162. Memorandum From the Deputy Under Secretary of State for Economic
Affairs (Dillon) to the
Secretary of State1
Washington, September 26,
1957.
SUBJECT
- U.S. Counter-Proposal to SUNFED at
General Assembly
In the absence of a constructive alternative, it is likely that the General
Assembly will vote to establish SUNFED
and that the U.S. will be isolated in opposition. From preliminary
indications, many of the Western European countries, the Soviet Bloc, and
practically all the underdeveloped countries will vote for SUNFED. Even the U.K. is presently considering only an abstention and appears to
be prepared to participate in drafting the Charter of SUNFED.
If SUNFED were formally established, it
would almost certainly have great difficulty in securing contributions.
However, the U.S. would be subjected to continuing and increasing pressures
to contribute. If SUNFED should begin
operations with the meager funds it might receive initially from France, the
Netherlands, some Scandinavian countries, and the Soviet Bloc, the pressure
for the U.S. to participate might become very difficult to resist.
In the attached position paper a counter-proposal is put forward for a
substantial enlargement of the UN Technical
Assistance program to permit concentrated work in basic fields such as
surveys of natural resources, technological institutes, and industrial
research and productivity centers. The U.S. would state its willingness to
support a doubling or tripling of the UNTA
fund, now at an annual level of
[Page 422]
$30 million, it being understood that the U.S. percentage contribution would
within the next 3 years be reduced to 33⅓%. The details and the rationale of
the proposal are spelled out in the attached position paper (Tab A).
It is not unreasonable to believe that a U.S. initiative along these lines
might carry. However, whether or not it defeats the anticipated SUNFED resolution, the proposal can stand on
its own feet. The UNTA is doing a useful
job well but it is strapped for funds. Its present $30 million annual level
compares with annual appropriations for the U.S. bilateral technical
assistance program of $125–$135 million. Moreover, the counter-proposal
offers a practical and constructive way to promote economic development
through UN machinery; it has the advantage
over bilateral technical assistance that it enables us to tap experts from
other countries; it offers a basis for eliciting contributions from other
developed countries for an important U.S. objective; its dimensions are
realistic in terms of what other countries can afford and what the UN can competently handle; and the job can be
undertaken within the framework of existing UN machinery. Moreover, the response of other countries will
give a telling indication of how much financial support there is for further
development activity through the United Nations.
If countries respond to the U.S. initiative, the U.S. contribution would have
to rise over the next several years from the present level of $15.5 million
to perhaps as much as $33.3 million.
If you approve this counterproposal in principle, we will seek the
concurrence of the White House and the Bureau of the Budget and will consult
with key members of the Congressional authorizing and appropriations
committees.
Recommendation:
That you approve the counterproposal in principle subject to the concurrence
of the Bureau of the Budget and the White House and to your further review
after consultation with Congressional leaders.2
[Page 423]
[Tab A]
PROPOSED POSITION PAPER ON SUNFED
FOR TWELFTH GENERAL ASSEMBLY3
Problem:
In a resolution adopted 15 to 3 (U.S., U.K., Canada), the ECOSOC urged the General Assembly to establish a SUNFED and to set up a preparatory
commission which would (a) prepare the necessary steps for its
establishment and (b) select a limited number of projects to be financed
through voluntary contributions pending the full operation of the
fund.
U.S. Position:
- 1.
- The U.S. delegation should state the U.S. position on SUNFED firmly and forcefully so as
to leave no doubt where we stand: (a) The U.S. is fully alive to the
needs of the less developed countries for external assistance; this
is amply demonstrated by the record of U.S. aid for more than a
decade, (b) However, the U.S. is not prepared to support the
establishment of SUNFED at this
time; will vote against any resolution authorizing its present
establishment; and will not participate in any preparatory
commission to set up SUNFED. The
resources which SUNFED could now
command would be totally inadequate to permit it to do the job
intended for it. If established now, SUNFED would be structure without substance; it would
raise hopes that could not be fulfilled; its limited resources would
be dissipated among minor capital projects all over the world
without real impact on the development process anywhere, (c) The
U.S. stands by the pledge contained in General Assembly resolution
724 (VIII)4 to ask the American
people, when sufficient progress has been made in
internationally-supervised disarmament, to join with others in
devoting a portion of the savings from such disarmament to an
international fund, within the frame-work of the United Nations, for
economic development. Only such disarmament will make possible
contributions of sufficient size to establish an effective
international economic development fund. Responsibility for
preventing such disarmament rests squarely with the USSR which has
rejected all attempts of the U.S. and other Western
[Page 424]
powers to attain a substantial measure
of internationally controlled disarmament.
- 2.
- The U.S. believes that a more constructive approach than the
ECOSOC resolution to the
problem of promoting economic development would be to use the
additional resources that countries may be prepared to make
available at this time to support a substantial enlargement of the
UNTA program. The UNTA program needs substantial
additional resources to enable it to do two important jobs: (a) to
meet the pressing needs of the many newly independent nations while
maintaining the momentum of its present activities within the
existing scope of the program, and (b) to enlarge the scope of its
activities to permit systematic and sustained work in certain basic
pre-investment fields, such as intensive surveys of water, power and
mineral resources; engineering surveys; the staffing and equipping
of regional training institutes in technology, statistics, and
public administration; industrial research and productivity centers.
Surveys, research and training of this kind are of basic importance
for successful economic planning and progress but for lack of funds
the UNTA program has had to abstain
from such projects or to undertake them only in the most limited and
piecemeal fashion. They require a larger outlay for supplies and
equipment and more sustained support than the present program can
afford.
- 3.
- More specifically, the U.S. delegation should state (a) that the
U.S. stands ready, on a sharing basis, to see the financial scope of
the UNTA program doubled or
tripled, it being understood that the U.S. percentage contribution
will, within the next 3 years be reduced to 33⅓%; (b) that within
the total enlarged fund a special fund should be set aside and
earmarked for concentrated work on special projects of the
pre-investment type basic to economic growth.
- 4.
- In support of this position, the U.S. delegation should submit a
resolution as a substitute for the SUNFED resolution asking the General Assembly to
appoint a preparatory committee (a) to define the basic fields and
within these fields the types of special projects to be eligible for
assistance from the special projects fund, giving special attention
to the projects advanced in Chapter III of “The Forward Look”
(E/2885); (b) to define the changes which may need to be made in the
present administration and machinery of the UNTA program to assure speedy and effective use of the
special projects fund; (c) to ascertain the extent to which
governments would be willing to contribute to the enlarged UNTA fund with an indication of the
amount they would be prepared to earmark for the special projects
fund from their increased contributions; (d) to prepare the
necessary amendments to the present UNTA legislation and procedure. The resolution should
also request governments to assist the preparatory committee in its
work and specifically to indicate the
[Page 425]
extent to which they would be willing to
increase their contributions to enable the program to expand. It
should invite the specialized agencies, the UNTAA, and the TAB to provide their views and
suggestions to the preparatory committee through the
Secretary-General. The Committee would be requested to submit its
report and recommendations to the 26th session of ECOSOC (and through ECOSOC to the summer 1958 session of
TAC); the ECOSOC would be requested to
transmit the committee report together with the comments of ECOSOC to the 13th session of the
General Assembly in 1958 for final action.
Several countries at ECOSOC stated or
implied that the U.S. would be forced to participate once SUNFED were established. It is
important, therefore, that the U.S. state its position on SUNFED unambiguously so that countries
will not vote SUNFED into being on
the assumption that the U.S. will reluctantly go along.
Nevertheless, from present indications it is likely that, notwithstanding
the clearest statement of the U.S. position, a resolution to establish
SUNFED will carry unless a
positive and constructive alternative can be put forward.
The counter-proposal to enlarge the resources and scope of the UNTA program may succeed in postponing a
showdown on SUNFED this year and
might even take some of the pressure off for the next few years while
the UNTA fund was being built up.
Countries that would like to vote with the U.S. would find it easier to
turn down SUNFED, and even some
diehard supporters of SUNFED might be
prepared to settle, for the time being, for something that promised
additional resources even though the resources would not go into brick
and mortar projects.
However, whether or not the counter-proposal defeats SUNFED, it is a proposal that can stand
on its own feet. It offers a practical and constructive way to promote
economic development through UN
machinery; it has the advantage over bilateral technical assistance that
it enables us to tap experts from other countries; it offers a basis for
eliciting contributions from other developed countries for an important
U.S. objective; its dimensions are realistic in terms of what other
countries can afford and what the UN can
competently handle; and the job can be undertaken within the framework
of existing UN machinery. Moreover, the
response of other countries will give a telling indication of how much
financial support there is for further development activity through the
United Nations.
The UN Technical Assistance program is now
doing a useful job well. It is strapped for funds. The present level of
$30 million a year compares with U.S. annual appropriations for
bilateral technical assistance of $125–$135 million. The UNTA tries to be responsive to reasonable
government requests over the whole range of economic
[Page 426]
and social activity. However, for lack of
funds, it can give its experts practically no logistic support, and it
has been quite unable to undertake survey, training, and demonstration
projects where these involve relatively large equipment expenditures to
be effective. Because it cannot commit too large a share of its limited
funds to continuing projects if it is to meet new requests, it has been
unable to give the sustained and systematic support to going projects
that they deserve.
While specific dollar figures should not be discussed with other
delegations in the absence of clear indications of the over-all extent
of financial support from other UN
Members, we would envisage a gradual buildup in the UNTA fund of perhaps as high as $50
million to enable the program to maintain its present momentum and to
meet the needs of newcomers, and a target of perhaps as high as $50
million for the special projects fund. The special projects would be in
basic fields essential to growth, e.g. surveys of water, power, and
mineral resources; education, technological, vocational and basic
literacy; industrial research in the use of local materials;
agricultural research and demonstrations. While the UNTA operates in these fields in a
piecemeal way, the special projects fund would enable it to concentrate
in depth in these fields and to support projects that are more costly,
require more sustained assistance, and are more operational in nature.
Priority would be given to projects within the basic fields that would
have the widest impact, e.g. regional institutes and training facilities
of a permanent nature from which several neighboring countries could
benefit; surveys of water resources affecting several countries, e.g.
the Mekong River. Chapter III of the report of TAB entitled “The Forward Look” suggests several areas
where more systematic research and training is needed as a foundation
for economic growth.
The fund would not do the job envisaged for SUNFED. It would not build bridges, dams, roads, power
plants, or houses; the capital required for that kind of job is
completely out of line with the resources countries are prepared to make
available. It would however do a job of significant and basic
importance. In less developed countries there is a shortage of
administrative, managerial and technical skills at every level. There is
little data on natural resources, and little or no experimentation on
new and productive ways to use the resources that are known. The
enlarged technical assistance program would help countries train their
manpower and assess and use their resources more productively.
Very few changes would need to be made in existing UNTA machinery to support the larger
program. It might be advisable to appoint a Special Projects Director
who would work together with a technical committee of the TAC to review projects and evaluate
[Page 427]
them. Project proposals could
be submitted by governments, by specialized agencies and the UNTAA, and
by the TAB. The TAC would review and approve the specific projects.
In presenting its counter-proposal, the U.S. delegation could elaborate
U.S. views on organization, basic fields, and criteria for selection as
set forth in this section, while recognizing that the full analysis and
study of these questions would be a matter for the preparatory committee
and the final decisions a matter for agreement among governments at the
General Assembly.
