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AID response to Fortune article Justification of Philippine aid pro-

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U.S. Government obligation backs insurance and guarantees...

Committee chart showing foreign assistance authorizations and appro-
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Department of State memorandum, "Some Examples of IGA Work".
Letter from J. K. Mansfield, Inspector General, AID, to Senator
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Statement of August Maffry, senior consultant, Bank of America, in-
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State Department memorandum on reduction of U.S. forces in

Thailand

FOREIGN ASSISTANCE ACT OF 1969

MONDAY, JULY 14, 1969

UNITED STATES SENATE, COMMITTEE ON FOREIGN RELATIONS, Washington, D.C.

The committee met, pursuant to notice, at 10:05 a.m., in room 318, Old Senate Office Building, Senator J. W. Fullbright (chairman), presiding.

Present: Senators Fulbright, Symington, Pell, McGee, Aiken. Mundt, Case, Cooper, and Williams.

The CHAIRMAN. The committee will come to order.

The committee is meeting this morning to begin consideration of the administration's foreign aid proposal, S. 2347.

We begin our study of this bill in a rather troubled time with a continuation of an unpopular and costly war, a mounting inflation, growing resentment over high taxes, and a worsening of the social problems throughout the country.

In the 20 years that I have been a member of this committee, we have voted to approve about $100 billion in foreign aid. Developments over the last few years at home and abroad have raised many doubts about the wisdom of these vast expenditures and whether the foreign aid program as constituted really serves our Nation's best interests.

Although this bill would authorize about $2.7 billion in foreign assistance, it is but a portion of the U.S. overall foreign aid effort. Total foreign aid proposed for fiscal 1970, including Public Law 480, contributions to multilateral agencies, and the military sales program, amounts to around $5 billion.

We cannot study this bill in isolation but must view it in the context of the total foreign picture and of fundamental importance in terms of overall national priorities.

We are very pleased this morning to have as our principal witnesses the Secretary of State, Hon. William P. Rogers, and Administrator of the Agency for International Development, Dr. John A. Hannah.

They both have prepared rather lengthy statements, and we hope they will summarize them inasmuch as this is not a new program and many of the aspects of it are well known to the committee. We are very pleased to have you, Mr. Secretary, and Dr. Hannah. Will you proceed, please, sir?

STATEMENT OF HON. WILLIAM P. ROGERS, SECRETARY OF STATE

Secretary ROGERS. Thank you, Mr. Chairman.

Gentlemen, I think Dr. Hannah has indicated he will submit his statement for the record, and I will attempt to shorten this prepared statement I have.

Mr. Chairman, I am glad to be here today in support of the administration's program of foreign economic and military assistance. Dr. Hannah, the AID Administrator, will answer questions on the details of the economic assistance program and the justification for it. Secretary Laird will be here tomorrow to discuss the military assistance program in detail.

AMERICANS CAN BE PROUD OF PIONEERING ROLE

I think that Americans can be proud of the pioneering role that our Government has played in responding to the peaceful revolution in economic and social development that is now taking place in every major region of the world. This is one of the major trends of recent and contemporary history. It has had enormous implications for the evolution of world affairs and for the future position and prospects for our own country.

We have helped, by example and contribution, to raise the expectations for a better life among masses of the people on every continent. We have encouraged them to believe that poverty and misery are not foreordained. We have responded generously to their need for help in the earlier stages of growth-both directly and by supporting a range of United Nations, regional and other international organizations engaged in aiding economic and social development of the poorer nations which make up the majority of the world community.

From this I believe we can derive a large measure of satisfaction and, I would hope, a certain zest for working hard at this constructive, humane, and promising enterprise which means so much to so many.

CONCENTRATION OF PROBLEM AREAS

The proposed program for fiscal year 1970 is strongly concentrated on major problem areas and has clear program priorities.

The President's foreign aid message to the Congress in May set forth the administration's initial proposals for redirecting and strengthening our programs which we believe are required by present needs and circumstances to assist less-developed countries in their efforts to develop. At the same time, the President announced that he would appoint a public advisory group to recommend U.S. policies and programs of international development cooperation for the

decade of the 1970's.

GREATER STRESS ON FOUR ASPECTS

Pending a full-scale review of U.S. foreign assistance policies and programs to be undertaken by the President's task force, we have decided to place greater stress on four aspects of our foreign aid programs for fiscal year 1970.

1. We will increase the opportunities for private enterprise and private initiative to apply these vast resources and energies to the work of development.

2. We will emphasize the transfer of American knowledge and skills through technical assistance.

3. We will increase our support for multilateral aid programs and our efforts to coordinate our aid with other donors.

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