890.00 TA/4–2751
Memorandum by the Deputy Assistant Secretary of State for Far Eastern Affairs (Merchant) to the Under Secretary of State (Webb)
Subject: Relationship of Point IV to ECA in Southeast Asia1
This is in response to your request2 that there be set forth the basis for FE’s position that technical assistance (Point IV) in Southeast Asia should be administered by ECA. In taking this position FE obviously has no intention of reflecting either on the basic merit of Point IV as a program or on the quality and sincerity of the Point IV Washington staff which the Department has been fortunate enough to assemble. We are motivated rather by a desire to get on with the job that has to be done to achieve U.S. objectives in the area in the most effective, best coordinated, and least confusing manner.
FE had originally insisted that there should be a separate Point IV operation in Southeast Asia. It was with some regret that we concluded after being confronted with a number of resultant difficulties after some months that it would not work out. Accordingly, we have already taken steps in certain of these countries, with the approval of TCA, to merge the two programs under ECA. Our position is based on two sets of reasons: (1) those dealing with fundamental principles for effective aid programs in the area, and (2) those dealing with the special circumstances which are present in Southeast Asia.
1. Fundamental Principles
a. Having two U.S. agencies providing similar types of assistance serves to confuse the recipients and affords opportunities for the agencies to be played off against each other.
b. Jurisdictional bickering between the agencies is inevitable even with the best of intentions because of the difficulty of distinguishing the infinite number of projects falling under the heading of either “economic” aid or of “technical” assistance. For example, distinguishing between “training” and “education” is but one of the more obvious areas of conflict.
c. Under dual agency operations there is inevitably waste of manpower in (1) coordination activities, (2) duplication of effort, (3) duplication of supervision and overhead, and (4) multiple demands on the limited number of officials of the recipient governments.
[Page 32]d. The State Department is unfortunately hamstrung in the competition for the limited number of qualified U.S. technicians who are available for assignment to the Far East because of the security investigation requirements and lower salary scale.
2. Special Circumstances in Southeast Asia
a. When the Associated States of Indochina were informed by our Legation that the United States was making available Point IV assistance under an administrative setup separate from STEM, it became abundantly clear that French objections to multiple U.S. agency operations would prevent an effective Point IV program. The French are of course concerned about the creation of additional channels of direct communication between the Associated States and the United States and afraid of the replacement of French technicians with Americans. They have accepted, however, the STEM concept of providing technicians on the basis that they are there primarily an connection with an economic program and are really there to oversee the effective use of supplies and equipment provided by the United States rather than as merely technicians bringing “know how” in direct competition with French experts. We have recognized the realities of this situation and have delegated to ECA responsibility for Point IV in Indochina with the approval of TCA.
b. In both Burma and Thailand the ECA has virtually completed the establishment of its missions and has been most successful in its efforts to have the respective governments establish appropriate mechanisms to coordinate their economic and technical assistance programs both with the U.S. and with the large number of U.N. agencies planning to engage in programs in these countries. It has been extremely difficult in the case of Burma to work out a satisfactory delineation of projects under even the limited concept of segregating “education” as a Point IV field. Similarly in Bangkok there was the same problem of constant delay while projects were being assigned and Point IV staff was non-existent.
c. We found that the provision of specialists without a substantial quantity of demonstration supplies and equipment would be relatively ineffectual because of the lack in Southeast Asia of the specific materiel directly needed to make the “know how” useful.
d. In both Formosa and the Philippines the situation so predominantly calls for substantial economic assistance that there can be little question of the direct advantages accruing from having the ECA administer the comparatively minor portion of Point IV that would be provided.