252 Burton to Commonwealth Government Departments

Memorandum, CANBERRA, 6 May 1949

CONFIDENTIAL

The attached document, of which two copies are provided, contains suggestions as to the policy to be adopted by Australian representatives in considering expanded economic development programmes submitted to forthcoming meetings of the United Nations Educational, Scientific and Cultural Organization, International Labour Organization, World Health Organization, Food and Agriculture Organization, and Economic and Social Council.

An attempt has been made to outline a common policy. As the questions raised impinge in some cases on matters of direct concern to other Departments, the paper is submitted for comment and such amendments as are felt to be necessary.

I would propose that the principles agreed upon by Departments should be submitted to the Acting Minister for External Affairs for consideration by Cabinet if he considers it necessary.

A copy of this letter has been sent to Department of Health, Canberra Department of Commerce and Agriculture, Canberra Department of Labour and National Service, Melbourne Department of Treasury, Canberra Department of Post-War Reconstruction, Canberra Commonwealth Office of Education, Sydney Director-General of Agriculture, Melbourne C.S.I.R., Melbourne.[1]

Secretary Attachment (extract) INTERNATIONAL ECONOMIC DEVELOPMENT PROGRAMME [matter omitted]

Proposals for an Economic Development Programme 5. President Truman proposed in his inaugural address an international programme for the dissemination of scientific knowledge throughout the under-developed areas of the world. The United States delegation brought the matter before the eighth session of the Economic and Social Council in February, 1949. The Australian delegation supported the proposal in principle on the grounds that activity of this limited kind was a necessary preliminary for more extensive programmes of financial aid as and when the United States is prepared to provide it. It is reasonable to suppose that the United States initiative is designed to divert the heavy pressure being exercised against it by Asian, Latin American and other countries to provide a programme of financial aid analogous to that provided for Europe.[2] At the same time the American proposal for a programme restricted to the more modest purpose of educating under-developed areas in techniques could be regarded as a valuable first step.

6. The council decided that the Secretary-General should prepare for the ninth session (in July) a report on, firstly, a comprehensive plan for a programme of technical assistance (this report to be undertaken in consultation with the specialized agencies and with member Governments); secondly, the financial arrangements for such a programme; and thirdly, the methods of effectively co-ordinating planning and action by the international agencies which would be concerned. The text of the Economic and Social Council resolution is attached as Annex III.

7. The Council discussion left the project in a nebulous form since at no time did the United States commit itself as to the contribution it would make. Nor did any other country commit itself to contribute. Private discussion suggested that the expanded programme would take the form of a substantial increase during 1950 in the 'operational' budgets of the United Nations and specialized agencies. A figure of $100 million has been suggested as the total size of the programme and it is thought that the United States contribution might be $70 million. Latest reports suggest that inter-agency discussions are not progressing satisfactorily, and the United States has still not committed itself to a definite figure.

8. The United States proposes that part of its own contribution will be made by bilateral negotiations with recipient countries. The extent to which it will work through the United Nations structure will no doubt depend on the response of other potential contributors like Australia.

[matter omitted][3]

Australian Policy on Economic Development 15. The Australian Government is represented on the Executive Board (or equivalent) of all these agencies. Decisions may be made within the course of the next few weeks. It is therefore necessary to attempt to define a common Australian policy towards what is intended to be a co-ordinated international programme implemented by a series of separate agencies. In this way it will be possible to ensure that each Australian representative speaking in each organization (the first in point of time being the I.L.O. Governing Body meeting on 4th June) will follow the same policy. Apart from the obvious interests of the Government in co-ordinating Australian policy in this way, the United Nations, under Resolution 125 (II) 'calls upon members to take measures to ensure on the national level a co-ordinated policy of their delegations to the United Nations and to the different specialized agencies in order that full co-operation may be achieved between the organization and the specialized agencies'.

16. From a preliminary examination of the programmes and proposed budgets for 1950, as far as they are known, it appears to this Department that they have the following general characteristics:

(a) Greater financial provision has been made for demonstration and advisory services of a technical nature to under-developed countries, either through the sending of special Secretariat or ad hoc missions to under-developed countries, or by maintaining local regional offices of permanently employed staff.

(b) In some degree these programmes for providing personnel also entail the provision of specialized materials which, for financial or supply reasons, would not otherwise be available.

(c) All the four agencies listed and the United Nations have provided for fellowships, in their own specialized fields, under which personnel from under-developed member countries will be trained in selected countries at the expense of the organization.

(d) apart from the training of fellows in more highly developed countries, the United Nations and the agencies are showing a greater interest in general manpower problems, including migration for employment and the provision of technical training centres in under-developed countries.

17. An attempt is made below to suggest, for departmental consideration, some broad principles which might be followed by Australian representatives in the respective agencies. It may be felt that some of these issues are important enough to warrant reference to Cabinet or to particular Ministers. The main features of the Australian policy might be:

(1) It is Government policy to afford international aid to under-developed areas, subject to various conditions set out below as to the size and nature of the financial commitments and the direction of the aid.

(2) Australia would prefer aid afforded by the United States to be channelled through international organizations rather than through bilateral arrangements made by the United States with recipient countries. The latter course is open to the objection of permitting political discrimination and at the same time making it difficult for other countries which contribute through international organizations to synchronise their programmes with those of the United States. The experience with post-UNRRA relief suggests the advantages of international responsibility for the allocation of aid.

The prestige and strength of the United Nations organizations will be enhanced by a further development of their present limited field work. Australia should therefore consider sympathetically the views of the United States concerning the conditions under which the programme should be administered by the various agencies in order to encourage full participation of that country.

(3) Australia's main interests in this respect are in South East Asia and any aid should be concentrated, as far as practicable, on that area. It follows that Australia will seek budgetary and administrative procedures which enable any aid which Australia gives to be readily identified with South East Asia, both by the beneficiary countries and by the general public; (e.g., the 'UNESCO' fellowships provided by Australia for nationals of countries in South East Asia).

(4) A fair sharing of the burden of aid is essential. In addition, the administrative and budgetary arrangements of the various organizations through which the aid is afforded should ensure that the operational expenditure of the organization in hard currencies is limited to the hard currencies contributed by the United States, Switzerland, and any other hard currency country. It would follow that 'operational' contributions by Australia would be in soft currency or Australian currency. Australia will consider sharing an increased contribution in hard currency for the expansion of the administrative part of the budget which relates to headquarters and other normal activities. The size of this contribution will depend, inter alia, on the United States attitude towards the size of its contribution. Any proposals made should in any case be submitted for approval.

(5) The principle should be firmly established that recipient countries will provide local currency for a reasonable proportion of the expenditure of visiting missions, visiting demonstration teams, and other local expenditures. Each agency might adopt as a working guide the standard agreement made by the International Children's Emergency Fund in this respect. (Text is attached as Annex IV.) (6) As a consequence of the foregoing the operational programme should be drawn up not from the point of view of the optimum type of assistance to e afforded or even the most efficient administrative organization, but from the point of view of the maximum use of soft and blocked local currency and precise limitations on hard currency expenditure.

The W.H.O. provides experience of the opposite procedure - namely, the establishment of a programme based primarily on conceptions of what is the best way of achieving a given health objective, with budgetary implications considered separately. This procedure entails programmes being voted upon and adopted without consideration of financial limitations, and in that sense is directly contrary to the principles suggested above.

The Australian representative should insist that the budget be presented in categories of hard, soft and blocked local currency. In voting for the budget Governments will then know their commitments.

This procedure will lengthen the preparation of the programme: it will necessitate, for example, a prior determination (at least within broad limits) of the country in which operations will take place, the countries from which the various proportions of technical personnel and supplies will be drawn, and the category of currency into which they will fall. Definite conclusions might involve months of negotiations. Nevertheless the Australian representatives should insist that an attempt at general estimates is an essential part of the preparatory work for projects whose financial implications are of the size contemplated.

(7) If the foregoing conditions are satisfied it should be possible for the Australian Government to agree to the principle of compulsory contributions - that is to say, contributions which will be determined according to a special scale (which will include a major United States contribution) and assessed upon members. In the long run this may result in a more equitable contribution by Australia than a system of 'voluntary' contributions under which each Government is merely exhorted to make whatever contribution it thinks fit. Experience with the I.L.O. Reserve Fund, post-UNRRA relief, the Children's Fund, and Arab relief[4] suggests that the majority of Governments will not make a contribution unless it is assessed upon them by a vote of the organization as a whole. The Australian Government would, of course, make no commitment until the stage had been reached at which both the proposed scale of contribution and the size of the budget were known.

(8) If an expanded programme comes into operation certain aspects of co-ordination will be important and it is suggested that Australia should adopt the following additional principles:

(a) A programme of the equivalent of 100 million dollars should not be spread thinly throughout the world. Substantial results are more likely to be achieved by the concentration, in particular areas, of health and hygiene measures, agricultural development, improvement of transport and training in science and administration, rather than by each agency operating alone in a particular area. Two main difficulties are, first, that this approach may imply discrimination against some applicant countries since the volume of aid will be limited; and, secondly, decisions concerning the counties which are to receive benefits may in certain cases be retained in the hands of the executive body or the annual conference of the organization, and this introduces a rigidity which is likely to prevent the administration of any agency readily fitting into joint agency projects set in motion for particular countries between meetings of the Executive. There would appear to be no objection to leaving substantial discretion with the Director-General of the agency to select the countries to which he may apply the resources of the organization within the limits of the programme and budget approved by the annual conference.

(b) An effort should be made to ensure that each agency presents its programme (and appropriate budgetary documents) on a regional basis. Only in this way will it be possible to fit the programmes of specialized agencies with the activities of regional organizations such as the Economic Commission for Asia and the Far East and the South Pacific Commission with which Australia is greatly concerned. So far there is no indication that the programmes being prepared by the agencies have taken account of this point although it was stressed in instructions to Australian representatives.

(c) In particular fields some joint management or supervision may be desirable. Only recently has it been possible to get a perspective of the international fellowship programme. (See U.N. Secretariat brochure No. 49-3206: 'United Nations International Fellowships'.) It is now possible to observe that there are marked disparities as between the countries which have received the benefit of facilities for training their nationals in other countries. Similarly, certain countries, of which Australia is one, have not provided facilities for the training of an adequate proportion of international fellows and an opportunity seems to have been missed of promoting understanding of Australia through a method which in many cases would involve the Australian Government in no expense since many of the fellowships have been paid for in dollars. The review of international fellowships also suggests that the decision as to the country in which training should take place has not always been wise. For example, the United Nations has awarded a high proportion of its social welfare fellowships for study in the United States which is relatively backward in this field. For these reasons it may be appropriate to establish an international board for the allocation of fellowships.

From the point of view of political relations Australia should seek to attract the maximum number of fellows to come to Australia within the limits to be determined by the Government as to the absorptive capacity of Australian institutions and the financial commitments upon the Australian Government. Following the suggestions set out earlier this would involve in particular the training in Australia of Asians. This Department is asking the Commonwealth office of Education to study the implications of this suggestion and to advise generally upon the possibilities of expanding further the training of visiting fellows.

18. Two copies of these notes are being circulated to the Departments of Health, Commerce and Agriculture, Post-War Reconstruction, Treasury, Labour and National Service, and to the Commonwealth Office of Education, the Director-General of Agriculture and the Council for Scientific and Industrial Research.[5]

[1] The letter appears to have been sent also to External Territories.

[2] A reference to the European Recovery Program (or 'Marshall Aid').

[3] The omitted material reviews the budgetary position and operational programmes for 1950 of the United Nations Educational, Scientific and Cultural Organization, World Health Organization, International Labour Organization, Food and Agriculture Organization and the United Nations Organization itself.

[4] See Document 62 for Australia's experience of providing relief in Palestine.

[5] Subsequently Burton invited Departments to send representatives to a meeting at External Affairs on 24 May 1949 'to assist the preparation of definitive instructions' for conference delegations.

[AA : A1838, 716/1/1, I]