Economic Assistance to South and South-East Asia
1. We have still not been able to obtain any guidance from the State Department on the extent or nature of total assistance which should be given to the region of South and South-East Asia, nor the specific needs of individual countries. The United States machinery for this work has not been properly established, as funds have not yet been voted by Congress, and American officials seem reluctant to commit themselves until they know the total amount of assistance which the United States itself will be able to give. In addition, they are waiting for Griffin's reports. On his return he will crystallize American views on the total amount and nature of the programme in this region. You will no doubt have learnt his views from Eaton in Djakarta.
2. The sources of aid to this region now appear to be:
ECA funds (being spent in Indo-China)
Military Assistance Programme ($75,000,000, which will be for a limited period only)
Fulbright funds for exchange of teachers, etc.
Smith-Mundt1 funds for exchange of teachers and periodicals etc.
British Commonwealth Assistance
|International Aid:||UN expanded programme of technical assistanc International BankInternational Monetary FundOther aid by specialized agencies|
3. The only source of supplies and capital (as distinct from technical assistance) in the foregoing U.S. and international lists are: ECA, MAP,2 Export-Import Bank, and the International Bank. The MAP programme, the initial portion of which will cover Indo-China, Siam, and Indonesia, is so far devoted to police and semi-military assistance, and could—and probably will—be expanded to include economic assistance.
4. It would, therefore, seem that the needs of the region for technical assistance will be more adequately covered than their needs for other forms of aid. There is a feeling among many officials of the State Department—this is personal and not necessarily official policy—that the Commonwealth scheme might be most effective if it could make available some of the things which would make technical assistance more useful. These would include: agricultural implements; seeds; livestock; medical supplies; incentive goods; and perhaps some demonstration projects. This would not preclude technical assistance also forming part of the Commonwealth programme.
5. The list of sources of aid given in paragraph 2 above indicates the immense problem of coordination. It will be necessary not only to coordinate the UN programme and the U.S. programme internally, but to coordinate them with one another and with the British Commonwealth programme. For practical reasons, and also to give the British Commonwealth and the United States maximum freedom of action, it will probably be necessary to take the UN programme for granted and to coordinate and shape the bilateral programmes as additional to the UN. It will therefore be necessary for both the United States and the Commonwealth to know, as soon as possible after it is made, each decision by a UN body to give aid in this region. The most appropriate, and possibly the only formal, source of information will be the Technical Assistance [Committee]3 (TAC). It would be possible to insist that every decision by an agency or by the TAB to grant aid should be given immediately to each member of TAC; it would not be necessary for the TAC itself to be in session in order to receive this. This procedure would suit the U.S.A. and the U.K., which will always be members of TAC, but Australia's term of office on ECOSOC expires this year and, unless we are re-elected, Australia will not be a member in future. It would be possible to get around this, no doubt, either by asking that the information be given to all members of the UN or by using those members of the Commonwealth which are on TAC as receiving agents for the other members. It would seem, however, in any case, that both the Commonwealth and the U.S. will have to have somebody in New York in day-to-day contact with the UN officials and with one another.
6. The problem of coordination was touched upon this week by Mr. L. A. Wheeler, Director of the Interim Office for Technical Assistance of the State Department, in an address which is appended in full to our memorandum No. 999/50.4 He said:
'Naturally, the existence of these two sets of programmes through the UN and through U.S. bilateral arrangements raise important questions of coordination. It may turn out that this problem is smaller than appears on the surface because it must be remembered that both the UN and the U.S. programs will be based on actual requests from individual countries. In other words, the countries themselves have the option of deciding whether they want the work done through the UN organizations or through the United States. Furthermore, with actual experience it may turn out that certain types of activities will be found more suitable for the UN while others may be found more suitable for bilateral projects. In that case, certain criteria can be established which will be valuable in avoiding duplication and achieving coordination. Another point to be remembered in this connexion is that the United States participates actively in the planning of work in each of the UN rganizations. Another possible point of coordination will be through the American Embassies in each of the countries. They will be able to give advice as to the interests of the countries themselves in particular kinds of work. While on this point it may be worth mentioning that there is also a problem of coordination within the UN organizations themselves and within the United States agencies that will be concerned with this program. Probably the most helpful thing that can be said about this whole question of coordination is that there is good will on both sides. That is to say, in both the UN and in the United States agencies concerned with the problem, there is a desire to work out the vast arrangements possible for achieving the results desired.'
7. Mr. Wheeler's point that the problem is smaller than it appears because programmes will be based on actual requests from individual countries, is not completely sound. if we envisage these programmes, and particularly the United States and Commonwealth programmes, as an attempt to promote the economic development of the region and of each country as a whole, it will not be enough to rely on individual requests from the countries concerned. It may be necessary to have a master plan into which the three sources of aid can be fitted. This need not be a straitjacket or something imposed upon the countries concerned, but could serve as a frame of reference, particularly for the Commonwealth and U.S.A.
8. Mr. Wheeler suggests the American Embassies in each country as a possible point of coordination in addition to the machinery in Washington. It will, no doubt, be necessary toset up some over-all coordinating machinery for the Commonwealth and U.S.A.—this need not be very formal, and certainly should not be large; in addition, there might be close working relationships between the Commonwealth and American diplomatic missions in each country of the region. Another possibility, which would be worth considering, would be missions of the nature of the one sent by the UN to Haiti; the UN has followed this up by sending an Englishman (Wakefield)5 to Haiti to act as general adviser to the Haitian Government and as coordinator of international projects in that country.
9. We would, therefore, appreciate some background indication from you as to your thinking on the nature of the Commonwealth machinery. Is a Secretariat to be set up and how is Commonwealth assistance to be allocated?
10. Aid is already being given by the United States to dependent areas in Africa (mostly out of ECA funds). This is cleared through the OEEC, thus preventing duplication and helping to direct this assistance into the most useful channels.
11. It is impossible to predict at this stage how much of the Point Four assistance of the United States will go to South-East Asia. The economic sections of the State Department think that a bigger proportion will go to that area than the political sections do. It would seem that about $15,000,000 will go to Latin America, irrespective of whether the total programme is $25m, $35m, or $45m. Aid for Africa and the Middle East will have to come out of the balance, but in both these regions a lot of assistance will be given under programmes other than Point Four.
12. We understand that the Griffin mission did not receive a very warm welcome from Burma, whose officials were described by one American as being 'pathologically [sic] suspicious'. Some Burmese seem to suspect the motives of the U.S. in offering aid; on the other hand, the attitude of the Burmese can probably be explained in part by inexperience, ignorance, and general confusion. The United States certainly feels inclined to give Burma a high priority, second only to Indo-China, with Thailand probably in third place.
13. We have been told by the British Embassy of an interview between Griffin and Malcolm McDonald, in which Griffin referred to his conversation with Mr. Keith Officer in Singapore. Griffin was most impressed by Officer and by Officer's account of the British Commonwealth intentions in this region. McDonald felt that Griffin was going about his task in a most competent way, and thought that his recommendations should be given great weight.
[NAA: A1838, 708/9/2 part 2]