Report to Committee by Preliminary Meeting of Officials on Priority Economic Requirements of the Area and Questions other than Technical Assistance raised in Australian Paper (Ref. CC/SY/1/7.)1
1. The Conference of Commonwealth Foreign Ministers at Colombo recommended, (see Committee Document CC/SY/1/2)2 that the participating Governments should:—
(i) examine the possibility of making financial assistance available for essential productive purposes in South and South-East Asia, taking into account their existing commitments;
(ii) support as high a priority as possible for projects presented to the International Bank for Reconstruction and Development which would contribute to the economic well-being of the area and would be in accordance with the Bank's objectives;
(iii) contribute to the technical assistance work of the United Nations and its Specialised Agencies, and support in these organisations as high a priority as possible for the needs of South and South-East Asia;
(iv) examine the possibility of making supplementary bilateral arrangements in appropriate cases for the provision of direct technical and other assistance;
(v) generally, consider proposals for the economic development of the area, keeping in view the possibilities of mutual assistance.
This decision has been re-affirmed by Governments.
2. In the context of the above recommendations, the present Meeting of Officials has given preliminary consideration to a 'Review of priority economic requirements of countries in the area' (item 5 of the Agenda listed in Committee Document CC/SY/1/15)3 and to the questions, other than technical assistance, raised in the Australian paper (CC/ SY/1/7) i.e. questions of short-term action.
3. The economy of the area is primarily agricultural, with a very large proportion of the manpower producing a low yield, chiefly because of primitive methods and lack of mechanical equipment and modem hand tools, fertilizers and pesticides. The same considerations apply to fishing, which produces an important item in the diet of the people. Industry gives employment to only a small proportion of the population in spite of the fact that there are considerable mineral resources, in the mining of which present methods preclude large yields. A considerable proportion of the industrial population is employed in cottage industries, which offer very great scope for technical improvement. Many countries in the region have plans at various stages of completeness for the development of light and heavy industries, public works and utilities. Expansion is, however, hampered by lack of technical skill at all levels, by the shortage of both internal and external investment capital and by the need to develop basic services, while the present necessity of certain countries to import large quantities of foodstuffs limits the amount of foreign exchange available for development.
II. CONSIDERATION BY PRELIMINARY MEETING OF OFFICIALS
4. Priority economic requirements have generally been agreed to be predominantly in the sphere of food supplies, agriculture, textiles, medicines and some other essential consumer goods. There is consensus of opinion on the need for additional assistance immediately in countries of South and South-East Asia but there is difference of opinion on the way this assistance should be afforded.
5. One view is that provision of immediate assistance would not only constitute concrete evidence of our desire to help but would in most instances have a more significant effect than an equivalent effort made at a later stage.
6. While considering the economic priority requirements of the different countries in this area, it was suggested that arrangements for the supply of food, textiles, medicines and other consumer goods constitute the basic priorities and every effort should be concentrated on increased supplies of these commodities being made available. While plans for other aspects of development are proceeding immediate attention seems desirable for meeting these basic needs. Particular emphasis has been laid on the problem of Indonesia.
7. Provision for immediate assistance is proposed, according to this view, in the form of:—
(1) Emergency supplies;
(2) Provision of credit facilities by the Commonwealth as a whole to be available to countries with immediate requirements.
8. The other view is that whereas the needs are immediate in the sense that greater supplies would be welcome and ease the situation in this area, the proper approach is to concentrate efforts increasingly on furthering and accelerating the development plans designed to strengthen the basic economies of the countries of the area. There are at present, according to this view, by and large, no emergency crisis needs and as such emergency needs become clear they should be tackled on an ad hoc basis by members of the Commonwealth individually or in collaboration with other members of the Commonwealth.
9. As regards short-term action it is emphasised that whatever help the individual members of the Commonwealth, particularly the United Kingdom, are in a position to give is being given and there is no need, and indeed, it would be disadvantageous to set up an organisation to administer such assistance designed to meet emergency needs. According to this second view countries requiring credit facilities should adopt existing practices. It is therefore suggested that the question of aid to meet immediate needs should be taken up on a bilateral basis by the country needing aid with the country in a position to give aid. The country which is in a position to give aid will then consider whether any further cooperative action within the Commonwealth is called for.
As there was a difference of opinion on the way immediate assistance should be afforded, no conclusion was reached on the question of constitution of a fund and machinery for its administration. If the view in paragraph 7 is accepted, the question of exact machinery will require further examination.
[NAA: A10617, 1950/8]