230 Memorandum by Tange

, CANBERRA, 10 March 1949

ECONOMIC AND EMPLOYMENT COMMISSION OF THE UNITED NATIONS, AND SUB-COMMISSIONS First draft[1]

Introduction 1. By Resolution 146 (VII) the Economic and Social Council decided that it should consider at a future session 'the question of the most effective way to fulfil the purposes for which the Economic and Employment Commission was established, including the future and the terms of reference of the Commission and its Sub-Commissions'. Members of the United Nations are asked to communicate their views to the Secretary-General before 15th March, 1949, so that they may be considered by the Commission's own Committee on Organization. It is intended that the Ninth Session of the Council, in July-August of this year, should take up the question of the future of the Commission. In the meantime informal conversations are going on among members of the Council as to the future of the Commission.

2. For these reasons an attempt has been made in this paper to set down the considerations which led to the establishment of the Commission and its Sub-Commissions, an appraisal of the work of these bodies, and some proposals for alternative machinery to carry out their essential tasks. The paper has been drafted with a view to submitting it formally to the Secretary-General of the United Nations as the view of the Australian Government. An early expression of Australian views is the more necessary because it was Australia which played the chief part, in the Preparatory Commission of the United Nations, in ensuring that the 'Economic' Commission, when set up, should have terms of reference which placed emphasis on full employment and expansive demand policies and it was Australia which initiated the Resolution of the Seventh Session asking for the future of the Commission to be reconsidered in the light of experience of its working.

[matter omitted]

Division of Functions between Council, Secretariat and other Advisory Bodies 16. To an increasing extent the role of advising and informing the Council has been assumed by the Secretariat of the United Nations. This progressive development has caused a change in the activities of Commissions and necessitates a reconsideration of the actual purposes of the Commissions. The advantages of increasing use of the Secretariat have been stressed from time to time by a number of Governments, including the Australian Government. On the initiative of the Swedish delegation the General Assembly in 1946 adopted a resolution (No. 183 (II) ) which called upon the United Nations 'to consider carefully, before the creation of special commissions and sub-committees, whether the task to be carried out could not usefully be entrusted to the Secretariat'. In successive resolutions the Council has called upon the Secretariat to assume increasingly important functions. In some cases they are functions complementary to those of the Commissions. In others they are functions similar to those assigned to the Commissions. For example, under various resolutions, the Secretary-General has been asked to assume the responsibility of advising the Council of any 'economic situations which should receive special consideration' (26 IV) ; of reporting and analysing balances of payments (28 IV) ; and of preparing an analytical report on the replies to the Employment Questionnaire (104 VI). Regional commissions have progressively undertaken studies which are closely akin to those of functional commissions.

17. In the view of the Australian Government it has become questionable whether, in all the fields embraced by the Commissions, it is necessary to continue to have a Commission or Sub-Commission interposed between the Secretariat and the Economic and Social Council, or even attempting to complement the Secretariat in its relations with the Council.

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The Economic and Employment Commission 20. The Commission was established to advise the Council on economic questions in order to promote higher standards of living. In particular the Commission was to advise on the promotion of full employment the prevention of wide fluctuations in economic activity, the reconstruction of devastated areas, and the promotion of economic development. The Commission's attention was drawn particularly to the question of action coordinated among a number of specialized agencies and Commissions.

21. Progressively the Council, through various resolutions, has referred specific tasks to the Commission:

[matter omitted][2]

27. A second subject[3] which the Commission has been asked to study is the appropriate forms of international action for maintaining full employment and economic stability. In turn the Sub-Commission on Employment and Economic Stability has made some contribution to this subject in its report on inflation. A review of the results achieved since this subject was first presented for study in March 1947 suggests that it would be many years before a comprehensive report on anti-depression measures has been completed by the Commission and Sub-Commission machinery. In the opinion of the Australian Government no subject is more deserving of regular and thorough analysis than the main elements of a stable full employment policy and the special remedial measures which could be applied on the international and national level in the event of a failure of current policies to maintain stability and employment.

28. Moreover, the Governments which drafted the Charter of the International Trade Organization acted on the assumption that the Economic and Social Council would exercise its authority and resources to the full for the taking of measures against the international spread of a decline in employment, production or demand whenever occasion called for such action. Article 5 of the Havana Trade Charter provides that: 'The members of the organization shall participate in arrangements made or sponsored by the Economic and Social Council of the United Nations, including arrangements with appropriate inter-governmental organizations ... for consultation with a view to concerted action on the part of governments and inter-governmental organizations in order to promote employment and economic activity.' This article was drafted in this form because it seemed desirable to maintain the central authority of the Economic and Social Council in the field of employment and anti-deflation policy as an alternative to the International Trade Organization assuming the main function in what is a matter of great concern to that organization. It is the more necessary, therefore, to ensure that the Economic and Social Council is equipped with machinery which will enable it to undertake the responsibilities which other agencies expect it to undertake.

29. There remain many aspects of the related question of economic development which have not as yet been effectively explored by the Commission and its Sub-Commissions. The report of the Sub-Commission on Economic Development dealt with some general economic and political principles but, in the opinion of the Australian Government, made no great contribution towards elucidation of the practical issues involved. The report of the Sub-Commission on Employment and Economic Stability contained a useful analysis of the implications of current inflationary trends. It is apparent, however, that with the present schedule of meetings it would be several years before the Sub-Commission furnished a report on 'the kinds of action which are likely to be feasible and of assistance in maintaining full employment and economic stability'. Such a report should, in order to promote the basis for effective action by the Council, analyse not only principles but also the role which all the international agencies may be expected to play in a co-ordinated international full employment policy. Occasional meetings of two weeks' duration are unlikely to permit the Sub-Commission to make such a report within a reasonable time. The experience of the Sub-Commission does suggest that a small group of experts could continue to undertake valuable work for the Council if it operated under more favourable conditions. The changes which would appear to be necessary would include lengthening the duration of meetings of the group. It also appears that little is to be gained from maintaining the Sub-Commission subordinate to the present Economic and Employment Commission.

Conclusions 30. A simpler and more productive system must be sought. In the opinion of the Australian Government a system, the broad outlines of which are set out below, would serve the Economic and Social Council better than the present one.

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34. Having endowed the Secretariat with the responsibility for factual reporting and economic analysis, and with the facilities to enable this responsibility to be carried out, and having made provision for special consultant groups, it is then proposed that the Economic and Social Council devise new machinery for the task of reviewing expert studies and formulating the recommendations for policy action by governments or specialized agencies, for consideration by the Economic and Social Council. Whereas, at present, the Economic and Social Council looks to the Economic and Employment Commission to study any subject referred to it by the Council, or to initiate before the Council policy questions which the Commission considers should be taken up, the Australian Government would propose that these functions be taken over by the Council itself. If these arrangements were satisfactorily made, the Economic and Employment Commission could then be dispensed with.

35. It is clear that the Economic and Social Council is not able, during the course of its usual session, to give close attention to economic issues and to formulate detailed recommendations for action. To enable it to do so would necessitate lengthening its sessions and this seems undesirable. An essential part of the Australian proposal is that if the Economic and Employment Commission is abolished, provision should be made for meetings of a Committee of the Whole of the Council on Economic Questions, meeting whenever necessary between sessions of the Council. The most appropriate arrangement would appear to be to call meetings of this Committee two or three weeks before a session of the Council. In respect of any matters upon which the Council was unable to reach a decision at any particular session, it would be expected that any further analysis of facts that might be required would be undertaken by the Secretariat and the issue then examined by the Council Committee prior to the following session of the Council. Given two or three weeks it should be possible for the Committee to prepare proposals which could then be examined immediately by the Council in plenary session. Only in exceptional circumstances would there be any justification for referring such issues back to the Committee for further study during the session of the Council itself. Prior study by a committee representing all members of the Council should enable a decision to be made by the Council relatively promptly. The result would be a shortening of the sessions of the Council as compared with the present situation where Council members justifiably require scope for full analysis of reports and recommendations of the Economic and Employment Commission, and the other Commissions, in a committee of the Council during the session itself. It is suggested that the Committee of the Council, meeting before the session, should examine and prepare recommendations on reports which, in the normal course of events, are presented to the Council from, for example, its regional commissions.

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39. The abolition of the Economic and Employment Commission would mean a decision by the Economic and Social Council to dispense with what was intended to be a body of experienced experts advising the Council on appropriate international policy. It might, perhaps, be felt that the substitution of a Committee of the Council itself would not necessarily ensure that in the delegations participating in the Council Committee there would be persons of the same standard of specialized economic experience and knowledge as are in fact available in the Economic and Employment Commission. It might, for example, be expected that the representatives attending the Council Committee would in many cases be drawn from staffs readily available in the Missions to the United Nations. Taking the situation as it is, and recognizing the fact that, in the past, many governments have not been able to provide persons of high economic standing to attend meetings of the Economic and Employment Commission, the change would probably not result in any lowering of the efficiency with which the preparatory work for the Council is undertaken. At the same time there would appear to be certain advantages in ensuring that the preparatory work for the Council is in fact done by persons who are closely associated with the work of the Economic and Social Council and the economic work of other organs of the United Nations. The nearer the Council approaches a decision on any specific economic issue, the more important it appears to be that consideration should be given to the history of the treatment of economic problems by the United Nations and by the specialized agencies so that an effective and co-ordinated policy can be sponsored by the Council. It is thought that the proposed change in methods would have net advantages in this respect.[5]

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[1] Sent for comments to Departments of Treasury, Post-war Reconstruction, Trade and Customs, Commerce and Agriculture, the Delegation to the United Nations, and to Wilson and Melville on 11 March 1949.

[2] The specific tasks were, chiefly, to investigate and report on how better to utilise resources such as labour and materials; to report on world economic conditions including factors affecting full employment; and to make recommendations on problems of economic development.

[3] The first subject was to report on world economic trends.

[4] The omitted material proposes that the United Nations Secretariat prepare reports on economic trends and, where called for, engage experts for short-term assignments.

[5] Wilson used the memorandum for discussions in the Economic and Employment Commission but did not submit it to the Secretariat.

[AA : A1838, 701/8/1/3]