FRC Lot 53 A 278: ECA Cable File
The STEM Chief in the Philippines (Renne) to the ECA Acting Administrator (Bissell)
Toeca 1571. Re Ecato 1445,1 program goals.
1. Appreciate fullest your need have specific program objectives and desirability state them in quantitatively measurable terms. Believe objectives you propose are significant but by no means only major goals. Cannot agree selection or rejection major program objectives should depend on measurability in standard units. Even this test, however, would permit inclusion very important objectives you omitted from list major objectives, such as, (a) financial stability as reflected govt budget, money supply, price and wage relationships, et cetera, (b) balance foreign receipts and payments, (c) real income distribution, (d) land and property ownership as reflected size holdings, percentage tenancy, private investments.
2. Believe will be possible obtain measurements of progress toward most our objectives in spite of statistical limitations in Phils. Fact that it may be difficult quantitatively measure progress toward some objectives does not in our opinion detract from their legitimacy or necessity in presenting to executive, legislative and US and foreign public the aims of program.
3. Are deeply concerned about major shift in emphasis suggested your para 2. Do not believe any less urgent concentrate on social, political objectives in period ahead than formerly. This abundantly confirmed by testimony mission chiefs Baguio and reflected proposed action program statement Ecato 1440.2 Indication your para 2 that agrarian reform, tax and wage legislation and moderating maldistribution wealth and income although “not ruled out” no longer major program objectives is irreconcilable spirit and letter Foster Quirino agreement and bilateral, also inconsistent numerous ECA policy expressions, press releases, report to Public Advisory Board, emphasis on land reform etc. Near-exclusive emphasis on increasing physical production, while downgrading other major objectives outlined para 5 below would seriously unbalance these basic means of carrying out US overall policy. Fear proposed shift in emphasis might [Page 1586] cause serious let-down and greatly diminish value ECA operations in combatting communism in Phils, SEA.
4. Equally concerned, if we understand your cable correctly, at indicated misconception feasible ECA operating methods Phils. Exhortation–persuasion not effective Phils unless backed by material incentives. Program recommendations from beginning this mission have emphasized and continue emphasize use of materials provide ECA program as leverage to accomplish reform without which aid to specific installations and even fullest success in increasing production on projects where ECA applied cannot make program truly effective. Believe substantial progress already achieved in tax and wage legislation using this technique. Expect make progress agricultural extension, other social, economic, administrative reforms and legislative improvement coming sessions. Use of material things to inspire these actions will continue to be of utmost importance. Reforms which are and should remain major objectives (see para 3 above) most difficult to achieve over resistance powerful status quo beneficiaries and inertia, in articulateness, lack of organization broad masses. Your apparent assumption that such objectives achievable by “exhortation and persuasion” or that recent tax and wage legislation was so achieved, is profound misreading of facts and realities Phil situation. There was clear recognition on part Phils that enacting such reforms was prerequisite to ECA material aid.
5. Recommend that statements to Budget Bureau executive working groups, Congressional committees should present, subject your judgment in phrasing, the following major objectives as means of carrying out US policy of building internal strength in Phils:
- (a)
- Increasing productivity Phil economy through research; application results research; improved techniques, modern tools, and other production aids; training manpower; increased and redirected national investment in productive enterprise; expanded utilization natural resources; et cetera.
- (b)
- Raising standard living large masses Phil people through more equitable distribution Phil national income, including distribution economic results of successful achievement objectives (a) above, by means legislative and administrative reforms especially land reform; rural credit; revision tax system; improvement health and housing conditions; settlement in under-populated areas, et cetera.
- (c)
- Improving government administration and institutions through expert guidance; service and overseas training of govt officials; legislative, budgetary and organization reforms; improvement of planning, research and enforcement; lifting of standards of remuneration your govt service, governmental integrity, et cetera.
6. Objectives stated para 5 above to be achieved through (a) ECA dollar purchases of commodities, (b) provision of technical assistance, [Page 1587] (c) use of counterpart funds, (d) maximum degree of redirection Phil Govt and private resources and investment, (e) legislative, fiscal and administrative action.
7. Appreciate large job you have in making this presentation and wish assure you of every possible assistance. Remainder points Ecato 1445 covered separate cable.3