Foreign Relations of the United States, 1955–1957, Foreign Economic Policy; Foreign Information Program, Volume IX

149. Memorandum From the Director of the Office of International Economic and Social Affairs (Kotschnig) to the Assistant Secretary of State for International Organization Affairs (Wilcox)¹

Washington , June 13, 1956 .

SUBJECT

• U.S. position on SUNFED and possible alternatives

The General Assembly Ad Hoc Committee on SUNFED concluded its work on June 6. Its analysis of replies of 46 governments revealed considerable support for the early establishment of SUNFED at the level of $200,000,000 to $250,000,000 for the first year. The replies of governments revealed many disagreements on details of organization and administration of such a fund, although there was majority support for an autonomous, independently operating body. The United States, which neither replied to the questionnaire of the Secretary General nor took an active part in the meeting of the Ad Hoc Committee, will have to take a position in July on the report of the Ad Hoc Committee and will be expected to define its basic position with regard to SUNFED.

The United States Government continues in a state of indecision. The intra-departmental committee set up by Mr. Prochnow and chaired by Emerson Ross is deeply divided. E is strongly opposed to the establishment of SUNFED within the foreseeable future and strongly holds that a fund of $200,000,000 to $250,000,000 would be altogether inadequate. The type of organization and administration proposed for such a fund by the Scheyven Report and generally supported by the underdeveloped countries and some of the developed countries would, in the opinion of E, make for a scattering of resources, ineffectiveness and eventual disillusionment. E is also inclined to discount the political benefits we might derive from joining an International Development Fund as well as the deleterious effects of our refusal to support it. Other bureaus are divided. S/P, EUR and NEA on the whole favor the early establishment of an international fund for political reasons, while FE and ARA, for reasons of their own, are more interested in the regional approach. In the light of this situation, it is anticipated that the intra-departmental committee will not be able to produce a joint report and that the several reports which may issue will not facilitate the formulation of a clear-cut position at the top-level.

This continuing indecision, heavily weighted on the negative side by the attitude of the top-level in E and in Treasury, is likely to place the United States in a perilous position both at ECOSOC ² and at the forthcoming General Assembly.³ The United States is likely to be blamed for the failure of the drive for SUNFED and it is not excluded that the USSR may take the lead in support of SUNFED, which would place not only the United States but also such countries as France, Netherlands, the Scandinavian countries and Canada, which are more favorably inclined toward SUNFED, in a difficult position.

The proposals given below are advanced to break the deadlock, to give us a positive policy and to recover the leadership which we are about to lose.

I. SUNFED

It is proposed that the United States, both in ECOSOC and in the General Assembly, take the following position:

1. The United States recognizes the need for multilateral action to aid underdeveloped countries, including the eventual establishment of an international aid fund in keeping with the President’s speech of April 16, 1953.

2. The United States is convinced that a fund of the magnitude of $200,000,000 to $250,000,000, even if gradually enlarged by contributions at a later date, is likely to prove inadequate, particularly if its organization and administration is to be modeled on the Scheyven proposals. Such a small fund would represent only a fraction of international financial aid and capital available to underdeveloped countries each year at the present time. If applied to the underdeveloped countries throughout the world, it would only permit scattered support for a limited number of minor development projects in these countries and would not substantially aid in their development.

3. The United States should point out that in order to safeguard the international character of the fund no one country should be expected to contribute more than 50% of the total and that under such a condition it was very doubtful whether even a small fund of $200,000,000 to $250,000,000 could be established in the near future.

4. The United States should propose that under these conditions any further discussions of the establishment of SUNFED should be suspended until a larger measure of effective disarmament resulting in a substantial reduction in military expenditures was achieved.

5. At the same time, the United States should state that in recognition of the desire and need for multilateral aid to underdeveloped countries, it is prepared to consider alternative forms of aid which might be realizable at this stage and of immediate benefit to the underdeveloped countries.

II. Alternatives

1. By way of such alternatives, the United States should propose a substantial expansion of the technical assistance programs of the UN and the specialized agencies to be achieved in two stages and in keeping with the broad proposals contained in the TAB report entitled “A Forward Look” (E/2885).⁴

(a) As a first stage, the United States should support an increase of the present Expanded Program of Technical Assistance operating at a level of $30,000,000 a year to $50,000,000 over the next few years. This would permit a development in depth of ETAP and its geographical extension, particularly to some of the non-self-governing territories. Thus by indirection, the United States would also again demonstrate its interest in the development of the non-self-governing territories.

(b) As to the second stage, the United States should declare its willingness to participate in the consideration and elaboration of plans for a further enlargement of the Technical Assistance Programs up to $100,000,000 to $150,000,000 per year. The funds above the original $50,000,000 mentioned under (a) would not be scattered to serve a multitude of individual minor projects but would be used for basic impact programs clearly defined and limited in time such as:

(i) the complete eradication of malaria and possibly other debilitating diseases;

(ii) the elimination of certain animal diseases such as rinderpest, hoof and mouth disease, and the elimination of such animal pests as locusts;

(iii) the organization and implementation of a comprehensive mineral resources survey. This project would, in accordance to information received from American oil companies, be most warmly supported by American business;

(iv) the establishment on a comprehensive basis of training facilities in planning and public administration. This would respond to a crying need of most of the underdeveloped countries;

(v) the development of fundamental education projects including aid in the establishment of teacher training facilities;

(vi) the development of fundamental science, research centers and institutes and particularly the establishment of training facilities to prepare for the full development of peaceful uses of atomic energy when it becomes economically competitive with conventional sources of energy. (In this connection special attention should be given by the United States Government to the proposals made by Mr. Robert McKinney, Chairman of the Citizens Panel which reported to the Joint Congressional Committee on Atomic Energy on the Impact of the Peaceful Uses of Atomic Energy).

(vii) Other similar major projects might be added or substituted for some of the projects mentioned above.

Any such consideration of a second stage in the development of technical assistance, which would include a considerable increase in supplies, should be guided by a determination to maintain and strengthen the multilateral approach and truly international character of technical assistance. Thus it should be made clear that no country could or should be expected to contribute more than 50% of the additional funds needed; that these funds should be freely convertible into usable currencies or given in the form of supplies considered helpful by international authorities responsible for the program.

As to organization, the first stage (increase up to $50,000,000) would not require any fundamental changes in the present set-up except strengthening of personnel, particularly in TAB. For the implementation of the second stage, the existing system would have to be strengthened and streamlined throughout. The TAB might be reestablished as a sub-committee of the Administrative Committee on Coordination to bring it more directly under the supervision of the chief executive officers of the international organizations, including the Bank and the Monetary Fund, under the Chairmanship of the Secretary General; and TAC would have to be streamlined and probably reduced in size from the present 18 to 12, it being understood that the first 6 of the 12 members would be the chief contributing countries. This, without instituting weighted voting and other highly unpopular devices, would give the United States a predominant position in the allocation of funds.

2. The United States might declare its willingness to explore, possibly in connection with the second stage outlined above, the feasibility and desirability of the Secretary General’s proposal made in his McGill address (May 30) for the establishment of an international professional and technical civil service.

3. The United States might furthermore declare its willingness to explore the Lester Pearson plan for systematic consultations within the framework of the UN of countries interested in the economic development of the underdeveloped countries with regard to international financial aid, bilateral, regional and multilateral.

4. The United States should propose a stepped up campaign to promote the flow of private capital.

It is submitted that these proposals are realistic. They will not immediately satisfy the underdeveloped countries which are mesmerized by the SUNFED proposals but would greatly lessen the pressure for the early establishment of SUNFED. In the light of preliminary explorations they would certainly meet with support on the part of the UN Secretariat and probably the specialized agencies. More important, these alternatives would effectively aid in the development of the underdeveloped countries and render any financial aid now being given in various forms more effective. They would also prepare for the more effective use of any international development fund if and when it is established. .

III. Recommendations

It is recommended:

1. That you authorize the drafting of appropriate position papers for the impending meetings of TAC and ECOSOC, embodying these suggestions. The papers will of course be subject to wide clearances.

2. That you engage at your earliest convenience in consultations on the top-level, beginning with the Secretary and including the several Assistant Secretaries, as appropriate, with regard to these proposals.

These proposals are being made as “an end run proposition” aiming at giving the United States a positive policy by the beginning of July. They will not succeed unless they are treated as such an end run proposition which has to be given top priority.

1. Source: Department of State, Central Files, 398.051/6–1356. Confidential.
2. The 22d session was scheduled to convene in Geneva on July 9.
3. The 11th session of the General Assembly was scheduled to convene in New York, November 12.
4. The report is printed in Economic and Social Council, Official Records, Twenty-second Session, 9 July–9 August 1956, Annexes, Agenda item 9, p. 22.