Senator PELL. You are very kind and I appreciate the briefness of your testimony. Your statement will be fully studied. Thank you very much, Mr. Venables. I agree with you on the two years authorization period. The meeting of the Foreign Relations Committee is adjourned, subject to the call of the Chair. (Whereupon, at 12:45 p.m., the Committee was adjourned, subject to the call of the Chair.) (The following statements were later submitted for the record:) STATEMENT IN SUPPORT OF THE APPROPRIATIONS FOR THE UNITED NATIONS CHILDREN'S FUND (UNICEF), BY MRS. EDWARD F. RYAN, CHAIRMAN, NATIONAL PTA COMMITTEE ON LEGISLATION Mr. Chairman and Members of the Committee, am Mrs. Edward F. Ryan, of Manchester, Massachusetts, Chairman of the National PTA Committee on Legislation. On behalf of our membership, we wish to reaffirm our established policy of support for the United Nations Children's Fund (UNICEF) and urge your approval of $15,000,000 for the fiscal year 1970. The Foreign Committee has demonstrated its interest in the past in UNICEF and we are grateful for this, and believe you share with us a desire that this important work continue. The National PTA comprises more than 11 million memberships in fifty states, in the District of Columbia, and in the American overseas dependent's schools. We have been in the forefront in encouraging the development of UNICEF into a permanent organization concerned with the welfare of children in the world. We continue our strong interest and support of this agency because of its emphasis on self-help and internal matching by the assisted country. There are one billion children in the world today; three out of four of them live in the "developing" countries. Six hundred million of them suffer from hunger, disease, or lack of education, and frequently all three. UNICEF cannot do everything, but this organization is doing a large share in the fight for the preservation of the world's greatest resource-its children. It's role is building people healthy, alert, well-educated, skilled in ability to help themselves and their countries. It's role has always been to aid projects for the long range benefit of progress in the recipient country and thus the world. It is the only agency under the United Nations devoted solely to the welfare of children and youths. However, as always, this year there have been emergencies suffering of children and youth in the Nigeria-Biafra dispute; the cyclone disaster of Burma, flood victims of Syria, earthquakes in Iran and Sicily-to name a few. These emergencies have strained the UNICEF funds. It is known that if all the project programs now on hand could be met, UNICEF would need at least $60,000,000. UNICEF cannot do everything; but it can do a great deal. What we do here, along with the other nations of the world, may well determine whether development continues to be a reality, or any empty slogan. The consequences for good of the care and training they offer is incalculable for these children of the world are the potential leaders of tomorrow and are the ones who will work alongside our children as adults in an increas ingly interdependent world. UNICEF'S executive director has requested $15,000,000 this year and we strongly support this request. It is believed that UNICEF can match this on the accepted 40-60 ratio from other governments. In 1968, there were contributions from 119 governments; with 36 increasing their contributions. More increases this year are anticipated. Czechoslovakia increased its contribution 50%; other sizeable increases came from Sweden (who continues to make the highest per capita contribution). Federal Republic of Germany, Netherlands, Norway, Switzerland, Japan. The United States continues to rank 7th in per capita contributions. It is interesting to note that last year 12% of the total contributions to UNICEF came from the developing countries. These contributions were in addition of the internal matching of funds for assisted programs within their borders. In 1968, 117 countries received UNICEF help. It continues to be a sad commentary on our world to note that UNICEF continues to help millions of children and mothers each year with less money than the governments of the world spend on armaments in less than two hours of a single day. With the awareness that our country's leadership in building a better world for our heirs is absolutely essential, we sincerely hope that you will continue to support the catalytic effect of UNICEF funds in the development of people and countries and continue to demonstrate our belief in and leadership of the world in this emphasis on human worth and development. STATEMENT BY THE NATIONAL COUNCIL OF JEWISH WOMEN, INC., IN SUPPORT OF THE FOREIGN ASSISTANCE ACT OF 1969 The National Council of Jewish Women, an organization established in 1893, with a membership of over 100,000 in local units throughout the United States, dates back its support of the Foreign Assistance Act to the program's inception as the Marshall Plan in 1948. This support is based on two of our organization's major interests: first, our humanitarian concern with the disadvantaged everywhere, reflected in our service projects at home and overseas-and second, the belief expressed in our resolutions that conditions for peace depend on free Institutions, self-determination and social and economic progress. This resolution has been reaffirmed biennially at our National conventions, most recently in Chicago in April 1969. We were gratified to note that the four new directions recommended in President Nixon's Foreign Aid Message—encouraging Private enterprise, expanding technical assistance, enlisting the participation of other nations and furthering food production and family planning, were entirely consistent with the emphasis which..National Council of Jewish Women has been placing in its testimony before this Committee in past years. We were also pleased that the message followed quite closely the recommendations enunciated in the report of the President's General Advisory Committee on Foreign Assistance Programs released in January 1969. We would strongly endorse the establishment of the Overseas Private Investment Corporation as a means of promoting private investment through loans and risk guarantees to both U.S. investors and investors in the recipient countries. It has been pointed out many times that private investment is an essential and effective complement to Public Development Assistance and that those countries which are developing most rapidly are those where public policy, private investment and external assistance have combined to bring the dynamic forces of private initiative into play to achieve self-sustaining growth. Taiwan and Iran, now no longer receiving concessional Aid from the United States are prime examples. We also support the proposed new emphasis on Technical Assistance and the administration's request for a two-year funding authorization for this part of the program. We would particularly like to see AID provide increasing support to responsible voluntary agencies and other organizations which have a traditional interest in helping the disadvantaged overseas in the form of technical assistance and emergency relief. It is important to keep in mind, however, that the socio-economic effects of a technical assistance program are usually not immediately visible. Approaches and methods must be adapted to each recipient country's particular needs, and to their attitude towards solving these needs. A quality program demands specialized personnel with a thorough appreciation of the problems indigenous to a specific area. Such an understanding can sometimes only be reached with time and experience. Therefore, it seems to us imperative that technical Assistance be recognized as a long-term, open-ended, flexible program, requiring for its success longer-term appropriations than other Foreign Assistance programs. We would hope, however, that the proposed special emphasis on Technical Assistance will not have the adverse effect of separating it entirely from the Total Foreign Aid Program. It cannot, for instance, be divorced from the Capital Assistance Program. All recent evaluations point to the fact that successful International Development depends on a comprehensive and co-ordinated approach to a country's needs. The National Council of Jewish Women has consistently advocated that aid be provided through multilateral channels where possible. We feel strongly that International Development is indeed an International responsibility. From broader co-operation and a sharing of resources and know-how by the developed coun tries can arise a mutual concern in the field of Foreign Assistance which could transcend national interests and international discord. This could be, in turn, a valuable opportunity to develop a climate favorable to world peace. It will not be an easy task, however, to convince other nations to increase their participation, if we ourselves refuse to carry our relative fair-share of the burden. The gradual erosion of the program in recent years, and the constant reduction in budgetary allowance, can only be interpreted by the rest of the world as the fact that the United States is no longer interested in this aspect of Foreign Policy. We believe it should be a prime national priority for this administration, this congress and indeed for all American citizens to recognize the rightness and urgency of invest ing in world progress and world stability, and, in turn, to communicate this conviction to the other members of the free world. Our organization cannot quarrel with the recommendation that priority be given to food production and family planning. These are two extremely important aspects of Foreign Assistance, the success of which have been demonstrated in certain recipient areas. We would hope, however, that the programs in Health and Education will not be underemphasized or undersupported, and that due recognition will be given to the necessity of a combined attack on all of the problems affecting the lives of the people. The National Council of Jewish Women will be awaiting with interest the deliberations of the special Task force of private citizens charged with reviewing Foreign Aid policies for the decade of the 70's, as well as the forthcoming recommendations of the Pearson Commission. Such reevaluations are certainly necessary to ensure the relevancy of the Program to the complex needs of a changing world. Meanwhile, however, we must urge that the necessary authorization be given to assure the success of the present program. Such a success depends in great part, of course, on adequate funding. The administration's request for Foreign Assistance is the lowest proposed since the program began. It is essential that the Total request be authorized if the program is to have any impact at all on the situation which it is designed to alleviate. We would urge this Committee, therefore, to give favorable consideration to S. 2347. Chairman, Committee on Foreign Relations MY DEAR SENATOR FULBRIGHT: I am writing on behalf of the National Foreign Trade Council, whose membership consists of a broad cross-section of American companies engaged in all major fields of international trade and investment, and whose functions since 1941 have been devoted to the protection and promotion of U.S. foreign commerce on a private enterprise basis. The Council endorses the proposal included in the proposed Foreign Assistance Act of 1969 (S. 2347, Part I, Chapter 3, Title II) for establishment of the Overseas Private Investment Corporation (OPIC). Believing that the investment insurance and guaranty programs now carried on by the Agency for International Development (AID) should be continued, the Council sees merit in the proposal to establish OPIC as a separate corporation to help assure business-like management of these investment incentive programs on a financially self-sustaining basis and to provide additional emphasis on the role of private enterprise and U.S. private investment in less developed countries. In considering this proposal, the Council has noted favorably the language of Section 331 (b) of the proposed legislation which states that not later than March 1, 1974, the Corporation shall submit to the Congress an analysis of the possibility of transferring all or part of its activities to private U.S. citizens, corporations, or other associations. The Council has also noted favorably the number of respects in which the organizational, functional, and financial provisions for OPIC have been modified from those contained in the original proposal of the International Private Investment Advisory Council (IPIAC) of AID for establishment of a "United States Overseas Development Corporation". As a member of IPIAC, I neither endorsed nor opposed the IPIAC recommendation, pending clarification of a number of points on which the IPIAC recommendation appeared deficient or to raise questions. Specifically, in our view, the original IPIAC proposal did not give sufficient emphasis to the extent to which favorable investment decisions depend upon the climate for investment established by the developing countries. It also caused concern because of its provision for equity investment by the United States Overseas Development Corporation itself; its failure to draw sufficiently upon the talents and experience of executives from the business world; its too open-ended access to borrowing from the U.S. Treasury to finance lending operations; and because of the extent and ways in which the corporation would be involved in pre-investment survey and cost-plus management contracts. Analysis of the present OPIC proposal shows modification in important respects from the original IPIAC version. Specifically, 1. The majority of the Board of Directors of OPIC, six members out of a total of eleven and including the Chairman and President, are to be ap pointed from private life. The President's Message also stated that such appointees have business experience. 2. OPIC is not authorized to make equity investments. While its loans may take the form of convertible debentures, OPIC itself cannot convert such loans to equity holdings. 3. OPIC is not authorized to raise capital for lending operations through the issuance of securities or by borrowing from the U.S. Treasury. Authorization for borrowing from the U.S. Treasury is limited only to the extreme case where if reserve funds for the insurance and guaranty programs were exhausted, such borrowing would be necessary to maintain the full faith and credit of the United States. 4. Also eliminated is the authorization included in the original IPIAC proposal for cost-plus incentive management contracts or for such contracts with U.S. firms to build and manage projects abroad. In the Council's view these modifications represent a substantial improvement over the original IPIAC proposal and meet the principal reservations which were held in respect thereto. In now endorsing the establishment of OPIC, the Council however emphasizes the following: 1. The importance of demonstrated business competence on the part of the members of the OPIC Board of Directors to be appointed from private life, as well as the requirement of business experience for appointees to the staff of the Corporation. 2. The essentiality of actions by the less developed countries themselves to maintain or create a climate to attract private investment, if such investment in fact is to be increased. 3. The need for OPIC to be able to operate in the context of consistent overall policies of the United States Government in protection and support of private international investment. In this connection, policy at all levels of Government should strictly observe the principle that in making their investment decisions companies should have the right to determine without risk of discrimination the ownership forms best suited to the nature and competitive requirements of their foreign subsidiaries or affiliates. 4. In respect to investment financing, the Council recommends that the language of the proposed legislation be amended to provide more specifically that in its lending operations the Corporation should exercise its functions to supplement and encourage and not compete with private capital. The preponderant thrust should be on the guaranty of private financing, with direct loans by OPIC to be kept to minimum levels as contemplated in the program under the proposed legislation. The lending features of the program, which would be carried out initially by making available funds to the extent of $20 million per year for five years from the repayments of prior AID and predecessor agencies development loans, can be increased [Sec. 326 (b)] by the transfers of revenues and income earned by OPIC from its investment insurance and guaranty programs. Such transfers, in our view, should not be permitted to result in any substantial negative impact on what we believe should be the main emphasis, namely, the encouragement of private investment through the insurance and guaranty programs. These programs should provide for the lowest realistic rates which bear a business-like relationship to the risks involved and the claims paid. We respectfully request that these views on behalf of the National Foreign Trade Council in support of the establishment of the Overseas Private Investment Corporation be incorporated in the Hearings of the Foreign Relations Committee in regard to S. 2347, the proposed Foreign Assistance Act of 1969. Sincerely yours, ROBERT M. NORRIS, President. STATEMENT ON FOREIGN ASSISTANCE ACT OF 1969, S. 2347, FOR THE CHAMBER OF COMMERCE OF THE UNITED STATES (By Charles H. Smith, Jr.*) The National Chamber supports foreign aid as an instrument of United States foreign policy, an important element of which is stimulation of private initiative in the development process. We believe that President Nixon set the scene properly in his foreign aid message when he underscored the need to know more about the role of foreign assistance in the development process and the relationship between development and overall United States foreign policy. We do not necessarily need new studies on development because a great deal of research and documentation has already been done. Instead, we must synthesize various views to gain a perspective on the type of foreign assistance most readily adaptable to changing elements of economic and social development. Section 205 of S. 2347 places emphasis on research and evaluation of development activities. In implementing this section it is important that long-range development rather than aid be stressed. Various reviews of development assistance programs show that basic needs of developing countries must be met to establish a stable economic base upon which emerging countries can develop human and natural resources on their own terms. Although these needs frequently vary from country to country, experts have pinpointed the following priorities: food production, population control, manpower training and utilization, and development of social and political institutions. Development banks and savings and loan associations linked to local investment are essential elements in this bootstrap operation. Section 207 of the bill properly underscores the value of popular participa. tion in the development process. We cannot emphasize too strongly the positive effect of self-help programs and involvement of foreign nationals in the establishment and operation of democratic private and local government institutions. The National Chamber reiterates its position that recipients of development assistance must participate in planning from the outset to assure that programs meet the needs of the country concerned and offer a role for foreign nationals in implementing specific projects. One point is quite clear. The American humanitarian spirit demands that continuing efforts be made in helping others help themselves. In so doing, lessdeveloped countries move closer to sharing an experience that has made our country great and for which the developing world is crying out—dignity of the individual. Hunger and want, stemming from inefficient techniques and swelling populations, threaten the survival of developing countries and often dissipate development efforts undertaken by industrialized countries. Our efforts must be coordinated and our objectives clearly defined in a multilateral drive to attack basic problems which, when ameliorated, will then give the possibility of opening the door to rational industrialization by less-developed countries. It is evident that the United States cannot shoulder the major portion of development assistance indefinitely. Congress has expressed this sentiment. The public has addressed itself to this point in Congressional testimony and organizational gatherings. Industrialized countries must continue to increase their participation in development as the role of multilateral assistance becomes more important, and indeed, imperative since recent studies show that the rate of capital and technical assistance absorption on the part of emerging countries is on the upswing. Many changes have taken place in the foreign assistance concept since the Marshall Plan was established 21 years ago. At that time, assistance was based on the need to rebuild economies destroyed by World War II. Marshall Plan foreign aid was administered as a crash program for the short term. Needs of emerging countries just beginning to structure new economies have shifted emphasis to long-range development which takes a great deal of time, money, and evaluation. Combined with this shift of emphasis in foreign assistance programs, the United States is faced with an order of spending level priorities. Other programs, particularly those in the domestic area, now compete with development assistance which has become increasingly unpopular with the public, primarily due to ex Mr. Charles H. Smith, Jr., a Director of the National Chamber, is President of SIFCO Industries, Inc., in Cleveland, Ohio. Formerly known as The Steel Improvement and Forge Company, SIFCO has investments in foreign countries. 32-308 0-6918 |