Foreign Relations of the United States, 1958–1960, Foreign Economic Policy, Volume IV

183. Memorandum of Conversation⁰

October 8, 1959.¹

SUBJECT

• 1. Suggestions for High Level Meetings on Economic Policy
• 2. International Development Association (IDA)

PARTICIPANTS

• Mr. Dag Hammarskjold, UN Secretary-General
• Mr. Philippe de Seynes, Under-Secretary (UN)
• Mr. Robert Huertematte, UN Commissioner for Technical Assistance
• Mr. C. Douglas Dillon, Under-Secretary
• Mr. Christopher Phillips, US Representative to ECOSOC
• Mr. John Leddy, Department of State
• Mr. S. M. Finger, USUN

Mr. Hammarskjold said he would like to discuss in particular two suggestions: (1) the possibility of occasional meetings under the auspices of the United Nations Economic and Social Council at which officials of ministerial level would discuss important questions of economic policy; and (2) the nature of any relationship between the proposed International Development Association and the United Nations.

With respect to the first suggestion, Mr. Hammarskjold noted with regret a decline in the influence and prestige of ECOSOC. As a consequence, the Second and Third Committees of the General Assembly had tended to become much more prominent. This tendency was most regrettable since a body like ECOSOC was much better constituted and equipped to enable serious and responsible discussion of economic and social problems. He thought that a high level discussion of an important economic issue under ECOSOC auspices would not only be useful in itself but would also add to the prestige of ECOSOC.

What Mr. Hammarskjold had in mind was an Ad Hoc meeting lasting not more than four or five days. Such a meeting would be devoted to a specific subject, and would be provided with good documentation, distributed sufficiently in advance to enable serious study. Mr. Hammarskjold hoped that under these circumstances there would be a real exchange of views instead of mere statements of position. He did not mean to reflect in any way upon regular sessions of ECOSOC, which he thought were most effective, but it was true that delegations to ECOSOC had to make statements in line with precise instructions worked out beforehand. There was little opportunity for representatives to express their reactions to policy statements by other representatives. Mr. Hammarskjold thought that economic policy officials at the ministerial level might engage in a real exchange, particularly if discussions were informal. In his view, there would be no resolutions emerging from such sessions but simply an agreed report.

Mr. Dillon appreciated the Secretary-General’s clarification. He noted that the United States Government had a general aversion to more regularly scheduled meetings, since there already were so many. He noted further the general reluctance of finance ministers to indulge in international discussions of policy.

Mr. Hammarskjold said he did not necessarily have in mind ministers of finance; rather he was thinking of officials who made general economic policy. In some countries this might be an official in Mr. Dillon’s position, in others a minister of economics, in others a minister of trade and in some a minister of finance. It all depended on who was in charge of economic policy.

Mr. Dillon observed that the difficulties in arranging for United States participation in such a meeting would be lessened if participation were not reserved for ministers of finance.

As to the possible nature of such meetings, Mr. Hammarskjold, for illustrative purposes, noted that one topic might be the question of policy toward producers of primary materials. He noted the increasing pressure from the primary producers for some action to improve their situation. The Soviets have seized upon this interest as a means of advancing their proposal for a World Economic Conference. Mr. Hammarskjold was shocked even by the name of such a meeting and was convinced that it would do far more harm than good. As an alternative, he thought that one should consider re-invigorating ECOSOC by a high level discussion of pressing economic problems.

Mr. de Seynes said that another possible suggestion for a high level meeting under ECOSOC auspices would be a review of current policy affecting economic development. Mr. Dillon thought this was an interesting idea, but wondered whether it had not been put forward in Resolution 1316 (XIII),² a proposal initiated by the United States.

Mr. de Seynes agreed that the elements in Resolution 1316 (XIII), would form an excellent basis for a high level meeting. He said, however, that only the United States had replied fully and well to the requests put forward in that resolution for a report on current policies affecting economic development.

Mr. Leddy asked whether the high level meeting would be open or closed. Mr. Hammarskjold said it could be arranged either way, depending on the view of potential participants.

In reply to a question from Mr. Dillon on the reaction of other governments to Mr. Hammarskjold’s tentative proposals, the Secretary-General said the four Latin American countries he had visited in August had been most interested. The United Kingdom was keen about the idea; Foreign Minister Lloyd took it up with Hammarskjold on his own initiative. Lloyd commented jokingly that he did not “know if it was you or Ormsby-Gore who started this.”

Mr. Dillon said he had been impressed by the suggestion of Australian Foreign Minister Casey in his statement to the General Assembly. Mr. Casey had suggested that ECOSOC might propose topics to be considered by the General Assembly each year.³

Mr. Phillips inquired what if any role the Secretary-General had in mind for General Assembly action to promote his ministerial level meeting idea. The Secretary-General said he would welcome current GA action recommending that ECOSOC consider such a proposal, but of course ECOSOC would have full responsibility to work out arrangements.

The discussion next turned to the question of a relationship between the United Nations and the proposed International Development Association. Mr. Dillon said that anything decided would have to be in agreement with Mr. Black. Likewise, anything which suited Mr. Black would also suit the United States. This was, of course, subject to the reservation that there would be no influence or intervention in the actual operations of the International Bank or the IDA.

Mr. Hammarskjold emphatically affirmed that he did not have in mind any sort of United Nations role in the actual operation of the Bank or the IDA. He thought, however, that there were two good reasons for setting up a Consultative Board for the IDA which might be similar to the Consultative Board of the Special Fund. The discussions of the Consultative Board had helped greatly in clarifying the relationship of the various other programs to the Special Fund. On the other hand, views expressed by members of the Consultative Board were purely advisory and the Managing Director could accept or reject them as he saw fit. Mr. Hammarskjold thought that, in the case of any similar board that might be set up for the IDA, the complete independence of IDA and International Bank operations must be safeguarded.

The second reason why Mr. Hammarskjold favored a Consultative Board for IDA was tactical. Frankly, he considered the tactical problem more urgent. There was the feeling among many underdeveloped countries that they should have more opportunity to express their views. Among the developed countries, many like the Scandinavians, Canada and the Netherlands were eager to have some sort of symbolic tie between the IDA and the United Nations in order to resist more firmly the pressure for a UN Capital Fund as well as IDA. Supporters of SUNFED would find it difficult to switch their support exclusively to IDA in the absence of some gesture toward the UN. Sometimes when two groups are two miles apart the gesture of walking a hundred yards helps enormously to solve the problem. Mr. Hammarskjold felt that this was just such an occasion and a gesture would give UN members a feeling that their views are in the picture, if such a gesture were made in the immediate future. He expected a visit from Mr. Black shortly and would discuss these points at that time.

Mr. Phillips noted that in all likelihood we would be confronted with a General Assembly resolution urging that consideration be given, in drafting the articles of agreement of the IDA, to a link with the United Nations. He thought that, provided the Secretary-General and Mr. Black had agreed on some relationship, we might go along with a resolution calling for an “appropriate link”.

Mr. Huertematte, who had been to almost every meeting of the Board of Governors of the International Bank, in his capacity as Governor representing Panama, supported Mr. Hammarskjold’s suggestion. Mr. Huertematte felt that the desire of the under-developed countries for a voice in the policy of IDA might give rise to some concession in voting procedure. He thought it would be very bad, since it would give the under-developed countries an entering wedge into the management of the IBRD as well as IDA. On the other hand, however, a Consultative Board including the Secretary-General of the UN would be an effective gesture toward the under-developed countries and would not carry the risk of interference in the operation of either the IDA or the IBRD.

Mr. Hammarskjold pointed out that he would be seeing Mr. Black from time to time on an informal basis and periodically at sessions of the Consultative Board of the Special Fund. At such times the IBRD, the IDA and the Special Fund would inevitably be talked about; consequently, the main significance of having some sort of Consultative Board for the IDA would be symbolic.⁴

0. Source: Department of State, Central Files, 340.4/10–859. Confidential. Drafted by Finger and cleared by Leddy.
1. The conversation was presumably held in New York, where the 14th session of the U.N. General Assembly was meeting.
2. See footnote 4, Document 157.
3. For text of Casey’s September 30 address, see U.N. doc. A/PV.814.
4. Dillon discussed this conversation with Anderson on October 13. They agreed to allow Black to define the U.N.-IDA relationship. (Informal notes of telephone conversation; Department of State, Secretary’s Memoranda of Conversation: Lot 64 D 199) Black informed Hammarskjold in an October 23 letter that he opposed establishing a consultative committee. (National Archives and Records Administration, RG 56, Records of the Office of the Secretary of the Treasury, Robert B. Anderson, Subject Files, International Development Association)