LETTER TO THE HONORABLE ALEXANDER M. HAIG JR. FROM W. W. ROSTOW RE: THE OCTOBER MEXICO SUMMIT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83M00914R002300020017-1
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 21, 2016
• Document Release Date: June 17, 2008
• Sequence Number: 17
• Publication Date: May 14, 1981
• Content Type: LETTER

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State Dept. review completed.
LBJ Library
2313 Red River Street
Austin, Texas 78705
May 14, 1981
Dear Al:
The item in the current Newsweek about the October Mexico Summit
prods me to write this letter, which I was inclined to do in any case.
The Summit will be exceedingly important for President Reagan as
a measure of the breadth of his statesmanship. Whatever the administration
thinks now, the dynamics of the affair will push him towards some positive
proposal as it pushed Eisenhower towards Open Shies at Geneva in 1955
against the cautious, negative view of the established bureaucracy. (I've
just written an account of that affair which I'll send you if you'd like to read
it.) In short, telling the developing ,world to rely on private investment will
not suffice for the world's leader; and this will become increasingly clear
as the occasion approaches.
One narrow reason why the President will be pushed towards a
positive stance is that, inevitably, the administration will have to organize
some inter-governmental aid program for Central America and the Caribbean
in addition to whatever private capital flows can do. And, I suspect, events
will push us in that direction on a broader front in Latin America, perhaps
after the Summit.
On the other hand, with expenditure cuts at home and a stance that
maximizes the role of private enterprise (with which I agree), a positive
stance at the Summit cannot be a simple unilateral Marshall Plan or
Alliance for Progress offer.
I believe an appropriate, realistic reconciliation of these imperatives
is the following nine-point stance at the Summit.
1. The President r ecogntzes the pressures now slowing economic
and social progress in large parts of the developing regions and believe-3
the advanced industrial countries and the developing countries should co-
operate closely in relieving those pressures, thus permitting growth and
progress to proceed rapidly. This requires that we identify the key problems
t.T'. p dtng growth and act strongly in concert to deal with them.
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2. The key problems impeding growth in the developing regions
are: high oil import prices, rising outlays for food imports, and continued
star flation in the advanced industrial countries. The overriding common
tasks for the next generation in the developing regions are to build up new
energy supplies in substitution for imported oil, to use energy more
efficiently, and to expand agricultural production to meet the inescapable
sure of population increase in the developing regions. These do not
exhaust the problems the developing regions confront but they are funda-
mne ntal.
3. The critical decisions in dealing with energy and agriculture
must be rn. ade by the developing countries themselves: to increase their
oven efforts in energy production, energy efficiency, and agriculture.
Without increased allocations of their domestic resources to these tasks and
wise policies which stimulate domestic efforts, no amount of external assis-
tance can be effective.
4. A great deal of external assistance can and should take the form
of increased flows of private capital. Here serious efforts should be under-
taken to reconcile the legitimate and fundamental interests of the capital
importing nations and those of private investors from abroad. The bilateral
experience of a good many developing nations demonstrates this reconciliation
is possible and of mutual interest.
5. So far as aid from official sources is concerned, the World Bank
and the regional development banks ought to enlarge their resources and
concentrate them in support of rational efforts to enlarge energy production,
increase energy efficiency, and to accelerate the increase in agricultural
production. The United States is prepared to play an appropriate, equitable
role in such a global, multilateral effort if, others take the same view.
6, The implementation of such efforts should, in substantial part,
be conducted regionally:. in the Western Hemisphere, the, Pacific Basin, and
in Africa. The global institutions (e. g., World Bank,. FAO) would work with
the regional ban"-.3 and other regional institutions where they exist or are
created,
7. If.a substantial global consensus emerges on these matters,
the United States would be prepared to gear its national programs of,
economic assistance to the agreed priorities.
S, Conscious that certain urgent economic problems exist, notably,
but not e>:clt:;,ively, among small rations, we are prepared to play an
appropriate, equitable role in meeting such needs on a multilateral basis,
DL-In:! time for long, run solutions to be developed.
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9. The combination of low growth rates and high inflation rates
in the advanced industrial world has adversely affected the developing
regions by reducing their capacity to earn foreign exchange. One of the
major responsibilities of the advanced industrial countries to the world
community as well as to their own citizens is to reconcile control over
inflation with rapid, steady growth. We in the United States are making
such an effort at reconciliation.
Notes: A. Leaving aside possible additional contributions to
the World Bank and regional bank soft loan windows, the only budgetary
commitment implied in this stance is our share in helping small
countries in distress; e. g. , in Central America and the Caribbean. We
shall, in any case, have to do this kind of thing. By dramatizing the issue
at the Summit, we may be able to generate more contributors, get more
out of Japan, etc.
B. If we decide to go some such route in Mexico, we should care-
fully concert in advance not only with the advanced industrial countries but
also with the PRC, Brazil, Mexico, and others.
C. The OECD report summarized in the March 1981 OECD
Observer (pp. 12-15) indicates the legitimacy of the focus on energy as,
well as the correctness of introducing paragraph 9, above, on U.S.
domestic policy.
D. I have left out any explicit references to the NNTIEO global
negotiations. President Reagan could either ignore them or say we are
prepared to continue that dialogue, despite its evident sterility thus far;
but its existence should not prevent.us from getting on with urgent North-
South business on a regional as well as a global basis.'
E. Congressional consultations should be und.ertaken before the
Summit, as before the Hemispheric Summit in 1967.
I hope these reflections are of some use.
The Honorable Alexander M. Haig, Jr.
Secretary of State
1)cp:t rtmnent of State
Yours,
VT, VT. Rostow
IV VRcs.1o:v: rin
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