U.S. National Archives 1969-05-23

Telegram 7699 From the Mission to the Organization for Economic Cooperation and Development to Secretary of State Rogers in New Delhi, May 23, 1969, 1922Z

Page: 0

Foreign Relations of the United States
Volume E7
Documents on South Asia, 1969-1972

Source: National Archives, RG 59, Central Files 1967–69, AID 9 INDIA. Limited Official Use; Priority. Joint State/AID message. Repeated to the Department of State. The consortium of governments and institutions organized to provide development assistance to India met in Paris, May 22–23, under the chairmanship of the World Bank. The meeting was attended by representatives of Belgium, Canada, Denmark, France, Germany, Italy, Japan, the Netherlands, Sweden, the United Kingdom, and the United States. The International Monetary Fund sent observers.

May 23, 1969, 1922Z

SUBJECT:
INDIA CONSORTIUM: SUMMARY

FM USMISSION OECD PARIS

TO AMEMBASSY NEW DELHI PRIORITY

FOR SECRETARY:

1. SUMMARY OF CONSORTIUM MEETING FOR USE AS APPROPRIATE BY SECRETARY. DETAILED REPORTS FOLLOW SEPTELS:
2. TONE OF MEETING CONSTRUCTIVE WITH MUCH LAUDATORY COMMENT ON RECENT IMPROVEMENTS IN INDIAN ECONOMY AND CONSTRUCTIVE EXCHANGE ON NEED FOR IMPROVED INDIAN PERFORMANCE INDUSTRIAL EFFICIENCY LONG-TERM EXPORT PROMOTION, DECISION MAKING RE INVESTMENTS, AND FAMILY PLANNING. AGREEMENT REACHED FOR MEETING ON THIS SUBJECT WHEN UN STUDY COMPLETE, PURPOSE TO COORDINATE CONSORTIUM COUNTRY EFFORTS WITH INDIAN NEEDS.
3. AID PLANS IFY 1969-70 MOST COUNTRIES WERE NOT IN A POSITION TO MAKE FIRM COMMITMENTS, BUT EXPRESSED INTENTIONS (SUBJECT IN MOST CASES INCLUDING US LEGISLATION) APPEARED TO COME FAIRLY CLOSE TO IBRD-RECOMMENDED LEVEL OF $1 BILLION INCLUDING DEBT RELIEF. US INDICATED BUDGET REQUEST FOR INDIA IN US FY 1970 AID BILL WAS $385 MILLION. JAPANESE AND ITALIANS REMAIN RELUCTANT TO UNDERTAKE COMMITMENTS, LATTER EXPRESSING INTEREST IN WHETHER BANK WOULD AGREE THAT SUPPLIER CREDITS ARE IN SOME CASES APPROPRIATE SUBSTITUTE FOR AID. GERMANY EXPRESSLY AGREED TO EASE AID TERMS AND NETHERLANDS AND BELGIUM NOTED POSSIBILITY SIMILAR ACTION.
4. DEBT RELIEF: AGREEMENT REACHED FOR IFY I969-70 DEBT RESCHEDULING IN SOME CASES, INCLUDING US, SUBJECT TO REFERENCE TO CAPITOLS, AND FOR PRINCIPLE THAT SIMILAR RELIEF SHOULD BE GIVEN IN 1970-71.
A. AMOUNT TO COMPRISE AT LEAST $300 MILLION OVER COURSE OF THREE YEARS MEANING COUNTRIES WITH SHORTFALL IN I968-69 WILL ATTEMPT MAKE FULL SHARE. JAPAN TO REPORT ITS CONTRIBUTION IN TWO MONTHS: OTHER MEMBERS INDICATED COMPLIANCE.
B. SOME IMPROVEMENT IN TERMS OF RESCHEDULING BY GERMANY WHILE FRANCE, JAPAN AND ITALY STILL UNABLE TO MEET DESIRED TERMS ALTHOUGH LATTER TWO WILL COME UP TO QUANTITATIVE QUOTA.
C. PRESSED ON SUBJECT SOV BLOC DEBT,GOI ASSERTED THAT REPEAT NOW HAS TRADE DEFICIT WITH "RUPEE AREA" AND THAT IT CONTINUES APPLY PRESSURE ON USSR FOR INCREASED NET FLOW RESOURCES IN FORM LARGER NON-PROJECT IMPORTS, WITH SOME SUCCESS.
E. INDIA PRESSED HARD BY SEVERAL DELEGATIONS, INCLUDING US, TO LIMIT USE SUPPLIER CREDITS.
5. INDIAN DEK HIGHLY PLEASED WITH RESULTS CONSORTIUM MEETING AND US THEY ARE SO REPORTING TO DELHI.

BROWN