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for his loss by the U.S. Government un I am pleased that the Foreign Rela pect not only a dollar return on these inder the guarantee. Our Government tions Committee has approved the full vestments in the future, but also in would then step into the shoes of the administration request for increasing increased exports of American compoformer owner and acquire all his legal the ceiling on specific risk guarantees nents and equipment to supply these new rights against the foreign government. from $1.3 to $2.5 billion. This request factories. If necessary, the U.S. Government can also has been approved by the House. A number of other measures are being sue the foreign government before an I am also pleased that the Foreign Re taken by our Government toward iminternational tribunal
tribunal or arbitration lations Committee rejected a provision proving the local climate for investment commission to obtain reimbursement for in the House bill which would make an and stimulating the growth of local prithe funds it had previously paid out to investment guarantee agreement a con vate enterprise. These include: Workthe American investor.
dition for aid. I agree with the com ing with host governments to induce local The confiscations of American busi- mittee's statement on page 14 of its re changes and reforms in tax, tariff, monenesses in Cuba by the Castro regime are port that such a provision would not tary and agrarian policy; assisting in oronly too familiar to us all. Although accomplish the intended purpose of pro ganizing and financing local investment the guarantee program had been in exist- moting U.S. investment. On the con centers, development institutions and ence in Cuba long before Castro's ascent trary, I think there is ample evidence,
trary, I think there is ample evidence, productivity centers for identifying into power, none of the U.S. companies especially in Latin America, that such a vestment opportunities, bringing tooperating there had taken advantage of provision would seriously jeopardize U.S. gether local and foreign investments, the insurance against expropriation private investment. I hope our con training and assisting local businessmen The lesson was well learned through this ferees will stand firm in conference on in improving business administration; sad experience, and since that time ap- dropping this very unwise provision,
dropping this very unwise provision, conducting feasibility studies to establish plications for investment guarantees which was adopted by the House after
which was adopted by the House after what investment opportunities exist by have increased
increased markedly. Presently brief debate, and after being rejected in industry for particular countries; conpending are over 1,000 applications for the House Foreign Affairs Committee. ducting a major participant training proinvestment guarantees amounting to Fifth. Guarantees involving $30.9 mil gram to provide training, and the like. more than $4 billion.
lion have been authorized to cover ex One good example is the school of busiIn view of the unsettled conditions in tended risks of U.S. private investments ness administration being established in the world today, the frequent talk about in self-liquidating pilot housing projects Peru by U.S. experts, which the Peruvians nationalization of foreign enterprises,
in Latin America. One nonhousing ex themselves will later operate. This is and the newspaper articles on bombings tended risk guarantee has been author the first graduate school of business adby Communist rebels, one might expect ized to assist in the financing of an inte ministration in all of Latin America. It that the Government must have paid grated petrochemical complex in Argen is a pioneering step toward developing out substantial amounts of money un- tina involving five U.S. firms.
the entrepreneurial and business skills der these guarantees. Yet, amazingly
Sixth. There has been vigorous sup which Latin Americans need in order to enough, to date the only loss suffered port of intermediate credit institutions. spur the growth of private business. by the Government is that one case I Since September 1951, over 1 billion in Through our foreign aid program we already mentioned, the Pluswood Co. in dollars and dollar equivalents of local are attempting to spread by every posOshkosh, Wis., where the net loss currency has been lent to 85 institutions sible means a wider knowledge in the equaled about $9,000. Thus, for over $1 in 46 countries for relending by them to developing countries of what modern rebillion in insurance coverage, the U.S. qualified private subborrowers in the sponsible private business leadership can Treasury has had to pay out only $9,000 fields of industry, housing, and agri- do to speed up economic development. In and that small outlay has been more culture.
order for us to achieve the foreign aid than amply offset by the premiums col In Colombia, for example, a dairy com goal of self-sustaining economic growth, lected on the policies over $12 million pany has completed an investment sur we must strengthen the local private secas of June 1963.
vey and is proceeding with a joint tor, including the role of U.S. industry, Although the program has been oper venture to produce dairy products. A by applying basic American business ating since 1948, no guaranteed invest
number of U.S. firms are considering principles—good pay for trained and proment has ever been nationalized by a for- partnership ventures in the fields of food ductive workers; large volume sales on eign government and no guaranteed in- processing, meatpacking, metalworking, small net profit; mass production and vestment has yet been damaged by war, lumber, and building materials.
mass consumption. The success of these revolution, or insurrection. Of course, it In Nigeria, another major dairy com principles in fostering economic growth, is possible that in the future these events pany, with U.S. assistance, has com so amply demonstrated by our own econcould occur and that is why the guar- mitted itself to make a half million dollar nomy, has also been demonstrated in antees are available. But the Govern investment to build a reconstituted milk recent years in the successful growth of ment has taken several steps to minimize plant in Lagos with Nigeria partners; it the economies of Greece, Israel, Mexico, the likelihood of their occurrence. Be- has applied for a U.S. political risk in the Philippines and Taiwan. fore the program may be instituted in vestment guaranty.
In a sense, much of our foreign aid is any country, suitable arrangements must In Thailand, a joint venture between like a consumer credit operation selling be made by the government of that na- a U.S. cable and wire manufacturer and goods on time. Foreign aid is financing tion to protect the interest of the United a local Thai firm is under active nego capital projects and investments which States. This generally takes the form of tiation as a direct result of U.S. efforts. will help the countries receiving aid to an international agreement in which the Our foreign aid officials also are working become self-supporting and to repay foreign government agrees to submit any with a potential investor in an aluminum their loans from us. After World War disputes with the United States arising fabricating plant in Thailand.
II, we provided substantial economic asout of investment guarantee matters to In Pakistan, an investment proposal sistance to Western Europe and Japan. international arbitration. In this man- for a tire plant is now going forward, We no longer need to help those nations, ner, the foreign nation assumes both a and investment survey grants have been and their booming economies now permit legal and moral obligation to respect the approved for a carbon black plant, a ma them to buy ever-increasing amounts of rights of the American investor and his chine tool operation, a pulp and paper American goods. In the same way, our Government. At present, 57 less devel- manufacturing plant, a plastics firm, and aid to the underdeveloped world, while oped countries have signed these agree a seafood processing venture.
helping to stimulate industrialization and ments and implemented the program. What about the effect of these pro the creation of a higher standard of liv
Each individual investment must also grams on our balance of payments? A ing for millions of underprivileged peoreceive the approval of the government recent survey of investments covered by ple, can provide a rich new future market of the host country before an investment specific risk guaranties showed that 88 for American goods and investments. guarantee is issued. As of June this year percent of the investment was in the Mr. SIMPSON. Mr. President, this almost 700 applications for guarantees form of exports of U.S. goods—of equip year, at long last, I have seen an attempt had received foreign government ap- ment, materials, engineering—leaving
materials, engineering-leaving by a few Senators to express the will and proval in nations throughout the free an initial dollar outflow of 12 percent of the desires of the American people who world.
the investment. In addition, we can ex are tired of seeing their money wasted
on needless foreign aid programs. I our causes or persons who are eager to
our causes or persons who are eager to pete from a preferential position with want to take this opportunity to com- benefit personally from our foreign aid our own people. mend the gallant effort that Senator programs.
We are the United States of America. WAYNE MORSE is carrying on in his effort Over $242 billion, American taxpayer's Let us keep our perspective. Let us to bring commonsense to our foreign aid money, has gone to the Communist gov- maintain our Republic. We must proprogram. Many of us are here support- ernment of Yugoslavia headed by an tect our own interests if we are to gain ing him but few have shown the spirit avowed Communist, Marshall Tito. the leadership of the world. Until very and the courage that has been demon- What have we done in that country recent years we were the envy of all strated by this American. I am proud with our money? We have not pur- Nations. But, recently we have not lived to associate myself with him in this fight chased a friend. We have not wooed up to our commitments. We have apagainst this excessive authorization for the country from the Communist bloc. peased our enemies. We have shown foreign aid. Many Americans have We have not brought freedom to its peo- weakness when strength was needed. wanted to phase out and eliminate our ple. We have done nothing but pour We were the envy of the world because foreign aid program. At long last the $21/2 billion down the rathole.
we had an industrial country which Senate of the United States has had a
Our Treasury gates have been left could compete and withstand the presfew Members who have shown the cour wide open with the big spenders shovel- sure of the whole world. We were miliage to rise up and fight the big spenders ing our American money to countries tarily strong. We had a people who of Washington who give away our money. which will never make the needed re- were devoutly religious with a faith in I hope that this fight which is being
forms. The welfare of the United States their God and confidence in themselves made by a group of Senators is the begin
demands that we stop this shocking and in their Government. And now look ning of the end for the days of the free waste and the inefficient policies of our at us. We are now looked down upon spenders who have dominated the Wash- foreign aid program. We need to phase by the peoples of the world because they ington scene for many years. Let us out this program. Steps must be taken look at a government which is inconbring commonsense back to Government. to do that in the immediate future. The sistent and does not have a program or It is patent that the Americans have
debate here on the Senate floor resembles an objective. lost their patience with the big spend- a gigantic auction sale. We have been We have been abused by those people ers who insist upon giving away millions
selling to the most persuasive bidder U.S. we have financed. We are ridiculed the of our taxpayers' dollars for programs
tax dollars. A few patriotic Senators world over because we attempt to buy that are poorly administered and lack have been attempting to stop the out- friendships which are not for sale. Let realistic or practical effects beneficial to
flow of our taxpayers' money. In order us be realistic about foreign aid. Let the citizens of the countries receiving to stop the flow they must compromise us put our resources to building a counthe huge sums of money.
with the administration's spokesmen. try and a Nation which can once again I have voted for all the amendments
We have been compromising with the aspire to a position that is respected which would bring order out of the chaos property rights of the American tax- and envied the world over. and the confusion that exists in our curpayers. It is their money which has
FOREIGN AID-A SOUND INVESTMENT rent foreign aid program. I voted for been the subject matter of the great the so-called powerhouse amendment
Mr. HUMPHREY. Mr. President, becompromise. with full realization that the cuts au
fore the final vote on the foreign aid
Today America is faced with some sethorized in that amendment were totally rious problems of its own.
bill, I would like to offer a few final com
We have an inadequate and insufficient if a realistic unemployment problem. Our economy bill itself, but more importantly on the
ments. I would like to comment on the and effective program were to be adopted. is not growing at a rapid enough rate. treatment of the aid bill in the Senate The need for foreign aid today bears no resemblance in either cause or effect to serious threat Our balance of payments is creating a
this year and on the future of the forserious threat to our solvency. Our the justification of foreign aid in the gold outfiow is at a precarious level. Let
eign aid program. late 1940's and early 1950's.
The present situation is indeed paraus face our home problems with all our The debate which has taken place on energies, talents, and resources. Do not ent foreign aid program is the best
doxical. All things considered, the presthis floor in the past 2 weeks has con
forget that this Nation is faced with clusively shown one thing to be a fact crises which need to be handled today, the Marshall plan. Following the enact
administered program we have had since and that is: We cannot buy friendship. Generosity is a wonderful thing and I ment of the Act for International DeIn administering our foreign aid pro- believe that we should give a helping gram we have given money to Commu- hand when assistance is needed, but velopment in 1961, the whole program nist countries and to neutral countries charity begins at home and our talents
It a which have not been friendly toward us, and resources are needed here.
regional basis, with a regional adminisbut, in fact, have denied us when the
trator directing and coordinating all aid
We had better use our talents and rechips were down. We have doled out since the incep- we may develop a country which is strong edgeable aid administrator was appointsources here in the United States so that activities in one area. New personnel
were recruited. An experienced, knowltion of our foreign aid program $104 bil- economically and militarily. We need ed from the ranks of the President's lion. Some of this money has been con
to protect our own interests. We must structively used to stimulate and develop not let the State Department dictate has left us today with an aid organiza
closest collaborators. In general, this economies of countries which were economic conditions under which this
tion that is better tooled to do the job wrecked because of the war. We have country must operate in order to favor assisted many peoples and have alleviat- a foreign country. We must not try to yet, paradoxically, this is the very time
than has been the case in years. And ed much suffering. But times have buy friendship. We must not let counchanged. We are no longer living in the tries import great quantities of mate
Congress has heaped criticism on this 1940's and 1950's. This is 1963. I ask rials into this country in a vain effort to
program. the advocates to admit to changing times win their friendship. Let us not use
Why this assault on the aid bill this and realize that because a program was huge sums of American taxpayers
year? It should be clear by now from successful in 1948 does not mean that it moneys to build giant steel mills and
the debate in the Senate that the foris good today. We have tried to convince other industries in foreign countries eign aid bill this year has become a ourselves that we are buying friend- which then turn around and import lightning rod for every frustration sufship, but friendship cannot be pur- goods into this country, thus creating a
fered by any Senator. If a Congresschased. greater unemployment problem for our
man or Senator is unhappy about conWe have attempted to establish strong own people. The unemployment prob
tinued high unemployment, he may give governments through our foreign aid lem is bad. I think it deserves imme
vent to his dissatisfaction by attacking gifts and yet because our foreign aid pro- diate attention. We must take the
the foreign aid program. If he is disgram has been mismanaged, the govern- shackles off our own industry if we are
satisfied with the inadequacy of the pubments we have attempted to establish going to solve our own unemployment lic works program in his State or dishave been mismanaged. Governments problem. I do not feel that the way to trict, he may attack the aid program. we have financed have been destroyed help ourselves in this area is to create If he is disappointed over the failure of and taken over by other persons alien to great industries abroad which can com the Congress to pass a tax bill or a civil
rights bill, his frustration spills over on committed. Doubt sets in, and discour- before we even consider a human being the foreign aid program. If he believes agement grows.
mature enough to shoulder individual the administration has pushed too hard Then, suddenly, a sense of despair responsibility, and the Alliance, as the in the field of civil rights, a healthy slap seems to grip the mind. Doubts become Life editorial says, involves nothing less at foreign aid may serve to remind the fears, and hopes are overcome by ques
fears, and hopes are overcome by ques- than the building of a new society and a administration of congressional power. tions. Can foreign aid ever work? Are new economic system. Even in the In short, the aid program is fair game there any solutions to the problems of space age, where time has been comfor attacks from any source for any development? Would we be better off pressed beyond belief, it is foolish to exreason.
to abolish the existing foreign aid pro- pect such a gigantic task to be accomThe actions of Congress these past gram and start all over again?
plished overnight. Ten years may seem weeks also indicate a growing frustration Many are worried, and rightly so, to us like a long time. But measured by with the heavy burden of the cold war. about our balance of payments. But why history, and by the time required to The foreign aid burden continues after take it out on foreign aid, which con- change whole societies, 10 years is but 15 years and there is little prospect that tributes less to the balance-of-payments a beginning. The Alliance was never it will disappear, because there is little deficit than the cumulative spending of meant to be completed in 10 years. It prospect that the cold war will disappear. American tourists overseas, in fact only
was meant to be well underway within Again we are confronted with a strange half as much?
10 years. Yet there are those who are and disturbing paradox. At the very
Others are justifiably worried about saying after only 2 years have passed time we finally appear to be winning the restrictions placed by other countries on since it was created that the Alliance cold war, we seem to be doubting our American exports. But why make for
cannot succeed. Truly it could not sucown strength. At the very time the eign aid the whipping boy when 8 out ceed if this attitude were to prevail. It Communists finally seem to be giving of every 10 foreign aid dollars are spent is succeeding, and I am convinced that way and pulling back, we also seem to be on exporting U.S. goods and services?
it will succeed, but only if we give it our giving way and pulling back.
Why kick foreign aid, when major full and continued support now and in The Communists are having trouble U.S. industries are benefiting materially the years ahead. with their economy. They are cutting from export sales financed by foreign aid Arnold Toynbee has said that this age back on their foreign aid program be
dollars-when one-fourth of the exports will be remembered not as the atomic age cause they do not have the necessary
of U.S. iron and steel companies, one or even as the space age. It will be resources. What a great opportunity third of U.S. fertilizer exports and al
third of U.S. fertilizer exports and al- remembered as the age in which onethis provides the United States and the most one-fourth of U.S. railroad equip- third of the human race banded together rest of the free world. Now is not the ment, for example, are paid for by for
ment, for example, are paid for by for- to help the other two-thirds. Being time to retrench. Now is the time to use eign aid?
mortal and finite, being bounded in our our own economic resources and the Some are increasingly concerned, with understanding and in our perspective, we fruits of our $600 billion national in good reason, about the future of consti
good reason, about the future of consti- have difficulty comprehending the hiscome for a great foreign aid offensive. tutional government in countries strug- torical significance of the momentous Now is the time for mobilizing all the gling toward political democracy. gling toward political democracy. But events of our day and generation. We
act by faith, reason, and conviction, resources at our command-public and why should the foreign aid program as private-yes, above all, bringing into our
a whole suffer because of particular without knowing the consequences. We oversea economic and technical assist
problems encountered along the way? can see back, but we can only look ahead. ance programs the private economy of
Others are troubled by the climate for We can peer into the future, and try to the United States—we must put to work American investment overseas and the take the road which leads in the right all private enterprise resources.
effect of development in other countries direction. But we commit an act of Now is the time for faith in ourselves,
on our own economic strength. But faith, in ourselves and in human destiny, and confidence that the future belongs to
why should foreign aid be blamed for our whenever we choose one way in preferfreemen.
economic distress and dislocation, or for ence to another.
There are many who look upon foreign As the Soviet Union cuts back on its
Foreign aid has its problems, and they aid as the wrong course to follow. Some commitments we should move ahead.
must be faced realistically and resolutely look back in sorrow, and some in anger, Look at the way the Germans are mov
But foreign aid should not become the at the mistakes made in the name of foring ahead all over the world. Some of
catharsis for all the ills of the world, nor eign aid in the past. Each of us, I supthe largest investments in the underde
made the scapegoat for accumulated pose, might run the foreign aid program veloped world are being made by the
anxieties. Federal Republic of Germany, many of
differently if we were in charge. And
No undertaking in the history of the each of us wonders, when the roll is them in some of the most apparently un
human race has posed a greater chal- called, whether our faith in the foreign settled countries, such as the Congo,
lenge than the foreign aid program. The aid program, if faith we have, will be Korea, and Brazil.
wonder is that we have made any prog- justified by the future. We see through The same is true of the French Gov
ress during the brief time the program ernment, which is expanding its foreign has been in operation. It has been al- in ourselves and the future; unless we
a glass darkly. But unless we have faith aid program.
most a thousand years since the Magna can translate past success into future acOr look at the example of the British, Carta, and we are still struggling with
Carta, and we are still struggling with tion, we will forfeit one of history's who are preparing to launch an even basic questions of democratic govern- greatest opportunities for human good larger foreign aid program at the very ment. Yet scarcely more than 10 years and advancement. time we are reducing ours. How parasince the launching of one of history's
Some day, if we live long enough, we doxical.
greatest human undertakings there is will celebrate the success of the Alliance It strikes me as just a bit strange that impatience with its progress.
for Progress and of the entire foreign aid at the very time when our example is be Life magazine, in a recent editorial on
program, just as we celebrate now the ginning to catch hold, we find ourselves the Alliance for Progress entitled “The great success of the Marshall plan. I talking about cuts. This is like cutting Latin Sky is Brighter,” commented that hope I am around then, not to say "I told back on production just as the new the goals of the Alliance “are nothing you so," but to celebrate one of the models begin to catch on, and sales have less than to raise the incomes, diversify
less than to raise the incomes, diversify greatest victories in human history. I started booming.
and integrate the economies, reform the Unfortunately, foreign aid does not tax and land structures, improve the the pleasure of reading back one of these
may allow myself one small pleasurealways achieve quick results. If we have health, housing and schooling, and en- debates, and comparing what was said learned anything in the last 15 years, it large the freedom of 200 million people
with what happened. is that the development of less-developed in the next 8 years.
in the next 8 years. Unlike the Marcountries requires determination-dog shall plan, which rebuilt a damaged but
We have heard one Senator say here ged determination. The way is often going concern, the Alliance aims to on the floor of the Senate, “If I believe hard. Results are not always readily shape a society and an economy that the expenditure of this amount of money apparent. Change is stubbornly slow. have not existed before."
would stop the spread of communism, I There are many disappointments and Impatience is sometimes a virtue, and would support it. But in the light of hisdefeats. Mistakes are made. Errors are complacency a sin. But it takes 21 years tory, how can any Senator rise on this
floor and say it will stop communism?” There are countless other examples of can achieve new opportunities for comWe have heard another Senator say that the successes being achieved in the less- mercial relations with countries which foreign aid “is the road to bankruptcy, developed countries with our help. You
developed countries with our help. You can become good customers in the future. and not a very long road at that."
could write a shelf full of books on the We all know that besides promoting Someday I want to read back over tehnical assistance achievements made more and better trade between the lesswhat is being said on this bill. I want possible through U.S. aid, or on the ad
possible through U.S. aid, or on the ad- developed countries and our own, the to amuse myself, as well as to console vances made in public administration, foreign aid program is also having an myself, just as I have with the state taxation, and business administration increasingly beneficial effect ments I have just quoted from the Sen Countless other examples could be cited American economy. Eighty percent of ate debate on the Marshall plan in 1948. in the field of cooperatives, in which I all procurement now consists of AmeriI want to rejoice then, as I do now, that have taken a special interest; in the can goods and services, and much of the the prophets of doom were wrong, ut- development of private enterprise remaining 20 percent eventually comes terly wrong, in predicting such dire con through the extension of credit; or in the back home. Almost every State in the sequences for foreign aid; in saying it development of agriculture through a
development of agriculture through a Union is now beginning to experience the would never work. The Marshall plan combination of technical assistance and good effects of aid contracts. was a key weapon in the defense of Eu agricultural credit.
In addition to the direct benefit of rope against communism. And rather Many stories could be told about the sales, aid-financed U.S. procurement is than bankrupting the United States, the great achievements in the fields of health also providing the opportunity for U.S. Marshall plan created vast new markets and education. One of the most dra- business to gain experience in world for American business, and now has en matic of these is the story of malaria trade. Many contracts are being let to abled Europe to join the United States eradication. During recent years the businesses which have never before had in helping the less developed countries. number of cases of malaria in the world any experience, or have had very little The Marshall plan had its legion of has been cut from 350 million to less than
has been cut from 350 million to less than experience, in selling overseas. Through critics. But these are always with us. 100 million. In some countries malaria foreign aid contracts American businessI sometimes wonder how the American has been eliminated altogether, freeing men are learning the ropes and acquirConstitution was ever adopted. It passed millions of people for more productive ing the skills necessary for
for selling the New York Convention by only one lives. This is not only a great human through regular commercial channels in vote and was ratified by a bare margin achievement. It is a great step toward the future. As trade replaces aid in the in Virginia. How could so many virtu developing the economic potential of years to come, these skills, techniques ous and intelligent men have been wrong countries burdened with sickness and
and business contacts will prove invaluin 1789, and in 1948? History has not disease. In several areas of India, for
able in enabling the American businesstreated them kindly. Events have not example, the return on money invested man to take his rightful place in the borne out their fears and misgivings. In in controlling malaria has been about 50 world market. the cold light of history they stand con to 1 in increased industrial production, There have also been great improvevicted of being wrong, however sincere resulting in an increase in the Indian ments in the organization and adminisand well motivated they were at the gross national product of some $500 mil- tration of foreign aid in the last several time.
lion each year. In one rich region in years. The whole program has been reI think it is important for us to bear northern India the elimination of ma
northern India the elimination of ma- shaped according to the new directions in mind some of the remarkable im laria increased the area of cultivated established by Congress in the Foreign provements which have been made in the land by 400 percent and the production
land by 400 percent and the production Assistance Act of 1961. These include foreign aid program during the past 2 of food grains by 130 percent.
emphasis on long-term development years, together with some of the accom In terms of overall economic success, projects within the framework of genplishments which are beginning to be a recent analysis of 41 countries which eral development plans, increased efforts seen. Unlike the Marshall plan, of have received more than $300 million in to boost the contributions of other donor course, foreign aid to the less developed American assistance since the beginning nations, emphasis on self-help and renations is a much longer, slower process. of the program, or, in the case of coun
form, and greater concentration and It has taken more than 10 years to eval tries of less than 10 million which have selectivity. As the committee report uate the success of the Marshall plan, received at least $30 per person, reveals states, there has been considerable progand it will take considerably longer be that 33 have achieved substantial eco
ress in these respects. Eighty percent fore the results of our assistance to the nomic growth of at least 1.5 percent per
of all U.S. economic assistance is now less developed nations can be appraised. capita in increased income per year for going to 20 countries. Eighty percent of
I shall not attempt to recite all of the the last 5 years. Fourteen of these all military assistance is going to 10 successes we have gained in recent years. countries have achieved complete self- countries. Almost every day there is news of some sufficiency, while another 11 have
Foreign aid is also becoming more new achievement. Just the other day I reached the point of adequate self- selective as a result of better planning learned about a remarkable example of sufficiency with less than 20 percent of and programing, both by our Governthe progress we are making. In India, their total investment presently being ment and by recipient governments. which is receiving more American assist- covered by foreign aid. In all 24 of the For years, one of the greatest weaknesses ance and more assistance from other countries which have achieved both sub- of the aid program has been the lack of free world countries than any of the less stantial economic growth and adequate a comprehensive U.S. approach to the developed countries, the rate of indus- self-sufficiency, democratic political in- problems of a country, as well as the lack trial production increased from 6.4 to 8 stitutions have also been strengthened of planning by the countries being aided. percent during the year ending March Another overall measure of the suc
Until recently, most aid has been given 1963. Some of the increases in Indian cess of our foreign aid program is the
on a project-by-project basis. There production are particularly amazing. increase in our trade with countries was very little intensive and systematic The production of aluminum, for exam- receiving our assistance. U.S. exports analysis of the situation in each country, ple, increased from 20,000 tons to 43,000 to Marshall plan countries more than together with analysis of ways in which tons, more than doubling during the doubled from 1953 to 1962. Our exports the United States could most effectively year. The output of machine tools, an to Japan have more than tripled since The procedure now being used by our aid
assist with development of the country. industry so essential for industrial de- 1950. In 32 countries receiving 80 pervelopment, expanded by more than 50 cent of U.S. aid between 1957 and 1962, old system. Careful studies are made of
officials is a great improvement over the percent during the year. The produc- imports from the United States have tion of nitrogenous fertilizers, without increased four times as fast as U.S. eco
each country, and comprehensive plans which the Indians cannot achieve vitally nomic aid. There are many reasons why are set forth to maximize the effectiveneeded agricultural output, increased by foreign aid is in our interest. One of ness of U.S. assistance. Except where 40 percent. These startling statistics these is the contribution foreign aid urgent political considerations are inare one measure, among many, of the makes toward promoting trade. The volved, aid is given according to developstrides in the underdeveloped world be- less-developed world is potentially a vast ment priorities established for each ing made possible by the combination market for American goods and services. country. Careful studies are made of a of local initiative and American help. Through foreign aid American business country's progress in order to make sure
that U.S. aid is achieving maximum re The top priority in our aid program is ress. The emphasis of the suggestion is sults, and that the country is undertak- and should be given to Latin America. that our aid should be channeled toing satisfactory self-help measures. The Alliance for Progress program ward the building of free groups and
We are now also encouraging and should not be merely one of four regional private enterprise in the countries aided. helping countries to study their problems programs in the same agency. It is dif To do this requires the mobilization of and to formulate their own development ferent, and on the U.S. end alone entails nongovernmental U.S. and international plans.
a wide variety of capital development agencies. In the case of the Alliance for Prog- loans, economic loans, social develop Where the self-help of recipient naress, every Latin American country is re ment loans and grants, and technical tions is largely confined to public enquired to submit development plans to assistance. The Alliance program in the terprise, U.S. foreign aid is creating an expert committee of the Organization U.S. Government should be more inde "Frankensteins" which will eventually of American States for review and rec- pendent, should be more autonomous threaten, rather than contribute to, ommendation.
than it now is. Perhaps it should be a American security. Every dollar spent Another way in which greater selec- separate agency, like the Peace Corps.
separate agency, like the Peace Corps. in a manner which encourages free tivity has recently been introduced into If this would pose too great a problem groups and institutions is a step toward our foreign aid program is through agree- of coordination with the State Depart a world which is in harmony with Amerments on conditions or requirements ment, there should be some other steps ican interests and ideals. This notion which must be met before aid is forth- taken to make the Alliance program is in accord with Secretary Dean Rusk's coming. We labored for many years un- more autonomous, independent, and demand for an active and affirmative der the mistaken assumption that such visible.
policy of building the social economic conditions or strings on aid constituted While a large U.S. lending program and moral strength of independent nainterference in the domestic affairs of will probably continue to be necessary tions so that they will have the capacity other countries, and therefore, were under the Alliance for Progress, more of within themselves to throw off the virus wrong. By contrast, it is now recog- the capital development lending should of totalitarianism and pursue material nized that in order for U.S. assistance to be shifted to the Inter-American Bank objectives in a climate of expanding be effective, agreement has to be effec- and other international finance institu
freedom. It would seem to be in accord tive, agreement has to be reached be- tions.
with the present administrator's ideas. tween the United States and the recip In other areas of the world, such a But what is needed is the practical appliient country on conditions which must multifarious, many-sided program is cation of this idea on a sufficient scale be met before aid can be made avail- unnecessary. In the Far East, our mili to assure its practical significance. able. tary-oriented program should be grad
If nongovernment agencies are to be Many of these changes were long over- ually scaled down, just as our direct in
encouraged in countries which receive due, and many others remain to be others remain to be volvement in southeast Asia should be
U.S. aid, this can be done effectively only made. But there has been remarkable gradually curtailed.
in one way: by the channeling of U.S. progress.
In the Near East and parts of Asia like
aid to a large extent through nongovernDespite the outcry in Congress, I am India and Pakistan, multilateral agen
ment U.S. and international agencies and convinced that there is substantial sup- cies can and should supply much of the
by the encouragement of the developport in the electorate for foreign aid.
capital needed for large-scale develop- ment and creation of such agencies Support for foreign aid is strong, and ment. Increasing the role of the World
among the nations receiving aid. This growing stronger, in one of the most im- Bank and IDA in promoting capital to
requires the enlistment for the U.S. aid portant groups in American life—Amer- countries like India, Pakistan, Iran, and
program of a great variety of nongovican businessmen. A recent study of Turkey can both provide the capital as
ernmental agencies, ranging from the 1,500 prominent businessmen by the Re- sistance needed and, at the same time,
great foundations such as Ford and search Institute of America disclosed enlist greater participation on the part Rockefeller to a multitude of small agenthat the great majority of American busi- of our European allies on economic par
cies concerned with health, education, ness leaders consider foreign aid essen- ticipation sorely needed.
community development and many other tial for promoting a self-supporting In Africa we should encourage the
noneconomic activities. AID has recentand prosperous community of free na Europeans to play the leading role in
ly made a contract with the National tions. These findings as reported in the providing economic assistance. Our
Association of Settlements which will General Electric Forum, were hailed as presence can be assured through provi- help to encourage Urban Community “revolutionary in their significance"- sion of technical assistance, through the
Development in Venezuela to assist in and they are. They signify not only the Peace Corps, the food-for-peace pro
community developments among people end of economic and political isolation gram, limited economic aid, and other
gram, limited economic aid, and other moving from the country into Caracas. in the American business community, forms of assistance. The limited capital
Such contracts on a scale which helps but also the existence of a new consenassistance that we make available for
to encourage several hundred of such sus concerning the responsibilities of Africa should be channeled, in part,
groups every year in every country which the United States as the leader of the through multilateral agencies, where it
receives aid is the dimension needed to free world. will be matched by European funds.
restore U.S. foreign aid to the status it RECOMMENDATIONS FOR CHANGES AND IMPROVE
We ought to encourage multilateral,
merits and which it needs to survive MENTS IN THE FOREIGN AID PROGRAM multinational, international banking
satisfactorily in the United States of Before closing, I would like to make structures to do more of the financing.
America and abroad. several comments about the redirection We can ask for proper representation on
An approach to foreign aid keyed to of the aid program during the next year. the boards of these banks. We can ask
such an objective on this scale would The report of the Senate Foreign Rela that Americans be included in substan
provide a substantial leverage effect for tions Committee has already recomtial numbers in the secretariat or the
foreign aid funds given AID; it would mended a further concentration of the administrative structure, but we have to
help to mobilize local and international program and acceleration of the trend come to a recognition that direct bila
resources on a hitherto undreamed of toward multilateralizing the aid proteral arrangement in financing involves
scale; it would therefore help rapidly to gram. I would like to concur with and
us in each country's trouble and is very, reduce the funds which the United States to go beyond the committee's comments. very costly. By putting our emphasis
has to contribute. It would bring about If the discussion in the Senate this upon the multinational organization, we
the involvement of the American people year has revealed anything, it has shown will be able to get the help of others
which is needed to rekindle their enthat the Congress is not prepared to fi- in financing world development. Other
thusiasm for the great and noble enternance a farflung, multifaced aid pro- wise, we do most of it ourselves.
prise which American foreign aid has gram forever in every area of the world. GREATER USE OF PRIVATE GROUPS AND OTHER been in the past and can again become. The time has come to make a sharper
This approach will remove most of the distinction between some areas of the I would like to add one final suggestion misgivings and create a national atmosworld and others and to translate this for consideration by AID officials. This
for consideration by AID officials. This phere in which the administration can distinction into the machinery of the aid has come to me in response to remarks again count on congressional support for program,
I have made upon the Alliance for Prog its foreign aid program.