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0 010122Z MAY 76

FM USDEL SECRETARY IN MONROVIA

TO SECSTATE WASHDC IMMEDIATE

AMEMBASSY DAKAR IMMEDIATE

USINFO WASHDC IMMEDIATE

AMEMBASSY ACCRA IMMEDIATE

AMEMBASSY DAR ES SALAAM IMMEDIATE

AMEMBASSY KINSHASA IMMEDIATE

AMEMBASSY NAIROBI IMMEDIATE

AMEMBASSY PRETORIA IMMEDIATE

UNCLAS SECTO 11222

F.O. 11652: N/A

TAGS: OVIP (KISSINGER, HENRY A.)

SUBJECT:

INFORMAL REMARKS MADE BY SECRETARY KISSINGER TO AMERICAN BUSINESSMEN AT THE LUNCHEON AT THE AMBASSADOR'S RESIDENCE APRIL 30: SECRETARY KISSINGER: " I HAVE BEEN SENT HERE BY PRESIDENT FORD IN ORDER TO PUT SOME EMPHASIS BEHIND OUR AFRICAN POLICY. IT IS NECESSARY THAT OUR FRIENDS IN AFRICA, THOSE COUNTRIES IN AFRICA THAT HAVE STOOD WITH US, HAVE A PLATFORM AROUND WHICH THEY CAN RALLY, AND IT IS NECESSARY ALSO THAT WE HAVE A PROGRAM IN THE NAME OF WHICH WE CAN RESIST SOVIET AND CUBAN AND OTHER PENETRATION OF THIS CONTINENT. THOSE OF YOU WHO WORK HERE WILL APPRECIATE THAT WE'S CANNOT SIMPLY WRITE OFF AFRICA, ONE OF THE GREATEST, ONE OF THE MOST IMPORTANT CONTINENTS, WITH CLOSE LINKS TO EUROPE, WITH HISTORICAL LINKS TO THE UNITED STATES AND YOU, THEREFORE, HAVE TO UNDERSTAND MY TRIP THROUGH THIS AREA AS AN ATTEMPT TO PUT SOME NEW VITALITY INTO OUR RELATIONSHIPS. SECONDLY, I KNOW THAT IN THIS COUNTRY, AMERICAN PRIVATE ENTERPRISE HAS BEEN EXTREMELY ACTIVE.

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IN FACT, YOU'RE ALL REPRESENTATIVES OF AMERICAN PRIVATE ENTERPRISE. WE LIVE IN A CURIOUS SITUATION IN THE WORLD IN WHICH AMERICAN PRIVATE CAPITAL OR ALL PRIVATE CAPITAL IS SORT OF FROWNED UPON AND GOVERNMENTAL AID IS EAGERLY SOUGHT AND THE ARGUMENT AGAINST PRIVATE CAPITAL IS THAT IT IS SUPPOSED TO INTERFERE IN THE POLITICS OF THE COUNTRIES CONCERNED. I DON'T WANT TO BE OFFENSIVE TO A GROUP OF DISTINGUISHED BUSINESSMEN, BUT MOST BUSINESSMEN THAT I HAVE MET DON'T KNOW ENOUGH POLITICS TO INTERFERE IN IT. AND SECONDLY, I WOULD HAVE THOUGHT IT'S GOVERNMENTAL AID THAT CAN BE USED FOR INTERFERENCE MUCH MORE EFFICIENTLY THAN PRIVATE CAPITAL. BE THAT AS IT MAY, IT IS PRIVATE CAPITAL, REALLY, WHICH IS IN MUCH LARGER SUPPLY AND WHICH, IF THE CONDITIONS ARE RIGHT, CAN FLOW MUCH MORE EASILY, AND IF ONE LOOKS AT THE COUNTRIES THAT HAVE BUILT THEMSELVES UP RAPIDLY, IT HAS ALMOST INVARIABLY BEEN DONE BY PRIVATE FOREIGN CAPITAL AND NOT BY GOVERNMENTAL FOREIGN CAPITAL. SO, I'M GLAD THAT AMERICAN PRIVATE CAPITAL IS SO ACTIVE IN A COUNTRY LIKE LIBERIA. I UNDERSTAND THAT DOING BUSINESS HERE WAS ITS EXCITEMENT AND GETTING RAPID DECISIONS IS NOT THE EASIEST MATTER IN THE WORLD. I HAVE GREAT SYMPATHY WITH YOU BECAUSE I HAVE TO DEAL WITH THE STATE DEPARTMENT. GETTING RAPID DECISIONS AT TIMES IS NOT AN EASY MATTER FOR ME. IN FACT, IF I DIDN'T TAKE THESE OCCASIONAL TRIPS, I WOULD NOT ONLY NOT GET TO MAKE DECISIONS, I WOULD HAVE REAL TROUBLE FINDING OUT WHAT IS GOING ON. BUT, I REALLY HOPE YOU WILL HANG IN THERE AND NOT GET DISCOURAGED. EVERY COUNTRY HAS ITS CULTURAL MODE OF PROCEEDINGS AND THEY'RE NOT ALWAYS OURS, BUT I BELIEVE THAT PRIVATE CAPITAL SIDE BY SIDE WITH SPECIFIC AID PROJECTS WHICH WE CAN ENGAGE IN CAN HAVE A GREAT FUTURE AND NEXT WEEK IN NAIROBI, I'M GOING TO MAKE A PROPOSAL WHICH IS SUPPOSED TO MAKE IT EASIER FOR PRIVATE CAPITAL TO WORK IN UNDERDEVELOPED COUNTRIES OR DEVELOPING COUNTRIES, OR WHATEVER THE TERM IS THAT IS NOW BEING USED. TO MAKE IT EASIER BECAUSE OF OUR PROFOUND CONVICTION THAT IT IS THE PRIVATE SECTOR THAT CAN MOVE MORE EASILY AND HAVE MORE RESOURCES AVAILABLE. FOR THESE REASONS, I AM GLAD THAT THE AMBASSADOR GAVE ME THIS OPPORTUNITY TO MEET WITH YOU AND TO WISH YOU WELL AND TO TELL YOU THAT I THINK YOU'VE BEEN HELPING YOUR COMPANIES, YOU'RE ALSO HELPING THE UNITED STATES. THANK YOU VERY MUCH. "

QUESTION BY MR. LEPAGE OF FIRESTONE: "MR. SECRETARY, WHERE DO YOU FEEL THAT OPIC INSURANCE MIGHT COME INTO THIS PICTURE. THIS IS ONE IN WHICH I AM A BUSINESSMAN FROM THE UNITED STATES; I DON'T LIVE HERE, BUT IT'S ONE THATS IMPORTANT TO ALL OF US MAKING INVESTMENTS

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OF HAVING SOME INSURANCE ON THAT INVESTMENT, AND THERE IS TREMENDOUS TALK, MORE AND MORE OF IT BUILDING UP THAT THIS WILL EITHER BE ELIMINATED OR MOVED INTO THE PRIVATE SECTOR AT A COST THAT MIGHT BE PROHIBITIVE TO MAKE AN INVESTMENT IN A COUNTRY SUCH AS THIS. WOULD YOU CARE TO COMMENT ON THAT?"

4. KISSINGER: "ON THE QUESTION OF GUARANTEEING INVESTMENTS, I KNOW THERE HAS BEEN SOME TALK ABOUT ELIMINATING OPIC. I'M GOING TO PROPOSE AT NAIROBI NEXT WEEK A SCHEME BY WHICH I WILL GO INTO GREAT DETAI LATER, BY WHICH AN INSTITUTION IS SET UP IN WHICH PRIVATE INVESTMENT CAN BE GUARANTEED AS A MEANS OF MAKING IT POSSIBLE FOR PRIVATE INVESTMENTS TO GO INTO UNCERTAIN SITUATIONS IN WHICH THEY SUFFER FROM THE DANGER OF EXPROPRIATION AND OTHER HARDSHIPS AND IT IS NOT STRICTLY SPEAKING AN INSURANCE SCHEME, BUT IT HAS THE SAME PRACTICAL EFFECT AS AN INSURANCE SCHEME AND IT IS ON A BROADER BASE THAN OPIC WAS AND I THINK YOU WILL FIND IT AS A STIMULUS TO INVESTMENT AND AS AN ASSURANCE FOR AMERICAN BUSINESS."

KISSINGER

UNCLASSIFIED

PRESS
DEPARTMENT OF STATE

May 1, 1976

No. 211-B

REMARKS BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
UPON DEPARTURE FROM MONROVIA, LIBERIA

MAY 1, 1976

**Secretary Kissinger:** Mr. Minister and friends: I would first like to take this opportunity, Mr. Minister, and your distinguished colleagues for doing me the great honor of making me Paramount Chief, an honor which to my knowledge has not been conferred previously on any Secretary of State and I am conscious of all the prerequisites that go with this position. It is a very pleasant occasion and I am very grateful to you. I'm sorry to have to leave Liberia because of your extraordinary hospitality. My visit here, brief though it was, deepened the sense of close friendship between our two countries. I take with me renewed appreciation of your hopes for development and your support for human dignity and racial equality. And I want to reiterate the intention of the United States to provide Liberia with the kind of assistance that will help you in your great effort and with the support that will achieve your human and moral and political aspirations together with other African nations. The United States and Liberia have always had a special relationship. In the modern era, this relationship has shown its durability which derives from our shared purposes. It is our future, as well as our past, that truly unites us now. I recognize that the test of my visit will not be the speech that will be delivered, but the actions that will follow. And the purpose of this visit is to inaugurate a program of action when I return to the United States and have reported to President Ford. My talks with President Tolbert and other members of your government added much to my understanding. I look forward to resuming our dialogue and to the opportunity to reciprocate Liberia's warm hospitality when President Tolbert honors the United States with a state visit during the Bicentennial celebrations. President Ford looks forward with pleasure to these meetings. I value not only the serious political talks I have had, but also the friendship that was demonstrated on the human level. I thank you on behalf of my entire delegation. I came to Liberia knowing we were friends but I leave Liberia feeling that we are part of the same family, a family working together for the mutual success for achievement of African goals and the greater good of the world community. Thank you very much.

**Question:** Just before you arrived here, President Ford exchanged telegram messages with President Tolbert and you have come to listen to the advice and counsel of President Tolbert and his Ministers. I want to know just how much advise you'll be taking with you and what effect this advice will have on your foreign policy orientation?

**Secretary Kissinger:** President Tolbert and I had an extensive talk yesterday afternoon with a very few advisors. We spoke very frankly

For further information contact:

PRESS
DEPARTMENT OF STATE

May 1, 1976

NO. 214

STATEMENT BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
UPON ARRIVAL
DAKAR, REPUBLIC OF SENEGAL

May 1, 1976

SECRETARY KISSINGER:

Mr. Foreign Minister, friends, I have looked forward to my visit to Senegal, the first Secretary of State to do so. By geography, you are our nearest African neighbor but your country and mine are close also in our desire to see all the peoples of Africa realize their aspirations for human dignity, racial justice and economic progress.

After completing visits to five countries in East, Central and West Africa, I am in Senegal as the culmination of the bilateral portion of my African journey. I welcome the chance to meet with your great President, not only to review our excellent relations with Senegal, but also to discuss my over-all impressions from my trip. I look forward, with pleasure, to my first meeting with President Senghor, who is universally respected as a man of courage and wisdom and a great intellectual and distinguished statesman. I will also have valuable discussions with the Prime Minister and Minister of State for Foreign Affairs and others of your leaders.

I have come to Senegal to begin a new era of cooperation between our countries. Our friendship and cooperation, of course, go back many years. Recently it was reaffirmed and demonstrated in the joint efforts we made to provide some relief to the victims of the tragic drought in the Sahara region. Together with others, my country intends to do more. The challenges of development and progress extend far beyond the immediate requirements of emergency relief. This vast continent is undertaking a monumental effort to establish political independence, economic and social advance-ment, racial justice and an identity in growth for Africa on the rural sea. The American people feel a profound sympathy for these goals because of our own moral heritage for freedom which we celebrate in this Bicentennial year and because of our interest in a world of security and peace and human well-being. This commitment to human dignity is almost a definition of what we know as civilization. Senegal has been a powerful and elegant voice in its causes. The United States is proud of its friendship with you and I have come to strengthen and deepen it.

Thank you for your welcome and hospitality.

* * * * *

[L]

PRESS
DEPARTMENT OF STATE

May 1, 1976

No. 215

As Prepared For Delivery

TOAST BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
AT LUNCHEON HOSTED BY
SENEGALESE FOREIGN MINISTER ASSANE SEOK

DAKAR, SENEGAL

MAY 1, 1976

SENEGAL

Mr. Foreign Minister, distinguished guests, friends: I want to tell you, Mr. Foreign Minister, how pleased I am to be in Senegal.

I have come here with the purpose of strengthening the friendly ties that have existed for so long between our two nations. And I am here to continue the discussions on issues of mutual concern which took place last year between President Senghor and President Ford when you, Mr. Minister, and President Senghor visited the United States.

I am delighted to be in this vibrant, exciting city. The cultures, the religions, the races that meet here in Dakar are a living demonstration that distinctive cultural identities can thrive even as they contribute to the best aspirations of our common humanity in an era of interdependence.

They are aspirations which our two countries share -- our hopes for peace, for justice, and for the well-being of our peoples. Today I want to touch on each of these three objectives -- particularly the question of economic well-being, which is of such particular importance to the nations of the Sahel.

Since our two Presidents talked in Washington, Mr. Minister, we have seen significant changes in Africa -- events that compel our concern, as well as developments that give us greater cause for hope:

- Additional African countries have won their independence, but in Angola there has come a new extracontinental intervention, a profoundly disturbing and unacceptable development.

- At the same time the cause of self-determination and majority rule in southern Africa has aroused wide concern in Africa and around the world, bringing new claims for human dignity and racial justice.

- The prosperity of Africa has felt anew the impact of troubling forces. The wrath of nature and the instabilities of the global economy have brought suffering and a sense of insecurity to parts of Africa and to many other areas of the developing world. But these developments have led to a new recognition by the world community of a need for responsible and common action. They have brought a vigorous response from my country and others who seek to seize the

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opportunities before us to help construct a new era of international
economic cooperation.

In the course of my trip to this continent, I have sought to convey and to
develop the United States' position on these three aspects of our
mutual concern.

Peace is our common goal. But true peace must serve positive purposes. It must, to be meaningful, permit nations to determine their own destiny free from outside pressure or threat; it must enhance the unity of peoples, not fragment them. This is why the massive expeditionary forces which have intervened in Angola to impose a solution there have aroused widespread concern.

The United States has always -- since the colonial era -- opposed outside intervention in Africa. We lent firm support to the process of decolonization and ever since have resolutely opposed the return of great power rivalry to Africa. As Adlai Stevenson said to the United Nations General Assembly in 1961, "Africa for Africans means Africa for Africans, and not Africa as a hunting ground for alien ambitions."

If extracontinental powers are free to pick and choose between African factions; if they can proceed to create blocs of client nations, the result can only be detrimental -- to the freedom of African states, and to Africa's continental solidarity.

The United States is prepared to deal with any African faction or government. We do not look to their ideology but to whether they are the result of African decisions and represent African aspirations. We have most recently demonstrated this policy in our dealings with the Government of Mozambique. We take a similar stand toward Angola. We are ready to open discussions with the Angolan authorities regarding normalizing relations, including eventual economic cooperation. But our commitment to African self-determination and unity compels us first to determine the intentions of the Angolan authorities toward the massive presence of non-African troops on their soil long after all other non-Angolan forces have been withdrawn. How can a government be considered African that requires 15 thousand Cuban troops?

The cause of justice in Africa is a compelling concern of all who care for human dignity. I have, in the course of my trip, given America's firm commitment to the cause of majority rule and racial justice in southern Africa. On behalf of President Ford I put forward in Lusaka a concrete 10-point program on the urgent question of Rhodesia. In carrying out this program we will work closely with the Presidents of Botswana, Mozambique, Tanzania, and Zambia and with all other African governments.

There is no need for us to continue the debate between those committed to a peaceful solution and those who see no alternative to armed struggle. For one fact is clear: change will come, and it can only be permanently achieved by negotiated settlement. The United States urges all the

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parties involved urgently to bend their efforts to negotiations. In our view this is the only way to avoid a needless and tragic bloodbath; the only way to create a harmonious future free from bitterness and reprisal.

Let me turn to discuss in greater detail the third major aspiration which our two countries share -- the urgent question of economic well-being.

The United States has taken a leading role in developing the initiatives needed if nations are to build together a new international structure of economic cooperation. Last September at the Seventh Special Session of the United Nations General Assembly I set forth a comprehensive set of proposals aimed at achieving progress on the central issues of trade, commodities, energy, finance, and the problems of the poorest nations. I will continue this effort next week in Nairobi, at the United Nations Conference on Trade and Development. All these are urgent issues which the nations of North and South must cooperatively address if economic development is to come swiftly and under conditions fair to all. One of the primary topics I shall address at Nairobi will be commodities, and the burden which excessive swings in the world market impose upon nations which, like Senegal, rely heavily upon a single commodity for the prosperity of their economies.

But long-term development must be based upon sustained effort. No plans for the future can be secure if they are carried out under the constant threat of economic crisis or natural disaster. Senegal, a nation of the Sahel, knows this as well as any nation. The tragic cycle of recurrent drought and famine which afflict this area has dramatized to the world that all our efforts at economic progress depend upon our success in mastering the forces of nature and harnessing them to the service of mankind.

Senegal, along with other countries of the Sahel, has been deeply affected by the deteriorating ecological condition of this region. The recurrent drought of the past few years has made clear that the desert is encroaching on a large scale, and that food production capacity in western Africa is seriously threatened. If present trends continue, in ten years the Sahel will need to import one million tons of grain in a normal year, an amount equal to the largest imports at the height of the drought. In response to this crisis the United States has, since the late 1960's, more than quadrupled our aid to the Sahel nations. And we are gratified that we have been able to provide emergency food assistance which has done so much to save human life.

But traditional aid levels and methods will not be enough. Nor can any one country or any single donor provide the resources necessary to meet the critical, long-term needs of the Sahel. What is now needed is a comprehensive international program that, rather than ease the effects of the drought, will help roll back the desert -- instead of relief measures, will develop additional water resources, increase crop acreage, and build food storage facilities in order to ensure that hard-won progress in economic development will not continue to be wiped out by recurrent natural disaster.

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To meet this challenge, the community of concerned nations should organize an international consortium to undertake a systematic and comprehensive attack on the Sahel's development problems to eliminate the problem of the drought rather than ease it. In the long term this could cost far less than endless relief effort. This will require mobilizing foreign and local investment on a major scale over the next decade, especially through multilateral institutions.

To this end, the United States is prepared to begin discussions with concerned nations aimed at the creation of an international development investment program to be integrated and dedicated to the goal of eventual self-sufficiency for the Sahel. This will mean:

- initiating the development of major river basins -- the Senegal, Gambia, Niger and Volta, as well as the Lake Chad Basin -- to reduce dependence on annual rainfall and promote food production;

- developing broader and more comprehensive programs for utilization and conservation of groundwater;

- undertaking a major broad-scale effort to improve the use of dry land areas for crop and livestock, particularly until comprehensive water resources development can have an effect;

- developing distribution systems commensurate with improvements in agriculture;

- undertaking major reforestation programs;

- developing basic transportation and communications networks; and

- mounting a concerted, massive attack on the problems of disease and inadequately trained local manpower.

Such a program would deal with the challenge of development in a methodical and comprehensive strategy. Each element would be planned to contribute to the primary goal -- self-sufficiency and self-sustaining growth for the Sahel. Thus, its organization must:

- provide mechanisms for donors and Africans to set agreed program priorities and select the appropriate technologies they will require;

- allow African states to participate either on a national basis or through strengthened regional institutions;

- provide the means to concert the efforts of donors, even though many of their contributions may in fact be made bilaterally; and

- utilize the planning, organizing and coordinative capacity of existing multilateral organizations.

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The magnitude of this task makes international cooperation indispensable. Fortunately, a forum already exists in which a comprehensive international strategy can now be elaborated. African nations have welcomed the formation of a new international coordinative mechanism -- the Club des Amis du Sahel. The United States has been encouraged by the success of the first meeting of the Club here in Dakar in March. Much of the credit is due to President Senghor for his leadership and personal attention to the organization and conduct of that meeting. Thus the stage has been set. To advance this effort, the United States is prepared to participate in an examination of a major regional development program under the auspices of the Club. The potential of the Sahel and the responsibility which the international community bears for bringing a new, brighter future to this region compels our attention. All nations and international institutions capable of doing so, the industrial nations, the oil-rich nations, including some African states, should participate with multilateral international institutions.

Mr. Minister, there is much work to be done to construct the kind of peaceful and cooperative world for which we all yearn. Senegal and the United States have important work to do together, and in concert with other responsible nations of the world.

Senegal has exercised an influential role both on the African continent and in the developing world. You are an example of how a small nation, with creative and far-seeing leadership, can play a part on the world stage far exceeding its size or power. The United States respects and accepts Senegal's non-alignment; we value Senegal's responsible voice for fair and pragmatic solutions to global problems; we hold a great admiration for Senegal's dedication to reconciliation between black and white, between North and South -- and its willingness to explore the creative potential of a world of diversity and interdependence.

The exemplar of this is of course your President Senghor -- one of the legitimately great men of our time. He has given us all a priceless awareness of the meaning and the possibilities of the modern predicament. As a renowned statesman and poet he has probed the far reaches of the human condition and the heights of lyrical expression. He has given us hope that the trauma of modernization need not -- indeed, must not -- let the roots of our traditional culture atrophy. He has shown us that the multitude of the world's distinctive cultures can and must provide the interlocking structure of that wider global community of man which is the ultimate goal of us all.

I ask you to join me in a toast to President Leopold Senghor, to the success of your nation, and to cooperation and friendship between Senegal and the United States.

* * * * *

PRESS
DEPARTMENT OF STATE

[LC]

May 2, 1976

NO. 216

STATEMENT BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
UPON DEPARTURE
DAKAR, REPUBLIC OF SENEGAL

MAY 2, 1976

SECRETARY KISSINGER:

Mr. Foreign Minister and gentlemen, on departing your beautiful capital, I would like to express my appreciation and the appreciation of all of my colleagues for the hospitality we have received here and for the extraordinarily helpful talks I have had with your President, your Prime Minister and Foreign Minister.

Dakar was the last capital on my bilateral part of the journey — a journey in which I attempted to bring a message of economic progress, racial justice and human dignity, absence of external intervention, and willingness to work with all governments in Africa that represent African aspirations and not foreign domination. My meeting with your President was one of the highlights of this trip. He is known throughout the world as one of the great intellectuals. And he deepened my understanding and contributed to the shaping of the policy which we expect to undertake when we return to the United States.

This morning we had the opportunity to visit Goree Island, which is a symbol of the inhumanity that man has historically inflicted upon each other, and which should call all of us to our duty to build on this continent a period in which all human beings — black as well as white — can work together, in which all Africans can achieve dignity and human progress, and in which the foreign intervention that has been the tragedy of Africa for centuries will at last be banished forever from this continent. And it is in this spirit that I will now go to Nairobi and then return to the United States to work with our Congress after the President has formulated our policy of cooperation, racial justice and economic progress.

And now I will be glad to take some questions.

**QUESTION:** What significance do you attach to the UNCTAD Conference at the time when the North/South dialogue is marking time? Do you believe that the UNCTAD Conference will be able to get things moving again?

**SECRETARY KISSINGER:** The United States attaches very great importance to the dialogue between the developed and developing nations. For the last year and a half the United States has proposed a series of major initiatives to express a spirit of cooperation — most recently at the Seventh Special Session of the General Assembly. The reason that I am traversing Africa again, after completing my visit to the various countries, to go to

**For further information contact:**

PR # 216

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Nairobi is to underline the importance the United States attaches to a
world in which developed and developing, consumers and producers, rich and
poor, all have a stake and all have a sense of cooperation. I would like
to emphasize also that a distinguished Congressional delegation from the
United States has agreed to accompany me to Nairobi, and that Senator Javits
has joined me here in Dakar and will be joined by other delegates in Nairobi.
In other words, we are going to Nairobi with a serious effort to help con-
tribute to a constructive dialogue and to move forward the relations be-
tween developed and developing nations, and, I believe I speak for a bi-
partisan consensus in the United States.

**QUESTION:** In your Lusaka speech you said that the United States would work on your Congress in order to associate yourself with the economic sanction against Rhodesia. What means do you have upon Congress when we know that in the Angolan situation your Congress did not follow the lead of your Government?

**SECRETARY KISSINGER:** We have had extensive conversations with Members of the Congress of both parties and we have the impression that it will be possible to repeal the Byrd Amendment. Several Senators have introduced a resolution supporting the Lusaka speech and the Congressional reaction to the Lusaka speech has been extremely favorable.

**QUESTION:** Mr. Secretary, a few months ago you said that countries who do not support us at the UN should not expect to receive aid from us. For many Africans this sounds like blackmail and is unacceptable, and particularly coming from a country which is considered to be the bastion of democracy, bulwark of democracy. Do you believe that this is the best way to secure friendships or develop your relations in the Third World?

**SECRETARY KISSINGER:** I have never made such a statement and this statement is a total misrepresentation. The United States respects non-alignment and it is obvious that the opinions of other countries will not always coincide with ours. And I may say that the distinguished Ambassador from Senegal to the United Nations has often expressed views that are not identical with our own without affecting in any way our economic relationship. If a country opposes the United States on every issue, if it is no longer non-aligned, but is in total opposition, this is something that we would obviously have to take into account in our public opinion and in our Congressional presentations. But we respect genuine non-alignment and we are not in the business of buying votes in the United Nations.

********

PRESS
DEPARTMENT OF STATE

[LC]

May 3, 1976

NO. 221

EXCHANGE OF TOASTS BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
AND
UNCTAD SECRETARY GENERAL GAMANI COREA
AT A LUNCHEON FOR THE IV UNCTAD DELEGATES
HOSTED BY SECRETARY KISSINGER

MAY 3, 1976

SECRETARY KISSINGER:

Mr. Secretary General, distinguished Delegates, gentlemen: I think it is appropriate that the American Delegation begin these meetings by meeting their colleagues from developing countries, because the purpose of this Conference to speed economic progress concerns above all the developing countries and the ultimate goal of our efforts, which is to build a world in which all countries feel a sense of participation, can be achieved only through a sense of cooperation between the developed and the developing countries. It cannot be achieved by confrontation. It cannot be attained by rhetoric.

The day is long past when nations could expect to determine their economic destinies by isolated national policies. The world economy has evolved into a single global system in which all our countries sell our goods, buy needed products and materials, support our currencies and otherwise seek to earn our way, and enhance the economic well-being of our people.

The cooperative economic institutions which were created a generation ago have only increased our mutual dependence. The statesmen of a generation ago deserve our gratitude for their historic contribution to mankind's well-being. They shaped the world's economic evolution in the direction of multilateral collaboration. The institutions for trade, monetary affairs, and development have helped accelerate world-wide growth and thereby expanded the economic system. We have all flourished in reliance on these institutions.

Today, a second generation of international economic cooperation must begin. We face challenges of adapting institutions to fundamentally new international conditions. The number of the world's nations has tripled since 1945. The complexities of maintaining international cooperation is formidable. Yet the political role and economic power of the new nations is undeniable. The structure of international cooperation must be brought to embrace their constructive participation. A world that is permanently divided between rich and poor cannot be a world that will be considered just or acceptable. This is the fundamental task of building a world order in our time.

Both the industrial world and the developing world have to recognize some realities in this process. The industrial nations must recognize that the developed nations have legitimate claims for equity and for a voice

PR # 221

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in international deliberations affecting the world's trade and monetary institutions because of their relative weakness. The developing nations are not always automatically heard. But we must realize — we in the industrial nations must realize — that their prosperity can become a powerful force for global prosperity and is, in addition, a moral imperative of our time.

At the same time, the developing nations must recognize that they too are dependent on the flourishing of the economic system for achievement of their own development goals. Attempts to wield block economic power disrupt the entire system, as we have seen in recent years, and ultimately rebound to the detriment of all. The nations of the Third World have a choice, just as the industrialized nations do, between slogans and solutions, between rhetoric and reality.

In the last few years, the international community has in fact gone through another period of extraordinary creativity. Major improvements have been made in the world's institutional arrangements to broaden the participation and to affect new means of strengthening the role and performance of developing countries in the world economy. New forums and institutions have been created. Imaginative use is being made of institutions and forums that have long existed.

But we must always remember that we are not dealing in dry, economic statistics and specialized, technical mechanisms. We are speaking of the well-being of peoples, of the age-old struggle against poverty, illiteracy, malnutrition, hunger, disease, unemployment, and social conflict. Whether we describe ourselves as materialists, or men of religious faith, we share a universal aspiration to raise all men and women to a level of well-being and personal fulfillment and dignity.

The issues we grapple with as governments are not simply political and economic, but at their roots, moral. If our efforts show visible success our period will be looked upon someday as another historic moment of transformation and achievement. This is the attitude with which my colleagues and I have been sent here by President Ford to begin our discussions on difficult problems of development.

We will do our best to listen to your concerns and we will present proposals which go as far as is possible for the United States, but which we are prepared to modify and to discuss in weeks that are ahead of us.

We believe that this Conference will be judged, not only by the concrete, technical measures that are before us, but by the spirit with which we deal with each other, by our ability to create a sense of community, by our conviction that our prosperity, our security, and our development can only be achieved in a world of cooperation and mutual respect. And therefore, I would like to ask my colleagues here to join me in a toast to our cooperation, to the success of this Conference, and to the great goals of peace, justice and progress.

### UNCTAD SECRETARY GENERAL COREA:

Mr. Secretary, distinguished Delegates: I think that I would be according the wish of all of you if I were to take this opportunity to convey our very sincere and warm thanks to Mr. Kissinger, not only for the hospitality he has afforded us this afternoon, not for his very presence here

PR # 221

- 3 -

in our midst at this, the beginning of the Fourth Session of UNCTAD.

I think, Mr. Secretary, that by your participation in the Nairobi Conference you have helped immensely to focus the attention of the entire world on the very important issues that will be discussed at this meeting.

I think that we all appreciate the fact that this session of UNCTAD is going to be a particularly crucial one. It is taking place as you yourself said, at a moment of time when new initiatives, new advances, are being sought in relation to the whole question of development, in relation to the very relationships between developed and developing countries.

If we succeed in Nairobi, I think we would be laying very sound and very secure and very enduring foundations for the future. If we do not succeed, then I think we would be facing a major setback. It is the first prospect that I look forward to.

I am very encouraged to hear this afternoon from you, and also in the discussions we had, of the very constructive, positive way you are approaching this Conference and of the proposals that you intend to present to it. We all look forward to these with great anticipation, with great expectation, with great hope. If they do succeed, as you said, in generating the right spirit of negotiation, of the search for common ground, then I think, Mr. Secretary, that you, yourself, would have laid the foundations for a successful Conference.

So once again I would like, on behalf of all of you, to convey our very warm thanks to you and to the Members of your Delegation for receiving us this afternoon and giving us the opportunity of being with you. May I, in turn, invite everybody to raise their glasses in a toast to the Secretary of State and to the Members of the American Delegation.

* * * * *

REMARKS TO LDC
LUNCHEON
Talking Points

Distinguished delegates, ladies and
gentlemen:

--The day is long past, if it ever existed, when nations could expect to determine their economic destinies by isolated national policies. The world economy has evolved into a single global system in which all our countries sell our goods, buy needed products and materials, support our currencies and otherwise seek to earn our way and enhance the economic well being of our own peoples.

-2-

[LC]

-- The cooperative international economic institutions which were created a generation ago have only increased our mutual dependence. The statesmen of a generation ago deserve our undying gratitude for an historic creative contribution to mankind's well being. They shaped the world's economic evolution in the direction of multilateral collaboration. These institutions for trade, monetary affairs, and development have helped accelerate worldwide growth and thereby

- 3 -

expanded the economic system. We have all
flourished in reliance on these institutions.
Our very success over thirty years has
increased and elaborated our interdependence.

-- Today, as a second generation
of international economic cooperation begins,
we face a challenge of adapting these
institutions to fundamentally new international
conditions. The number of the world's nations
has now nearly tripled since 1945. The

- 4 -

complexity of maintaining international cooperation
is formidable. Yet the political role and economic
power of the new nations is unmistakable. The
structure of international cooperation must be
broadened to embrace their constructive partici-
pation. This is a fundamental task of world
order in our time.

-- Both the industrial world and the
developing world have to recognize some realities
in this process.

- 5 -

-- The industrial nations must
recognize that the developing nations can make
legitimate claims for equity and for a voice
in international deliberations affecting the
world's trade and monetary institutions. Because
of their relative weakness, the developing nations
are not automatically heard. Their prosperity
can become a powerful force for global
prosperity. Their cooperative participation is
best served by ensuring that they have a stake
in the system's stability and progress.

-6-

-- At the same time the developing nations must
recognize that they too are dependent on the
flourishing of the economic system for achieve-
ment of their own development goals. Attempts
to wield bloc economic power disrupt the entire
system, as we have seen in recent years, and
ultimately redound to the detriment of all, and
particularly the poorest and weakest among us.
The nations of the Third World have a choice
between slogans and solutions, between
rhetoric and reality. They can expect coopera-
tion from the industrial countries if they offer
a similar cooperative spirit in return.

-8-

Food Conference, UNGA Special Sessions, Law of the Sea and Multilateral Trade Negotiations.

Just to recount them is to recall the tremendous burst of creative activity in the international

economic realm in the past two and a half years.

Both the developing nations and the industrial

nations have shown great capacities for leadership, imaginative contributions, and determination.

-- We must remember that we are not dealing in dry

economic statistics and specialized technical

mechanisms. We are speaking of the well being of our peoples -- the age-old struggle against

-7-

-- In the last few years, the international community has in fact gone through another period of extraordinary creativity. Major improvements have been made in the world's institutional arrangements to

broaden participation and to effect new means of strengthening the role and performance of

developing countries in the world economy. New forums and institutions have been created;

imaginative use is being made of institutions and forums that have long existed. They have

all been engaged in the effort in complementary

ways -- the IEA, OECD, UNDP, IBRD, IMF, UNGA, CIEC, and now UNCTAD; the World

-9-

unemployment, and social conflicts. Whether
we describe ourselves as materialists or men
of religious faith, we share a universal aspira-
tion to raise all men and women to a level of
well being and personal fulfillment and dignity.

The issues we grapple with as governments are
not simply political and economic but, at their
roots, moral. We have an enormous responsi-
bility. If our efforts show visible success,
our period will be looked upon some day as
another historic moment of transformation
and achievement.

-10-

-- Therefore, I ask you to join me in a toast:

. to our cooperation,

. to the success of this Conference,

. and to our great goals of peace, justice,
and progress.

PRESS
DEPARTMENT OF STATE

[LC]

May 4, 1976

NO. 223

REMARKS BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
AT A DINNER HOSTED BY THE SECRETARY
FOR THIRTEEN HEADS OF UNCTAD DELEGATIONS

NAIROBI, KENYA

MAY 4, 1976

Secretary Kissinger:

This is a small and intimate group of old friends and colleagues who have worked together in many international forums over a long period of time, and we have asked this particular group to meet with us because we all have a special responsibility for the success of this Conference. There are many meetings that we all attend in our various capacities, and some of us are usually occupied with the problems of peace and war and the day-to-day issues of great power confrontations, and therefore it is easy to forget that it doesn't happen often in history that an opportunity exists to build an international order — that is, a set of relationships in which most of the countries, and hopefully all of the countries, feel that they have a stake and which they want to maintain because they're convinced it represents their fundamental interests. We are, with all of the turmoil in the world, at such a period. In some of the negotiations we have the opportunity, perhaps, to do something about the burden of arms and about the threat of war. In our discussions we deal with the most fundamental of all human problems: whether it is possible to construct a world in which human aspirations are being positively fulfilled. And our age, for the first time in history, has the technical capacity to enable all nations to fulfill, at least to some considerable extent, the hopes and the well-being of their peoples. And our age is the first in which it is possible for all nations to meet on global problems and to find at least some common language. That 150 nations should meet in Nairobi to discuss development — that would have been unthinkable 15 years ago. So I have been asked by President Ford to be here to underline that with all the uncertainties that inevitably exist in the world, with all the tensions that are inseparable from a period of upheaval, our time will be remembered by whether it has met the fundamental challenge of answering to the human needs and to the aspirations for a better life. We have gone, in the United States, to the limits of our domestic possibilities in presenting a program both at the Seventh Special Session and in presenting a program here. But we are open-minded about the views of others, and the presence here of two distinguished Senators from our two major parties, and of other Congressional members that will come during the Conference, is a guarantee that the Legislative Branch and the American public are behind this effort that we are launching here tomorrow.

So, to my friends and colleagues here with whom I've worked in so many different forums, I know the spirit that you bring to this effort, and I know that even though we will have disagreements on individual technical problems that we are all animated by the same goals, and so I would like to propose a toast to the success of our common effort and to the hopes for progress in the world.

For further information contact: * * * *

TOAST AT LDC/DC DINNER

Nairobi, May 4, 1976

Distinguished delegates, friends:

We meet at UNCTAD at an opportune moment.

The world economy is beginning its unmistakable recovery from one of the most difficult periods of recession and inflation in recent experience.

The United States, mindful of its responsibility to the world economy as well as to its own people has been leading this recovery.

President Ford has long believed that there was no greater contribution we could make to the world's confidence in its own future than to promote the resurgence of the American

economy and to do this without setting off a new round of inflation. And we are succeeding.

The prospects for economic growth and development worldwide are therefore brighter now than at any time in the last few years. It should be the task of this Conference, and of all international institutions concerned with development, to take new steps to ensure that the developing countries share equitably in the world's prosperity. By structural reforms of the world economic system to take account of their concerns by new mechanisms of support,

-2-

-3-

and by a new commitment by all of us to strengthen
our global collaboration, we can take great
strides forward in coming months.

We have already achieved a great deal -- at
the Seventh Special Session at the UN General
Assembly, at CIEC, and in many other forums
and negotiations. Many steps were taken in
response to world economic difficulty; today,
as global recovery advances, we must continue
our effort, so that we gain full benefit of the
general improvement of economic conditions --
so that we take positive advantage of new

-4-

prospects and new hope.

My delegation, on the instructions of
President Ford, has come prepared with detailed
new ideas and recommendations for collective
action. I will present them on Thursday.
The United States Government is united and
committed in its desire to promote further
progress, building on what has been achieved.
The participation of two distinguished United
States Senators here tonight, and a large
Congressional contingent in our UNCTAD

-5-

delegation, testifies to the breadth and
bipartisan nature of the support that this
effort has in my country.

Therefore, it is an honor and pleasure
for me to welcome you here tonight. The
spirit of cooperation and friendship which has
been displayed here tonight is a good omen.

-- to the success of UNCTAD IV,

-- to the success of the great global enterprise of development, and

-- to world peace and cooperation..

[LC]

PRESS
DEPARTMENT OF STATE

May 5, 1976

NO. 225

REMARKS BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
AT A LUNCHEON HOSTED FOR
DELEGATION HEADS OF THE
ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT
TO THE UNCTAD IV CONFERENCE
NAIROBI, KENYA
MAY 5, 1976

Secretary Kissinger:

Mr. President of the European Community — I cannot possibly mention all your other titles because other people have appointments —, distinguished Ministers, gentlemen: my friend Gaston has indicated he will make a reply and I know that it will be crushing, so I will get to him as quickly as possible.

I am grateful for this opportunity to meet with you. The Members of the OECD who are at this Conference have, in our view, a particular responsibility and a particular opportunity. The problem of how to organize a world in which there are 153 nations, the large majority of which has come into being within the last generation, a world which for the first time in history is united by instantaneous communication and by shared aspirations, is an absolutely unprecedented problem. It occurs, moreover, at a time when there are profound political divisions in the world and important ideological divisions, and where the day-to-day events of diplomacy produce a great consciousness of contention and of insecurity. And yet the fact is that just as we are doomed to co-existence by the nature of modern weapons, so that the only practical problem is the method of co-existence in the political field, so we also face an imperative of developing a common approach to the one issue that unites us all: the problem of development, of economic growth, and of respect for the human personality.

We of the industrialized world have gone through periods of grave transformations, and we are here with a challenge of defining a future that is hopeful, but at the same time a future that is within the realm of what our countries can do domestically and what the world can support economically. We have to avoid the twin dangers of rigidity and continuing old slogans, but we also have to avoid the danger of a sort of competitive sentimentality in which each of us attempts to outbid the other with programs that we have not fully thought through, programs that may solve a temporary difficulty but offer no hope of real achievement.

I had the opportunity to talk to Mr. Van Lennep at lunch about his idea that perhaps we all ought to think about the kind of world we in the industrialized countries would like to see come about, a world which of course must include hope and promise for the developing world because only an international order

PR #225

- 2 -

in which all countries feel that they have a stake can be permanent.

I want to make clear what our position at this Conference will be. We are not here to score any debating points vis-a-vis other OECD countries. We believe that the problem of development is one that none of our nations can solve individually, and it is a problem that all of our nations must cooperate in if it is to be realized. It is a problem in which none of us can try to score points against the other.

We attempted at the Seventh Special Session to put forward a series of concrete, detailed proposals in order to avoid this endless debate between whether we are shaping a new economic order or improving the old economic order, between our economic system and some other economic system. We thought that the problems of development and of economic growth, if they were serious, had to be summed up in some concrete and do-able proposals. It is obvious that one cannot come up with a new agenda every six months and the attempt to do so is in itself a sign of restlessness and inward insecurity that will doom the overall effort.

So what we have done, and you will all see our remarks, is to take the basic principles of the speech of the Seventh Special Session and tried to carry them further within that general framework - in the area of commodities, in the area of transfer technology, in the area of balance of payments, and in the area of the poorest countries. All of our proposals depend on the cooperation of other OECD nations, and of course depend on the sense of cooperation of the developing nations. There are no American schemes that can be implemented, or are intended to be implemented, by the United States in a solo performance.

And I believe that the great challenge of our economies, which really becomes a political and moral question of how we define our future, requires first of all that the OECD nations define for themselves what sort of cooperative future they want, and not engage in a whole series of random efforts unrelated to some general approach. So our effort is to put before UNCTAD our conception of how the initiatives of the Seventh Special Session can be carried forward, how the developed and the developing nations can cooperate.

In my meetings with the developing nations I have made it clear that while we are open-minded, while we are willing to listen to counter-proposals, we are at the limit of what we can do within the framework of our domestic possibilities, and that therefore we should use this year and next year to do the attainable, and then look at the world again because this is not going to be the last UNCTAD Conference. So I would like to stress that our delegation here is instructed to work with your delegations on the basis of the closest cooperation. We hope that our proposals will find the agreement, at least in principle, of those countries whose future is so intimately tied with our own. And our proposals are also put forward in a spirit of conciliation and good-will towards the developing nations, so that we can advance the progress and the challenge of building an international order which is the preeminent problem of our time, and the one which will face us for as far ahead as we can see.

So I am grateful for this opportunity to see you here. I've worked with almost all of you in so many different contexts so that we know that we can cooperate here for the good of all of our countries, and I hope for the good of all other nations represented at this Conference. So I'd like to propose a toast to the success of our common efforts and to the success of this Conference.

* * * *

OPTIONAL
TALKING POINTS

This conference marks a new stage in the intensive dialogue between north and south which we began at the Seventh Special Session and continued at CIEC -- and which, after Nairobi, we will continue at the next UNGA and the Ministerial Meeting of CIEC.

Here at Nairobi we must seek to maintain the momentum of the program we adopted at the Special Session and strengthen the constructive atmosphere we created there. This is the best guarantee for our effective cooperation in areas of mutual interest.

This session comes at a time when the international community recognizes as never before the imperative of cooperation; of the need to find positive alternatives to

- 2 -

confrontation; to recognize that the surest route lies through
negotiation of practical solutions to economic problems for
our mutual benefit.

-- And this conference takes place against a background
of special circumstances: the global economy has started its
recovery from prolonged recession. Our hope for the future
is tempered by fear that the poorest countries could be left
even farther behind the rich than before.

-- The goal of the United States is to build an inter-
national system of cooperation based on respect, confidence,
and mutual benefit between the developing and the developed
countries and which will strengthen and hasten the economic
growth of the developing nations.

-- We regard this conference as a chance to reinforce
this process and to enlarge the area of agreement and shared
responsibility between north and south.

-- We regard this conference as an extremely important
opportunity to deal with these global problems. That is why
I am attending this session, the first time a Secretary of
State has done so; and it is why I will deliver a major speech
on Thursday which will embody our approach to north-south
issues.

- economic development will benefit all countries;
unless it takes place, no nation's or group of
nations' prosperity can be assured.

- progress on north-south issues is crucial to an
efficient, durable and just world order. And
progress must rest on shared respect and responsibility.

- 4 -

- development requires sustained effort. It will not end with any one conference, but will require our sustained efforts.

- broadly generalized solutions to the problems of the developing world will be neither appropriate nor effective, for these countries have widely differing capacities, capabilities and degrees of development.

A serious approach requires us to identify specific problems and negotiate practical solutions to them.

- we must be especially aware of the needs of the poorest countries, those on the edge of helplessness and despair.

- those developing countries which have recently acquired great wealth have a special responsibility to contribute to global development.

- 5 -

- and private enterprise, possessing as it does
vast capital, technological and management
capabilities, has a critical role to play in the
development process.

My speech on Thursday builds on these themes. It
represents the further development of America's policy
toward the developing nations in the areas of their most
urgent concern.

-- A failure at UNCTAD IV would be a major setback to
our mutual efforts to find positive and constructive ways to
promote LDC growth and to move further away from the pre-
Seventh Special Session confrontation.

-- We believe we have made considerable progress in
implementing the Seventh Special Session initiatives,

- 6 -

particularly in the financial field.

-- We realize that the LDCs are seriously concerned about progress in the fields of commodities, technology and balance of payments and we will present constructive proposals which deal with these issues.

-- In commodities, our proposals will be addressed to:

(A) facilitating investment for the production of basic commodities, and to assurance of the equitable sharing of the benefits from such investments;

(B) establishment of a definite timetable for producer/consumer meetings on commodities of priority interest to the LDCs;

(C) the financing of buffer stocks where it is determined

- 7 -

that they are appropriate for the particular commodity
concerned;

(D) further progress in trade negotiations in both the
areas of market access and supply access; and

(E) discussion of the operation of compensatory financing
systems for shortfalls in export earnings.

-- We recognize the LDC concern about debt burdens which
we believe to be but one element in the overall balance of
payments problem which can be best met by expanding financial
resources for short term balance of payments problems and through
a case by case approach to debt rescheduling where the need is
demonstrated.

-- Recognizing LDC concern for improved access to
technology, we will present a five-point program with proposals

- 8 -

(tc)

addressed to improving research, training, adaptation of
technology, diffusion of information, technical advice and
services, and private investment and licensing.

-- While endeavoring to build on the progress made in
north-south cooperation by the program adopted at the Seventh
Special Session, we are willing to examine in serious fashion
any approaches, even if they have been unacceptable in the
past. Equally, we hope others will recognize that maximum
progress can be achieved through building on the areas of con-
sensus established at the Seventh Special Session, rather than
pushing contentious issues where agreement is not now possible.

-- The U. S. is trying to maintain the momentum of the
north-south dialogue but to be a truly reciprocal process,

- 9 -

the interests of the developed countries in such matters as
better treatment for investment and reasonable oil prices
must be recognized as well as the interests of the LDCs.

-- At UNCTAD IV the U. S. will seek to enlarge the area
of genuine consensus and to promote practical measures of
mutual benefit. It is prepared to offer resources, skills and
dedication to expanding the global economy for the benefit
of all nations and open up opportunities for developing nations
for a just share in global growth.

-- We hope that other governments are approaching UNCTAD
in the same spirit of cooperation that we do and [that] our
countries can work closely together on the complex and
momentous tasks we face to insure concrete accomplishments.

The Secretary
of State

[LC]

Speech

May 6, 1976

Nairobi, Kenya

Bureau of Public Affairs
Office of Media Services

UNCTAD IV: EXPANDING COOPERATION FOR
GLOBAL ECONOMIC DEVELOPMENT

Secretary Henry A. Kissinger before the Fourth
Ministerial Meeting of the United Nations Confer-
ence on Trade and Development (UNCTAD).

We are assembled here to carry forward one
of the most important enterprises in history—the
endeavor of independent nations to advance global
economic development and so to better the quality
of human life on Earth. Our goal is nothing less
than to shape an enduring structure of interna-
tional collaboration that offers peace and prosperi-
ty, equal opportunity and dignity to all peoples.

Man has always yearned for peace and a just
international order. In our time these twin goals
have become a realistic possibility. Their attain-
ment will require us to meet challenges whose scale
eludes the grasp of individual nations, whose com-
plexity mocks the slogans and solutions of the
past, and whose pace outstrips the measured
processes of traditional diplomacy.

There is before us all the imperative of world
stability—the task of resolving conflicts, reducing
tensions, and resisting the encroachment of new
imperialisms, new oppressions, and new dangers.
For this undertaking the United States, together
with other nations, has assumed a heavy responsi-
bility.

Beyond it lie our positive aspirations. The
American people are a humane people. We know
that stability is not enough; peace must extend
mankind's reach for a better life. In the Declara-
tion of Independence of the United States, the
seminal document of our national existence, we

have written that "... all Men are created equal...."
and entitled to "... Life, Liberty, and the Pur-
suit of Happiness." This pursuit has brought
me to Nairobi—to advance on behalf of President
Ford and the U.S. Government the great cause we
all hold in common.

In the long sweep of history, the future of
peace and progress may be most decisively deter-
mined by our response to the necessities imposed
by our economic interdependence. This is the chal-
lenge which we have assembled here to address—
the urgent need for cooperative solutions to the
new global problems of the world economy. These
issues dominate the agenda of the evolving rela-
tionship between North and South, the industrial
and the developing countries.

* They are issues of economics—of an effective
system of trade, monetary relations, and develop-
ment assistance and of insuring that the prosperity
of some nations does not come at the expense of
others.

* They are issues of politics—of how nations
deal with each other and of how we can construct
an international order that promotes peace.

* They are issues of morality—the recognition
that economic might does not make right.

* And they are issues of justice—the awareness
that the well-being of our peoples depends upon
an international system fair and open to all.

The modern age and our common morality
insistently demand respect for human dignity and

PR 224

2

the fulfillment of the human personality. But a
world in which poverty and misery continue to
afflict countless millions would mock these impera-
tives. The daily preoccupation of men and women
would be the harsh necessities of survival; the ener-
gies of nations would be consumed in hatred and
rivalry. We must build, instead, a world of coopera-
tion and widening human opportunity reflecting
the fundamental interdependence of our destinies.

Today the accelerating forces of moderniza-
tion-technological, economic, social, and politi-
cal-link the peoples of the world as never before.
They can intensify conflict or they can provide us
with unprecedented possibilities to advance our
common aims. All nations are part of a global
economic system. If that system is to flourish it
must rest on the firm foundation of security, fair-
ness, and opportunity to all who wish to partici-
pate-rich and poor, North and South, consumer
and producer. It must embrace the interests of all
if it is to be supported by all. President Ford has
sent me here committed to bring about a construc-
tive and cooperative relationship between the
developed and the developing countries over the
remainder of this century.

This Ministerial Meeting of UNCTAD is the
first of its kind to be held in Africa. This is alto-
gether fitting, for Africa's importance in world af-
fairs is growing. And African countries have an
especially high stake in a successful conference
leading to concrete progress. No continent has
been more vulnerable to worldwide economic in-
stabilities. No continent suffers so cruelly when
crops fail for lack of rain. No continent endures a
heavier burden when commodity prices fluctuate
violently. And no continent has more to gain from
the organized cooperation of all nations to pro-
mote economic and social progress and to insure a
greater role for the developing nations in the
world's economic deliberations.

This is a continent of proud traditions and
new nations, of rising aspirations, and of deter-
mination in the face of monumental challenge.
Here it can—indeed it must—be demonstrated that
men of all races and colors can live and prosper
together in peace with equal rights and mutual
respect.

During the past two weeks I have been privi-
leged to be a guest in Africa and to enjoy the extra-
ordinary hospitality of its people and leaders. I

have greatly benefited from my discussions with
African statesmen, and I have learned much about
the concerns and hopes of the peoples of Africa.
The nations of this continent can be confident that
the United States is prepared to cooperate with
them in their great struggles for justice, economic
progress, and freedom from external intervention.

Today we are all especially indebted to the
Republic of Kenya and its world renowned leader,
President [Jomo] Kenyatta, for making this beau-
tiful city available as the site of this conference.
The U.S. delegation has come to Nairobi to
achieve, with representatives of other nations, a
major step forward in international cooperation.

We begin this conference at a moment of
opportunity. The world economy is recovering
from a deep recession-my own country perhaps
most rapidly. Increasing American demand for
products of other countries will make a major con-
tribution to recovery around the world. Many
obstacles to sustained economic growth remain;
but there are convincing signs that we have sur-
mounted the worst part of the economic crisis and
that before us, if we act with wisdom and energy,
is the opportunity for a new and prolonged period
of prosperity.

This, therefore, may be a decisive moment
which offers us a brief, but special, opportunity to
reinvigorate and improve the world's international
economic system. Now is the time to free the
world from disruptive cycles of boom and bust and
to enhance the opportunities of the developing
countries.

The United States, better than almost any
other nation, could survive a period of economic
warfare. We can resist confrontation and rhetorical
attacks if other nations choose that path. And we
can ignore unrealistic proposals and preemptory
demands. But the historic opportunity which is at
hand would slip away. It is up to us, as the spokes-
men of nations meeting in this world forum, to
reach beyond the doubts and temptations of the
moment toward the permanent international
interests of us all. In so doing we can take courage
from the knowledge that the means exist to
achieve a brighter future. It lies within our power
to shape a world where all men can live in dignity
and aspire to progress.

Let us, therefore, hold before us as the goal of
this conference, and of the dialogue between

(LO)

3

developed and developing nations, the motto of
the Republic of Kenya: "Harambee—work together
for the good of all."

Let us begin by building on the positive ac-
complishments of the Seventh Special Session of
the U.N. General Assembly last September. At that
meeting the industrial and developing nations, in
an encouraging demonstration of consensus, put
aside ideological confrontation, declared their
common purpose of moving forward cooperatively,
and adopted an agreed agenda for action.

On behalf of President Ford, I call upon this
conference to accelerate the efforts and continue
the cooperative spirit which began then. I will
introduce new proposals on all the priority con-
cerns of this conference to reflect what we have
heard of your ideas and your aspirations in the
Manila declaration and in other forums, including
the Conference on International Economic
Cooperation [CIEC] in Paris.

These proposals represent the contributions
of all relevant agencies of the U.S. Government
under the direction of the President. I have worked
especially closely with my colleague, Treasury
Secretary Simon, in shaping the program we are
presenting.

The strong bipartisan support which our approach enjoys results from weeks of close consultations between the Executive and both Houses of our Congress. It is demonstrated by the presence here of two distinguished Senators representing our two political parties [Jacob K. Javits and Abraham A. Ribicoff]. Other Senators and members of the House of Representatives will follow as your work proceeds.

The United States pledges its dedication and
willingness to cooperate over the decades ahead.
We do so with an open mind. We want to hear your
ideas and proposals. We are here to exchange views
and to forge a fresh consensus.

## The State of Our Efforts

Let me first review what our nations together
have achieved since last September.

* We agreed at the Seventh Special Session to take measures to help insure basic economic security against cycles that devastate export earnings and undermine development. In January the International Monetary Fund expanded its compensatory

financing facility as we had proposed, to make
available several billion dollars to stabilize export
earnings.

* In September we pledged to accelerate economic growth by improving developing countries' access to capital and new technology. To these ends the United States, other industrial countries, and several oil-producing countries have begun to marshal increased capital, technological, and human resources to promote development. Negotiations have been completed to increase World Bank capital by $8 billion; we will contribute our fair share to a $6 billion increase in the resources of the Inter-American Development Bank; we will contribute to an expansion of the African Development Fund; we are actively participating in discussions on replenishment of the Asian Development Fund and Bank.

* At the special session the world community dedicated itself to improving trade and investment in key commodities. International solutions have already been achieved on several key commodity issues, including the successful negotiation of coffee and tin agreements. Progress is also being made in expanding the world's supply of its most vital commodity—food.

* And finally, at the special session, the world community made a commitment to meet the special needs of the poorest countries which have suffered the most from recent economic dislocations. We have made significant progress by providing financial and technical assistance to increase food production and by introducing new measures to help relieve crushing balance-of-payments problems of the poorest nations.

These achievements are only the beginning of
the process. We are—this year—in the midst of what
may well be the most extensive series of international
negotiations on trade, finance, commodities,
and development in history—involving more nations,
addressing more issues, and affecting more
people than ever before. This conference has a
major role to play. In particular we can advance
our work in four key areas:

First, we must make renewed efforts on commodity issues, including the problems of resource investment and trade. Commodities—energy, food, and other primary products—are the building

4

blocks of growth and prosperity. For many countries development of resources is the key to industrialization, employment, decent incomes, and healthy diets. All nations need adequate supplies of primary products and fair compensation for their production. Solving the complex of these issues is a critical test of our ability to work together systematically to expand the world's wealth for the benefit of all.

Second, we must design a far-reaching long-term program to accelerate technology transfer. The quantity of capital investment by itself does not assure sustained development. There must be, as well, continuous improvements in productivity that only new technology and trained local manpower can bring. Comprehensive efforts are crucial; the subject deserves high priority and comprehensive efforts will be required.

Third, we must deal with serious balance-of-payments and debt problems which face a number of developing countries. Rising import costs-caused in large part by higher oil prices and reduced export earnings due to recession in industrialized countries-have created unprecedented international payments problems. An improved world economy will automatically ease the problem for many countries. Nevertheless we must continue to seek means of assistance for the particular problems of certain developing countries.

Fourth, we must continue to respond to the special and urgent needs of the poorest countries. Helping these nations will demonstrate not only the capacity of the international economy to serve all countries equitably; it will also reflect our collective sense of responsibility.

Let me now suggest specific new approaches for dealing with each of these four problems.

## A Comprehensive Approach to Commodities

Commodity exports are critical for development. The non-oil developing countries rely on primary products for nearly two-thirds of their export earnings. Yet production and export of these resources are vulnerable to the whims of weather, the swings of worldwide demand, and new technology. Cycles of scarcity and glut, underinvestment and overcapacity, disrupt economic conditions in both the developing and the industrial world.

It has become clear in recent years that a piecemeal approach to these issues will not suffice. The UNCTAD Secretariat has made an important contribution to meeting these problems in its integrated commodity program. While the United States cannot accept all of its elements, there are many parts which we are prepared to consider.

At this conference the United States proposes its own comprehensive approach to commodity issues. It reflects many of the objectives contained in the integrated program and our desire for constructive action on all aspects of the challenge. It contains the following elements:

* Insuring sufficient financing for resource development and for equitable sharing in their benefits by the host nation;

* Improving the conditions of trade and investment in individual commodities and moderating excessive price fluctuations;

* Stabilizing the overall export earnings of developing countries; and

* Improving access to markets for processed products of developing countries while assuring consumers reliability of supply.

Let me discuss each of these elements in turn.

**Adequate Investment.** Most of the world's raw material production, in fact, takes place in the industrial countries. But if development is to take hold, a special effort must be made to expand the production and exports of primary products of developing countries. Such a program must overcome the following problems:

First, we must deal realistically with the political and economic problems which are diverting investments from developing to developed countries. For paradoxically resource development is often discouraged by the very countries which are most in need of it. Nationalization and forced change in the terms of concessions in some developing countries have clouded the general climate for resource investment in the developing world. Social and political uncertainties have further complicated investment prospects. As a result commercially viable projects have been postponed, cancelled, or relocated; and capital, management, and technology have been diverted to production of

(LC)

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higher cost raw materials in the industrialized world.

Second, in the next decade alone the total requirements for global investment in resources will be massive. Individual projects will require unprecedented sums of capital and complex financial arrangements. The time required between the beginning of a project and its completion is increasing. All these factors compound the political uncertainties and further inhibit rational investment.

Third, there is no one institution that can work comprehensively to facilitate resource development, particularly in energy and minerals, or to promote equitable sharing of its benefits.

If present trends continue, serious misallocations of capital, management, and technology are inevitable. The costs of raw material and agricultural production will escalate. Many potential producers will be unable to attract adequate capital. All countries will pay the price in accelerated inflation and retarded growth—with the poorest countries suffering the most.

To overcome these problems the United States proposes the establishment of an International Resources Bank [IRB]. This new institution would promote more rational, systematic, and equitable development of resources in developing nations. It would facilitate technological development and management training in the developing countries. It would help insure supplies of raw materials to sustain the expansion of the global economy and help moderate commodity price fluctuations.

The International Resources Bank would mobilize capital for sound resources development projects by assisting individual resources projects to secure direct financing and issuing bonds which could be secured by a specific commodity. Alternatively these bonds could be retired through delivery of a specific commodity. "Commodity bonds" of this type could greatly improve conditions of supply and market access and help developing countries to stabilize export earnings.

To enhance confidence for both host governments and investors the International Resources Bank would begin operations with a capital fund of $1 billion. It would participate with foreign investors and the host government in project agreements

specifying the conditions of the investment on a basis acceptable to all parties. Such an agreement could include a formula for production sharing and arrangements by investors to help develop the managerial, technological, and marketing capabilities of the host country. The bank would support guarantees of both investor and host nation performance in accordance with conditions established in the project agreement.

To insure effective coordination with other public institutions, the International Resources Bank could be associated with the World Bank group, in a form to be worked out by the participating countries. It could operate in close collaboration with—and render even more effective—other institutions such as the World Bank and its associate, the International Finance Corporation, and the Inter-American Development Bank as well as the U.N. Revolving Fund for Mineral Exploration. The IRB proposal offers many advantages and new concepts.

* Its facilitating role as third party with the host country and the foreign investor will encourage conditions for project development consistent with internationally accepted standards of equity.

* The IRB mechanism provides multilateral guarantees of the performance of both the host nation and the foreign investor in accordance with the project agreement—thereby reducing the noncommercial risks. This cannot fail to promote greater flows of investment capital for resource projects on reasonable terms.

* The proposal contemplates production-sharing arrangements under which the foreign investor is assured of an established percentage of total production with disposition of the balance to be controlled by the host nation. This allows the host nation to share in production from the outset, providing it with the basis for further processing of the raw material should this prove to be economically feasible.

* Commodity bonds would be a fruitful new international instrument for forward purchases of commodities. They could contribute to earnings stabilization. They would also provide added assurance of market access for the host country and supply access for the consumer.

* Finally, through the IRB, modern technology

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would flow into developing nations. The two key elements required for development-management and technology-are provided by the foreign investor directly in a new form of capital investment. The trilateral agreement could include provision for the progressive acquisition of technology by the host country and thus contribute importantly to the process of technology transfer.

We consider the International Resources Bank to be an innovative and significant response to the basic needs of the developing nations and the international community. It will be a major advance in the sharing of benefits and responsibilities between industrialized and developing nations. It will help insure the essential flow of capital, management, and technology into resource development under conditions acceptable to host governments. And it will enhance the predictability that is essential to attract capital investment. We hope other countries will join us during the coming months to design and establish this global institution.

Improvement of the Conditions of Trade and Investment in Individual Commodities. We are all conscious of the problems the world economy has faced recently in this area. Within only two years the tight supply and astronomical prices of many critical materials have been followed by a period of declining prices. Many economies have been severely shaken, and several countries have suffered balance-of-payments crises. Drastic price changes affect the developing countries most severely, playing havoc with foreign exchange earnings and development plans. And because raw material production projects require years to develop and involve high risks, volatile prices tend to lead to erratic patterns of investment.

There are a number of ways to improve commodity markets—long-term contractual arrangements, better exchange of market information, improved distribution, more efficient production methods, and better storage and transport facilities.

We agree with the UNCTAD Secretariat that buffer stocks deserve special attention. For those commodities where buffer stocks are feasible, sharp fluctuations in prices can be moderated by building stocks when markets are weak. And adequate supplies at reasonable prices can be as-

sured through releasing stocks when markets are tight.

The United States believes that buffer stocks can be financed from a combination of sources—direct contribution by the participants, export taxes, commercial borrowing guaranteed by the countries participating in the buffer stock, or through the existing facilities of international institutions. Should existing sources prove inadequate we would also be prepared to consider the IRB as a supplemental channel for financing a particular buffer stock. In these ways we are convinced that adequate international financing for buffer stocks can be assured within the context of the specific commodity agreement under which the stock is established. Clearly the United States would not want a buffer stock in which we had agreed to participate to fail for want of adequate financing.

The United States has pursued a constructive approach to other aspects of the commodities problem.

* We have joined with producers and consumers of key commodities to agree on measures to improve and stabilize markets.

* We have signed commodity agreements on coffee and tin, and we will participate in negotiations on sugar. We viewed cocoa as well-suited to a buffer stock arrangement but were disappointed in the agreement negotiated a few months ago which we believe is unlikely to improve the functioning of the cocoa market. If other parties are interested, we stand ready to renegotiate this agreement.

* The United States recently participated in the first meeting of producers and consumers of copper. We look forward to the establishment of a permanent producer-consumer group.

* Agricultural raw materials need serious attention as well. Those that face declining markets from growing competition from lower-cost producers and synthetics can benefit from market promotion, research to improve productivity, and marketability or diversification into other products. We recommend that producer-consumer forums dealing with individuals commodities focus on such possibilities. We urge that the World Bank and the regional development banks give high priority to funding projects for these purposes.

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Today the United States proposes these additional measures:

* First, let us reach agreement on a definite timetable for the study of specific commodity problems of interest to developing countries. We are prepared to initiate concerted consideration in producer-consumer forums this year of measures to improve the stability, growth, and efficiency of markets for all key developing countries' commodity exports. Particular attention should be given to the formation of groups for bauxite and iron ore.

* Second, since many of the poorest countries are dependent on these products for export earnings, we urge the World Bank and regional institutions to sponsor projects to improve production efficiency and markets for jute, sisal, and other hard fibers—or to facilitate diversification into other products in order to reduce excessive reliance on them.

* Finally, any program of resources development must emphasize the two most vital international resources—food and energy. Forecasts of good harvests must not lull us into letting the progress begun at the World Food Conference slip away. At that conference nations agreed to work toward a system of world grain reserves to improve food security, to increase support for agricultural research, to develop programs for nutritional improvement, and to increase agricultural development in low-income countries.

We urge other countries to join us to make the concept of world food reserves a reality, to increase support for agriculture development in poorer nations, and to provide necessary food aid.

In energy we strongly support the efforts of oil producers and consumers from both the industrialized and the developing world to achieve cooperative solutions at the Conference on International Economic Cooperation. We urge that our proposal for an international energy institute—which would help developing countries take advantage of their domestic energy resources—receive priority attention in the months ahead.

**Stabilizing Export Earnings of Developing Countries.** At the Seventh Special Session, the United States listed as its first priority the need to insure economic security for the developing world.

We continue to believe that the world economic system must provide the developing nations greater security from the worst effects of fluctuating prices, recession, inflation, and other economic shocks which they are helpless to prevent or avoid.

We are gratified at the rapid implementation of our proposals to the special session for the far-reaching expansion of the International Monetary Fund. These innovations make available billions of dollars in new financing to offset steep declines in export earnings. The most significant step forward has been the Fund's agreement to liberalize its compensatory financing facility. As of now roughly $800 million from this improved facility has been provided. If this rate continues, more money will have been lent this year from the facility than the entire amount provided over the last 12 years.

Another major advance has been the establishment of an IMF trust fund to help meet the balance-of-payments needs of the poorest countries. While many developing countries have received substantial benefits from the compensatory financing facility, low-income countries, whose export revenues depend on one or two commodities, often need additional financial help to meet balance-of-payments problems. To assist the poorest countries the United States has proposed that the trust fund provide concessional financing to poorer countries to offset declines in earnings from an agreed list of particularly significant commodities.

Moreover the United States would be ready to join others in a review of the adequacy of the trust fund's resources, should they prove inadequate to stabilize earnings and thus provide general balance-of-payment financing for low-income developing nations. We especially urge those oil-producing nations with strong reserves to contribute to the trust fund's lending capacity.

**Expanding Trade in Resources and Processed Goods.** Trade has been an engine of growth for all countries; for many developing countries it is the most critical vehicle of development. The United States has taken a number of initiatives to meet the special needs of developing countries. We have reduced global trade barriers, especially those affecting processed goods; provided preferential access to our market for many exports of developing

8

countries; worked in the multilateral trade negotiations [MTN] in Geneva for reduction of barriers in tropical products; and recognized in our general trade policy the special trade needs of developing countries.

We now have these challenges:

* We must maintain the momentum in reducing world trade barriers.

* We must focus especially on reducing barriers against processed goods, which retard developing countries' efforts to industrialize.

* We need additional international arrangements to assure reliability of supply, for the steady flow of new materials is vital to every country.

To maintain momentum in reducing trade barriers, industrial countries of the OECD [Organization for Economic Cooperation and Development]—despite the strains on their economies from higher energy costs and recession—have pledged themselves to avoid restrictive trade measures. The United States intends to join with other developed countries in a renewal of that pledge at the next OECD ministerial meeting in June.

In addition at the multilateral trade negotiations now taking place in Geneva we will pay special attention to the interests of developing countries, particularly in such areas as processed exports, tropical products, and nontariff barriers.

The institution in January of a generalized system of preferences [GSP] by the United States, combined with the preference systems of other industrial countries, has opened significant trading opportunities for developing nations. Our own preference system already covers more than 2,700 items from nearly 100 countries. The annual trade value of these items is roughly $2.5 billion. We are examining the possibility of including additional products.

The United States will give priority support to the U.N. Development Program financing of a joint GATT/UNCTAD [GATT—General Agreement on Tariffs and Trade] program of technical assistance to developing countries. This will help those countries take full advantage of the preference schemes of industrialized countries by finding the most productive areas for new and increased exports and the best techniques of marketing their products.

In addition intensive negotiation is now under-

way in the MTN on tariff treatment of tropical products—including processed goods and manufactures—that are of particular interest to developing countries. The United States intends to implement negotiated tariff reductions in this area as soon as possible once the tropical product package is agreed upon.

In keeping with the Tokyo declaration, the United States believes that the MTN negotiations on rules concerning nontariff barriers must give greater attention to the needs of developing countries. For example the United States believes that a code to govern the use of countervailing duties against export subsidies should recognize the special conditions facing developing countries. We will urge that the special needs of developing nations be taken into account when new international rules pertaining to offsetting action are being developed.

With respect to new rules on safeguard measures against injury from imports, we will consider special treatment for less-developed countries which are minor suppliers or possible new entrants into the U.S. market.

We recognize, too, that developing countries have interests in other reforms of the trading system which are not presently under negotiation. We will respond to these views with an open mind. We are confident that with goodwill on all sides constructive agreement can be reached on specific reform issues within the timeframe of the multilateral trade negotiations.

The reduction of tariffs against the exports of processed raw materials from developing countries is especially important. Lowering these barriers would provide fresh opportunities to expand and diversify exports, particularly in cases where tariffs now escalate with the degree of processing. To this end the tariff reduction proposal which the United States has made in the MTN will not only result in significant tariff cuts but also will reduce tariff escalation. We expect that developing countries will regard this as an incentive to positive cooperation in the current negotiations.

If more open market access is one pillar of an expanding international trading system, greater reliability of supply is another. Without reasonable assurance from producer countries that they will not arbitrarily interfere with exports, importers must turn to other sources. Consumers will then

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bear the cost of less efficient production, unreliable producers, the cost of lost markets, and reduced foreign investment.

There is an urgent need to analyze methods to improve reliability of supply. We urge that work begin promptly in the GATT to determine whether an international code on export controls is feasible. Such a code should define more clearly the circumstances under which countries may legitimately apply export controls. It would reduce the uncertainties for consumers and for exporters; and it would mitigate some of the political damage to relations between countries when restrictions are imposed on exports.

The United States will also continue to seek commitments of reliable supply in the context of specific arrangements negotiated for individual commodities.

This four-point program—a new International Resources Bank, a case-by-case effort to improve conditions of trade and investment in primary products, stabilization of export earnings, and improved market and supply conditions—recognizes that these issues are linked; yet it permits pragmatic and flexible treatment of specific problems. The approach I have described is a major effort by the United States to deal on a comprehensive basis with commodity issues. It is workable; it is achievable; it is a program which meets the needs of developing and developed nations alike. We urge favorable consideration and rapid collective action.

## Technology For Development

Let me now turn to another area of major concern—the application of technology for development:

Technology is at the heart of the development process. It enables man to extend his horizons beyond the mere struggle for existence. Technology draws the fullest measures from the finite resources of our globe. It harnesses the intelligence of man and the force of nature to meet human needs.

For two centuries technological progress has been fundamental to rapid industrial growth. A central challenge of our time is to extend the benefits of technology to all countries.

There are a number of impediments to a rapid and effective technology transfer from indus-

trialized to developing countries.

First, in many cases technology from industrial countries may not fit the real needs of developing countries. By and large the challenge is not to transfer a carbon copy of existing technology but to develop new technology and technological institutions that are most relevant to the conditions of individual developing countries.

Second, developing countries often lack adequate information and expertise to identify the technology which best meets their needs.

Third, there is often a shortage of the trained manpower needed to select, adapt, and effectively manage technology.

Fourth, technology often cannot be separated from capital and management. Hence it is one element of the overall investment process. And to be successful, technology must be applied within a framework of government policies which facilitate and nourish the process of technology transfer.

The task, therefore, is not simply the turnover of formulas or blueprints. We must pursue a comprehensive approach which provides a broad range of programs and incentives to transfer both technology and the fundamental skills that will give it root and effectiveness.

To promote this, the United States proposes a five-point approach.

First, to adapt technology to the needs of developing countries, the United States supports the establishment of a network of research and development institutions at the local, regional, and international level. We need to strengthen global research capacities for development and to expand intergovernmental cooperation.

Therefore, we propose the following:

* An International Industrialization Institute should be established to encourage research and development of industrial technology appropriate to developing countries. A founder's conference involving all interested countries should be held no later than this fall.

* The Energy Commission of the Conference on International Economic Cooperation should establish an International Energy Institute to facilitate energy research and the application of energy-related technologies to the special needs of developing countries.

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* We should extend existing networks for applied research in the fields of agriculture, health, and education. The creation of new institutions must be accompanied by measures to help the process of technology transfer. To improve cooperation between industrialized and developing countries, the United States proposes new programs in three fields of advanced science, to which we are prepared to make major contributions of knowledge and experience—in satellite technology, in water resources development, and in oceans technology.

* Satellite technology offers enormous promise as an instrument for development. Remote sensing satellites can be applied to survey resources, forecast crops, and improve land use in developing countries. They can help to foresee and evaluate natural disasters. Modern communication technologies, including satellites, have large untapped potential to improve education, training, health services, food production, and other activities essential for development.

Therefore, from July through October of this year the United States will make available to interested developing countries demonstrations of the various applications for development of the experimental ATS-6 communications satellite, the Landsat remote sensing satellite, and high resolution photography. We are prepared to cooperate with developing countries in establishing centers, training personnel, and, where possible, adapting our civilian satellite programs to their needs.

* The United States will play a leading role in applying water resources technology to such objectives as improving the quality and productivity of agriculture and developing new industry. We will play an active role at the U.N. Water Conference to be held in March of next year, putting forward practical measures to share our knowledge and experience.

* The technology necessary to mine the deep seabed, to manage fisheries, and to exploit the vast potential of the oceans is rapidly being developed. The United States has made major advances in this field. We plan to invite scientists, managers, and technicians from different countries to participate in our scientific projects. And we strongly support provisions in the Law of the Sea treaty which will provide incentives for sharing of deep seabed

technology appropriate to developing country needs.

* Finally, there is a pressing need to develop new ways to use technology to improve the basic condition of the poor. The United States is increasing the technical component of its development programs to provide basic nutrition, health, and education services.

The second element of our program is to improve the amount and quality of technological information available to developing countries and to improve their selection of technology relevant to their needs. We will support the efforts of the U.N. International Center for Exchange of Technological Information to provide comprehensive information on the capabilities and facilities of national and regional information services. For its part the United States will inventory its national technological information resources and make available, both to developing countries and to the U.N. Center, consultants and other services to improve access to our national information facilities. These include the National Library of Medicine, the Division of Scientific Information of the National Science Foundation, the National Agricultural Library, and the Smithsonian Information Service.

The United States also supports the proposed UNCTAD advisory service to strengthen the ability of developing nations to effectively identify, select, and negotiate for technology most appropriate to their requirements. We support the concept of regional advisory services under UNCTAD auspices to provide expertise and resources to the technology requirements of particular regions and countries. These regional centers could act as conduits for the activities of other programs and institutions for the application of technology to developing countries.

Third, to nurture new generations of technologists and technology managers, the United States proposes a priority effort to train individuals who can develop, identify, and apply technology suited to the needs of developing countries. To this end:

* Training competent managers of future technology should be central objectives of the

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proposed International Industrialization Institute
and the International Energy Institute.

* For its part the United States will encourage universities, research institutes, and industrial training schools in the United States to create special institutes and curricula for technology training for the developing countries; we will provide for and assist their sister institutions to developing countries. We invite other developed countries to join us in this effort.

* Finally, the United States proposes that appropriate incentives and measures be devised to curb the emigration of highly trained manpower from developing countries. For the benefits which developing nations derive from trained technology managers is of no consequence if they leave their home countries.

In this connection the U.S. Government will encourage the formation of a technology corps, which will parallel our executive service corps in organization and operation. This will be a private, nonprofit organization to which corporations and universities would contribute highly skilled personnel experienced in the management of scientific and technical operations. They will work with and help train local manpower in specific development projects.

The fourth element of our approach is to make the process of transferring existing technology more effective and equitable.

New technology in industrialized countries resides primarily in the private sector. Private enterprise is in the best position to provide packages of management, technology, and capital. To enhance that contribution, both industrialized and developing countries must create an environment conducive to technology transfer.

The United States recommends that voluntary guidelines be developed that set forth the conditions and standards of technology transfer which encourage, facilitate, and maximize the orderly transfer of technology.

The proposed International Resources Bank also contains features which can enhance the ability of developing countries to manage technology and thereby encourage its transfer. In the trilateral agreement with the host nation and the International Resources Bank, the foreign investor

would generally undertake to provide both management and technology. The investment project could, by mutual agreement, include the obligation to progressively transfer some of the technology to the host nation over the period of the agreement—as well as accelerate the developing of the country’s capacity to manage such technology.

The flow of technology in the channels of world commerce can be diverted by restrictive practices. Some practices may directly limit the transfer of technology; in addition, where technology is transferred, restrictive provisions on trade in high technology products can limit its benefits for others. The United States proposes that international attention be focused on the full range of these practices, with a view to their reduction or elimination.

The fifth element of the U.S. program is to set goals for achievement before and during the U.N. Conference on Science and Technology for Development, now proposed for 1979. The United States strongly supports this conference and its objectives. Preparations for it provide a major opportunity for both developed and developing countries to review their responsibilities for the sharing and use of technology.

To speed our preparations the United States will convene a national conference next year to bring together our best talent from universities, foundations, and private enterprise. They will be asked to consider the broad range of technological issues of concern to the developing world. They will be invited to help mobilize American resources to assist developing countries to meet their research requirements. And they will be encouraged to prepare detailed American proposals for the conferences and institutes I have described.

We recommend also that the OECD nations urgently study the possibilities of a greater contribution by all industrialized nations to overcoming the problems of technology transfer.

This five-point program represents the most comprehensive effort ever put forward by the United States to deal with the challenge of applying technology to development. We hope that the UNCTAD conference will give these initiatives serious consideration. We invite your ideas and

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proposals. Working together we can see to it that this age of technology will improve the quality of the lives of all of our peoples in a manner undreamed of by previous generations.

## Balance-of-Payments and Debt Problems

Rising import costs caused in large part by higher oil prices and reduced export earning resulting from recession in the industrialized nations have generated unprecedented international payments deficits. Although global economic recovery has begun, many countries will face persisting deficits this year.

A major institutional effort must be made if these countries are to avoid severe cutbacks in their imports and consequent reductions in their economic growth. There are three priority areas.

* We must insure that flows of funds for development projects are neither reduced nor diverted by short-term economic problems. In addition long-term financing must be increased and its quality enhanced.

* We must enable private markets to continue to play a substantial role in providing development capital. For many countries private capital flows are, and will continue to be, the principal form of development finance.

* We must see to it that the domestic economic policies of all our countries are sound. They should not place undue pressures on payment positions by unnecessary accumulations of debt. And we must give particular attention to those countries unable to avoid critical debt problems.

### Resource Flows.
We have been heartened by the immense effort made since the Seventh Special Session to assure adequate balance-of-payments financing for less-developed nations. Especially important has been the expansion of the International Monetary Fund's lending facilities. These efforts should help insure that sufficient balance-of-payments financing is available on an aggregate basis to developing countries.

But emergency lending cannot be a substitute for effective and high quality foreign aid. Although most foreign assistance from the United States and other donors is provided on highly concessional terms, much can be done to improve the quality of resource flows. In many cases the conditions of

assistance restrict its financial and developmental impact; one example is the tying of aid to procurement in donor countries which can reduce its value. The United States therefore will urge the OECD Development Assistance Committee to develop arrangements for the reciprocal untying of development assistance.

### Private Capital.
For many developing countries, particularly those in the midst of industrialization, private sources make up the bulk of development capital. Of the $35 billion balance-of-payments deficit of the non-oil producing developing countries in 1975, nearly half was financed by private capital flows. Without this contribution, the consequences of the mammoth deficit would have been unmanageable. The IMF/IBRD Development Committee is studying a wide range of measures to insure that international capital markets continue their imaginative adaptation to the needs of developing nations.

In addition negotiations on the replenishment of the International Finance Corporation [IFC], which we proposed at the Seventh Special Session, have been completed. The IFC is actively engaged in examining the U.S. proposal for international investment trust to mobilize portfolio capital for investment in local enterprises. The United States gives its full support to these efforts.

### Debt Problems.
Many countries have had to resort to short-term external borrowing to finance their deficits. Debt payment burdens are mounting; a number of countries are experiencing serious problems in meeting their debt obligations.

Generalized rescheduling of debts is not the answer. It would erode the creditworthiness of countries borrowing in private capital markets. By tying financing to debt, it obscures the significant differences among countries and prevents an appropriate focus on those in most urgent need. And it would not be fair to those nations which have taken strong policy measures to reduce their obligations.

The debt problem must be addressed in relation to each country's specific position and needs. The United States stands ready to help countries suffering acute debt service problems with measures appropriate to each case. The procedures must be agreeable to creditor and debtor alike. The device of a creditor club is a flexible instrument for negotiations.

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To improve the basis for consideration of balance-of-payments problems of particular developing countries, the United States proposes that the CIEC Finance Commission or another mutually acceptable forum examine the economic and acute financing problems of developing countries.

## The Poorest Countries

The needs of many nations in the developing world are great, but the special requirements of the poorest countries are massive. This conference has a collective moral responsibility to respond to this challenge. We must devote major efforts to improve programs for the poorest countries and to devise new ones where necessary for, without adequate assistance, the poorest will be condemned to continuing poverty and helplessness. We must increase resource flows, improve their terms, and enhance their quality. And aid must be given on softer terms, because the poorest countries are by definition unable to service debt except on a highly concessional basis.

Resource flows to the poorest countries must be freed from restrictions on procurement sources and the financing of local costs which distort the design of projects, waste resources, and cause excessive reliance on imported equipment.

The IMF trust fund now being established will importantly ease the immediate balance-of-payments problems of the poorest countries.

For the longer term a substantial replenishment of the International Development Association is imperative. The United States will, as always, meet its commitments to this vitally important source of assistance. And we look forward to generous OPEC [Organization of Petroleum Exporting Countries] support for this important institution.

Thus the United States has already taken a number of steps to assist the most needy countries. We will do more.

* To meet the urgent needs of the Sahel region, we are actively participating in the deliberations of the Club des Amis du Sahel. In addition we have proposed that an urgent study be undertaken on ways not merely to ease the drought but to end the water shortage by mobilizing the great African rivers, not to perpetuate relief but to initiate basic reform.

* The U.S. Congress has already authorized a contribution of up to $200 million for the International Fund for Agricultural Development. We look forward to the June plenipotentiary conference which has been called to sign the agreement; and we urge others to contribute generously so that the one billion dollar target can be met.

* We have secured authority under our Foreign Assistance Act to finance all total costs of aid projects in least developed countries when necessary to insure their success.

* Seventy percent of our bilateral development assistance is now programmed for countries with per capita GNP of $300 or less.

* For countries whose per capita GNP is less than $500, we strongly support proposals to increase their share to over 80 percent of all UNDP [U.N. Development Program] grants. One-third of this should go to the least developed countries in this category.

* We pledge a major expansion of our efforts to develop integrated systems for basic community health services. These will combine medical treatment, family planning, and nutritional information while making full use of locally trained paramedical personnel.

In the Law of the Sea negotiations now under way in New York, the United States has made a detailed proposal that revenues from deep seabed mining and resources exploitation be shared with the international community, especially for the benefit of the poorest countries.

This is a substantial effort. It must be complemented, however, by improvement in the terms of bilateral assistance to the poorest countries. To this end the United States proposes that all donor countries agree to provide all development assistance to the relatively least developed countries on the UNCTAD list on a grant basis.

The United States will seek authorization from the Congress to provide all development assistance to the poorest countries on this basis. We already have congressional authorization to convert repayment of a portion of our loans under PL-480 to grants under certain circumstances. Taken together these two steps will significantly increase the grant element in our bilateral assistance programs.

14

Human suffering and human deprivation are not questions of ideology or bloc politics. They touch the elemental needs of mankind and the basic imperatives of universal moral values. We must not fail to do our duty.

## Conclusion

Economic development is a task of many dimensions. Whatever may be our differing perspectives, the United States believes that a number of conclusions stand out clearly.

* Development is a mutually reinforcing endeavor. There is nothing permanent about the distinction between the developed and developing worlds. Developed countries thrive and advance most surely when the international economy grows vigorously and steadily. As the United States sees other nations develop and industrialize, we feel renewed confidence in the world economic system and in our own economic future. Sustained growth and development require that we work together cooperatively.

* Development involves mutual responsibility. International cooperation cannot be one-sided. The strength of the industrial countries must be regarded as a trust for the progress of all; the developing countries only hurt themselves if they weaken that strength through contrived scar cities, cartels, embargoes, or arbitrary seizures of property. At the same time the developed countries have an obligation to do their utmost to spur development. Our efforts here must take into consideration the concerns and the contributions of all countries-developed and developing, producer and consumer, East and West, North and South.

* Development is a process of change and innovation. It must respond not only to rapidly changing technology but also to the evolution of political attitudes. The old relationships of donor and recipient are increasingly paternalistic and anachronistic to the recipient; they may also come to seem a one-sided burden to those who have long been donors. We must fashion a new sense of cooperation that is based on the self-respect and sovereign equality of all nations. Each nation must find its path to development which allows it to retain its self-respect and identity, its culture, and its ideological preference. But development itself is

not a function of ideology-it must unite practical solutions and a philosophy of international cooperation. It cannot grow from doctrines of confrontation and the exploitation of despair.

* Development is a human enterprise. It is the talents and efforts of individuals which make development a reality, and it is they who are its ultimate beneficiaries. Our first aim is the minimum essentials of life-food, clothing, shelter-and the relief of human suffering and monotony, debilitating illness and ignorance, and demeaning servitude to others. Then development must look beyond survival to provide opportunities for education, greater personal freedom, and individual dignity and self-respect. Finally development must deal with the quality of life-the dignity of the individual, personal freedom, and equality of opportunity regardless of race, religion, sex, or political belief.

The magnitude of the task before us will require unprecedented international collaboration. No nation alone can surmount-and only together can all nations master-what is inescapably a global challenge of historic proportions.

But we are not confronted by overwhelming odds or by intractable obstacles. We have it in our power to achieve in our generation a rate of economic advance that has no parallel in human experience.

In each age men and women have striven for greater prosperity and justice and dignity. Yet always in the past there have been setbacks; history has recorded a surfeit of misery and despair. Our age is the first where we can choose to be different. And therefore we must.

If we succeed this decade could be remembered as a turning point in the economic and political evolution of man. The new institutions and mechanisms we create could be perceived as building blocks of international cooperation that strengthened the world's sense of community. The implications for world peace, as well as for economic cooperation, are vast.

The United States proceeds from the conviction that both morality and practical interest point in the same direction-toward a dedicated enterprise of cooperation. If we are met in a cooperative and realistic spirit, we are prepared to offer our

PRESS
DEPARTMENT OF STATE

May 6, 1976

No. 226

EMBARGOED FOR RELEASE AT 6:00 P.M. (EDT) THURSDAY, MAY 6, 1976. NOT TO BE PREVIOUSLY PUBLISHED, QUOTED FROM, OR USED IN ANY WAY.

INTERVIEW WITH
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
BY
BERNARD KALB OF C.B.S.
RICHARD G. VALERIANI OF N.B.C.
AND EDWARD J. KOPPEL OF A.B.C.
NAIROBI, KENYA

MAY 6, 1976

**MR. KALB:** Mr. Secretary, why is this speech important?

**SECRETARY KISSINGER:** The speech is an attempt to put before the 153 nations that are assembled here the American vision of how they can cooperate for a better future for themselves, for the growth of the world economy and, therefore, for their own direct benefit. I think that requires a lot of complicated proposals, but when you deal with the future of so many nations the issues are complicated.

**MR. KALB:** What emerges as the single most significant proposal you are making?

**SECRETARY KISSINGER:** Well, I suppose the proposal that will receive most attention is the one that is the proposal for an International Resources Bank which is supposed to stimulate investment in the development of raw materials and at the same time, together with other measures, help stabilize the earnings of a number of these countries. But the essence of this speech is that it attempts to move forward in the field of raw materials, technology, the problem of the poorest and the balance of payments issues, all of which have produced a global recession, great insecurity, and it tells the nations assembled here that they should get off the slogans and get to work on a concrete program that we have put before them.

**MR. VALERIANI:** Mr. Secretary, what happens after you make the speech? What's the next step?

**SECRETARY KISSINGER:** Well, after I have made the speech I would assume that there will be several weeks of discussion, some of which could become quite acrimonious here, because there are many nations here that do not agree with our approach which stresses private enterprise and the individual initiative. But I would hope that at the end of this Conference a number of resolutions will be passed, and that then smaller international groups will deal with the individual proposals we have made. If one looks at what has happened since the session last year,

PR #226

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in which we put forward a similar program, a great deal of it has been
implemented and indeed I think we can take pride in saying that almost
anything that has been achieved in the area of economic development has
been as the result of an American initiative.

MR. KOPPEL: Mr. Secretary, especially if this is a constructive proposal, why would America's adversaries allow it to succeed?

SECRETARY KISSINGER: Because economic progress knows no national boundaries and some of our adversaries have no means of preventing it from succeeding. Other countries that do not necessarily agree with us politically are nevertheless part of the same world economy and when the chips were down they have found repeatedly that they will have to make the choice between rhetoric and concrete progress. We have shown them, or we are trying to show them, how to make concrete progress.

MR. KOPPEL: You mean the Soviet Union --

SECRETARY KISSINGER: The Soviet Union has no means of blocking it. They may not support it, but they have no means of blocking it.

MR. KOPPEL: Why not?

SECRETARY KISSINGER: Because the Soviet Union is not so closely connected with the world economy that its financial support is necessary and the Soviet Union can stand aside from this, as indeed it has from most such programs, without interfering with it.

* * * * *

[LC]

PRESS
DEPARTMENT OF STATE

May 6, 1976

No. 228

STATEMENT BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
UPON DEPARTURE FROM NAIROBI, KENYA

MAY 6, 1976

Ladies and Gentlemen:

As I am leaving the continent of Africa, I would like to express my appreciation, first of all to the Government of Kenya and then also to the other governments that have received me in this extraordinarily cordial manner. I came to Africa in order to enable our Government and our President to formulate an approach to this continent and to its aspirations the American people can support and sustain that will enable this continent to achieve its aspirations for racial justice and for economic progress with the cooperation of the United States. The United States seeks a peaceful solution of all the issues on this continent, free of great power rivalry; and I think that my talks to the various leaders have taught me a great deal and will help shape American policy in a positive way. I believe also that the session here of UNCTAD has made — can make — a very great contribution to the aspirations for development of all of mankind. So I leave with a sense of appreciation and again particular appreciation to the Government of Kenya that has hosted this Conference in such an excellent manner and has treated my colleagues and me all so well. Particularly thanks also to Senator Javits and Ribicoff for having taken the time off from their busy schedule not only to come but to contribute in such a dedicated manner to this bipartisan enterprise.

Thank you very much.

**QUESTION:** Mr. Secretary, how was your speech received by the Third World? Are the early results in?

**SECRETARY KISSINGER:** Well, the preliminary reactions that my colleagues have heard have been positive. Of course, some time will be needed for the various delegations to analyze all these proposals. But we have heard only positive comments up to now. Of course, I suppose some of the negative ones may not come to us.

**QUESTION:** Mr. Secretary, have you heard positive comments from people you feared might have had negative comments?

**SECRETARY KISSINGER:** We haven't really had a chance to canvass all the delegations. Secretary Robinson is staying here. Senator Javits, in fact, is staying here this afternoon to meet with some of the delegations. I've met with Perez Guerrero who has been one of the leaders of the group of 77 at the Seventh Special Session, and we had very constructive and cooperative talks. So we are optimistic that something positive can be achieved.

PR #228

-2-

**QUESTION:** Mr. Secretary, you recall at the outset of your trip there were many forecasts in Africa that your trip was doomed to fail. How do you feel you would currently assess it yourself?

**SECRETARY KISSINGER:** Of course the success and failure of any foreign policy move can only be judged over a period of time. And no one could ever, should ever, believe that any trip of less than two weeks could by itself determine the success of the policy of such a major continent. But in terms of the fact that the United States needs to relate itself to a continent, to one of the largest continents containing the largest numbers of nations of any of the continents, in terms of the issues before us, I believe that we have begun to build areas of understanding and areas of cooperation.

**QUESTION:** In your talk with African leaders do you find that they recognize that the United States has made a significant departure from its previous policies?

**SECRETARY KISSINGER:** That is my firm impression, and I have been very well impressed by the spirit of cooperation of the African leaders with whom I have talked. I've told them frankly what American concerns were, they have told me frankly what theirs were, and I think we have narrowed the areas where our views do not always coincide and have established many areas of cooperation.

Thank you.

* * * * *

PRESS
DEPARTMENT OF STATE

[LC]

May 7, 1976

NO. 230

REMARKS TO THE PRESS BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
FOLLOWING HIS MEETING WITH
PRESIDENT GISCARD D'ESTAING
PARIS, FRANCE

MAY 7, 1976

**SECRETARY KISSINGER:** The President and Foreign Minister and I had extremely useful and extremely friendly discussions. I told the President my impressions of my visit to Africa and of some of the intentions of the United States and the directions in which we are thinking of going. The President gave me his considerations which I thought were extremely important, and we had a most useful exchange. We also reviewed the situation in Lebanon in some detail and we understand that we ought to have parallel interests there as well. We reviewed the President's trip to the United States to which we look forward with great anticipation and which will give the two Presidents an opportunity to review the whole range of international affairs. And as far as the United States is concerned, we attach very great importance to the trip of President Giscard and we are looking forward to it with great anticipation.

**QUESTION:** (Inaudible) French troops to Lebanon?

**SECRETARY KISSINGER:** We just discussed the situation in a general way, including all of its aspects. Any specific measures that may be taken by any of the countries will evolve in further discussions, so we did not discuss any precise projects.

**QUESTION:** But in the few days before President Gcard D'Estaing's official visit to the United States, how do you view the Franco-American relationship?

**SECRETARY KISSINGER:** I think the Franco-American relationship has never been better. It is being pursued on the basis of strict equality in which each side reserves its right to maintain its own views on matters, but on this platform I would say that our relationship have never been better and we attach the greatest importance to the views of France and to seek to the greatest extent possible to coordinate our policies on a parallel course.

**QUESTION:** Did you speak of the future of the Concorde in the United States?

**SECRETARY KISSINGER:** The subject did not come up in any detail but it will undoubtedly come up, I would think, when the President visits the United States, and I have been notorious in the United States about stating my view from the foreign policy point of view (laughter).

**QUESTION:** Have you heard of the French Communist party's position about French-American relationships?

PR #230

- 2 -

**SECRETARY KISSINGER:** I have not had an opportunity to study it and I do not want to make any comments about the French domestic situation.

**QUESTION:** (Inaudible)

**SECRETARY KISSINGER:** We discussed the situation in Lebanon in some detail and in the course of this had a brief review of the Middle East situation.

**QUESTION:** Mr. Secretary, did you discuss the possibility of ... the upcoming elections in Italy ... the Communists?

**SECRETARY KISSINGER:** I think we both agree that the domestic decisions of other countries are for the other countries to make. Each of us has the right to state what the consequences for our own policy are, but this was not the occasion to do this.

**QUESTION:** The English Secretary of Foreign Affairs, Anthony Crosland, just came back from China, and apparently said when he came back that the Chinese officials say that the conflict between the United States and Russia was going to happen pretty soon. What do you think about that?

**SECRETARY KISSINGER:** Well, this has been said before, including to me. We do not consider a war with the Soviet Union inevitable and we believe that the two great nuclear powers have a special responsibility to world peace in conducting their relations with restraint, and no one has a moral right — no one in our country has a moral right — to talk about the inevitability of nuclear war.

**QUESTION:** Mr. Secretary, how do you feel about going back to the United States where foreign policy seems to be the major issue in the elections?

**SECRETARY KISSINGER:** Well, it's a pleasure to be in a friendly capital --

* * * * *

PRESS
DEPARTMENT OF STATE

[LC]

May 7, 1976

NO. 231

REMARKS TO THE PRESS
BY_
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
BEFORE AND AFTER HIS MEETING WITH
PRESIDENT HOUPHOUET-BOIGNY OF THE IVORY COAST

PARIS, FRANCE

MAY 7, 1976

**SECRETARY KISSINGER:** I am so glad to have this opportunity to meet with you.

**PRESIDENT HOUPHOUET-BOIGNY:** I was awaiting for this opportunity. My health has not permitted me to receive you at home where we could have met much longer.

**SECRETARY KISSINGER:** I hope to have an opportunity to visit you there some-time. This trip would not have been complete without an opportunity to see you.

* * * *

**QUESTION:** Mr. Kissinger, would you care to tell us a few words about your conversation with Houphouët-Boigny?

**SECRETARY KISSINGER:** I agreed with the President that the talks have been extremely constructive. We reviewed the problems of all of Africa. We agreed that they should be solved without outside interference and I emphasized to the President that the United States will encourage the development of Africa by Africans and cooperate with its friends in Africa and all other African nations to bring about the aspirations of the African nations and together with the European nations that are prepared to do so.

**QUESTION:** Sir, do you agree with President Houphouët-Boigny that there should be dialogue with South Africa as long as it is proven that war is not better than peace?

**SECRETARY KISSINGER:** I believe, that it would be extremely helpful to solve the problems of South Africa with a dialogue.

**QUESTION:** Thank you kindly.

* * * * * * * * * *

PRESS
DEPARTMENT OF STATE

[LC]

May 7, 1976

NO. 232

REMARKS BY
THE HONORBALE HENRY A. KISSINGER
SECRETARY OF STATE
UPON DEPARTURE
ORLY AIRPORT
PARIS, FRANCE

May 7, 1976

SECRETARY KISSINGER:

Ladies and Gentlemen, I wanted to express my appreciation to the President of France and to the Government of France for the manner in which we have been received here. My conversations with President Giscard D'Estaing covered the problems of the future of Africa, discussions of Lebanon, and his forthcoming trip to the United States. I consider them extremely constructive and they were conducted in an atmosphere of great cordiality. With respect to Africa, we reviewed the convictions of both of our countries that Africa should be free of outside interference and the problems of fulfilling the aspirations of the African nations. I also had an extremely useful talk with President Houphouët-Boigny reviewing my trip to Africa and again with agreement that the development of Africa and the realization of its aspirations should be left to the Africans, with the support of all the Western countries that have an interest in helping the aspirations of African nations. I have indicated the support of the United States for these efforts and, of course, there are many European nations with traditional roles and links to Africa that will make their own decisions with respect to the role that they will play. I am grateful for the meetings I have had and we look forward with very great anticipation to the visit of President Giscard to the United States since we consider his views extremely important in charting our own course.

Thank you.

* * * * * *

PRESS
DEPARTMENT OF STATE

[LC]

May 7, 1976

NO. 235

REMARKS BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
UPON ARRIVAL
ANDREWS AIR FORCE BASE

MAY 7, 1976

SECRETARY KISSINGER:

Ladies and gentlemen: the President sent me to Africa on a mission of hope. I went to a continent that was torn by racial and other conflicts, in which foreign - mostly Communist - powers were beginning to exploit the tensions, in which the hopes of the peoples were being increasingly frustrated, and the relationship between the United States and the Western world on that crucial continent were in jeopardy.

On a trip of two weeks, we managed to make some progress with a message that the United States favors negotiation and not struggle; that if favors majority rule, but also minority rights. The United States as always in its history stands for human dignity and human progress, and the peoples that we met, and the leaders to whom we have talked, heard that message and are prepared to reciprocate.

I will now report to the President; and after I have talked to the President, I will talk to the Congressional leadership and to the American public about this trip. And I am confident that the American people will support - as they always have - conciliation and progress and peace.

Thank you.

* * * *

DEPARTMENT OF STATE

TRANSCRIPT OF SPECIAL REMARKS BY SECRETARY OF STATE HENRY A. KISSINGER
MADE AT A DINNER MEETING OF THE PRESIDENT'S BUSINESS COUNCIL, AT THE
HOMESTEAD HOTEL, HOT SPRINGS, VIRGINIA,

FRIDAY EVENING, MAY 7, 1976, 9:35 P.M. (Introductions)

THE CHAIRMAN: And now I have had the very great pleasure of
having as my dinner companion, the charming Mrs. Henry Kissinger. (Applause)

Distinguished guests, ladies and gentlemen, our speaker this
evening is a good friend who has been with us before, and truly, requires
no introduction. Even in remotest Africa no one felt the need to say,
"Dr, Kissinger, I presume." (Laughter.)

As our distinguished Secretary of State, he has labored long and
hard in the interest of achieving a more peaceful and harmonious world. He
is a true patriot, a great intellectual and a marvelous man.

When one realizes that less than twenty-four hours ago our
dinner speaker was a thousand miles away in Africa and in Europe, deeply
involved in discussions at the highest levels with heads of state, I think
you will agree that it is a singular honor to have him here tonight.

Secretary Kissinger, it is certainly above and beyond the call
of duty on your part, following such a long, and surely exhausting, trip
that you have agreed to be with us on this occasion. We want to thank you;
and also your lovely wife, for being willing to share you with us here tonight.
We are most anxious to have whatever words you care to give us on any
subject that you feel is appropriate.

It is my understanding that you would prefer to have -- to make
some informal opening remarks which are OFF THE RECORD -- and then perhaps

2

take a question or two from the floor.

Ladies and gentlemen, it is with a great sense of personal
pride that I introduce to you the Secretary of State, The Honorable
Henry A. Kissinger. (Rising ovation.)

SECRETARY KISSINGER: Mr. Chairman, ladies and gentlemen:

I appreciate the very friendly introduction that I have just
received, and particularly the fact that it called attention to my coming
to Hot Springs after just returning from Africa. I think I would deserve
a little more credit if conditions in Washington were different from what
they are. (Laughter.)

As it is, I like to visit friendly places. (Laughter & applause)

Now of course your Chairman who, as you all know, has his
ruthless side, got me here under slightly false pretences.

I said, when I was invited, that there was no possible way I
could prepare a speech, given the fact that I would just be returning from
a trip.

And he said, 'Oh, just come here and answer a few questions.
There is no need for you to make any remarks at all.'

So I hope that I can do here what happened to me in Kenya.
President Kenyatta made a speech, and he had assembled a lot of people from
all over the area. He made a speech, and then he said, "Now get up and you
say something."

I said, "They won't understand a word I am saying." (Laughter.)

He said, "Oh, that's all right. Only ten percent understand
what I am saying." (Laughter.)

(10)

3

He said, "All they want to hear is the sound of your voice."
(Laughter)

So let me give you the sound of my voice, and then I will
answer a few questions. (Laughter.)

Right now, we are in a curious period in our foreign policy
debates:

The country is at peace for the first time in fifteen years.
We have no major crises with any significant country. We have, indeed,
improving relations with our friends -- and less tension with many of our
adversaries -- and yet there is a debate going on in this country which
creates the impression that the United States has become second in
military power -- declining in its world influence -- and that "something
terrible is going on in the world that we are, somehow, not mastering."

Now it is -- Now I often ask myself what could be the
explanation for this state of affairs.

I think the basic problem is that we are living in a period
in which some of the traditional approaches of American foreign policy are
undergoing fundamental transformation -- not because of anybody's policies
but because of the fact that the world in which we live has changed.

For the predominant part of American history, the United States
was secure behind two oceans. The United States could decide whether to
intervene abroad, or when to intervene abroad. The kind of change that
would be required to effect American security, had to be of a magnitude so
great that a lot of other countries were involved, before the United States

6

That, incidentally, is our foreign policy problem -- not
our strength.

And not mistakes here and there (even though it is inevitable
that mistakes occasionally are made.) (But if you press me in the question
period and ask me to name one that I have made, I simply -- ) (Laughter.)
(That would be overtaxing my humility.) (Laughter.)

But that is the fundamental problem that we face.

Now I said that we lived in a revolutionary period whose
characteristic is that:

First of all, the nature of military weapons and military
options has changed totally.

Until the end of World War II, it would have been inconceivable
that any country could possess "too much" power. Any increment, any
addition of power into a country's arsenal, was both strategically and
politically useful.

Today, the superpowers each possess the capability to produce
casualties on a scale that would exceed all the wars in all of recorded
human history, and probably destroy civilized life, as we know it,
altogether.

Therefore, the military option in the conflict between two
superpowers, has a totally different significance than in the past; and
the rhetoric that I would describe as the "mach tough" rhetoric -- of
striking poses and of "facing people down," and of "showing your manhood"
have to be seen in the context that "in foreign policy, you are permitted
only one guess" and that in the nuclear age, you can have only one
war -- and no matter what you feel about the ideologies that we confront

7

no American President can avoid the problem of how to regulate
relationships in such a war, in such a way, as to reduce the
danger of nuclear war.

This is what has led to the policy of the "forbidden
word." (Laughter.)

And that, I would daresay, will have to be carried
out in one way or another, by any administration.

But I would like to say in addition, that of
course if one pushes the argument too far, it can lead to a policy
of total defeatist. Even though nuclear war is very difficult
to enunciate, there are many other dangers in many other parts of
the world for which we have to have military capabilities --
in conventional forces -- in naval forces -- and in air forces --
and the danger of regional conflicts has increased as the danger
of general nuclear war becomes overwhelming.

But I, having traveled around the world now, I would
like to make a comment about an observation which we keep reading
about -- namely, that "The United States has become second best,
as a military power."

I don't want to go into an esoteric, military
argument. I would like to stress that it is extremely disquieting
for our friends abroad, to hear, day after day, that some --
that "the United States no longer possesses the capability to
discharge its security obligations". And there are a number of
facts to keep in mind:

8

First, the forces we have today, result from decisions that were made eight to ten years ago. That is the lead time it takes to produce weapons. The decisions we make today will affect our forces in the 1980s. There is next to nothing that we can do to affect our military forces over the next two to three years.

Secondly: It is not true that the United States is not capable of discharging its security obligations. We have to adapt our military establishment to the condition that I described, where regional conflicts are more likely than general nuclear war -- but the basic point to keep in mind is this:

> No American setback of recent years -- indeed, no American setback of the entire post-war period has been caused by insufficiency of American strength.

> Every American setback of the last decade has been produced by the insufficiency of American will.

> No problem has arisen because we did not have adequate forces.

Many problems have arisen because we have not had an adequate domestic consensus -- whether it is Viet-Nam, or Turkey, or Angola -- these were all soluble problems. Maybe we should not have got involved in Viet-Nam -- I will not debate that issue now -- but what led to our difficulties was:

> First, that the war had to be conducted under incessant domestic pressures.

9

And that secondly, when the peace was finally negotiated, the North Vietnamese decision to relaunch the attack resulted idirectly from our own cuts in our aid to Viet-Nam -- and there has recently been published a book by the North Vietnamese Commander of the operations last year, who describes -- so this is not my assertion -- he describes that they decided to re-launch the war in the middle of 1974, when they realized that we had cut our aid to Viet-Nam by 60 percent -- that their ammunition had been reduced by 50 percent -- and their mobility by 60 percent.

The problem we have had in Angola resulted in no sense from an insufficiency of American power. Indeed, in Angola we had all the advantages. In Angola, what we lacked was the domestic will to produce $50 million which it would have taken in January of this year, to produce a different outcome.

So if we want to debate foreign policy, we should not do it in terms of the slogans of whether America is optimistic or pessimistic, or whether America is second best in military strength.

Any serious President, or any serious Secretary of Defense is going to see to it that we have adequate military power. That is a technical problem well within our capabilities. But what is not a technical problem, is whether the United States understands what the requirements of survival are in this period. Whether the United States can comprehend what our role is -- that our role has to be permanent, continuing -- depends on our perception of marginal changes.

10

Now in many areas of the world our ability to affect
events is still very great. I think it is safe to say that
whatever progress towards peace has been made in the Middle East
is due to American efforts and the recent, and the current
situation in Lebanon, for example, would almost certainly have
exploded into a Middle East war in recent weeks, since the middle
of March when it became acute -- except for American efforts
and the American ability as the only one of the major countries
to deal with all of the parties simultaneously..

But we cannot carry out this responsibility unless
the American leaders understand that the only way we can preserve
security and maintain prosperity, is to act in time, and to act
before dangers are overwhelming. And it is in this context that
I would like to make a few observations about the situation in
Africa -- simply because it is most on my mind, having just
returned.

Africa has been, in many ways, a backwater of American
diplomacy. We have been overwhelmed with other problems.
We have had the Vietnamese war. We have had the restructuring
of our relationships with the Soviet Union and with China.
We have had to adapt our relations to the emerging economic
power of Europe and Japan, and even in the developing world
we had other priorities.

But we found last year, as a result of events in
Angola, that Africa was becoming an arena of increasing
concern, and for the following reasons:

(w)

MEDALIST PAPERS

11

In Angola the Soviet Union did what they had done fifteen years before in the Congo -- that is to say -- they attempted to use a local situation by introducing large amounts of military equipment. It was not, militarily, a particularly good place for them to operate. They were far from their main sources of supply. They had a poor logistics situation, and there were many local forces that were opposed to this.

In fact, they were in the position in Angola that we were, in Viet-Nam. The difference was that while they supported their friends in Viet-Nam, we did not support our friends in Angola. And the issue for us in Angola, had nothing to do with which of the three factions won. If they had fought among each other, without significant foreign aid, the United States would have lived with the victory of any one of them -- as we have lived with the victory of many African groups in which we had no particular interest.

But when the Soviet Union introduced $300 million of military equipment (which is more than all of the military equipment that all the rest of Africa received from all other sources put together) into one little country. And then followed it with Cuban troops. We confronted a geo-political problem of great magnitude. We confronted a geo-political problem in the sense that every African state, all of whom are very poorly armed, had to face the fact that if fifteen thousand Cubans could appear in one country, they might appear in any country, and might be used to bring pressure on any of these

12

societies. This became a concern because it showed that the West (to which Africa had looked because of its colonial tradition) was not able to achieve its political objectives, and not willing to run the risks that other countries were willing to run.

It became symbolic for many of our allies, far away, and for the first time in the post-war period, the United States did not do what was necessary to stop a Soviet and Cuban action, and it was important because a little Caribbean country with a population of eight million, managed to put 15,000 troops into a country thousands of miles away --(which incidentally, they had not done by the time the Congress acted, but they tripled their forces afterward.) While the United States refused to give, even money, which is all that was at issue, to those who were --

Now this created a situation of psychological malaise. It accelerated the evolution of problems in Rhodesia, in __________ (ambivia) and in South Africa. It created the danger that all of these African regimes would become rapidly radicalized and that the United States and West European relationship to the raw materials and to the political relationships of Africa, would disintegrate.

You take a country like Zaire, with its enormous resources, which on its borders now has 350 Soviet tanks and 68 heavy helicopters (while it possesses not a single tank and very few helicopters) Sooner or later, one is going to see a

13

change in its political orientation.

Now therefore, I took the trip to Africa in order to state an American interest in this area, again.

And secondly, to give our Western European allies the courage to do what they can and what they must do -- given their historical relationship with that area -- and given the fact that one of the major problems in Europe is the sense of spreading impotence in the face of political and economic challenge.

I have seen some debates about the various issues in Rhodesia among our friendly countries in Africa and among their African countries.

In Rhodesia, the problem that we face was an inevitable result of Angola. That is to say -- all the African countries surrounding Rhodesia had begun a guerilla war against Rhodesia so it was not a choice that the United States had between whether to start a war, or not to start a war. The choice we have is whether we can manage events in such a way that the civilians keep control of the situation and not the men with the guns. If the men with the guns take over, then the white European minority is lost and the economic relationships with respect to chrome etc, will vanish.

If we can generate an evolution in which the result is achieved by negotiation, then there is a possibility of protecting our essential interests.

Secondly, we have to give the friendly African countries a program around which they can rally, so that they are not "naked"

14

in the face of radical pressures -- potential Cuban intervention
-- and whatever machinations other outside powers may engage in.

And thirdly, we have to demonstrate that the
radical direction does not lead to the achievement of the African
objectives.

All of these goals are within our means. All of these
goals we can achieve in cooperation with our European allies.

I cannot go into too great detail here, because I
have not yet had an opportunity to report to the President, but
I will say that on all of these goals, we have made considerable
progress in the last two weeks.

I believe that it is becoming more and more unlikely
that other African countries will accept Cuban troops.

I think it is becoming increasingly likely that the pressures
against the Cuban troops in Africa will begin to increase as
the months go by.

And as that happens, we will get the freedom of maneuver
to help negotiate solutions to the Rhodesian problem, to take
into account the concerns of the white minority and the economic
interests in which we are concerned.

This cannot be done if every issue, if every action
leads to a divisive debate in the United States in which, on the
one hand, every program to rally development support is attacked
on the ground that the money should go to American citizens --

15

And on the other hand, any program to negotiate is attacked on the grounds that "we are selling out another part of the world."

There has to be some sort of a consensus of the direction in which we go. And the importance of this lies in the fact that in all of the Western States (with the exception of the United States) to a greater or lesser extent, face at this moment a domestic crisis. It is a curious phenomenon that if one travels through Europe, for example, today, one finds that the only place in Europe where Communism is gaining, is in the non-Communist countries.

Nobody who lives in a Communist country in Europe has any confidence in their political, or economic, or social system. One has to go to Western Europe to find a growth of Communist parties. That, in my view, is not engineered from Moscow and it would be a grave mistake if we deluded ourselves that that is the cause.

It is the result in part of mismanagement, in part of demoralization, in part of the inability of governments to give their people a sense of direction, and in part a result of this pervasive tendency which the West tends to inflict on itself and nothing it attempts can ever succeed.

Now we, alone, of the countries of the Western world -- we, alone, still have the society that believes that great things are achievable. We still have the people that have confidence in its government. We still have the capacity to

(h)

16

give a sense of direction to those who want to defend their freedom and who want to create an international economic system that is open. And nobody who is interested in business should have any illusions that the economics that we know can possibly survive in a world which is constantly shrinking in relationship to our values. That at some point if we cannot maintain a significant area of the world which is compatible with our values, not only our political institutions, but our economic institutions will be in very grave jeopardy. This is the big problem that we face.

Now, having said this, I would like to stress that I believe it is quite manageable.

Nobody who has been in the Soviet Union can believe that this is a society that has great imagination, or a great ability to shape the world. They are skillful in accumulating power but they are not skillful in devising an international order.

When we go to international conferences like this meeting of UNCTAD that I attended in Nairobi -- when all was said and done -- and with all of the debates that are going on in this country -- with all of the self-denigration -- the only country that had a proposal of a comprehensive nature which other people could follow, East or West, North or South, was the United States.

And therefore, while we have massive problems, I also believe that we have the building blocks for an extremely creative area.

25% COTTON FIBRE
MADE IN USA

17

One of the African leaders to whom I spoke said to me that he was not worried about the American economy. And he accepted my explanation about American strengths. When he asked me whether it was really true that we had become a second-rank power. But he asked me a question which I believe not only Africans, but also Europeans and Japanese ask: "Is the United States capable of conducting a foreign policy over an extended period of time, with confidence and with public and Congressional support?"

And he said to me that he had to know the answer to that question, because his physical survival depended on it.

That is the question that we have to answer to the world.

I am not worried about American military strength. The marginal debates that are going on will be solved. Nobody in this room will question the American economic strength.

The big problem we now have, of which I have talked to a few in this room already, on a private basis, is: whether we can get public support that understands the necessity for consistent, permanent American action that does not pull up a tree every six months, or every four years, to see whether the roots are still there; and that does not create the impression that everything is open to total change at short term intervals -- because this will disquiet our friends and embolden our adversaries.

18

I believe that we have all the means to give a positive answer then, to the questions that we were asked. I believe that we are on the way to putting together a world order which assures our security and expands the world's prosperity.

But the most fundamental question is whether we can restore enough of our national unity to take advantage of our opportunities -- and that is a question which I wanted to leave with you.

Thank you. (Applause.)

THE CHAIRMAN: Thank you, Mr. Secretary.

At the risk of presuming even further on your very generous allocation of time that you have given us, I wonder if you would take two, or perhaps three questions from the audience, because I am sure there are things which they would like to ask.

GENERAL GRUENTHER: Mr. Secretary, two months ago today, I was in Johannesburg, South Africa. They knew about -- that you were going to make the trip and they were hoping that you would come to South Africa, a country of some twenty-two million people.

Without asking a question with a curve on it, why was not South Africa included in your itinerary?

SECRETARY KISSINGER: Could I ask you what you would consider a question "with" a curve on it? (Laughter.) (Applause)

I will answer this question very frankly:

We were debating whether to go to South Africa on this trip, and it seemed to me, after reflection, that the risks

19

were out of proportion to what could be achieved. The risks
being:

That the opponents of South Africa and of the United
States would raise expectations of what one should fulfill --
which were unfulfillable on the first trip.

That the Black African States, which we had never
met, would either think that we were colluding with South
AFrica --

Or would also expect us to come back from South Africa
with some immediate result (which you and I know is not achiev-
able.)

The art of Southern African policy is to gain enough
time so that the changes that are inevitable, can occur
without catastrophe.

I believe we have now established enough of a relation-
ship of confidence with the Black African States, so that
it is now possible (what would have been unthinkable before)
of beginning a consistent dialogue with South Africa.
And that will be the next phase of our African policy.
It would have been premature on this trip, but it will be
necessary in the next phase, and will be carried out.
(Applause)

THE CHAIRMAN: Another question?

Dave?

20

SECRETARY DAVID PACKARD: Mr. Secretary, let me say that, having had some experience in some of the areas you are talking about, I can say that I am firmly behind the things that you have said.

But this audience, this morning, had a discussion about the energy issue, and we had a very traumatic experience in our country in 1973 where -- and as you have already indicated -- the oil embargo had a very serious impact upon our (economy) (country)

Since that time, we had hoped that we would be able to implement an energy policy in this country. But we were not able to do so, and today we are much more vulnerable to an embargo than we were in 1973, and I would like to say very specifically, that I support your views that only the United States has got the ability to have an impact in that part of the world -- and I would not say this in detracting in any way from your own personal ability here.

But we have a great stake in what is going to be the situation in the Middle East -- and I would like to have a word or two about how you find, how you size up the prospects of further progress in the Middle East situation.

SECRETARY KISSINGER: Well first of course, I agree with you completely about the energy situation, and I believe it is imperative for the United States to reduce its dependence on imported oil. And if the present trends continue, we will become increasingly vulnerable, and another oil embargo could

21

create a very grave situation.

Now with respect to the situation in the Middle East
I believe that considerable progress has been made in the sense
that you compare the situation in 1973 with what it is in 1976:

At the end of 1973, all of the Arab States, together,
demanded an immediate solution of all of the problems -- at the
risk of another military confrontation.

At that time, Israel had the position, really, of being
very reluctant to make any concessions short of total peace --
and its definition of "total peace" was quite the opposite --
(well, not the "opposite" but at any rate completely "incompatible")
with the Arab position.

Since then, there have been two disengagement agreements,
and an interim agreement with Egypt.

Now we are in a situation in which the events in Lebanon
have absorbed everybody's attention, and in this period, we have
actually, not been able to present, in Damascus, some of the ideas
which we have for the next phase of the peace negotiations
because the Syrian Government has been so preoccupied with the
Lebanese situation.

But progress towards peace in the Middle East must be
made. If the stalemate continues, sooner or later -- next year,
or the year after, or the year after that -- something like the

(c)

22

events of 1973 will repeat themselves.

We face a number of obstacles in the fact that the Arabs are divided among themselves -- that within Israel, there is a very intense debate going on, on what the right solution would be (and whether much progress can be made before another Israeli election, I do not know.)

But I would say that within the next year, say, within the period of a year from today, some significant initiatives must be taken.

I believe they are possible. I think they will be difficult, but I think they must be taken.

I believe now we have probably to proceed, not anymore on a "step-by-step" basis but with some kind of a comprehensive approach which deals, at least with most of the issues simultaneously -- and we have to move the parties to a point where they will put forward such ideas for negotiation that is going to lead us into extended controversies, probably, with all of them. But I believe it is necessary and I believe it is possible. (Applause.)

THE CHAIRMAN: One last question.

Ed Carter.

MR. EDWARD CARTER: Mr. Secretary, there has been a lot of discussion lately about the Panama Canal. Is there in fact a problem, or not a problem down there?

23

SECRETARY KISSINGER: First of all, let's get clear
what the issues are in the Panama Canal:

First, on the issue reported "we've paid for it, it's
ours -- it's ours like Alaska and the Louisiana Purchase" --
that just is not true.

The Panama Canal, the legal status of the Panama
Canal Zone is not the same as that of Alaska -- as is proved by
the fact that a baby born in the Panama Canal Zone is not an
American citizen automatically.

It has an ambiguous legal status.

Secondly, nobody is talking about "giving the Panama
Canal away." There are a number of issues in relation to
the Panama Canal:

There is the issue of the legal status of the Canal
Zone.

There is the issue of the lands and the waters which
the United States, that the United States has a right to use.

There is the issue of the operation of the Canal.

And there is the issue of the defense of the Canal.

Now there is no question that if we say we refuse to
talk about this, that this is not illegal. We have a treaty
that is perfectly valid and that we can maintain. But I would
assume that all of you in this room have been in situations
where you have renegotiated an agreement that was perfectly
valid, in order to improve your position.

24

The issue that we face is, whether we can maintain
the security and the operation of the Canal under conditions
that are better than those that are likely to arise.

If the negotiations that have been going on for three
administrations -- this is not a new thing that has suddenly
happened -- if the negotiations that three administrations have
been conducting were broken off. Now the problem that we
face if the negotiations were broken off, is partly in Panama
and largely in Latin America.

Within Panama, of course, we can handle Panama
militarily. The question, however, is whether the best way to
operate the Canal is under conditions of guerilla warfare
in which they would participate not only Panama, but certainly
Mexico, Colombia, Venezuela, and almost every state in Latin
America that I know anything about.

The second question is whether, in breaking off
negotiations without having explored whether we can get a
tolerable new arrangement -- whether we should jeopardize our
whole Latin American relationship -- not just in terms of the
conflict in the Canal Zone, but in terms of our investments,
of our political relationships throughout Latin America --
I do not believe there is anybody in this room who has any
Latin American connections who will not agree that if Panama
becomes the touchstone, no government in Latin America that I
know anything about (with the exception of countries like
Paraguay) no government will be able to stand up to the public

25

pressures that would then develop against the United States
in general..

So all we are saying is that on proposals approved
by the Defense Department, approved by the Joint Chiefs of
Staff, we should have an opportunity to negotiate.

And what is it we want to negotiate?

We are prepared to change the legal status of the
Canal Zone.

That would put the Americans that live in that Canal
Zone, no worse off than the Americans that live in Costa Rica,
Nicaragua, or any other Central American state.

Secondly, we are willing to give up some of the land
and water which we have owned in the Canal Zone -- some of it --
which we have gone over carefully with the Joint Chiefs of Staff
and the Defense Department --

Like, for example, there is a railway which we used
to rely on to shuttle troops back and forth from one end of the
Canal Zone to the other, for defense.. I am not giving away
a military secret if I tell you that now we rely on helicopters
for this defense. (Laughter.)

And that we are not going to shuttle our troops back
and forth on that railway.

Third, we are prepared to let the Panamanians
participate in the operation of the Canal.

26

And fourth, we are prepared to give them some
technical participation in the defense of the Canal. But
given their military capabilities, this means in effect
that we will retain the defense of the Canal for a very
prolonged period of time -- which we estimate roughly coincides
with the useful life of the Canal.

All of these proposals are being put before the Congress
as we are making them. Nothing can possibly be implemented
that is Constitutionally without a two-thirds majority in the
Senate. So that one third of the Senate and one, can block
any agreement we possibly can negotiate.

So the only issue we face now is whether --
given the problems we face -- we should have the right to see
whether we can avoid the dangers that I have described --

Establish a better relationship in Latin America.

Improve the security of the Canal for the sort of
concessions that I have been talking about --

All of which will be submitted to the Senate when
the negotiation is completed --

All of which has been carefully worked out with the
Defense Department and the Joint Chiefs of Staff, that sent a
mission down, in which the Chairman of the Joint Chiefs of
Staff participated -- and the Deputy Secretary of Defense

And the position we are working from now, represents
the united position of the United States Government and not
some abnegation

INDEPENDENCE
ERASABLE BOND

27

some aberration of a State Department that is "determined to give away the national interest." (Laughter & Applause.)

THE CHAIRMAN: Mr. Secretary, almost twenty years ago a wise man wrote this prophetic statement, and I quote:

"The Statesman is, therefore, like one of the heroes in the Classical Drama who has a vision of the future, but who cannot transmit it directly to his fellow men; and who cannot validate its truth. Nations learn only by experience. They know only when it is too late to act. But Statesmen must act as if their intuition were already experienced, as if their aspirations were truth. It is for this reason that Statesmen often share the fate of prophets, that they are without honor in their own country, that they always have a difficult task in legitimizing (legitimatizing) their programs domestically, and that their greatness is usually apparent only in retrospect, when their intuition has become experience. The Statesman must, therefore, become an educator. He must bridge the gap between the people's experience and his vision -- between a nation's tradition and its future." Close quote.

Mr. Secretary, it is already a matter of record that you were the author of that remark.

(Laughter & Applause.)

History will surely record your performance as Secretary of State as one that will qualify you as fully meeting the demanding standards of the statement that you,

28

yourself have defined.

Once again, on behalf of the Business Council, I express to you our very keen appreciation for the job that you are doing for all of us, and for being here with us this evening.

This meeting is adjourned.

(Rising Ovation)

(Proceedings adjourned at 10:35 p.m.)