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96 Cablegram from High Commission in London to Spender

London, 11 September 1950

4332. SECRET IMMEDIATE

Consultative Committee

1. After preliminary discussion of draft synopsis of final report,2 Committee is discussing seriatim programmes of each Commonwealth country. These will be remitted to drafting committees for preparation of a condensed version. Australia is one of three countries preparing Pakistan condensed report.

2. Some re-arrangement of synopsis has been already agreed, the most important being that general conclusions on policy questions will appear in the report after description of country programmes and will draw out whatever general principles can be found in these programmes.

3. The committee has yet to discuss what should be included in the final chapters of the report. However, at the beginning of the meetings the Australian delegation supported by Canada pointed out the difficult practical problem of meeting the requirements that a report approved by Ministers in London should commit the Commonwealth to a precise amount of aid. The United Kingdom delegation also recognised the difficulty but pointed out the necessity of making the decision before an approach was made to the Americans. It was decided to defer any decision as to publication of the report but to draft it on the assumption that at some stage it would be published. Both India and Pakistan said they would be reluctant to3 publication unless it could be assumed that the financial assistance called for would be forthcoming.

4. It will be necessary to decide whether publication will be directed towards the public market and we have been asked for an indication from Australia as to the likely demand if publication were made on a commercial basis.

5. Following are development programmes for period 1951/57 (all figures in pounds million sterling) India 1380, Pakistan 258, Ceylon 102, Malaya 56, Singapore 63, Sarawak 4.5, North Borneo 5.2, total 1869.

6. External assistance required is respectively�608, 108, 41, 33, 15, 2.5, 3, total 810. Analysis of documents will show that assistance required is not evenly spread over six years. India's balance of payments assumptions are such that aid would be higher in the first two years than subsequently.

7. Copies of all documents being sent to Canberra by airbag. Following general comments may be made—

(1) It will not be practicable in London to make critical examination of each project and emphasise4 in accordance with the understanding in Sydney has been to seek to emphasise the strong points in the programmes as a whole.

(2) The meeting has avoided discussing implications of current Indian-Pakistan disagreements. Some of the Pakistan projects are directly designed to reduce economic

(3) Emphasis in programmes as a whole is on agricultural production particularly food and, in that respect, they differ from earlier plans of ambitious industrialisation.

(4) The United Kingdom feels that programmes are too modest to impress the United States and they are encouraging Pakistan and India to work up information on additional programmes.

(5) A large share (61%) of external aid asked for by India is for the import of consumption goods (mainly food) by the Central Government to be sold as a source of internal finance for development programme and as an anti-inflationary device

(6) Pakistan based plans on a preconceived estimate of level of foreign aid which might be forthcoming to finance only import components in each project and then selected projects for which she felt capable of providing all domestic finance. Pakistan programme is not well presented and it is impossible at this stage to assess the value of the various assumptions about potential internal borrowings, balance of payments etc.

(7) No attempt has yet been made to assess the currency sources of actual goods required and the extent to which the United States aid is required for dollar purchases.

(8) There is some doubt as to the best line of appeal to the Americans in drafting the report�whether in the case of India to emphasise the anti-inflationary purpose of foreign aid or social and economic benefits of economic development per se.

(9) There is general feeling in which Australia concurred that the report should bring out the effects of programmes on the food situation in the area as a whole. The delegation assumes that because of its political importance we should subscribe to the need for continuous effort in the region to build up its own food resources.

8. Further to Washington telegram (No. 64 to London)5 we have had no further indications of United States reactions except that the Foreign Office claims that discussions with Americans at fairly high level since the Minister wrote to Bevin have indicated American interest on the understanding that American financial assistance is required.

9. Foreign Office also says that the Americans were asked through their Embassy in London to advise the Governments of non-Commonwealth countries that the United States would support their participating with the Commonwealth in the London meetings. We were not able to ascertain American reaction to this suggestion and unless it has been acted upon the Minister might consider having the question followed up in Washington to ensure that at least the United States reassures non-Commonwealth governments that their cooperation with the Commonwealth would not prejudice existing United States assistance. This could be very valuable at time Commonwealth invitations go out.

[NAA: A9879, 2202/E1 part 2]

1 The cablegram was addressed to Spender in New York and repeated to the Department of External Affairs.

2 See Document 89.

3 A word seems to be missing here.

4 The word 'emphasise' should read 'the emphasis' according to the version of the cablegram on file A3 320, 3/4/2/1 part 2.

5 Document 93

Last Updated: 10 January 2017

Category: International relations

Topic: History