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

14. Memorandum From the Administrator of the Agency for International Development (Bell) to President Johnson¹

Washington, October 13, 1964.

SUBJECT

• Use of Foreign Aid Funds—FY 1965

Foreign aid commitments for the first quarter of FY 1965 were more than double those for the first quarter of FY 1964:

	FY 1965			FY 1964
	Funds Available (millions)	Commitments Through Sept. 30, 1964	Percent	Commitments Through Sept. 30, 1963	Percent
Military	1,141.6	390.0	34.2	213.2	17.8
Economic	2,183.6*	323.7	14.8	133.4	6.2
Contingency Fund	102.4	—	—	—	—
Total	3,427.6	713.7	20.8	346.6	9.8

These figures reflect our continuing drive to get things done more promptly and efficiently. They also reflect changes in the situations we are dealing with; thus, the increase in military assistance commitments compared to last year is due largely to a higher rate of activity in Viet Nam, Laos and the Congo.

The FY 1965 economic aid commitments include a very important $140 million loan to Pakistan to finance imports from the U.S. of iron and steel, chemicals, and other materials. This loan is part of the financing necessary to permit Pakistan to eliminate import controls on raw materials and spare parts—a step which we have been urging strongly as a major move to help the private sector in Pakistan grow faster, by increasing the flow of raw materials into the economy, by putting idle capacity to work, and by allowing small businessmen ready access to raw materials supplies. Other donor countries are also helping to finance this import liberalization.

In addition to a better showing on commitments of foreign aid funds, we are also doing much better this year in processing applications by private U.S. investors for specific risk guaranties for their investments in less developed countries. During the first quarter of FY 1965 we issued 150 coverages for a total of $299.5 million, as opposed to 27 coverages for $42.4 million during the first quarter of last year.

Attached are tables showing commitments made and guaranties issued in the first quarters of FY 1964 and FY 1965.

David E. Bell ²

Attachment

MUTUAL DEFENSE AND DEVELOPMENT PROGRAMSSTATUS OF FUNDS

	First Quarter FY 1965 (9/30/64)			First Quarter FY 1964 (9/30/63)
	Funds Available (millions)	Commitments		Commitments
		Amt.	% of Funds Available	Amt	% of Funds Available
Military Assistance	1,141.6	390.0	34.2	213.2	17.8
Economic Assistance
Development Loans	798.6	150.2	18.6	10.7	1.3
Technical Cooperation	228.2	38.1	16.7	30.3	13.3
Alliance Loans	435.0	21.2	4.9	41.0	8.5
Alliance Technical Cooperation	89.9	10.5	11.7	10.3	11.2
Supporting Assistance	420.9	73.9	17.6	27.3	7.6
Other Programs	210.8	29.7	14.1	13.8	7.3
Total Economic	2,163.8	323.7	14.8	133.4	6.2
Contingency Funds	102.4	*	—	—	—
Total Economic & Military	3,427.6	713.7	20.8	346.6	9.8

SELECTIVE RISK INVESTMENT GUARANTIES ISSUED

	First Quarter FY 1965	First Quarter FY 1964
Number of Coverages Issued	150	27
Amount of Guaranties Issued (millions of dollars)
Convertibility	106.6	23.9
Expropriation	124.2	18.2
War Risk	68.8	0.3
Total	299.6	42.4

1. Source: Washington National Records Center, RG 286, AID Administrator Files: FRC 68 A 2148, Administrator’s Weekly Report to the President, FY 1965. Limited Official Use.
2. Includes $300 million which may be released only by Presidential determination.
2. Printed from a copy that indicates Bell signed the original.
3. Less than $50,000