FRC Lot 53 A 278: ECA Cable File
The ECA Acting Administrator (Wood) to the Embassy in the Philippines
priority
Subject—Program Objectives and Industrialization
Reference—Toeca 10331
Ecato 1445. 1. Purpose this message is present for STEM review and comment statement re program objectives and industrialization FY 52 and 53 programs. This purpose best achieved in longer statement, but imminence budget presentation requires cable. Appreciate STEM comments soonest.
2. Major econ objectives next para selected because possible make significant progress their achievement with material things provided by ECA program. Other objectives (Reform, Impact, Morale, etc.) not ruled out but fall under following heads, and as such should be distinguished from major program objectives: (a) Those too broad to serve as explicit criteria against which programmed activities are measurable (e.g., morale, econ stability, moderating maldistribution wealth and income); (b) those more readily accomplished by exhortation and persuasion than by utilization material things provided ECA program (e.g., agrarian reform, tax and wage legislation); (c) those which involve short-term political gains, with emphasis immediate boost in consumption and unlikely therefore have lasting econ effects; (d) those desirable but classifiable under some main objective (e.g., increase productivity); and (e) those not themselves objectives but methods for achieving objectives (e.g., technical training). This para intended show desirability classify and limit objectives in order reduce them manageable proportions programwise.
3. Propose three major interrelated program objectives, all to be achieved rapidly as possible: (a) significant increase total indigenous output commodities essential welfare masses, applicable particularly to type goods now imported; (b) significant increase new work opportunities via dual approach of increasing opportunities existing occupations and establishing productive and distributive facilities new to Phil econ structure; and (c) significant increase number and kinds business units producing essential commodities. This aim highly important because econ development likely produce significant results only if process self-generating, i.e., not so dependent for perpetuation upon govt initiative; key to this lies in private hands.
[Page 1583]4. Re 3 (c). To divert private capital now either idle or unproductively employed into productive pursuits, powerful instrument needed. Development corp technique used Latin America and elsewhere and recommended somewhat different form by Bell Mission would be one instrument. Corp would extend loans or take equity participations and use other techniques and inducements necessary encourage industrial and other feasible projects. Prepared use counterpart funds provide all or part initial capitalization such corp. Interested your views this proposal and suggestions re contribution from counterpart funds. Understand Araneta working on charter for corp. What is current status?
5. Re para 4. If work on charter lagging, suggest you consider adaptation RFC2 or NDC3 or other govt corp as interim or perhaps permanent instrumentality for extension aid private capital. Stress need for enlisting private initiative connection ECA program in order help meet situation discussed Arnold letter Renne Oct. 12 FEPD #91.4 Propose you consider allocation this purpose counterpart pesos ten (P10) mill FY 52 and twenty (P20) million FY 53. In addition, prepared extend dollar aid to finance new industrial investment deemed desirable by dev corp. If you agree, request you recommend modifications your FY 52 and 53 program submissions to accommodate both dollar and counterpart allotments this project, and cable soonest for Budget Bureau submission brief justification amounts proposed.
6. In order give further meaning to major aims listed para 3 above note that ECA program, if integral part Phil development effort, could extend aid in four major fields of endeavor: production of goods; resettlement; public works; and basic government services. Relationship these fields to aims para 3 very direct. Progress first and second fields would directly increase output and work opportunities; in fact, progress first field (especially industry) could provide stimulus for expansion productive business units. Progress third field vital prerequisite for increase output and work opportunities. Progress last field necessary for support activity other fields. Extent ECA aid each field should be designed of course achieve three aims rapidly as possible. Note this does not rule out fields endeavor (e.g., agrarian reform) applicable to objectives para 2.
7. In separate cables will further review FY 53 program in terms above aims and fields endeavor. This connection wish express our appreciation of vol work and effort you and staff have put into FY 53 program.