Nations Development Program from $71 million in FY 1969 to $100 million this year. Other nations are expected to contribute some $160 million-62% of the total. Depending, of course, on the results of the President's Task Force report and the Pearson Commission recommendations, we expect to encourage further increased contributions to the various multilateral banks. We are especially pleased that the Congress last week appropriated the first $160 million of the $480 million authorized for the second replenishment of the International Development Association. We appreciate the support this Committee has consistently given this program. Growing enough food to feed the world's burgeoning population remains one of the most critical problems we face. Many less developed countries appear to be on the verge of sustained increases in their levels of food production as a result of new strains of wheat, rice and other grains, together with fertilizer and other necessary agricultural requirements partly financed by A.I.D. But the dramatic gains which some less developed countries are now experiencing must be consolidated, and the new technquies must be spread to more countries. Another decade of continued effort on the part of the less developed countries will be necessary if widespread famine is to be avoided. With our help and the help of other aid donors, it now appears that this can be done. It cannot be done, however, without increased attention to the reduction of population growth. Although progress has been slow, more and more countries which we are assisting are undertaking family planning programs. The less developed countries themselves, the aid-giving nations, international organizations and private groups are showing an increasing awareness of the enormous problems caused by rapid population growth. We will devote as large a part of our A.I.D. program as we can to help the less developed countries come to grips with this problem. The President's Task Force will carry out a further comprehensive review of our foreign assistance programs and will also consider other studies, such as the internationally sponsored Pearson Commission report. This review by the Task Force will serve as the basis for our final response to the Javits Amendment to the Foreign Assistance Act. At this point, Mr. Chairman, let me outline for the Committee the major elements of the economic assistance program proposed for Fiscal Year 1970. We are requesting $2.2 billion, consisting of: -$463 million for Technical Assistance, -$1.1 billion for Development Loans, including $438 million for Latin America, $515 million for Supporting Assistance, -$115 million for Contingency Fund, Administrative Expenses and other requests. In an effort to meet the special needs of the less developed countries for modern technical skills and strong institutions to train large numbers of people more effectively, we will re-emphasize and expand our support for Technical Assistance, both bilateral and multilateral. Over one-fifth of our request for economic assistance is for Technical Assistance programs. Development Loans continue to be the largest share of the program and the most important means of providing essential goods and services required to fuel agricultural and industrial development in the poor countries. In addition, they are the primary means A.I.D. has to stimulate borrowing countries to make the self-help reforms needed for their development. Eight countries-Brazil, Chile, Colombia, India, Indonesia, Korea, Pakistan and Turkey-will receive 86% of the Development Loan country programs proposed for this fiscal year. In addition to the two major forms of development assistance, A.I.D. also helps a few countries maintain political and economic stability through Supporting Assistance. In FY 1970 only seven countries will receive such assistance, and 93% of the Supporting Assistance country programs will be concentrated in Vietnam, Laos and Thailand. In addition, nearly $20 million will help support the UN peacekeeping force in Cyprus and the refugee programs carried out by UNRWA. The Contingency Fund is necessary to meet urgent needs for disasters, such as earthquakes and floods, as well as for unforeseen requirements often in situations of security interest to the United States. Other requests provide funds for salaries and related administrative expenses, support for American-sponsored schools and hospitals abroad and grants for the Indus Basin Development Fund. Our FY 1970 request will fund the following regional programs: -East Asia, $234 million -Vietnam, $440 million -Near East and South Asia, $625 million -Latin America, $605 million -Africa, $186 million In East Asia our aid is focused on both development and security purposes. Indonesia has come back from the brink of economic chaos and is launching a comprehensive development program, the success of which will depend very heavily on outside support for some time to come. The Republic of Korea is moving toward self-sustaining growth, and we expect to be able to continue to phase down the aid we provide to it. In both Laos and Thailand our assistance programs are for the most part an outgrowth of the hostilities in Vietnam and will depend in form and amount on the course of the war there. In Vietnam we are prepared to shift the aid program toward greater emphasis on economic and social development if there is a resolution of the conflict or a significant de-escalation of the war in the months ahead. In the Near East and South Asia, our economic aid program is concentrated almost entirely on the Subcontinent and on Turkey. In India and Pakistan-which have a population greater than that of Latin America and Africa combined-we have a testing ground of whether man can check the ravages of malnutrition and escape from the grip of poverty. The success or failure of the long-term drive which both India and Pakistan are making for their economic development will have ramifications throughout the world. That is why there is such wide participation of aid-giving countries in the consortia led by the World Bank for these two countries. That is also why over two-thirds of our proposed A.I.D. Development Loan program outside Latin America is planned for these two major countries. The previous pessimistic assessment that mass starvation would face the Indian subcontinent and some other regions by 1980 has given way to hope that with continued local effort and adequate outside help, the "Green Revolution" in agriculture can lead the way to overall economic development and progress. India and Pakistan will require development assistance for some years to come. But local as well as foreign experts now are convinced that with good performance and substantial aid these countries can in fact achieve self-sustaining growth in the not too distant future. Turkey, like Korea, is approaching the time when she will no longer need concessional loans to keep her economy moving ahead. In Latin America, our program is a continuation of the historically close and special relations between us and the other countries of the hemisphere. The President has expressed our determination to strengthen and improve these relations. Continuation of our assistance obviously is essential to constructive changes in an atmosphere of purposeful cooperation. The alternative to any refusal on our part to collaborate in their development risks continued social and economic stagnation with its great explosive potential. The present request for Latin America provides an important bridge to the new policy and program directions that will emerge as a result of the Executive Branch reviews now under way. Further reductions in our assistance to this hemisphere this year, following last year's deep cuts, could badly erode confidence in the reliability of our special relationship. Our aid program for Africa extends a modest amount of help to an area which is the least developed of all the continents and which contains one-third of all members in the United Nations. Our aid complements that of the former administering nations of Europe. Apart from contributions to ten African states, the United States is emphasizing the advantages of expanded markets and joint approaches to common development problems by focusing its assistance elsewhere on the continent on regional activities which reflect African initiatives. We also recommend a Military Assistance Program at the level of last year's appropriation. For the past few years, we have actively pursued a policy of phasing out military assistance for those countries whose economies have developed sufficiently so that they are able to provide for their own defense needs. The bulk of the FY 1970 military assistance request presented to you-almost 80%-continues to be planned for four strategic countries-the Republics of Korea and China, Greece and Turkey. Military assistance is also programmed for countries which provide to the United States facilities important to the defense posture of the United States and its allies. Small amounts of military assistance are also planned for other countries, most of which are to receive only training. These, in broad outline Mr. Chairman, are the proposals which President Nixon is making to the Congress for the foreign assistance program for the current fiscal year. Foreign assistance is integral to the conduct of our foreign policy because of a number of fundamental facts about the world in which we live. -More than two-thirds of the world's people live in less developed countries. In the next twelve years, the number of people in the poor countries will grow by about a billion-increasing their present population by almost one-half. -In recent years the less developed countries in the non-communist world as a whole expanded their production at a faster rate roughly 5% annually-than the United States achieved in most of our history. In this sense it can be said that foreign aid is working. But unprecedented rates of population growth are denying the individual citizens of the less developed countries much of the benefits of these gains in national production. -About four-fifths of the savings and investment necessary for sustained growth in the poor countries must be raised from their own resources, out of economies whose per capita national production averages about one-tenth that of the industrialized countries. -In some of the less developed countries the threat of aggression or insurgency requires the diversion of scarce resources to maintain security forces. -More rapid economic and social progess is the goal of every constructive political leader in the developing nations. -If the rich countries do not provide the critical margin of assistance to these constructive forces, the resulting frustration is certain to be exploited politically, and in the long run it will be detrimental to our national interests. On my recent trip to Asia I found, in the countries I visited, shared convictions on the overriding importance of breaking out of poverty; a new sense of confidence that real economic progress is possible; a growing commitment to regional cooperation; and a strong desire to stand as soon as possible independent of external support. To the extent that our aid policies and programs foster these trends-and it is clear that they do they directly support the conduct of our foreign policy. As you consider the program before the Committee, you inevitably will be looking at details and at requirements in the immediate future. But in considering immediate needs in priority areas for the next few years we should not lose sight of a broader issue involved. This issue is whether the East-West polarization that characterized the postwar world is going to be followed by a different polarization that divides the world into the rich and the poor. You have statistics at hand that measure the gap between the rich and the poor nations. Although the less developed nations as a group have improved their growth rate in the 1960's and are slowly improving their living standards, the absolute gap continues to widen from year to year. Even with great generosity in our efforts to encourage the development process in poorer parts of the world, the foreseeable prospects are for that gap to increase still further. In the face of this possibility, it would be shortsighted indeed if the United States failed to do its part with the other developed countries in providing assistance to the poor countries. I have been asked frequently by representatives of both rich and poor whether the sharp cutback in our aid level last year signalled a turn down such a path. I could only express the hope that this was not the case. Mr. Chairman, I said at the opening of these remarks that I believe Americans have the right to be proud of our role in pioneering the lending of a helping hand to nations straining to set themselves on the road to more decent standards of living because this is a constructive and humane thing to do. I also have tried to suggest that since this is a process now engaging the priority attention of most of the people of the world, it would be somehow incongruous if we were not engaged in this powerful current in human affairs. In closing this statement I should like to stress that the conduct of an active and adequate development assistance program also serves our interests in creating a more stable and progressive world. There can be no doubt of the close relationship between the development process, on the one hand, and security on the other. If there is a sense of security, it encourages people and leaders to make the necessary sacrifices for development because they have grounds for hope in the future. If there is a satisfactory rate of economic and social progress, it reinforces that sense of security. When both of these factors are present, the political structures of the less developed countries are strengthened, which in turn contributes to order in international affairs. Mr. Chairman. I want to emphasize that we consider the President's budget request for economic and military assistance for Fiscal Year 1970 to be important to our long-range national interests. We are conscious of competing demands upon our resources. The amounts requested we believe reflect that awareness. The budget this year is the smallest ever requested-in absolute amount, in relation to the budget, and in relation to the U.S. Gross National Product-since the Marshall Plan was launched two decades ago. President Nixon has therefore asked me to tell this Committee that it is his firm conviction that the authorization request for $2.6 billion this year is necessary to meet essential requirements. I respectfully ask the members of this Committee to support this request. The CHAIRMAN. Thank you, Mr. Secretary. Do you wish to say anything at this moment, Dr. Hannah? STATEMENT OF HON. JOHN A. HANNAH, ADMINISTRATOR, AGENCY FOR INTERNATIONAL DEVELOPMENT Dr. HANNAH. Well, Mr. Chairman, if it is agreeable, I would like to submit for the record the statement that you have before you, and then read perhaps one minute out of it. President Nixon is the fifth consecutive President to propose a foreign aid program as a basic element in our relations with other countries. We ask this committee to reaffirm our Nation's willingness to support the efforts of the less developed nations by acting favorably on the President's legislative proposals. INTENSIVE REVIEW OF AID PROGRAMS The question we now face is what basic role America should play in development assistance in the years ahead. The President and many of us began to confront this question earlier this year through an intensive review of our aid programs. That review led to certain conclusions about the direction in which we would like to move. In his foreign aid message the President stated his intention to appoint a task force representing a broad cross-section of American leadership. This group, including both supporters and critics of foreign aid as well as those who have taken no position, will be charged with the responsibility of recommending to the President in time for consideration by the Congress early next year what this country's foreign aid policy should be in the decade beginning in 1971. In the meantime this administration has reached some conclusion on what it is clearly necessary to do now to improve essential aspects of the economic assistance program. The resulting emphases are reflected in the proposed authorizing legislation now before the Congress. PRIORITIES President Nixon stated in his foreign aid message that: 32-308-69-2 We must encourage other economically advanced nations to increase their contribution to this common cause; and We must build on recent successes in furthering food production and family planning. The adoption by the Congress of these initial proposals will begin to turn our foreign aid efforts in new directions. But new directions are not enough. We need the funds to support them. This is a time of necessary fiscal and budgetary restraint. As a result, the President's $2.2 billion authorization request for the AID program is the lowest economic assistance request in 10 years. APPROVAL OF AUTHORIZING BILL URGENTLY REQUESTED Now I would like to make some comments that are not in the statement submitted. We are urgently requesting that you approve the authorization bill at this level recommended by the President so that we will be able to carry on in fiscal 1970 at an expenditure level slightly reduced from the actual expenditures in fiscal year 1969. The Presidential task force is now in the process of being appointed by the President. This task force is being charged with advising the President with a preliminary report in December 1969 and a final report by February 1970. The President's charge is: What should be the role of the United States in the whole area of foreign economic assistance for fiscal year 1971 and beyond? The request is not to reexamine present or past programs or proced res, but to take a comprehensive look at the world as it is, and as it is likely to be, and to propose what the U.S. role should be. The goal is not to arrive at some predetermined position or conclusion. The world of 1971 will be very different from the world of 1948 when President Truman proposed Point IV, and will also differ from what it was in 1961, when President Kennedy proposed what is now AID. If it can be agreed by the executive and congressional branches of Government what the U.S. role should be for the years ahead, we should be able to figure out how to move intelligently and in the national interest from where we are to where we think we should be. Mr. Chairman and members of the committee, we believe, and we hope you agree, that the $2.2 billion authorization requested by the President for economic assistance is the minimum contribution required to help fashion a better and more peaceful world for all mankind and for the yet unborn children who will bear the consequences of our decision. I would like to submit my statement. (The text of the full statement of Dr. Hannah's follows:) STATEMENT OF HON. JOHN A. HANNAH, ADMINISTRATOR, AGENCY FOR Mr. Chairman, I appreciate this opportunity to appear before this Committee in support of the President's proposed economic assistance legislation and the A.I.D. program for FY 1970. Members of this Committee have been concerned with this program for several years. On the basis of your experience I hope you agree with my long-held conviction that the United States must participate actively in the struggle for development that absorbs the energy and attention of the peoples of the developing nations. Our national heritage and enlightened self-interest require that we help. |