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

8. Report by the Chairman of the Council on Foreign Economic Policy (Randall)¹

Washington , December 1956 .

[Here follows a table of contents.]

FOREWORD

In December 1956, accompanied by three members of my staff, I visited the Far East for the same objectives that I had in mind when I made a similar trip to Paris, London, and Bonn in September. My purpose was to increase our knowledge and understanding of foreign economic problems by drawing upon the wide experience of United States officials serving in the area.

The discussions were unusually rewarding.

Once more, I followed the practice of inviting each participant in the discussions to submit a paper dealing with whatever aspect of foreign economic policy he found most challenging. These papers are included as a supplement to this report,² and the highlights are summarized under the heading “Observations and Proposals”.

In preparation for the Pacific trip, the Departments of State and Defense, the ICA, and the Bureau of the Budget arranged briefings for us and provided us with briefing papers, all of which we found to be extremely helpful when we entered upon the actual discussions in the field.

My associates on the trip to the Far East were the same persons who went with me to Europe in September, namely, Mr. Forest D. Siefkin, Vice President and General Counsel, International Harvester Company, who had been serving as my consultant; Lt. Colonel Paul H. Cullen, Secretary of the Council on Foreign Economic Policy; and Dr. C. Edward Galbreath, White House economist. Mr. Robert Barnes, Special Assistant to the Under Secretary of State, was again selected by the Department of State to assist with arrangements and was asked by me to serve as a participating member of the team.

It is my hope that this report may serve somewhat to widen the understanding of other Government officials with regard to the economic problems of the Far East and Southeast Asia in the same manner that I profited from the trip itself.

Clarence B. Randall ³

[Here follows a list of pre-trip briefings of Randall and his associates by officials at the Departments of State, Defense, Bureau of the Budget, and the International Cooperation Administration. The Randall group explained that it followed the same procedure as in the European trip (see supra ) and met with similar officials from the Embassies in Japan, Korea, Thailand, Vietnam, Laos, the Philippines, and the Republic of China. A list of suggested topics for papers and discussion on foreign economic policy toward Japan, Korea, and Southeast Asia follows. Also included is a list of the posts and officials visited from December 10 to 22.]

OBSERVATIONS AND PROPOSALS

Economic and Political Developments

The economic situation in the Far East has improved markedly during the past two to three years, although much remains yet to be done in every country. The economic advances of Japan and Taiwan, particularly when viewed against the background of war and economic dislocation, have been spectacular. Viet-Nam has made remarkable progress on the road to recovery. Less spectacular gains have been made elsewhere.

These gains, however, have not overcome all the shortcomings on the economic side and in a number of cases are tempered by unfavorable political developments. The situations in the Philippines and Burma particularly are disturbing.

In Japan, industry is currently operating at its postwar peak. The steel industry, for example, is producing at the annual rate of 11.5 million tons of steel ingots as compared with about 7 million tons eighteen months ago. Also, the shipbuilding industry is now producing at capacity, whereas two years ago it was operating at 25 percent of capacity. The high level of economic activity is reflected in the per capita consumption of food and clothing, now about 10 percent above prewar levels. Exports have increased 100 percent in three years. Japan moved from a $313 million deficit in its balance of payments in 1953–54 to a $535 million surplus in 1955–56, or virtually to a balanced position when special dollar receipts (expenditures by and for U.S. armed forces) are excluded.

These remarkable economic advances by Japan may be attributed primarily to three factors: (1) Japan’s own efforts, (2) a record rice crop in 1955 and a crop above average in 1956, and (3) the high degree of industrial activity in Western nations which not only created an enlarged demand for Japanese products but also drove buyers to Japan from customary sources of supply because of delays there in delivery. A high level of defense expenditures by the United States in Japan, which provided about 20 percent of Japan’s foreign exchange in 1955, was also an important factor. Certain of these factors do not provide a solid basis for the future of Japan’s economy.

Furthermore, Japanese industry in many fields cannot, at least for the present, compete price-wise with producers elsewhere. In 1956, for example, Japanese steel bars were selling at 10 percent above world prices, steel sheets at 18 percent, copper at 10 percent, ammonium sulphate at 18 percent, caustic soda at 55 percent, and aluminum at 2 to 3 percent.

There are other weaknesses in the Japanese economy: shortage of capital, a dearth of raw materials, and land shortage. The weak and uncertain political situation, resulting from lack of strong leadership and growing political opposition to the party in power, together with rising nationalism, may well have adverse economic repercussions.

In Korea, the task of repairing or rebuilding most of the commercial, transportation and communications facilities, destroyed during the war, has been largely completed. Electric power facilities have been built to supply electric power, formerly obtained primarily from the hydroelectric facilities in the north. Agricultural production has been increased, although Korea is still a food deficit country. Consumption, except for housing, is estimated to be back to the level of 1949–50, and in some instances even higher.

Despite these accomplishments in Korea, to which massive United States economic aid has made a major contribution, return to viability does not appear possible for a long time. There are now at least 5 million more people in South Korea than in 1945. The country has been cut off from the complementary northern half which contained most of the abundant natural resources. And it will be necessary for an indefinite time to maintain a large Korean military establishment. It is essential, therefore, that economic development programs go forward as rapidly as possible, so as to build up the economic capabilities of the country and reduce the amount of assistance required in the future from the United States.

On Taiwan, the remarkable economic achievement includes successful but evolutionary land reform programs accompanied by a substantial increase in agricultural production, a much larger rise proportionately in industrial output, and a modest but steady rise in living standards to levels rarely found in Asia. Notable progress has also been achieved in public health, education and general welfare. Despite these gains, the economy is not able to support the huge military establishment maintained there with United States support as defense against further aggression by Communist China.

The difficulties of Viet-Nam during the past two years have been formidable. There was the problem of receiving and caring for some three-quarters of a million refugees from the Communist North. Government administration had to be established in areas formerly controlled by the Vietminh. The most productive agricultural areas in the Southwest were controlled by dissident sects. The railways and canals were destroyed or in disrepair. Population had migrated from troubled areas to urban communities, abandoning farms and overcrowding the cities. Needless to say, production of the principal crops—rice and rubber—had declined to very low levels. Few observers believed that Viet-Nam had a chance of survival. The miraculous recovery over the past two years is now a matter of history. That massive economic aid from the United States was poured into Viet-Nam should not detract from the achievements of this country through its own efforts.

The situation in Thailand appears stable but its economy is not making substantial progress. As in other developing countries, there is a dearth of capital and of technical and managerial personnel. An adequate source of power is presently lacking, since there is virtually no coal, and hydropower possibilities are limited. In the north, construction of a dam appears feasible, and the Thais propose to undertake this project with the view to producing about 500,000 kwh. of electric power or 5 times the present very limited capacity. Before economic development can progress far, not only must more power be available but improved transportation and communications must be provided. Deficiency in human resources, which manifests itself at all levels of the economic and social structure, is perhaps the most pervasive factor inhibiting economic development.

The economy of Thailand is based largely on rice and a few raw materials, primarily crude rubber, tin ore and teakwood. Altogether these products provide about five-sixths of Thailand’s foreign exchange earnings. Its few industries are small in character and, except for rice milling, produce only for local markets.

Thailand’s current level of exports do not provide enough earnings to finance the foreign exchange cost of a sizeable economic development program.

Elsewhere in the Far East, the economic picture is not bright. The situation in Burma is serious. While gross national product has risen since 1950, it is still scarcely 90 percent of prewar. Per capita consumption is only about 70 percent of the prewar level. Burma remains highly dependent on rice exports, which represent approximately 80 percent of the value of its export earnings. Popular discontent is growing, and if the present government is to remain in power, it must lead the country to dramatic economic progress within a relatively short period of time. The seriousness of the situation is greatly intensified by the fact that the only significant opposition groups are either Communist or Communist infiltrated and manipulated.

In the Philippines, economic progress has been discouragingly slow. Productivity in both agriculture and industry remains low, even by Asian standards. Crop yields are among the lowest in Southeast Asia. Local-consumption industries are inefficient and are highly protected against foreign competition. Mineral resources, abundant as they are, have been largely neglected: Nationalism and antipathy toward the Chinese in the Islands plus the absence of a satisfactory foreign investment law have discouraged private foreign investment. Unemployment is estimated at 12 percent of the labor force, and underemployment is an even greater problem. The unsatisfactory economic situation constitutes a serious threat on the political front and stands in the way of adequate support through the Philippine budget for essential military support expenditures. The balance of payments is weak despite the special benefits from United States Government sources, which total about $190 million (including $65 million for veterans’ payments) or nearly 40 percent of total foreign exchange earnings.

A number of features characterize several or nearly all of the free countries of the Far East. Production increases are scarcely keeping ahead of population growth in a number of countries. In most of the countries, the governments are suffering from a lack of competent officials. There is also a growing nationalism which militates against the inflow of private investment and technical and managerial talent, and a growing pacifism which limits support of the military forces. Except for Japan, Taiwan, and Korea, food is produced abundantly, and much arable land remains to be cultivated and is available pretty much for the taking.

The control of malaria is far advanced in the area. This points to future success in adoption of public health measures which can have only beneficial results for all the nations concerned.

Burma is the only country in the area in which Soviet economic penetration has made much headway. Dealings with the Soviets, however, have not turned out well for the Burmese in important instances, and recently the Burmese Government has turned to the United States for assistance. Here is an opportunity for the United States to demonstrate goodwill and desire to help that country overcome its distressing economic situation.

Ability to Support Military Forces

The ability of friendly Far East countries to support armed forces is extremely limited at the present time. Japan, Taiwan, Thailand and possibly the Philippines are the only ones capable of supporting armed forces adequate for internal security. Viet-Nam and Laos are unable to support such forces. In Korea a state of suspended warfare exists.

From the economic standpoint, Japan can support a sizeable defense force beyond that needed for internal security, but the political situation is preventing the appropriation of adequate funds. The Japanese were thoroughly disillusioned by their defeat in World War II and are fearful of a resurgence of the military to power. The Socialist opposition, holding 35 to 40 percent of the seats in the Diet, is solidly against increased military expenditures. Improvement in the political situation and a reduction in the strength and influence of the Socialists must be accomplished before Japan can be expected to play an appropriate defense role. The situation in Japan is complicated by the Constitutional provision, included at the insistence of the United States, limiting the size of the armed forces Japan may maintain.

In Korea, because a state of suspended warfare exists, the armed forces required are large. Adequate manpower is available currently for the military forces being maintained—and the Korean Government wants a large military force—but the country is unable to provide much budgetary or economic support. Along with other military and economic aid, the United States is now financing out of counterpart funds a deficit of $120–130 million in the Korean military budget.

Lagging economic development in the Philippines and the unstable political situation there stand in the way of an adequate defense effort. The Philippine Government has taken a firm position that economic development must come first, and that position is reflected in the defense budget which provides little more than pay for military personnel.

Virtually the entire military program in Viet-Nam and Laos is underwritten by the United States. The capability to maintain forces at a level required even for internal security will not be reached for some time.

The Chinese Nationalist Government on Taiwan is now carrying a sizeable portion of the local currency cost of its huge military establishment, but the limited resources of the island cannot in the foreseeable future earn the foreign exchange to pay for the imports required by the military. At most, it is unlikely to be able to bear more than the local currency cost of maintaining armed forces of the present size—a large and vital part of the free world’s military strength in East Asia and the Western Pacific.

One concern of United States officials responsible for military and economic assistance to certain of these countries has been the problem of inflation where supplies of goods have not been adequate for the financial income generated. To absorb local currency and increase the supply of goods, the aid programs have been utilized to bring in consumables which are sold for local currency. In certain cases, it has been pointed out, this anti-inflationary device may result in raising the consumption level of the country to a point which cannot in the future be sustained by the country’s own economy, particularly in the absence of an adequate economic development program.

One conclusion stands out clearly. In those cases where United States aid programs are large, it is vital that enough of the assistance effort be devoted to economic development in order that the country itself may in the future become less dependent on outside aid. Otherwise, the burden on the United States taxpayer will continue and even increase. In the absence of a substantial increase in private foreign investment, either the military program will have to be reduced in order to make more aid available for economic development, or additional funds will have to be appropriated.

Furthermore, it is highly desirable that the countries themselves provide at least subsistence support for their military forces. It is essential to morale in the developing countries that their military forces be fully maintained by their own military budget and be at all times under full control of their own people.

Trade

Trade among the free world countries of the Far East has not developed to any considerable degree in the post World War II period. This is a reflection of the slow rate of economic expansion in Southeast Asia including the Philippines. In Southeast Asia, other than the Philippines, rice continues to provide most of the foreign exchange earnings.

Japanese foreign trade has increased rapidly, doubling in the last three years, and in 1955–56 the country attained a balanced position in its international payments without reliance on special dollar receipts from the United States armed forces. This trade has been built up primarily with the United States and the industrial countries of Western Europe.

In trade with the United States, Japan in 1955 purchased goods valued at $780 million and sold goods valued at $459 million. Japan is the largest purchaser of United States agricultural products—raw cotton, wheat, barley, soybeans and tallow. It is in this context that the problem of Japanese exports to the United States should be appraised.

In Japan, trade with Communist China has become an important political issue. Expansion of such trade is supported by the Socialist members of the Diet and a number of the Conservatives, as well as by many business leaders. The Japanese resent the way in which the controls on trade with Communist China affect Japan. She is prevented from shipping directly to Communist China many items which Western European countries may sell to the European members of the Soviet Bloc. They in turn transship them to Communist China. This resentment may however, be presently more of a political irritant than it is an economic factor. The American Embassy in Japan doubts whether Japan’s exports to Communist China would exceed $125 million (or 5 percent of total exports), compared with 1956 exports of $50 million, even if controls were reduced to the level of those governing trade with the European Soviet Bloc.

Southeast Asia, including the Philippines, could provide many additional raw materials which Japanese industries urgently require. The development of these resources would, in turn, increase the ability of the Southeast Asian countries to earn foreign exchange, and thus make them better markets for Japanese exports.

Because rice is a major factor in every economy of Southeast Asia, American officials in the area caution that this country should make every effort in disposing of surplus rice and wheat not to disrupt established rice trade and rice markets. They warn that there is no surer way of driving these countries toward Communist markets than by disturbing their established outlets for rice.

The Philippines and other countries in Southeast Asia, except for Thailand, are suffering from chronic balance of payments deficits. This situation must be corrected. Foreign private investment in the undeveloped resources of these countries could provide much larger exports of industrial raw materials and thus increase foreign exchange earnings. Further proposals for improving this situation through trade and economic development are discussed in the section on “Proposal for Regional Economic Cooperation”.

Climate For Private Foreign Investment

An adequate supply of investment capital is a major need of all the free countries of the Far East and Southeast Asia. Most of the countries have important untapped mineral deposits which could be developed into major export industries.

Capital in the amount needed for this economic development can presently come only from the outside. Economic assistance from the United States has played an important role in enabling these countries to survive in the aftermath of World War II, but private foreign capital is needed for the economic development job ahead.

The investment climate, however, is not attractive to private enterprise.

There are a number of reasons for this adverse investment climate. Most of these countries have only recently attained their political independence and are fully imbued with nationalism. Private foreign investment, to them, is a threat to their independence. They regard it as a form of colonialism. They want to control the development of their own resources. In Burma, the Government has committed itself to socialization as the only acceptable road to economic development. Even where socialism or extreme nationalism does not prevail, adequate investment laws have not been enacted, and the equity concept is slow in developing, even in Japan. There is also a lack of knowledge of how private enterprise operates.

There is great need in that area of the world, therefore, for a change in attitude toward foreign private capital investment. The United States, perhaps, can do more to bring about this change. Investment laws, which create a friendly attitude toward foreign private capital and enterprise while at the same time protecting the essential interests of the underdeveloped countries, might be worked out. Joint ventures, covered by specific agreement on nationalization, might be used to make private foreign investment attractive, as has been tried in Burma. A good deal of education is also needed to develop the equity concept and to show its great merits.

It has been suggested that some accommodation to socialism is worth looking into provided that private enterprise is given an opportunity—through an appropriate investment law and other measures to provide a favorable climate—to demonstrate its superiority. The argument is that when the two systems are permitted to work side-by-side, private enterprise will do the job so much better than enthusiasm for socialism will wane.

Proposal For Regional Economic Cooperation

Following the close of the war in the Pacific, and likewise following the armistice in Korea, the foreign economic policy of the United States in the Far East developed step by step, and nation by nation, but essentially always on a bilateral basis. Whether in the field of economic assistance, or that of trade, or of private investment, our policies and programs have been designed in terms of the relationship between the United States and the particular country in question, rather than in terms of the relationship of the Asian countries with each other, or of Southeast Asia as a whole. Much of our planning necessarily had to be done in the face of emergency conditions, and had to be designed to meet short-term objectives.

That period is passing. This is the time for reappraisal, and for making a determined effort to provide the leadership that may serve to draw the nations of the area into closer economic relationships so that the strength of one may serve to offset the weakness of another, and the collective well-being be made to rest more upon mutual and complementary effort, and less upon the resources of the United States.

The first step in this direction might well be the calling of an economic conference in the Pacific in which the Asian nations would themselves discuss their economic problems, and explore ways by which they might be of mutual assistance in the development of the total resources of the area.

Consideration of the problem of steel production and consumption in the area offers an example of what might be accomplished.

All the Asian nations have a rapidly increasing demand for steel. Japan has great capacity for the production of steel and possesses both management and technical skills, but her industry is operating under severe handicap for lack of raw materials. Those supplies are available elsewhere in the region.

As a substitute, Japan is making an embarrassingly heavy demand on the export of steel scrap from the United States. War scrap is available in the Philippines, but that country forbids its exportation, and makes no effort to collect and sell its domestic scrap.

New blast furnaces, if built in Japan, would curtail the importation of scrap from the United States, but the capital is not available. If built, those blast furnaces would require coal and iron ore. Coking coal is available on Taiwan, if plans for its exploitation could be worked out, and iron ore is awaiting development in Burma, Thailand, the Philippines and Korea.

If all of the nations involved in those transactions should jointly consider the problem of steel production, and if the United States could reorient its policies to a regional concept, spectacular progress might be achieved.

Furthermore, the duplication of such basic facilities as textile mills, sugar factories, and cement plants could be avoided if under our friendly guidance the various countries considered ways of conserving their limited capital potential, by dividing the effort.

The question of what Asian nations should be invited to such an economic conference is one that would have to be approached thoughtfully. Many different suggestions were made in the course of our discussions with United States officials in the Far East.

One obvious problem is that of whether Australia and New Zealand should be included, but there seems to be consensus that they should not, for fear that their presence might overawe the less advanced nations whose capacity for self-development it is desired to stimulate.

The Colombo Plan group has been proposed, but this meets the objection that it is a group which is socialist in influence, and British in background. Furthermore, it does not include Taiwan and Korea, both of whom need closer association with Asian neighbors.

SEATO is a possibility, but it includes Australia and New Zealand as well as the United Kingdom and France, and only two of the underdeveloped countries of the area under consideration, namely Thailand and the Philippines. Also SEATO is linked, at least psychologically, with a military-defense objective.

Whatever the basis, it is clear that Japan should be included, for Japan is the key to the economic development of Asia.

Yet clearly Japan must not call the conference. The animosities arising from conquest and occupation are still too fresh, and the fear of Japan as a sharp trader is too real, to risk that leadership.

Probably the country best situated, both geographically and psychologically, for being the host government is the Philippines.

Before approaching either the host government or other nations on this project, it would be prudent to bring together our own key economic officials from all parts of the area in order that the purposes and plans of the United States vis-à-vis such a regional grouping might be clearly established.

One basic field of inquiry would be that of whether regional financial support would be provided by our country, and if so from what sources. Agencies such as the IBRD and the Export-Import Bank might be helpful, but so far their emphasis has perhaps been on the more mature economies, rather than on those of the primitive nations found in Southeast Asia.

The President’s Fund for the Development of Asia might find such a regional group to be the appropriate vehicle for its activity, and conceivably Congress could be asked to make direct appropriations for that purpose.

Our leadership might be more important than our money. Certainly every precaution would have to be taken lest it be thought that a new super-form of aid was being created.

Funds generated in the area itself might also be employed such as the GARIOA payments, and Japanese reparations.

It is mutual assistance among the various countries that is now urgently needed, for the gap between the developed and the underdeveloped nations is rapidly widening, and there is danger that with this may come a widening of the gap in understanding. To promote joint activity in the economic field where self-interest may be served would be the best possible foundation for improved military security in the area, as well as for political cooperation among the constituent nations.

Some Suggestions Regarding Economic and Technical Assistance

In discussions with United States officials regarding the mutual security program, a number of problems and suggestions were presented.

Concern was expressed in almost every instance for the need for increased emphasis on economic development in our assistance programs. The objective is to raise the level of production of these countries to a point which can sustain their economies without continuing financial assistance from the United States. Especially in Korea, where the economy cannot be expected to achieve viability for a long time because of the special situation existing there (a suspended state of war), our officials stress the need for getting on with capital investment as a means of reducing future dependence on the United States Treasury.

In the Philippines, the large volume of underemployment in an economy having such a rich store of untapped natural resources indicates a great need for expanded economic development. In other countries of Southeast Asia, natural resources abound but are not being adequately developed. The minerals found in that area are in great demand in Japan as well as in other industrial countries, but exploitation is not being carried forward.

The task of economic development can best be done by private enterprise and that must be encouraged. As stressed in the section on “Climate for Private Foreign Investment”, appropriate investment laws and attitudes toward foreign capital and management are prerequisites. We must work toward this goal.

Our economic aid programs, however, can hasten the process of economic development and lay the foundations for private investment. Certain basic facilities, such as roads, ports, communications, and power, must be available for the operation of modern business enterprises. Most of these facilities necessarily have to be set up by government sponsorship with government financing. Outside financial and technical assistance is required to proceed with construction of these basic facilities, and our assistance programs, pointed more and more to economic development, can contribute greatly to this end.

In some countries, there is need for basic geological surveys to determine the nature of the mineral resources, their location, and other characteristics. Because of the technical requirements and costs involved, this job in most instances cannot reasonably be undertaken by private enterprise. For us to provide such basic working tools through our assistance programs makes possible the entry of foreign entrepreneurs into the country.

In this connection, it should be noted that it is a policy of the International Cooperation Administration not to use Mutual Security funds or counterpart funds to finance oil surveys in foreign countries. In view of the need to accelerate the rate of economic development and to reduce future dependence on United States assistance, it is suggested that this policy be reviewed to determine whether its continuance is in the interest of this country.

In connection with the technical assistance program, the advantage of providing technicians through contracts with private business concerns was emphasized, the thought being that this serves to reduce the area of irritability on the part of the aid-recipient countries. It was pointed out that the people in the underdeveloped countries are often sensitive about being advised by other governments on how to do things, but are less so when advised by private citizens.

The United States Operations Missions have found difficulty in recruiting technical personnel in the United States. Essential programs have been long delayed in many instances for lack of such personnel. Because qualified technical personnel are often available in other industrial countries—Japan in the Far East—it has been suggested that means be found whereby more technical personnel may be brought in from other countries for specific jobs.

A further recommendation was made that our staffs be redistributed so that an increasing proportion of the American technical experts would spend their full time working in the government offices of the aid-recipient countries, or at construction sites or industrial plants. While maintaining close relations with appropriate United States agencies, they would thus not appear as part of a large centralized U.S. Government organization from which the economy was being directed in the colonial tradition.

Procedures Involved In Economic Aid Programs

United States officials in the field report that they are handicapped by the long administrative delays in getting projects actually underway. These delays often involve 18 to 24 months. United States officials in Korea, for example, had not been informed in December 1956, of the ICA program for FY 1957.

While it is recognized that careful scrutiny of proposed programs is necessary, delay is destructive of goodwill, especially in the case of unsophisticated foreign officials who expect to see results follow quickly from discussions in the field. One further result of long delays is that conditions may have changed meanwhile, making programs less suitable than when originally planned.

Part of the delay, and an additional source of irritation, is the use of procedures which, though well-suited to advanced countries, are not suited to the underdeveloped countries.

The antidote that is suggested is the granting of more flexibility and authority to the field.

It has been the policy of this Government to insist that publicity be given to United States aid in the recipient country. It has been suggested that in certain instances where we wish to see a particular friendly government strengthened, it may be politically advantageous to the United States to avoid this and permit the nation to receive credit for the aid program.

The United States may also derive goodwill and develop responsible decision-making in the developing nations by encouraging countries not only to suggest what is needed but to assume responsibility for decisions with respect to aid programs even if some mistakes are made.

One complaint registered in the field concerns the volume of paper work required. A large staff is needed in the field just to “work for Washington”. They have occasionally been required to submit voluminous reports prepared according to instructions that were changed frequently, with the result that operations were on a crash basis much of the time. Some required reports were characterized as so elaborate that only a handful of persons in Washington could possibly have time to read them, let alone study them. As a result, additional reports of a duplicating but more general nature are often called for. When this occurs, little time is left to get the real job done.

Number of United States Government Personnel Abroad

One problem that was called to our attention concerns the number of United States personnel assigned to developing countries.

This problem has two aspects. First, the American scale of living transplanted to the host country often becomes a source of constant irritation. This reaction is accentuated wherever the number of Americans is large. Dependents add considerably to the total. Second, there may be more personnel assigned to a country than is required to do the job.

The exceptionally heavy load of paper work described in the previous section of the report increases the number of people required to be assigned to foreign posts.

Continuous resurvey of the number of personnel assigned abroad is urgently needed.

1. Source: Eisenhower Library, Harlow Records. Secret. The exact title is “Report on Foreign Economic Policy Discussions between United States Officials in the Far East and Clarence B. Randall and Associates, December 1956.” The report was forwarded to Bryce Harlow under cover of a letter from CFEP Secretary Cullen dated January 14, 1957. Ibid.)
2. Not printed. The papers submitted by individual respondents are ibid.
3. Printed from a copy which bears this typed signature.