Foreign Relations of the United States, 1951, Asia and the Pacific, Volume VI, Part 1

Policy Planning Staff Files: Lot 64D563: Box 20034

Copy of ECA Telegram Sent to Mission Chiefs in Far East

confidential

[Washington,] November 9, 1951.

Following is text of draft entitled “Action Program in Asia” prepared pursuant to final evening meeting Baguio Conference November 2. Draft submitted for consideration to Harriman¹ and Bissell² in Paris. Griffin and F.E. Mission Chiefs. Please cable any further comments on this draft to Washington by November 19.

Begin text. The President has just reemphasized (in signing Mutual Security Act of 1951) “necessity of supporting free nations of Asia in their efforts to strengthen economic foundations of their independence.”

However, negative language of Mutual Security Act, together with repeated efforts this year limit grant aid programs in Southeast Asia to straight technical assistance or to military support operations, warns us that true nature of crisis with which we are faced in Asia is still not widely understood. This lack of understanding today jeopardizes work already under way in Southeast Asia, and threatens nullify in practice the policy enunciated on several occasions by President.

First need therefore is for US Government define and announce an explicit set of policies which will clarify for peoples of Asia and America alike aims and objectives of US and actions it will take, in helping to strengthen economic foundations of independence in Asia and Far East.

The grand design will have to be relatively simple. It will have to be affirmative. To be successful at home, it will have to rest on concept that will appeal to the practical idealism of the American people. To be successful abroad, it will have to reflect felt needs of peoples of Free Asia, and identify American people with them in the pursuit of common purposes.

What are facts about needs and aspirations of peoples of Free Asia?

First, nearly all peoples are citizens of newly independent nations. One of greatest social and political movements in history has been change from colonial status to independence, within short space of six years, of more than one-fourth of world’s population. Never in history of mankind have nine new nations emerged in so short a period of time—or under such difficult conditions. Since the war, the Philippines, Indonesia, Vietnam, Cambodia, Laos, Burma, India, Pakistan, and Ceylon have achieved the independence about which their nationalist leaders talked and fought for so long.

Second, the peoples of these new nations want rapid economic development and rising living standards. But their governments are beset by problems which they find difficult, if not impossible, to solve without outside aid. They are extremely short of technicians and administrators, as well as institutions for training them. They are unable unaided to build up and carry on even essential public services to which they became accustomed under foreign rule, much less those that are required if there is to be social stability and economic progress. They have little experience looking after needs of people, and in some cases too little inclination to do so. For some of these governments it will be difficult and for others impossible without assurance outside help to plan and carry out plans for economic improvement that might give some hope for bettering their appallingly low standards of living.

Third, in these conditions of weakness new countries of Asia are target of major Soviet and Chinese Communist power drive. Favorite Communist technique of internal subversion is at work full time to exploit natural xenophobia of independence movements, and make most of contrast between actual conditions economic distress and growing expectations of people for better life. Our security interest thus dictates program that helps governments build their defenses against this attack from within. Objective situation in Asia dictates that such program should take form of helping independent governments get a good start on their economic development.

US has well underway in Southeast Asia programs designed tackle these problems vigorously with tools developed through several years experimentation and experience. Similar programs will soon get started in South Asia. Executive Branch has already decided (ISAC D–22/3³ and Deptel dated Oct. 20), that programs submitted to Congress next year should be essentially similar in scope and purpose to those authorized for FY 1952, and will seek any additional Congressional authority needed for this purpose. But will be necessary to focus these programs on well understood goals and objectives if we are to develop full understanding in Asia of American purposes, and achieve in US full public support that is preconditioned to success abroad.

Recommendations

1. Policy: President should declare as new extension US foreign policy that US proposes give particular support to newly independent countries to help them stand on their own feet. Such special support—technical and economic assistance on substantial scale—will be continued long enough to help these countries lay foundations for their economic development. For example: usual period might be four to five years.

This policy declaration would, of course, not replace but rather would add to existing lines of policy in foreign assistance field—in particular: (a) that we will provide Point IV aid to underdeveloped countries, (b) that we will extend assistance to countries that have associated themselves with us in defense of free world against Communist aggression, and (c) that we will also, when requested and where practicable, assist other countries whose independence is threatened.

2. Spotlight on Asia: President would make clear that new policy plus existing policies focus special attention on problems of South and Southeast Asia. In that region need for support of newly independent peoples overlaps our concern for security of area in face of Soviet-backed aggression, and our general interest in helping with economic development of underdeveloped countries. A special program of economic support in Asia would therefore be announced, to become part of the President’s program presented to Congress in January 1952. (It should be a part, but readily distinguishable part, of MSP for FY 1953).

Area covered by this special program would run from Pakistan to Philippines. Aid to Formosa should be justified on security grounds as special case, which it is. The Middle East presents somewhat different set of problems; aid requirement there would not be related, for the region, to “newly independent countries” doctrine, though new policy would constitute an excellent rationale for large aid program for Israel.

Military-support economic programs of various types would be associated with these “pure” economic programs in some countries, making total volume aid somewhat larger. But military-support component would never be in substitution for aid extended under “newly independent countries” policy.

Moderate economic support assistance to Thailand, which is not “newly independent”, would be justified as aid to fully committed Asian friend on account of security threat in Southeast Asia region.

3. Action: Announcement these policies should lead to two kinds of action:

(a) For FY 1953: Promotional steps designed to get a one-year extension of present type of Title III programs approved by Congress (as part of next year’s MSP); but designed at same time to bring home to Congress and American people need for longer-term program. With election already influencing Congressional actions, it is probably not feasible to develop public support this winter for a four or five year program. Moreover, starting so late it would be most difficult to put together a sufficiently convincing program. Continuation of FY 1952 programs for another year will pay considerable dividends in itself and will enable preparatory work for following year to be done carefully enough to be successful.

(b) For the Longer Pull: Programming of a four-year program starting with FY 1953. Based on President’s announced policies, US economic missions would develop with each country goals or objectives to be achieved within four-year period, action to be taken to reach them and probable cost. It will be especially important to state in as concrete form as possible what needs to be accomplished in order to construct foundations of economic development—i.e., conditions necessary to real stepping up of per capita production and income. The major objectives of program may be expressed as institutional goals or (where feasible) in quantitative terms. In case of each major country objective all types of action and aid, whether financed by local government or by outside sources, and whether consisting of personal services or supplies and equipment, should be regarded as part of a single plan of action to reach objectives.

One result of this programming work should be a “price tag” that will give everybody concerned, here and abroad, sense of amount of grant and loan funds US is prepared to invest in this enterprise. In early years, relatively more grant funds will be required. But grants can subsequently decline in proportion until, after end of four-year period, further outside assistance for economic development can in most cases take form of loans. End text.

None of above is, of course, to be discussed with governments at this stage.

Wood⁴

1. W. Averell Harriman, Director for Mutual Security (confirmed by the Senate on October 19). The Mutual Security Agency came into existence formally on December 30, 1951.
2. Richard M. Bissell, Jr., Acting Administrator, Economic Cooperation Administration.
3. Not printed, but see footnote 4, p. 99.
4. C. Tyler Wood, Associate Deputy Director, Mutual Security Agency.