Ask the Scholar

{
    "localId": "266848762",
    "label": "Caribbean Development Bank (CDB)",
    "core": "doc",
    "dtoType": "document",
    "citationUrl": "https://catalog.archives.gov/id/266848762"
}

{
    "id": "266848762",
    "sourceUrl": "https://catalog.archives.gov/id/266848762",
    "contentType": "document",
    "title": "Caribbean Development Bank (CDB)",
    "citationUrl": "https://catalog.archives.gov/id/266848762",
    "collections": [
        "National Security Files (Nixon Administration)",
        "Central Files"
    ],
    "iiifBase": "https://s3.amazonaws.com/NARAprodstorage/lz/presidential-libraries/nixon/rn-nsf/572248/266848762.pdf",
    "thumbnailUrl": "https://s3.amazonaws.com/NARAprodstorage/lz/presidential-libraries/nixon/rn-nsf/572248/266848762.pdf",
    "largeImageUrl": "https://s3.amazonaws.com/NARAprodstorage/lz/presidential-libraries/nixon/rn-nsf/572248/266848762.pdf",
    "imageCount": 1,
    "hasImages": true,
    "source": "import",
    "hasTranscription": false
}

{
    "url": "https://catalog.archives.gov/id/266848762",
    "naId": 266848762,
    "levelOfDescription": "fileUnit",
    "recordType": "description",
    "ocrSource": "nara-archive"
}

{
    "seq": 1,
    "pageIndex": 0,
    "type": "document",
    "url": "https://s3.amazonaws.com/NARAprodstorage/lz/presidential-libraries/nixon/rn-nsf/572248/266848762.pdf",
    "mediaId": "c127c9d95cac9e19",
    "ocrText": "1626\ndepartment OF STATE\nWashington, D.C. 20520\n11452\nAugust 22, 1969\nCONFIDENTIAL\nMEMORANDUM FOR MR. HENRY A. KISSINGER\nTHE WHITE HOUSE\nSubject: Caribbean Development Bank (CDB)\nIn your memorandum of July 22, 1969, you asked for a\nreport on the current status of the Caribbean Development\nBank (CDB) and the Department's views on the question of\nequity participation in the bank.\nCurrent Status\nThe CDB was launched as an idea in mid-1967 following\na study made by a team sponsored by the United Nations\nDevelopment Program (UNDP). After almost a score of meet-\nings and many fits and starts the bank is now scheduled to\nbe formally established by the end of 1969, although\nexperience would suggest that there might be some further\nslippage. The bank is to be capitalized at US$50 million\nwith the non-regional members (United Kingdom and Canada)\ncontributing 40%, or US$10 million each, and the Caribbean\ngovernments 60%, or US$30 million on a sliding scale. The\nU.S. has budgeted in the FY 1970 A.I.D. request a US$6 mil\nlion development loan to the bank, the uses of which are to\nbe negotiated when the bank is established.\n69. Wd 25\nRECEIVED.NSC NSC\nBackground\nThe idea of a development bank for the Caribbean arose\nout of a meeting held in Antigua in November 1966 when\nrepresentatives of the United States, United Kingdom and\nCanada met with officials of Barbados and the Leeward and\nCONFIDENTIAL\nGroup 3\nDowngraded at 12-year intervals;\nnot automatically declassified.\nReproduced at the Richard Nixon Presidential Library\nDECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.\nCONFIDENTIAL\n-2-\nWindward islands to discuss follow-through action on a tri-\npartite economic survey of the area. Impressed by the fact\nthat the Leeward and Windward islands (with a population of\n500,000) had no access to economic development funds except\nthe limited resources which the UK was able to make avail-\nable, the conferees decided to ask the UNDP to ascertain if\nsome public financial institution for the area might be\nfeasible and acceptable to the various islands. Not only the\noriginal islands, but also the Bahamas, British Honduras,\nJamaica, Trinidad, and Guyana informed the UNDP of their\ndesire to participate in such a bank. On this basis, UNDP\nrecommended the establishment of a bank capitalized at\nUS$50 million (half paid and half callable over a five-year\nperiod) with 40% of the equity (or US$20 million) allocated\nin equal shares for the U.S., UK, and Canada and 60% (or\nUS$30 million) for the islands.\nU.S. Position Up To This Time\nUnder the original proposal the U.S. equity partici-\npation was US$ 6.666 million (i.e., one-third of US$20 million)\nover a five-year period, or US$666,000 paid in and US$666,000\ncallable for each of the five years. The Department thought\nthat the U.S. should take up this equity participation in the\nbelief that this bank was a true self-help measure (the U.S.\nequity share was only 13% of the bank's capital), that the\nbank was a vehicle which would keep the UK committed to a\nlong-term institution in the Caribbean, and that the bank\nwould also be a means for U.S.-Canadian cooperation in the\narea.\nUnfortunately, at that time the Congress, which would\nhave had to approve U.S. membership and equity participation,\nalready had under consideration legislation concerning the\nWorld Bank, the Inter-American Bank, the Asian Bank, and the\nAfrican Bank, and the decision was made at the White House\nlevel that the U.S. would not participate in the CDB as an\nCONFIDENTIAL\nReproduced at the Richard Nixon Presidential Library\nDECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.\nCONFIDENTIAL\n-3-\nequity member but would, funds permitting, make available\nA.I.D. development loans to the bank, when established, in\nan amount substantially equal to half of the total UK-\nCanadian participation. This decision was communicated to\nthe other governments in October 1967. They were understand-\nably unhappy with the U.S. decision but did accept the fact\nthat the U.S. would cooperate with the CDB. The UK and\nCanada then agreed to absorb in equal shares the proposed\nU.S. equity participation.\nU.S. Equity Participation\nBy not committing itself to equity participation in the\nbeginning, the U.S. lost an element of leadership in the\nestablishment of the bank and an opportunity to lend its\nfinancial prestige to the institution. With final steps\ntoward the establishment of the bank being carried out in\nthe coming months, it would not be advisable for the U.S.,\nby offering equity participation now, to delay the setting\nup of the bank. Equity participation, and each increase in\nfunding, no matter how small, would require extensive hear-\nings in at least four congressional committees (Foreign\nAffairs, Foreign Relations, and Banking and Currency of each\nbranch). In addition, there is the question as to whether\nthe Congress should actually be asked to hold full-scale\nhearings and otherwise tie itself up for what is a relatively\nsmall amount of money.\nThe relationship to which we have committed ourselves\nis the same as that which we have with the Central American\nBank of Economic Integration (CABEI). This has worked\nreasonably well and as CABEI has become more active, the U.S.,\nthrough A.I.D., has been able to make a substantial amount\nof loans available to that bank.\nCONFIDENTIAL\nReproduced at the Richard Nixon Presidential Library\nDECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.\nCONFIDENTIAL\n-4-\nThe Department, therefore, for the reasons cited above,\ndoes not believe that the U.S. should at this time consider\nequity participation in the CDB.\nTheodore he.\nTheodore L. Eliot, Jr.\nExecutive Secretary\nCONFIDENTIAL\nReproduced at the Richard Nixon Presidential Library\nDECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified."
}