63. Address by Secretary of State Haig Before the United Nations General Assembly1

A New Era of Growth

The United Nations—this parliament of man—offers us a unique opportunity to examine the human condition. We are each called upon to declare our national purposes. And we are all obligated to address those problems that obstruct the vision of the charter.

Let us begin with the vision. The Charter of the United Nations reflects cherished dreams of a world distinguished by peaceful change and the resolution of international disputes without resort to force. The United States believes in these dreams. They offer the best chance of justice and progress for all mankind. They promise a world hospitable to the values of our own society including a certain idea of man as a creative and responsible individual; democracy; and the rule of law.

The ideals of the United Nations are, therefore, also American ideals. The charter embodies American principles. It will always be a major objective of our statecraft to make of the United Nations an instrument of peace.

We all know that the realization of our dreams cannot depend on hope alone. Obstacles to progress must be overcome through united efforts. The threats to peace are many, suspicions persist, and the price for inaction is great. Truly we face a difficult agenda.

As I make these comments, I am reminded that an observer once said of this annual debate: “Every year . . . a great and sacred orator . . . preaches before the assembly of nations a solemn sermon on the text of the charter.” Today, however, I would like to focus instead on an issue of compelling interest: international development.

International development reflects the worldwide search for economic progress, social justice, and human dignity. Short of war itself, no other issue before us will affect more people, for good or ill, than this search. And peace itself cannot be truly secured if the aspirations of mankind for a better life are frustrated.

Development is, therefore, an enduring issue. It has preoccupied the United Nations from the beginning. It will survive the agenda of this assembly and every assembly far into the future. And although [Page 217] great progress has been made, we face today a crucial choice of strategy that will dramatically affect the prospects for future success.

A Choice for the 1980s

Since the Second World War, the progress of development has been uneven but nonetheless widespread. Enormous economic growth has been registered. For example, in the last three decades, average incomes have actually doubled. There have also been great advances in health. Life expectancy has increased dramatically even in the poorest countries and infant mortality has been reduced.

This experience, however, has not been fully shared by all countries and the prospect for the future is now clouded by recent trends. The pattern of increasing economic growth, critical for development, has been slowed by inflation, high energy prices, severe balance-of-payments problems, heavy debt, and slower growth of markets. Political turmoil and instability have diverted precious resources into arms and conflict. The necessary synthesis between traditional values and modernization, never easy to achieve, has grown more difficult under the impact of accelerating change.

Let us dispense with illusions. We must choose today between two futures: a future of sustainable growth, an expansion of world trade, and a reduction of poverty or a future of economic stagnation, rising protectionism, and the spread of poverty. As the World Bank has put it: “By the end of the century, the difference between the two cases amounts to some 220 million more absolutely poor people.”2

Clearly, our task is to give fresh impetus to development by devising now a new strategy for growth. Such a strategy begins by recognizing the highly complex and difficult situation we face.

  • The poorest developing countries require long-term and generous concessional aid from developed and other developing countries to raise productivity through broadly based education and training, improvements in health and nutrition, and better infrastructure. They also need sound economic policies, particularly in the agricultural sector. Ultimately, the objective must be to involve them in the international economic system, thereby strengthening opportunities and incentives for self-sustaining growth.
  • The middle tier of developing countries have made significant progress. Nevertheless, they still suffer from widespread poverty. They are also acutely vulnerable to any economic downturn—especially volatile commodity markets—because of their narrow range of exports. [Page 218] These countries need foreign capital and assistance in developing the experience and credit worthiness to borrow on international capital markets. Technical support and manpower training are important to insure that their populations are productive and competitive. They also need an open international trading system to encourage export development.
  • The more advanced of the developing countries are able to maintain living standards and economic performance comparable to what some of today’s industrial countries achieved less than a generation ago. Their further development can be sustained best by a strong international economy with an open capital and trading system. They must be able to pursue national policies that take advantage of international opportunities and foster domestic adjustment. These countries also play a key role in helping poorer nations, both directly and as policy models.
  • The capital-surplus, oil-exporting countries need a stable and prosperous international market for their oil exports and a favorable environment in which to invest their financial assets and to develop their domestic economies. The international system must continue to evolve to reflect the growing importance of these countries, as they assume increasing responsibility for the management of that system and for assisting poorer nations.
  • Finally, the industrial countries are suffering from low rates of growth and high rates of inflation. They are trying to increase savings and investment in order to create employment, improve the environment, eliminate pockets of poverty, and adjust to the changing competitiveness of their exports. They must sell more abroad to pay for the increased cost of imported energy.

In a slowly growing world, these complex and diverse requirements would become potent sources of conflict. But the struggle for the world product can be avoided. The international economy can help all countries to achieve their objectives through a strategy of growth which creates the resources and the employment needed for progress. And this cannot be the task of any single nation.

As the report of the distinguished commission on international development issues, chaired by Willy Brandt, points out: “Above all, the achievement of economic growth in one country depends increasingly on the performance of others.”3

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Principles for a Strategy of Growth

It is on this view of a differentiated and interdependent world that we must build a new strategy for growth. But our strategy must also be informed by the lessons of the past. Such lessons, extracted from hard experience, offer the basis for principles to guide us through these austere times.

First, development is facilitated by an open international trading system. Developed and developing countries together face the challenge of strengthening the GATT (General Agreement on Tariffs and Trade) and international trading system to create mutual export opportunities.

Today the trading system is under enormous stress—rising protectionist pressures, new and subtle types of import barriers, restrictive bilateral arrangements, export subsidies and investment policies which distort trade. These are especially troublesome in a period of slow growth. Unless they are reduced or eliminated, the international trading system will be seriously weakened. Such a setback to the world economy would inflict the most suffering on the developing countries.

The industrialized countries have a special responsibility to work for a more open trading system with improved rules. We also look to the more successful developing countries to play a fuller role in strengthening the trading system. It will be difficult for each of our countries individually to open markets further unless we are committed to doing so collectively.

For our part, the United States has long supported open markets. Despite current complications, America remains a strong advocate of free trade. Although our gross national product is only one-third of the Western industrialized group’s total, the United States imports roughly one-half of all manufactured goods exported by developing countries. Earnings of non-OPEC developing countries from exports to the United States amount to $60 billion—more than double the foreign aid coming from all Western developed countries.

We call upon all members of the international community to join in resisting growth in protectionism. Developing nations must have the greatest possible opportunity to sell their commodities and manufactured product. Let us also work together to achieve a successful conclusion of the multifiber agreement.

A dynamic and successful trading system requires a smoothly functioning international financial system. We must, therefore, continue to work with other countries to encourage their support for the International Monetary Fund and their constructive participation in the Fund’s programs to facilitate adjustment. We will continue to [Page 220] cooperate with our developing country colleagues to strengthen the Fund. We share the view that the responsibilities of developing countries should be increased to keep pace with their growing economic importance.

Second, foreign assistance coupled with sound domestic policy and self-help can facilitate the development process. The United States has long believed in assistance as an effective tool in helping to promote development. Over the last three decades the United States has given more than $130 billion in concessional assistance. Over the last decade alone, the total has exceeded $50 billion. In 1980, the American people provided $7.1 billion, almost twice as much as any other donor.

The United States has also been the major force in the creation and support of the multilateral development banks. The banks represent an important, and to many countries essential, feature in the international financial system. In the last 5 years, the United States has authorized and appropriated an average of $1.5 billion per year for support of the multilateral banks. There is no question about their value as development institutions. As intermediaries they help to mobilize the resources of international capital markets to lend to developing countries. The banks’ loans for key projects are important catalysts for productive domestic and foreign private investment.

We recognize that many of the poorer developing countries must continue to rely heavily on concessional assistance for some time to come. Moreover, certain kinds of vital development programs will not pay the quick and direct financial returns needed to attract private capital. For this reason, a continuing bilateral assistance program and continuing support for the multilateral banks will be essential.

Given today’s economic conditions and the limitation on aid budgets in many countries, it is especially important that concessional assistance be utilized as effectively as possible; that it focus on countries which need it most and use it best; and that it be a more effective catalyst for mobilizing other foreign and domestic resources. We must also recognize that a strategy for growth that depends on a massive increase in the transfer of resources from developed to developing countries is simply unrealistic.

Third, regional cooperation and bilateral consultations can be effective in promoting development. The United States is working with other regional states to promote economic progress in the Caribbean area.4 We are convinced that the example of the recent multinational cooperation in [Page 221] the case of Jamaica and the broader Caribbean Basin initiative holds promise for other regions.5

We are already committed to a close working relationship with ASEAN [Association of Southeast Asian Nations]. We have benefited considerably from a better understanding of ASEAN’s views on multilateral issues and ways to strengthen our bilateral commercial ties. The U.S.-ASEAN Business Council is a model of how our private sectors can work together for mutual benefit.

In Africa we look forward to a close working relationship with the Economic Community of West African States, as it attempts to strengthen economic ties within the region. Constructive consultations on trade and investment issues have already occurred. We believe that mutually beneficial cooperation can be strengthened to our common benefit. Similar consultations with the developing countries of southern Africa are desirable. We have a strong interest in the economic health and stability of these nations. Commercial relationships along with foreign assistance will help us to attain that objective.

The United States has also worked with the capital-surplus members of the Organization of Petroleum Exporting Countries on both a bilateral and multilateral basis. We have been able to combine resources to attack development problems of common interest, such as food production. This cooperation should be continued and expanded.

Finally, we plan to make bilateral consultative groups between our government and those of developing countries more effective and to give full support to similar private sector arrangements. The U.S. Chamber of Commerce and its counterparts in many developing countries have developed particularly good relationships. We fully support these efforts and those of the private voluntary agencies; we are searching for means to work more closely with them.

In all of these cases, the United States recognizes the need to be sensitive to the diverse character of the societies involved and to the international circumstances in which development must occur.

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Fourth, growth for development is best achieved through reliance on incentives for individual economic performance. The individual is the beginning, the key element, and the ultimate beneficiary of the development process. The greatest potential for development lies in the hard work and ingenuity of the farmer, the worker, and the entrepreneur. They need incentives to produce and the opportunity to benefit from their labors.

Suppression of economic incentives ultimately suppresses enthusiasm and invention. And the denial of personal freedom can be as great an obstacle to productivity as the denial of reward for achievement. History cautions against regimes that regiment their people in the name of ideals yet fail to achieve either economic or social progress. Those governments that have been more solicitous of the liberties of their people have also been more successful in securing both freedom and prosperity.

The United States can offer what it knows best from its own experience. We have seen that policies which encourage private initiatives will promote better resource allocation and more rapid economic growth. Within a framework basically hospitable to market incentives, foreign private investment can supplement indigenous investment and contribute significantly to development.

But our goal is not to impose either our economic values or our judgments on anyone. In the final analysis, each country’s path to development will be shaped by its own history, philosophy, and interests.

Fifth, development requires a certain measure of security and political stability. Political insecurity is a major barrier to development. Fear and uncertainty stifle the productivity of the individual. Scarce resources are squandered in conflict. The close relationship between security and development cannot be ignored. We are, therefore, committed to maintain and, where possible, to increase programs essential to deter international aggression and to provide the domestic security necessary to carry out sound economic policies. We have no intention of providing foreign assistance, moral comfort, or the prestige of international political platforms to countries that foster international violence.

The United Nations has a key role to play in resolving conflict and promoting international stability. We welcome the Secretary General’s effort to promote intercommunal talks and a just settlement on Cyprus.6 We support a continuing role by the Secretary General’s representative in the Iraq-Iran conflict.7 And South Korea’s attempt to initiate a dialogue with the north epitomizes the search for peaceful settlement that is the heart of the charter.

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One of the greatest dangers to the charter today and to development itself is the willful violation of the national integrity of both Afghanistan and Kampuchea by the Soviet Union and Vietnam. Their behavior challenges the basic rights of all sovereign states. The world’s hopes for peace, for security, and for development will be jeopardized if “might makes right” becomes the law of nations.

The United States will continue to support security and stability as essential to progress. This is the basis of our active and continuing efforts to strengthen and expand the cease-fire in southern Lebanon.8 We shall also assist the negotiations specified by Resolutions 242 and 338 in order to bring a just and lasting peace to the Middle East.9 Our policy is to remain a credible and reliable party in the negotiations to bring independence to Namibia on the basis of U.N. Resolution 43510 and in a fashion acceptable to both the nations concerned and the international community.

The United States also believes that efforts to control arms, either among regional states or between the superpowers, can make an important contribution to the security that facilitates development. But these efforts do not occur in a vacuum. The international community has tended to overestimate the beneficial effects of the Strategic Arms Limitation Talks in dampening regional conflict. We have also tended to underestimate the impact of such conflict on the negotiations themselves.

The United States is strongly committed to balanced and verifiable arms control. We are equally committed to the peaceful resolution of regional disputes. Clearly, the restraint implied by arms control must become a more widespread phenomenon if such agreements are to survive and to make their proper contribution to a more secure environment for development.

In Pursuit of Growth

The United States is confident that a strategy for growth guided by these principles can succeed. We believe that three areas of action deserve immediate international attention.

First, a global expansion of trade. Plans could be formulated for the 1982 GATT ministerial with the special concerns of growth in mind.11 [Page 224] A major priority should be to integrate more fully the developing countries into the international trading system on the basis of shared responsibilities and benefits.

Second, an increase in investment. Our common objective should be to stimulate domestic and international private investment. We must encourage and support the individual investor.

Third, stronger international cooperation in food and energy. The recent U.N. Conference on New and Renewable Sources of Energy recommended that the developing countries be assisted in assessing their energy resources and determining the best way to exploit them.12 The U.N. Development Program and the World Bank have important followup responsibilities. And we must all work to engage more effectively private participation in exploration and production in oil-importing developing nations.

Domestic and international action must also go hand in hand to achieve food security. The United States continues to be the largest donor of food aid and places a paramount emphasis on its bilateral program to help developing countries increase food production. Greater attention should be given to scientific and technological research that will yield more bountiful food supplies.

I have outlined today the broad principles that guide America’s approach to new strategy for growth. In the immediate future, and prior to the Cancun summit,13 we will announce specific proposals to deal with this and other issues of development.

Dialogue for the Future

These broad principles reflect our view that the United States can and will continue to make an essential contribution to the process of development. We do not claim to have all of the answers. But we do believe that our collective responsibilities for the future allow no more time to be lost in sterile debates and unrealistic demands. The time has come for a reasoned dialogue with promise for the future.

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The search for economic progress, social justice, and human dignity has always been supported by the American people, themselves an example of successful development. Our initiatives and resources, through bilateral programs, the United Nations and other multilateral agencies, have made major contributions to the process of modernization throughout the world. For the United States, support of development constitutes a practical imperative.

At the Ottawa summit the United States reaffirmed its willingness to join its partners in exploring all avenues of consultation and cooperation with developing countries. In October, President Reagan will go to the summit meeting in Cancun, Mexico. He looks forward to a genuine and open exchange of views on questions of economic development and international cooperation. The Cancun summit offers a novel opportunity to gain fresh understanding of the problems we face together. The United States will join in a constructive and cooperative spirit.

Our objective is to bring about a new era of growth. But the purpose of both growth and development goes beyond materialism. As Winston Churchill said: “Human beings and human societies are not structures that are built, or machines that are forged. They are plants that grow and must be treated as such.”

Despite the difficulties of the moment, we should go forward in a spirit of optimism. We have the vision bequeathed to us by the charter. We have the potential of the peoples represented in this room. Let us go forward together to achieve a new era of growth for all mankind.

  1. Source: Department of State Bulletin, October 1981, pp. 1–6. All brackets are in the original.
  2. Reference is to World Development Report 1981 (Washington: World Bank, August 1981, p. 118).
  3. Reference is to the Independent Commission on International Development Issues (ICIDI), chaired by former Chancellor of the Federal Republic of Germany Willy Brandt. The Brandt Commission Report, entitled North-South: A Programme for Survival, was released in 1980. See Foreign Relations, 1977–1980, vol. III, Foreign Economic Policy, Documents 345 and 351.
  4. See footnote 11, Document 53.
  5. It is unclear as to Haig’s reference to Jamaica. Presumable references are to the March decision of eight international banks to establish a $70 million credit to the Government of Jamaica and the IMF’s decision to approve a $640 million loan for Jamaica. (Robert A. Bennett, “8 Major Banks Agree On Jamaica Credit Program,” New York Times, March 31, 1981, p. D1, and “I.M.F. Jamaica Loan,” New York Times, April 15, 1981, p. D6) In his remarks made en route to Cancun on July 31 (see footnote 3, Document 59), Haig referenced multilateral cooperation regarding Jamaica, stating: “Take for example the pilot program that has been developed for Jamaica, which is broadly based and involves investment—the private sector. It involves multinational participation in the critical country which is both regional and worldwide in context.” (Department of State Bulletin, September 1981, p. 33)
  6. Reference is to the intercommunal talks between Greek and Turkish Cypriots under the chairmanship of the UN Secretary General’s Special Representative on Cyprus Hugo Gobbi.
  7. Palme served as UN Special Representative to Iran and Iraq from 1979 until 1982.
  8. See footnote 6, Document 53.
  9. UN Security Council Resolution 242 (S/RES/242), adopted on November 22, 1967, affirmed that the fulfillment of the UN Charter required the establishment of a just and lasting peace in the Middle East. UN Security Council Resolution 338 (S/RES/338), adopted on October 22, 1973, called for negotiations among Egypt, Israel, Jordan, and Syria aimed toward establishing a just and durable peace in the Middle East.
  10. UN Security Council Resolution 435 (S/RES/435), adopted on September 29, 1978, reaffirmed the United Nation’s legal authority over Namibia.
  11. The contracting parties to the General Agreement on Tariffs and Trade (GATT) were scheduled to meet at the ministerial level in Geneva in November 1982.
  12. In A/RES/33/148, “United Nations Conference on New and Renewable Sources of Energy,” adopted by the UN General Assembly on December 20, 1978, the United Nations called for a conference to analyze the effectiveness and feasibility of ten new and renewable energy sources. The UNCNRSE took place in Nairobi, August 10–21, 1981. Special Representative to the President Stanton Anderson headed the U.S. delegation to the conference and addressed the delegates on August 13. For the text of his address, see Department of State Bulletin, January 1982, pp. 63–66. On August 21, conference delegates adopted a program of action, known as the Nairobi Plan of Action. For the plan, consisting of an introduction and three chapters, see Report on the U.N. Conference on New and Renewable Sources of Energy, Nairobi, August 1021, 1981, U.N. New York, 1981 (A/Conf. 100/11) (E. 81, I. 24). For additional information about U.S. preparations and participation at the conference, see United Nations Conference on New and Renewable Sources of Energy (UNCNRSE) and U.S. Delegation Participation, Report Submitted to the Committee on Foreign Affairs, U.S. House of Representatives, March 29, 1982, Committee Print, 97th Congress, 2d Session (Washington: Government Printing Office, 1982).
  13. See footnote 3, Document 59.