89. Special Message by President Nixon to the Congress1

On September 15, 1970 I proposed a major transformation in the foreign assistance program of the United States.2 My purpose was to renew and revitalize the commitment of this Nation to support the security and development objectives of the lower income countries, and thereby to promote some of the most fundamental objectives of U.S. foreign policy.

Today, I report to you on the progress of the last seven months in effecting that transformation and ask the Congress to join me in taking the next creative step in our new approach—the reform of the United States bilateral assistance program.

To achieve such reform, I am transmitting two bills—the proposed International Security Assistance Act and International Development and Humanitarian Assistance Act—and announcing a number of actions which I intend to take administratively. Taken together, they would:

  • —Distinguish clearly between our security, development and humanitarian assistance programs and create separate organizational structures for each. This would enable us to define our own objectives more clearly, fix responsibility for each program, and assess the progress of each in meeting its particular objectives.
  • —Combine our various security assistance efforts (except for those in Southeast Asia which are now funded in the Defense budget) into one coherent program, under the policy direction of the Department of [Page 313] State. This would enable security assistance to play more effectively its critical role in supporting the Nixon Doctrine and overall U.S. national security and foreign policy in the 1970s.
  • —Create a U.S. International Development Corporation and a U.S. International Development Institute to replace the Agency for International Development. They would enable us to reform our bilateral development assistance program to meet the changed conditions of the 1970s.
  • —Provide adequate funding for these new programs to support essential U.S. foreign policy objectives in the years ahead.

The Importance of Foreign Assistance

U.S. foreign assistance is central to U.S. foreign policy in the 1970s in three ways:

  • First, we must help to strengthen the defense capabilities and economies of our friends and allies. This is necessary so that they can increasingly shoulder their own responsibilities, so that we can reduce our direct involvement abroad, and so that together we can create a workable structure for world peace. This is an essential feature of the Nixon Doctrine.
  • Second, we must assist the lower income countries in their efforts to achieve economic and social development. Such development is the overriding objective of these countries themselves and essential to the peaceful world order which we seek. The prospects for a peaceful world will be greatly enhanced if the two-thirds of humanity who live in these countries see hope for adequate food, shelter, education and employment in peaceful progress rather than in revolution.
  • Third, we must be able to provide prompt and effective assistance to countries struck by natural disaster or the human consequences of political upheaval. Our humanitarian concerns for mankind require that we be prepared to help in times of acute human distress.

The Need for Reform

We cannot effectively pursue these objectives in the 1970s with programs devised for an earlier period. The world has changed dramatically. Our foreign assistance programs—like our overall foreign policy—must change to meet these new conditions.

In my September special message to the Congress I spelled out the major changes in the world which require new responses. Let me summarize them here:

  • —Today the lower income countries are increasingly able to shoulder the major responsibility for their own security and development [Page 314] and they clearly wish to do so. We share their belief that they must take the lead in charting their own security and development. Our new foreign assistance programs must therefore encourage the lower income countries to set their own priorities and develop their own programs, and enable us to respond as our talents and resources permit.
  • —Today the United States is but one of many industrialized nations which contribute to the security and development of the lower income countries. We used to furnish the bulk of international development assistance; we now provide less than half. The aid programs of other countries have grown because they recognize that they too have a major stake in the orderly progress which foreign assistance promotes, and because their capabilities to provide such assistance have grown enormously since the earlier postwar period.
  • —Today the international institutions can effectively mesh the initiatives and efforts of the lower income countries and the aid efforts of all of the industrialized countries. We can thus place greater reliance on such institutions and encourage them to play an increasing leadership role in the world development process.

Our ideas on the reforms needed in the world of the 1970s have evolved significantly since I received the Report of my Task Force on International Development, chaired by Mr. Rudolph Peterson, and since my special message of last September, as the result of our own deliberations and our further consultations with the Congress, the business community and many other sectors of the American public, and our friends abroad. Before spelling out a new blueprint for our bilateral assistance program, however, I wish to report to you on the gratifying progress achieved since last September in reorienting our assistance policies.

Progress Toward Reform

  • First, the Congress in December passed supplemental assistance legislation for FY 1971 which represented a major step in implementing the security assistance component of the Nixon Doctrine. This legislation authorized additional funds for military assistance and supporting economic assistance for countries in which the U.S. has major interests and which have convincingly demonstrated the will and ability to help themselves—including Israel and Jordan in the Middle East and Cambodia, Vietnam and Korea in East Asia.

    Such support is necessary to carry out one of the central thrusts of the Nixon Doctrine—moving us from bearing the major responsibility for the defense of our friends and allies to helping them achieve an increasing capability to maintain their own defense. This increase in security assistance enables us to continue to reduce our direct presence [Page 315] abroad, and helps to reduce the likelihood of direct U.S. military involvement in the future.

  • Second, the international development institutions have continued their progress toward leadership in the international development process. For example:

    • The World Bank continues to increase the size and improve the effectiveness of its operations. It also has decided to broaden the scope of its lending beyond the traditional financing of projects to the provision of funds to support overall development programs in appropriate circumstances, and it is developing an improved internal evaluation and audit system.
    • —The United Nations Development Program has initiated a reorganization to improve its administration. In time this will enable it to assume a leading role in coordinating the international technical assistance effort.
    • —The World Health Organization has effectively guided and coordinated the worldwide effort to cope with the present cholera epidemic in Africa.

  • Third, the industrialized countries have now agreed on comparable systems of tariff preferences for imports from the lower income countries. The preferences plan is a major step in the crucial international effort to expand the export earnings of these countries, and hence to reduce their reliance on external aid. The European Community has indicated that it plans to put its tariff preferences into effect on July 1, and Japan has announced that it will do so before October 1.
  • Fourth, there has been satisfying progress toward achieving the untying of bilateral development loans on a fully reciprocal basis. This action will enhance the value of economic assistance to recipient countries, and eliminate the political frictions which tied aid now causes. Virtually all of the industrialized countries have agreed to the principle of untying. Details of a system offering suppliers of all participating countries a fair and equitable basis for competition are now being worked out in the Organization for Economic Cooperation and Development.
  • Fifth, I have established a Council on International Economic Policy, which I chair, to coordinate all aspects of U.S. foreign economic policy, including development assistance. It will provide top-level focus for our policies in this area, and accord them the high priority which they require in our foreign policy for the 1970s.

    I am heartened by this progress, but much more remains to be done: [Page 316]

    • —I again urge the Congress to vote the additional funds which I have requested for the Inter-American Development Bank and the Asian Development Bank.
    • —We will shortly transmit legislation to authorize the U.S. contribution to the doubling of the resources of the International Development Association, the soft-loan affiliate of the World Bank, which stands at the center of the network of international financial institutions, and I urge the Congress to approve it.
    • —We are working with others to help establish a soft-loan window for the African Development Bank.
    • —We will shortly transmit legislation to authorize U.S. participation in the system of generalized tariff preferences for developing countries, and I urge Congress to approve it.

The New U.S. Bilateral Assistance Program

The next major step is the reform of the U.S. bilateral assistance program, incorporated in the proposed International Security Assistance Act and International Development and Humanitarian Assistance Act.

Our new bilateral assistance program must achieve several objectives. It must:

  • —Clearly identify our distinct aid objectives: security assistance, development assistance and humanitarian assistance.
  • —Be truly responsive to the initiatives of the lower income countries themselves and encourage them to play the central role in solving their own security and development problems. In the area of development assistance, this means working within a framework set by the international institutions to the maximum extent possible.
  • —Be concentrated in countries of special interest to the United States, and in projects and programs in which the United States has a special ability to be of help.
  • —Recognize the improved economic capacity of many of the lower income countries in establishing the terms of our assistance.
  • —Assure improved management.
  • —Reduce substantially the number of U.S. Government officials operating our assistance program overseas.

[Omitted here are details of the new foreign assistance program.]

  1. Source: Public Papers of the Presidents of the United States: Richard Nixon, 1971, pp. 564-567.
  2. See Document 70.