Foreign Relations of the United States, 1964–1968, Volume IX, International Development and Economic Defense Policy; Commodities

133. Current Economic Developments¹

Issue No. 771

Washington, January 17, 1967.

[Here follow articles on unrelated subjects.]

ECONOMIC ACTIONS OF THE 21ST UN GENERAL ASSEMBLY

The UN General Assembly, at its 21st session which concluded December 20th, approved a number of resolutions in the economic field. Among other things, it approved establishment of a UN Capital Development Fund,² approved the charter for the UN Industrial Development Organization³ and chose Vienna for UNIDO headquarters,⁴ and postponed the date for convening the second UNCTAD Conference.⁵ A summary of key economic actions is given below.

UNIDO

The General Assembly gave its unanimous approval to a resolution containing a charter for the UN Industrial Development Organization (UNIDO) established last year by the 20th General Assembly. The US played a leading role in the negotiation of this charter, achieving most of its objectives. The charter sets forth the functions, operating procedures and administrative arrangements of the Organization, which is intended to promote industrial development and accelerate the industrialization of the developing countries.

An autonomous body within the UN, its administrative and research expenses will be met from the UN regular budget while its operational activities will be financed by voluntary contributions and through participation in the UN Development Program and the UN regular program of technical assistance. We stated that we hoped that the UN Development Program will be the major source of UNIDO operational funds and that any US contributions to UNIDO for operational activities would be made through the UNDP. Abdel-Rahman, the UN Commissioner for Industrial Development, was named Executive Director of UNIDO, and US was elected to UNIDO’s 45-member Industrial Development Board. Vienna was chosen as UNIDO’s headquarters seat. Vienna was our third choice after UN headquarters at New York and Geneva, which were never in real contention in the voting for a site. We opposed Paris, the principal contender after Vienna.

UN Capital Development Fund

The US was unable to turn aside a determined drive by developing countries in the second committee which led to the establishment of a UN Capital Development Fund. The fund is empowered to make grants and loans to developing countries. Its operational resources are to come from voluntary contributions made at an annual pledging conference, but its administrative expenses are to be met from the regular budget of the UN.

We maintained our long-standing objection to the creation of a UN Capital Development Fund additional to the IBRD/IDA and the IDA regional development banks. We found particularly objectionable, as the largest contributor to the regular budget of the UN, the addition to that budget of an assessment for the administration of the fund. Since the Managing Director of the fund is expected to assume office on January 1, 1968, the UN Secretariat estimates initial staff and related administrative expenses will cost $335,000 in 1968.

The US and other major potential contributors have indicated they will not contribute to the resources of the fund so that the fund’s Managing Director is expected to preside over an expensive empty shell should the Assembly’s decision be put into effect. Even so, an attempt to have the provision for the payment of administrative expenses out of the UN regular budget considered an important budgetary question, necessitating a two-thirds majority for approval, was unsuccessful. The World Bank’s system of weighted voting proportional to subscriptions will not be followed by the fund. Most Western developed countries and Japan joined the US in voting against creation of the fund. Bloc countries and a few developing countries abstained.

Permanent Sovereignty over Natural Resources

The US was able to tone down in the second committee a number of objectionable passages in a resolution on the permanent sovereignty of nations over natural resources that was sponsored by a number of developing and bloc countries. We were, however, unable to secure modification of a passage we considered particularly objectionable and abstained on the resolution as a whole.⁶ The passage in question recognized, the “right”, particularly of the developing countries, to “secure and increase their share in the administration” of foreign-financed enterprises and “to a greater share in the advantages and profits” of these enterprises. It also contains wording which can be read to mean that developed countries should not take diplomatic measures in support of their nationals who invest abroad. We were unsuccessful in winning acceptance of four alternatives we proposed for this passage and, while we were prepared to accept a resolution which contained, from our point of view, a number of other drawbacks, we were unwilling to accept one containing a passage with such blatant anti-foreign bias.

Marine Science and Resources

On US initiative, the General Assembly at its 21st session adopted a resolution requesting the Secretary-General to undertake a comprehensive survey of activities in marine science and resources, both mineral and living, with a view to formulating proposals (a) to further international arrangements for an expanded program of international cooperation, and (b) to strengthen marine education and training programs.⁷ The Secretary-General was asked to set up a small group of experts to assist him in this task.

At the request of the Department, the US Mission has proposed to the Secretary-General that eminently qualified experts be appointed by him to this group. The names of a number of experts were suggested. In addition, we have proposed that the Secretary-General appoint a highly-qualified American oceanographer, Dr. Warren Wooster, to serve as the principal professional on the Secretariat while the survey is under way the next two years (1967–68). Dr. Wooster is a former Director of the UNESCO Secretariat Staff on Oceanography and the current Secretary of the Scientific Committee on Oceanic Research of ICSU. He is presently at the University of California Scripps Institute of Oceanography.

Marine science and resources activities are going forward at the present time in the United Nations itself as well as in a number of UN agencies and other organizations. The Intergovernmental Oceanographic Commission is in UNESCO, the fisheries program in FAO, natural resources development in the United Nations, charting in the International Hydrographic Bureau. Other UN agencies concerned with various aspects of this subject are the WMO, IMCO, WHO, and IAEA. In addition, outside the UN system, there are eight multilateral intergovernmental bodies concerned with fisheries and marine science.

ECOSOC at its 40th session in March 1966 asked the Secretary-General to survey technological know-how relating to resource development other than in the field of fisheries.⁸ This survey may be combined with the broader survey requested by the General Assembly.⁹

The National Council on Marine Resources and Engineering Development established by the June 1966 Congressional Act¹⁰ is spearheading a US Government survey of this subject.

UNCTAD

In a unanimous resolution, the GA decided to convene the Second UNCTAD Conference February 1–March 25, 1968, in New Delhi. In emphasizing the need for UNCTAD II “to concentrate on a limited number of fundamental and specific subjects with a view to achieving practical and concrete results,” the GA called upon the Trade and Development Board and its subsidiary bodies to identify those issues for which specific action programs can be drawn up at UNCTAD II.

In other separate resolutions relating to UNCTAD, the GA called again on member governments to make maximum progress toward implementation of UNCTAD recommendations as well as on certain specific issues before UNCTAD II convenes.¹¹ In a resolution on cocoa, the GA deplored the breakdown of the recent cocoa consultations and, in calling for early resumption of consultations, singled out consuming countries to exert maximum effort to arrive at an agreement on all outstanding matters.¹² Because of the latter provision, the US abstained, although all other countries voted for the resolution. In endorsing the need for both developed and developing countries, which so desire, to be represented in preparations for any new international monetary reform arrangements, the GA requested the UNCTAD SYG to consult with the IMF Managing Director of the progress of reform and report to the fifth session of the Trade and Development Board.

Other Actions

In other resolutions, the General Assembly:

• —Decided to establish a United Nations Commission on International Trade Law (UNCITRAL) for the promotion to the progressive harmonization and unification of the law of international trade;¹³
• —Asked that the Commission for Social Development prepare a draft Declaration on Social Development;¹⁴
• —Called on the Economic and Social Council and other bodies of the United Nations family concerned to assist, when requested, in strengthening national and regional facilities for training, research, information and advisory services in the field of population;¹⁵
• —Asked the Secretary-General to prepare “a preliminary framework of international development strategy for the 1970’s,” following the Development Decade.¹⁶

[Here follow articles on unrelated subjects.]

1. Source: Washington National Records Center, RG 59, E/CBA/REP Files: FRC 72 A 6248, Current Economic Developments. Limited Official Use. The source text comprises pp. 24–26 of the issue.
2. Resolution 2186 (XXI), adopted by the U.N. General Assembly on December 13 by a vote of 76–19 (including the United States), with 14 abstentions; text in American Foreign Policy: Current Documents, 1966, pp. 81–86.
3. Resolution 2152 (XXI), adopted unanimously by the U.N. General Assembly on November 17; text ibid., pp. 75–80.
4. Resolution 2212 (XXI), adopted by the U.N. General Assembly on December 17; text in Resolutions adopted by the General Assembly during its Twenty-First Session, 20 September–20 December 1966, General Assembly, Official Records: Twentieth Session, Supplement No. 16 (A/6316) (New York: United Nations, 1967), p. 42.
5. Resolution 2206 (XXI), adopted by the U.N. General Assembly on December 17; text ibid., p. 39.
6. Resolution 2158 (XXI), adopted by the U.N. General Assembly on November 25 by a vote of 104 to 0, with 6 abstentions (including the United States); text in American Foreign Policy: Current Documents, 1966, pp. 213–215.
7. Resolution 2172 (XXI), adopted by the U.N. General Assembly on December 6; text in Resolutions adopted by the General Assembly during its Twenty-First Session, p. 32.
8. Resolution 1113 (XL), approved March 7; text in Yearbook of the United Nations, 1966 (New York: United Nations, 1968), p. 325.
9. Resolution 2173 (XXI), adopted by the U.N. General Assembly on December 6; text in Resolutions adopted by the General Assembly during its Twenty-First Session, pp. 32–33.
10. P.L. 89–454, approved June 17. (80 Stat. 203)
11. Resolution 2209 (XXI), adopted by the U.N. General Assembly on December 17; text in Resolutions adopted by the General Assembly during its Twenty-First Session, p. 40.
12. Resolution 2210 (XXI), adopted by the U.N. General Assembly on December 17; text ibid., p. 41.
13. Resolution 2205 (XXI), adopted by the U.N. General Assembly on December 17; text in American Foreign Policy: Current Documents, 1966, pp. 218–221.
14. Resolution 2215 (XXI), adopted by the U.N. General Assembly on December 19; text in Resolutions adopted by the General Assembly during its Twenty-First Session, pp. 60–61.
15. Resolution 2211 (XXI), adopted by the U.N. General Assembly on December 17; text in American Foreign Policy: Current Documents, 1966, pp. 89–90.
16. Resolution 2218 (XXI), adopted by the U.N. General Assembly on December 19; text in Resolutions adopted by the General Assembly during its Twenty-First Session, pp. 42–43.