A NOTE ON THE OPERATION OF COMMUNIST COUNTERPART FUND SCHEMES IN TROPICAL AFRIC

Created: 10/30/1964

OCR scan of the original document, errors are possible

mtlOhmm HISTORICAL RB/JEW PROG

RELEASE AS8

k

KE40RA3IXN FOR! JeromeRD

Agency for International Development

Bote on the Operation of Cceauorlst Counterpart Fund Schemes In Tropical Africa

Li Thi* Beuorandum le ln response to your request ofctober

your office plane to question the field for additional Information. Should any responses not receive general distribution ve vould" appreciate direct copies.

2, Thus far In tropical Africa tbe USSR has set up counterpart programs in the Somali Republic, Ghana, snd Mali. Czechoslovakia alsoounterpart fund agreeaent with Ghana. Our inforuntlon is detailed only on tbe Soviet counterpart progren In Sasolla andesser extent in Ghana and Kali. These countries are conoidered in attachments to this memorandum.

Attachments:

"A"

. 3-

eflimraiiftL"

ATTAOKFOT "A"

SOMALIR

Ina the Somali Republic7 nllllon Una of credit to purchase Soviet goods. Proceeds fron tbe oale of those goods wore to be applied against local currency coeta of Soviet flounced development projects.

By the end3 someiln had been drown. During the flret half4 Somalia5 niUiou, bringing total drawings on thlo line of crodit5 allllon. Goods delivered byR included cauHrat, nugnr, wheat flour, vehlclee, tractors, end other equi-nont. Tncro have bean problems, bow over) ln particular, the USSR failed to deliver prcatincd snlpaenta of augnr on schedule. Scoolie also has complained that tne quality of Russian flour has been poor and thatulldozers, and other equipment are lU-uultod for the Somali climate ond terrain.

In Januaryoaalie requested postpocBteot of the first installment due. Lna, the USSR responded byift of0 worth of tbe coanodltleo aad equipment already delivered.

Repaynent provlciont of the contract are eujaaarlmed be low 1

Provision le ondcne-year grace period, following which payment is to be made in equal Inotallnentsears of doll very of tho goode.

Pnyaent on principal and ino ba ln Somali goods, including cotton, oil-baarino doc4a, and raw hldoa. The part not paid In goods to be paid In convertible currency, flitbin three months before tne beginning of eacp. year tho parties arc to detarnlne the type* and quantities of Somali goods to be delivered for the calendar year ahead. Tne prices arc to be based on world market price*.

(l) The Somali actional Beak end the Soviet State Bank or lto delegate, the USSR Foreign Comerce Bank, are to open special credit accounts aad eet up Jointly the means to administer the credit end its repayment.

(a) Internet from the day and for the amount drawn. I

ATTAca&nr "b"

SSR

illion coonterport fund ban been established3 protocol to tho Soviet-Ghana Economic and Technical Cooperation Agreement. This protocol vac designed to overcoao one of the principal handlcapo of tanlct*aatlng Govlet oldode qua to funds to ncct local costs. Tho protocol providee for delivery of Soviet consumer goods, building matoriela, and other items duringear. Proceeds from the sale of those goods are to bc used by the Ghaaelen government exclusively for meeting local costs connected with the construction of specific piojccto carried out vith the assistance of the Soviet Union. Despite difficulties. Including conouaor resistance to Sorlot goods, substantial local rands have been generated. By. perhaps

million worth of Soviet goods had been Imported under this program.

Although full details of the repaymentre not ftvallable, provisions probably nro oinllar to those for the Somalia credit, te do know, however, that Oman must repay the credits within six years after drawings are made and that an Interest rateer annuo Is to be applied.

wnoniTiAr-

flrTACHHOtt "C

SSH

faasrocoant to generate local currency fron tbe onle of

Tax-QwlotB vas concluded in Vo believe that nost of tbe credit has been drown, but at

otfiUe of oravincs ond repayaent provisions are not available-.

Original document.

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