Canberra, 25 August 1954
I have thought over the points you raised in your letter of 6th August1 about the future of the Colombo Plan and I can readily appreciate your point of view upon them.
It is, I agree, very important that Australia should make clear its intentions to meet to the full extent its undertakings under the Colombo Plan, but I would like to suggest that a good deal may turn upon the way in which the matter is expressed. We have, as you point out, encountered delays in providing aid for the development of the recipient countries under the Plan, and as the figures stand this may give the appearance that we have been somewhat tardy in meeting our original pledges. In fact, as you well know, the delays have been to an extent due to physical difficulties of procuring equipment and materials of the appropriate kinds. For the future you hope that the volume of aid going forward can be increased but in the nature of things there cannot be any certainty that, with changing conditions, actual performance will always come up to plans and expectations. You and I are fully agreed, I believe, as to the need for ensuring that such aid as we give will be in the form of equipment and materials which will make a positive contribution to the industrial advancement of the countries concerned. We also realise that from year to year financial emergencies may require the amount of our annual contribution to be brought under review.
Therefore it seems to me that in re-affirming our intention to meet fully our Colombo Plan pledge it is necessary to be cautious in naming a time limit. You mention a further two years after 1957 and it may be that such an extension of time will suffice. On the other hand, events may decree otherwise, and so I would suggest that, if you feel yourself obliged to mention a period of time, it should be only in an illustrative way and not give the impression of a deadline to be met at all costs. The essential thing to convey is that we regard our pledge not simply as a matter of spending a certain amount of money on economic and other aid but more importantly as one of making the best and most effective contribution we can from our resources. Even if this takes rather more time than the original somewhat arbitrary period it will be all to the advantage of the recipient countries in the long ran.
Your further suggestion is that Australia should at the Ottawa meeting 'support' a move for the maintenance of economic aid programmes under the Colombo Plan after the present expiry date. To me, however, it seems desirable that we should not initiate (even if we cannot avoid supporting the initiative of others) such a move until we have been able to assess the full implication of the S.E.A.T.O. meeting2 and the demands that may in consequence be made upon us for other forms of assistance in the economic field. As you remind me, we may have to face obligations in that field but for the present and perhaps for some time to come there cannot be any precise certainty what these obligations will be.
[NAA: A10299, C17]