conversions
for Western Hemisphere aid
a. Task Force Recommendation
b. Directive to IA/ECOSOC Del/AID/Treasury
a. Task Force Recommendation
o. Directive to agencies re compensatory mechanism
a. Task Force Recommendation
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C. IDB BOARD OF GOVERNORS MEETING
PROPOSAL SUGGESTED ACTION
IDB REPLETOSHMENT
I. Offer substantial replentishment of
IDB Ordinary Capital, including paid-
in capital to reduce interest rate
a. Task Force Recommendation
b. Directive to the Secretaries of Treasury and State
IDB V1:10
I. Offer to seek legislative changes to a. Task Force Recommendation
give up veto in FSO (eliminate 2/3 b. Ask State/Treasury/AID for options paper for
requirement) President
IDB-OTHER DONOR SUPPORT
1. Offer to provide incentive to encour- a. Task Force Recommendation
age other donor participation/sup- b. Directive to Treasury/STATE/AID to submit options
port for IDB--e. g. Canada, EEC, paper
Japan
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D. NEW PRESIDENTIAL INITIATIVES
PROPOSAL SUGGESTED ACTION
HEALTH PROGRAMS
1. Propose and support a special large-
scale pre-natal and post-natal
nutrition and health program--through
Inter-American System (PAHO) and/or
drawing on existing social agencies in
public and private sectors (possibly as
part of more comprehensive effort to
concentrate on early development of
human resources. )
a. Advisors and/or consultants
Z. Propose major initiative by PAHO/IDB a. Consultant
to construct and improve potable water
systems; offer to provide latest technology
(e.g. plastic pipes, standardized plans
to small communities, etc.); possibly
special guarantee program for local
community bonds
HUMAN RESOUR CE DEVELOPMENT
I. Offer to extend services of USG agencies a. Advisory Committee (including heads of domestic
which conduct domestic programs for programs.
human resource development, particu- b. Presidential directive to agencies.
larly those focussed on children, to
those LA countries and regional organi-
zations which wish to apply or adopt
such programs (e.g. Head Start,
Education, Job Corps.)
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PROPOSAL SUGGESTED ACTION
INTEGRATION
1. Proposals for new initiatives by
which US can assist and support
L.A. integration
EXPORT PROMOTION/INTEGRATION
I. Assist in establishing payments
arrangements for intra-regional
tra.je - financial and tial
assistance
2. Assist in facilitating transportation
within region -7 e. g. roads, rivers,
air -- financial and technical
assistance
HICKENLOOPER
1. Propose modification of mandatory
provision of Hickenlooper Amend-
ment
INITIATIVES IN COlvlivi0DiTY FIELD
1. Propose new initiatives in commod-
ity field?including supplementary
financing
a. Consultant e. g. Kindleberger)
a. Consultant
a. Consultant
a. Task Force Recommendation
a. Advisors and/or
Consultants
2. Offm . U.S. support--financial and a. Advisors and/or
technical aid Consultants
PRIVATE INVESTMENT (R. R. *)
1. Following study of USG role in pro-
tection of private investment, pro-
pose special conference/meeting
(possibly CLAP) to set forth US
po:Iturc and ouggcnt rcgic-nal cr
a. Task force Recommendation
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PROPOSAL
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SUGGESTED ACTION
national "rules of game" to
(a) assure more predictable
climate for investors (b) have
mutual understanding to mini-
mize future conflict
2. Assist or encourage US firms to
- make arrangements for local equity -
participation, as in AnaconJa- -
.Mexico case
a. Advisors (Council for Latin America)
PRIVATE INVESTMENT - TAX POLICY (R. R.*)
1. Propose tax policies to provide incen- a. Progress report on tax- sparing in treaties
tives for private investment to b. Consultants
-- go to high risk/high development
areas '
-- go to less developed countries
-- participate in joint ventures,
minority participation, phase-
out operations
PRIVATx., .Lo4v .t.,STIVIENT-CONTRACT
MECHANISMS (R. R.*)
I. Develop proposals for use of contract
mechanisms to attract investors to
high risk, high development potential
ventures--either through OPIC or new
IAFC
a. Consultant
LOCAL PRIVATE ENTERPRISE (R. R. * )
1. Establish special program for devel- a. Contultant (e.g. Harvard Business)
opment and training of L. A. entrepren- b. Stattio ; Report
eurs, managers through OPIC, private
US companies (CLA) or other means
to be carried out within LA and US
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PROPOSAL SUGGESTED ACTION
DIVISION OF LABOR
I. Propose conference on hemisphere
division of labor--to develop long-
term forecasts and ayalysis to help
hemisphere nations plan for trade,
investment opportunities problems
in the future
IMPORT QUOTAS
1. Propose ways in which LAs--or all
LDCs--can be assured of increased
share of growth in US imports of
basic commodities
OAS TECHNICAL ASSISTANCE (R. R.*)
1. Propose steps?and offer support--
to strengthen and im.porve effective-
ness of OAS Technical Assistance
Program in areas which complement
rather than duplicate other T. C.
programs
RURAL DEVELOPMENT (11.R.*)
1. Propose and support expansion of
LA rural development efforts
through regional agricultural
demonstration programs (centers)
covering whole range of production
processing, marketing services,
facilities
a. Advisors
a. Consultants
a. Task Force Recommendation
b. Directive and status report from State
a. Advisors
b. Progress report from State/AID
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PROPOSAL SUGGESTED ACTION
CULTURE/COMMUNICATIONS (R. R. *)
I. Propose new initiatives, programs
to give evidence?symbolic and sub-
stantive--of US desire for better
communications and understand with
nations of LA. Possible options are
(a) high-level conferences with be-
havioral science approach to US-Latin
problems (b) use or nuiicaiui
satellite for increased radio/TV
exchanges (c) new and/or expanded
exchange programs--educational/
cultural/media (d) large scale low-
b
costiexchange program (e) finance
special LA cultural "year" in US
e. g. sponsor LA art/music exposition
in US
a. Advisors
*RR. indicates Rockefeller Report Recommendation
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E. OTHER
PROPOSAL SUGGESTED ACTION
LABOR (R.R.*)
1. Increase support for worker educa-
tion and vocational training in L. A.
a. Status report from State /AID
SECURITY
1. Proposal or actions to strengthen Inter- a. Progress report from. State
American bodies concerned with
hemisphere security affairs.
HEALTH PROGRAMS (R. R.*)
1. Provide greater opportunity for US
health professions to study tropical
medicine in LA.
a. Progress report HEW/State/AID
2. Support WHO and PAHO as prime a. Status report State/AID/HEW
instruments for US effort in
improving health in Western
Hemisphere
CONSERVATION (RR*)
1. Propose an OAS multilateral conser- a. Status report from State
vation program
AID CONDITIONS
1. Review onerous c-nditions and a. Status report from State/AID
reArictions on US aid with
object of modifying or eliminating
them
*R. R. indicates Rockefeller Report Recommendation
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