STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75B00380R000600170055-2
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 15
• Document Creation Date: December 9, 2016
• Document Release Date: August 24, 2001
• Sequence Number: 55
• Publication Date: June 20, 1973
• Content Type: OPEN

S 11568
Li S
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CONGRESSIONAL RECORD ?SENATE June 20, 1[178
By Mr. BELLMON:
S. 2043. A bill to amend the Consolidated
Farm and Rural Development Act. Referred
to the Committee on Agriculture and For-
estry.
By Mr. HARTKE:
S. 2044. A bill to extend until September 30,
1975, the suspension of duty on certain dye-
ing and tanning products and to include log-
wood among such products. Referred to the
Committee on Finance.
By Mr. PERCY:
S. 2045. An original bill to require that
future appointments to the offices of Director
and Deputy Director-of the Office of Manage-
ment and Budget, and of certain other offi-
cers in the Executive Office of the President,
be subject to confirmation by the Senate.
Placed on the calendar.
STATEMENTS ON INTRODUCED
BILLS AND JOINT RESOLUTIONS
By Mr. RIBICOFF (for, himself,
Mr. HARTKE, Mr. CHURCH, Mr.
MONDALE, Mr. KENNEDY, Mr.
PASTORE, Mr. HUMPHREY, Mr.
NELSON, and Mr. FELL):
S. 2025. A bill to amend title II of the
Social Security Act and the Internal
Revenue Code of 1954 to establish 1974
(rather than 1975) as the first year in
which adjustments in benefits, wage
base, and earnings limitation, can be
made on account of increases in the cost
of living. Referred to the Committee on
Finance,
SOCIAL SECURITY BENEFITS ESCALATION
Mr. RIBICOFF. Mr. President, today I
am introducing legislation to assure all -
social security beneficiaries of an in-
crease in retirement benefits as of Janu-
tia,ry 1, 1974. Under present law social
security benefits are not scheduled to in-
crease until January 1, 1975.
In the past few years Congress has
substantially raised the social security
benefit levels. But the cost of living has
nullified much of these increases. Prop-
erty taxes have jumped by nearly 39
percent in the last 4 years, nearly twice
the overall increase in the Consumer
Price Index. And the impact has been
especially severe for the aged because
nearly 70 percent own their own homes.
Public transportation costs have risen
by over 33 percent during this same
period. Here again, senior citizens are
hard hit since many must rely on pub-
lic transit instead of private automobiles
Food prices have gone up by at least
34 percent in the 4-year period. This is
tragic for the elderly who spend 27 per-
cent of their income for food as compared
to 17 percent of all Americans. And
medical care costs?a significant 'cost
factor to the aged?have increased 36
percent.
And all of these price increases have
been escalating even more rapidly in the
last few months.
It would be one thing if social security
benefits were at an adequate level. But
they are not. Social security benefits for
millions of older Americans?even with
the 20-percent Increase enacted last
year?still fall below the Government's
own poverty benchmark. Average annual
payments for retired workers amounted
to $1,944 in 1972, nearly $40 below the
poverty threshold for single aged per-
sons. For widows, average benefits were
more than $320 under the impoverished
standard.
It is unconscionable for us to let prices
skyrocket out of sight while millions of
older Americans are denied an increase
in social security benefits.
The legislation I am proposing would
change the effective date of the so-called
cost-of-living escalator in the social -
security law from January 1, 1975 to
January 1, 1974. This escalator provides
that when the Consumer Price Index
goes up by at least 3 percent in any year,
social security benefits will be raised to
keep pace with the inflation. In view of
the 7-percent inflation to date this year
I hope that Congress will take speedy
action on this proposal.
By Mr. HUMPHREY (for himself
and Mr. AIKEN) :
S. 2026. A bill to amend the Foreign
Assistance Act of 1961, and for other
purposes. Referred to the Committee on
Foreign Relations.
MUTUAL DEVELOPMENT AND COOPERATION
ACT or 1973
MR. HUMPHREY. Mr. President, I
have been distressed to observe the de-
cline in U.S. support for the development
of the low-income countries. Part of the
reason for our poor performance stems
from a disagreement over how aid should
be administered.
Many people have expressed a strong
preference for multilateral aid over bi-
lateral aid. I share that view.
But some of the things America has
to offer others are best carried in a bi-
lateral form. For example, the great tra-
dition and experience of rural cooper-
atives ought to be brought to the atten-
tion of the developing countries, and this
is not likely to happen except through a
bilateral program. The same is true of
our private voluntary programs and our
great universities and land grant col-
lege's which have so much to offer the
world. And, in any event, it Would not do
to cut off bilateral aid until multilateral
efforts are ready to take over the job.
The world can ill afford to let its total
support for the poor and the powerless
of the earth decline. And that is exactly
what will happen if American bilateral
aid and its support of multilateral aid
continues to lag.
In the negotiations for the replenish-
ment of the funds of the International
Development Association, the soft loan
window of the World Bank, I am un-
happy to learn that it is America that
is dragging its feet. I know that we have
serious problems at home. Nobody is
more mindful than I of the ills that
beset us or more anxious to heal them.
Yet, with all our problems, we are a very
privileged people. Even our determined
attacks on our problems reveal our basic
strength. It is not like America, even
under great stress, to forget other people
in much greater need. This is not in
keeping with the splendid traditions of
this great Nation.
Americans are generous people. They
are citizens of the world as well as citi-
zens of the United States. Since they are
not directly represented on any of the in-
ternational bodies as individuals, it is up
to their Government to represent them
in their keenly felt role as Iriorld citizens.
I believe that we are failing to represent
our citizens in th.at role when we permit
this richest of all the world's nations to
become the laggard in the world's devel-
opment effort. We can do much better.
Not only for humanitarian reasons. But
the peace and political stability we seek
can only come about when the poor are
brought into the development process.
It was with a sense of genuine reas-
surance, therefore, that d- learned of the
vigorous new initiative of a bipartisan
majority of the House Foreign Affairs
Committee on American foreign eco-
nomic aid legislation. Nowhere have I
seen a more apt summary of that impor-
tant initiative than in an editorial last
Thursday, June 7, in the Minneapolis
Tribune from which I would like to quote
ohe paragraph:
One has to be impressed as much by the
ingenuity as the substance of a foreign aid
proposal offered last week by a bipartisan
majority of the House Foreign Affairs Com-
mittee. Consider this unlikely combination
of elements: The bill should appeal to
development idealists. It offers new markets
to profit-minded American exporters. It has
the potential of increasing 'U.S. employ-
ment. It would not increase taxes, and it is
politically shrewd in other ways as well.
Mr. President, I believe so strongly that
we are in need of such new departures
in foreign aid that I am today, on behalf
of Senator AIKEN and myself, introduc-
ing a bill identical to the House com-
mittee version to amend the foreign aid
legislation, -
In joining with me in this effort, my
good friend and distinguished colleague,
GEORGE AIKEN, brings to this effort a deep
sense of commitment to the principle
that American aid should reach those
most in need.
In past years, I worked closely with
Senator AIKEN in the development of
legislation dealing with foreign economic
assistance. During our joint efforts, I
was always impressed with Senator
AIKEN'S knowledge of the ingredients
needed to make the development process
become more effective. His cosponsorship
of the Mutual Development and Cooper-
ation Act of 1973 is symbolic of continu-
ing bipartisan efforts to make American
assistance responsive to the real needs
of the world's poor.
I believe this bill will do much to get
America back on a true course in our
relations with the developing countries.
For too long U.S. foreign policy has
been preoccupied with great power re-
lationships. If a nation has a nuclear
capability, or if it belong to the central
trading establishment of the world, we
have a place for it.
But our policy today has little room
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CONGRESSIONAL RECORD ? SENATE S 1150
for those nations where most of human-
ity lives. I submit that such a policy is
not only bad morality, it is bad security,
bad economics, and bad diplomacy as
well. The world is shrinking and econ-
omies and societies are growing more
interdependent. We have got to make
this world work, and it will not work for
the most fortunate unless it works rea-
sonably well for the forgotten majority.
We have no choice but to meet this
challenge. We cannot forget the world's
majority which is powerless today, but
can vitally affect our future and our
children's future tomorrow. Our foreign
policy will not be whole, nor will it be
viable until it is a policy which takes ac-
count of the developing nations and
works to make the bounties of the earth
available to them az well as to ourselves.
The bill we are introducing today is
by no means all idealism, though it is
idealistic. It is practical and tough-
minded, and it serves the highest na-
tional interest--L-our interest in making
this world more livable for all of us and
our children.
First, this bill recognizes a veritable
Intellectual revolt among scholars of de-
velopment who are turning against the
long-held view that growth alone is the
answer that will trickle benefits down to
the poorest majority. These scholars,
and now this bill, start from the proposi-
tion that the poorest majority must
share in the work of building a nation
and must share more equitably in the
fruits of development at the outset?
not at some future date after, growth
targets have been Met. Greater equity
and greater participation, instead of
taking a toll on growth, supports and
reinforces it. ?
Years ago, the Congress took an initia-
tive in passing title IX of the Foreign As-
sistance Act, which expressed an earlier
version of these views. The evidence of
scholarly study and of experience now
bears out the wisdom of that congres-
sional view, and today it reappears in
more mature and tangible form in this
bill. It is more tangible because this bill
specifies the fields of endeavor which will
most directly benefit the poorest major-
ity and commits money to each of those
sectors. And each field is responsive to a
deeply rooted human problem that per-
meates the societies of the low-income
countries. The three fields of emphasis
are first, food, nutrition, and rural de-
velopment, second, population planning
and health, third, education and human
resource development. ?
Increasingly, the AID program has
given sustained attention over a period
of time to a problem in one of these three
fields. And there are some stirring suc-
cess stories to tell as a result.
One story is about malaria. Twenty
years ago, well over 10 million people in
South Asia alone were afflicted with the'
disease. More than 1 million died each
year. Today the disease is under control.
Another success story is about cereal
production in South Asia. Seven years
ago India imported 10 million tons of
grain following a monsoon failure to.
avoid widespread famine. During the en-
suing years, she was able to accumulate
nearly 10 million tons' of grain reserves
from the expanded production made pos-
sible by the green revolution in which
American aid programs, public and pri-
vate, played such an important role.
Thus, when the Bangladesh crisis
arose, India was the principal food do-
nor, providing nearly 2 million tons of
food. Even with this unprecedented gen-
erosity, India has come very close to
surviving this year's drought, one of the
wQrst in a .century, by using its food re-
serves.
+ A third story is -about population. A
decade ado, populations were exploding
throughout the poor lands and nobody
was doing anything about it, and govern-
ments did not even dare to speak- of it
very openly. Today, although the prob-
lem is far from solved, it is out in the
open and governments?almost all of
them?have population stabilization as
an official or semiofficial goal, and they
are mounting campaigns to solve popu-
lation problems. That is real progress in
one short decade on such a basic and
sensitive problem.
These three success stories not only
refute some of the recent allegations by
ill-informed authors to the effect that
we do not know how to help in the de-
velopment process; they also illustrate
the worth of the problem-solving ap-
proach to development. That is the ap-
proach where we concentrate enough
resources over enough time on an acute
human problem affecting the poorest
majority to get some results. That is the
first very basic reform built into this
bill. This new approach to foreign aid
will enable the little guy to be reached?
millions of lower income families will be
affected.
The, second reform introduced by this
bill, grows out of an interesting piece of
research done by our House colleagues.
That reseach shows that the United
States is doing very well in increasing
its exports to the developing countries
as a whole. In fact, these countries have
become very important customers, im-
porting about as much as the Common
Market?including the United King-
dom?plus Japan.
It is a critical and growing market
whose importance is not often appre-
ciated However, the House committee
looked deeper and found that in the
poorest countries?those with per capita
GNP of $200 per year or less?U.S. ex-
ports are not doing well at all.
Not only are we losing our share of this
market to other exporters, we are losing
in absolute dollar volume of sales. Amer-
ican exports to these markets are de-
pendent on U.S. Government financing,
mostly AID and Public Law 480. The
Export-Import Bank and private loans
are not very large. This is not surpris-
ing, since these countries cannot afford
to import except on. easily repayable
terms. Other exporting countries un-
derstand this and are supporting their
exporters by offering steadily increasing
financing on attractive terms with low-
interest rates, long maturities and gen-
erous grace periods.
This bill would remedy- this situation
by setting up a new Export Development
Credit Fund with authority to make
credit available to pay for U.S. exports
to the lowest-income countries on terms
that are competitive. It would be able
to finance about $1 billion per year at in-
terest rates of perhaps 3 percent.
The difference between such low rates
and the approximately 7 percent it
would cost the fund to borrow ,money
from the U.S. public, would be paid for
out of receipts on old aid loans which
are now largely used for relending by
AID.
These receipts, which are increasing
in volume each year, make it possible to
establish such a Fund with borrowing
authority similar to the Export-Import
Bank, on a fiscally sound basis, and
without charge to the U.S. budget. The
Fund would only finance exports which
actually helped with development,
thereby enabling these countries to de-
velop the ability to repay and to become
better customers for our future exports.
There would be no luxury items or mil-
itary goods. And the Fund's clients
would be the least developed countries
where U.S. 'exports are lagging.
Mr. President, the bill we are intro-
ducing today is social statesmanship in
the highest form, where two very im-
portant U.S. goals can be served simul-
taneously. I refer to the goal of help-
ing the development of the lowest-in-
come countries and the goal of helping
U.S. exports, both immediately and in
building markets for the future. As
many as 80,000 U.S. jobs may be created
once the Export Development Credit
Fund gets into operation. Thus, Amer-
ica's role in helping our less fortunate
world neighbors need not be at the ex-
pense of those in need at home. Rather,
it can help them to get jobs, which we
will agree is the most basic way to help
them solve their problems.
There is a third purpose served by the
bill we introduce today. It recognizes
that America's responsibilities with re-
spect to the developing countries reach
far beyond our aid programs. U.S. pol-
icies on trade, investment, science pol-
icy, oceans, debt relief and other sub-
jects may affect very profoundly the
destinies of poor countries.
Yet until now, these policies are made
without coordination?without system-
atically informing ourselves of how they
will affect our interests in development.
This bill institutionalizes a coordinating
procedure that would insure that the
development factor was always consid-
ered. That factor may not predominate,
but at least it has to be heard.
In order to do this, the bill sets up a
Development Coordinating Committee
and makes as its chairman, the head of
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CONGRESSIONAL RECORD SENATE June 20, 1973
the Mutual Development and Coopera-
tion Agency?the proposed successor to
the AID, which is the agency most sensi-
tively attuned to the subject of develop-
ment.
Mr. President, I believe this bill is a
great improvement on present legislation.
It will focus bilateral aid an the most
pressing human problems..
It will put the great U.S. industrial
machinery and agriculture at the service
Of development while protecting U.S.
exports and U.S. jobs. And it will weave
into the fabric of our Government poli-
cies some common threads of develop-
ment. It will put America back onto Ek..
course in world affairs in which we can
again lift our heads and be proud. And
in my view, it will justly deserve arid
receive the support of the people of
America and the Congress.
Mr. 'President, I ask unanimous con,
sent that the full text of the bill along
with a section-by-section analysis be
printed at this point in the RECORD.
There being na objection, the bill and
analysis were ordered to be printed in
the RECORD, as follows:
S. 2026
Be it enacted by the Senate and House of
Representatives of the United States of
America in Congress assembled. That this
Act may be cited as the "Mutual Development
and Cooperation Act of 1973."
(b) Strike out "Agency for International
Development" each place it appears in such
Act and insert in lieu thereof in each such
place "Mutual Development and Cooperation
Ageircy".
POLICY; DEVELOPMENT ASSISTANCE AUTHORIZA-
TIONS
SEC. 3. Chapter 1 of part I of the Foreign
Assistance Act of 1961 is amended as fol-
lows:
(a) In the chapter heading, immediately
after "CHAPTER 1?POLICY" insert "; DEVEL-
OPMENT ASSISTANCE AUTHORIZATIONS".
(b) In section 102, relating to statement
of policy, insert "(a)" immediately after
"STATEMENT OF' POLICY.?", and at the end
thereof add the following:
"(b) The Congress further finds and de-
clares that, With the help of United States
economic assistance, progress has been made
in creating a base for the peaceful advance
of the less developed countries. At the same
time, the conditions which shaped the United
States foreign assistance program in the
past have changed. While the United
States must continue to seek increased co-
operation and mutually beneficial relations
with other nations, our relations with the
less developed countries must be revised to
reflect the new realities. In restructuring our
relationships with these countries, the Presi-
dent should place appropriate emphasis on
the following criteria:
"(1) Bilateral development aid should
concentrate increasingly on sharing Amer-
ican technical expertise, farm commodities,
and industrial goods to meet critical de-
velopment problems, and less on large-scale
Capital transfers, which when made should
be in association with contributions from
other industrialized countries working to-
gether in a multilateral framework.
"(2) Future United States bilateral sup-
port for development should focus on critical
problems in those functional sectors which
affect the lives of the majority of the people
in the developing countries: food production,
rural development and nutrition; population
planning and health; education, public ad-
ministration, and human resource develop-
ment.
"(3) United States cooperation in develop-
ment should be carried out to the maximum
extent possible through the private sec-
tor, particularly those institutions which
already have ties in the developing areas,
such as educational institutions, coopera-
tives, credit unions, and voluntary agencies.
"(4) Development planning must be the
responsibility of each sovereign country.
United States assistance should be ad-
ministered in a collaborative style to sup-
port the development goals chosen by each
country receiving assistance.
"(5) United States bilateral development
assistance should give the highest priority
to undertakings submitted by host govern-
ments which directly improve the lives of the
poorest majority of people and their capacity
to participate in the development of their
countries.
"(6) United States development assistance
should continue to be available through
bilateral channels until it is clear that multi-
lateral channels exist which can do the job
with no loss of development momentum.
"(7) Under the policy guidance of the
Secretary of State, the Mutual Develop-
ment and Cooperation Agency should have
the responsibility for coordinating all
United States development-related activities.
The Administrator of the Agency should ad-
vise the President on all United States
actions affecting the development of the less-
developed countries, and should keep the
Congress informed on the major aspects of
United States interests in the progress of
those countries."
(c) At the end thereof, add the following
new sections:
"SEc. 103. FOOD AND NUTRITION.?In order
to prevent starvation, hunger, and malnu-
trition, and to provide basic services to the
people living in rural areas and enhance
their capacity for self-help, the President is
authorized to furnish assistance, on such
terms and conditions as he may determine,
for agriculture, rural development, and
nutrition. There is authorized to be appro-
priated to the President for the purposes of
this section, in addition to funds otherwise
available for such purposes, $300,000,000
for each of the fiscal years 1974 and 1975,
which amounts are authorized to remain
available until expended.
"SEC. 104. POPULATION PLANNING AND
HEALTH.?In order to increase the opportuni-
ties and motivation for family planning, to
reduce the rate of population growth, to
prevent and combat disease, and to help pro-
vide health services for the great majority,
the President is authorized to furnish assist-
ance on such terms and conditions as he may
determine, for population planning and
health. There is authorized to be appropriated
to the President for the purposes of this
section, in addition to the funds otherwise
available for such purposes, $150,000,000 for
each of the fiscal years 1974 and 1975, which
amounts are authorized to remain available
until expended.
"Sac. 105. EDUCATION AND HUMAN RESOURCE
DEVELOPMENT.?In order to reduce illiteracy,
to extend basic education and to increase
manpower training in skills related to de-
velopment, the President is authorized to
furnish assistance on such terms and condi-
tions as he may determine, for education,
public administration and human resource
development. There is authorized to be
appropriated to the President for the pur-
poses of this section, in addition to funds
otherwise available for such purposes,
$115,000,000 for each of the fiscal years 1974
and 1975, which amounts are authorized to
remain available until expended.
"SEc. 106. SELECTED DEVELOPMENT PROD -
LEMS.?The President is authorized to fur-
nish assistance on such turns and conditions
as he may determine, to help solve economic
and social development problems in fields
such as transportation and power, industry,
urban development and export development.
There is authorized to be appropriated to the
President for the purposes of this section,
in addition to funds otherwise available for
such purposes, $93,000,000 for each of the
fiscal years 1974 and 1975, which amounts
are authorized to remain available until
expended.
"SEc. 107. SELECTED COUNTRIES AND ORGA-
NIZATIONS .?The President is authorized to
furnish assistance on such terms and condi-
tions as he may determine, in support of
the general economy of receipient countries
or for development programs conducted by
private or international organizations. There
is authorized to be appropriated to the Presi-
dent for the purposes of this section, in addi-
tion to funds otherwise available for such
purposes, $60,000,000 for each of the fiscal
years' 1974 and 1975, which amounts are
authorized to remain available un til
expended.
'SEc. 108. APPLICATION OF EXISTING PROVI-
sxoNs.?Assistance under this chapter shall
be furnished in accordance with the pro-
visions of title I, II, VI, or X of chapter 2
of this part, and nothing in this chapter
shall be construed to make inapplicable the
restrictions, criteria, authorities; or other
provisions of this or any other Act in accord-
ance with which assistance furnished under
this chapter would otherwise have been
provided.
"SEc. 109. TRANSFER OF FUNDS.?NotWith-
standing the preceding section, whenever the
President determines it to be necessary for
the purposes of this chapter, not to exceed 15
per centum of the funds made available for
any provision of this chapter may be trans-
ferred to, and consolidated with, the funds
made available for any other provision of this
chapter, and may be used for ally of the pur-
poses for which such funds may be used, ex-
cept that the total in the provision for the
benefit of which the transfer is made shall
not be increased by more than 25 per centum
of the amount of funds made available for
such provision.".
DEVELOPMENT LOAN FUND
Sac. 4. Section 203 of chapter 2 of part I of
the Foreign Assistance Act of 1961 is amended
as follows:
(a) Strike but "the Mutual Security Act of
1954, as amended," and insert in lieu thereof
"predecessor foreign assistance legislation".
(b) Strike out "for the fiscal year 1970,
for the fiscal year 1971, for the fiscal year
1972, and for the fiscal year 1973" and insert
in lieu thereof "for the fiscal years 1974 and
1975 for use for the purposes of chapter 1 of
this part and part V of this Act and".
ADMINISTRATIVE POSITIONS
SEC. 5. Chapter 2 of part III Of the Foreign
Assistance Act of 1961, relating to adminis-
trative provisions, is amended as follows:
(a) In section 638, relating to Peace Corps
assistance, insert before the period at the end
thereof "; or under part V of this Act".
(b) At the end thereof, add the following
new section:
"SEc. 640B. COORDINATION.?(0.) The Presi-
dent shall establish a system for coordination
of United States policies and programs which
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affect United States interests in the develop-
ment of low-income countries. To that end,
the President shall establish a Development
Coordination Committee which shall advise
him with respect to coordination of United
States policies and programs affecting the
development of the developing countries, in-
cluding programs of bilateral and multilat-
eral development assistance. The Cornrnittee
shall include the Administrator, Mutual De-
velopment and Cooperation Agency, Chair-
man; the Under Secretary for Economic Af-
fairs, Department of State; the Assistant
Secretary for International Organization Af-
fairs, Department of State; the Assistant
Secretary for International Affairs, Depart-
ment of the Treasury; the Assistant Secre-
tary for International Affairs and Commodity
Programs, Department of Agriculture; the
Assistant Secretary for Domestic and Inter-
national Business, Department of Commerce;
the President, Export-Import Bank of the
United States; the President, Overseas Pri-
vate Investment Corporation; the Special
Representative -for Trade Negotiations, Ex-
ecutive Office of the President; and the Ex-
ecutiVe Director, Council on International
Economic Policy.
"(b) The President shall prescribe appro-
priate procedures to assure coordination
among representatives of the United States
Government in each country, under the di-
rection of the Chief of the United States
Diplomatic Mission.
"(c) Programs authorized by this Act shall
be undertaken with the foreign policy guid-
ance of the Secretary of State. .
"(d) The Chairman of the Development
Coordination Committee shall report annu-
ally to the President and the Congress on
'United States actions affecting the develop-
ment of the low income countries.". ? ?
UNITED STATES EXPORT DEVELOPMENT CREDIT
FUND
SEC. 6. The Foreign Assistance Act of 1961
is amended by adding at the end thereof the
following new part:
"PART V
"Sac. 801. GENERAL Aurnoarry.?(a) In the
Interest of increasing United States exports
to the lowest income countries, thereby con-
tributing to high levels of employment and
Income in the United States and to 'the
establishment and maintenance of long-
range, growing export markets, while pro-
moting development of such countries, the'
President shall establish a fund, to be known
fig the 'United States Export Development
Credit Fund', to be used by the President to
carry out the authority contained in this
part.
"(b) The President is authorized to pro-
vide extensions of credit and to, refinance
United States exporter credits, for the pur-
pose of facilitating the sale of United States
goods and services to the lowest income
countries which advance their development.
The provisions of section 201(d) of this Act
shall apply to extensions of credit under this
part. The authority contained in this part
shall be used to extend credit in connection
with the sale of goods and services which are
of developmental character, with due regard
for the objectives stated in section 102(b)
of this Act.
"(c) The receipts and disbursements of the
Fund in the discharge of its functions shall
be treated for purposes of the budget of the
United States Government in the same
fashion as the receipts and disbursements of
the Export-Import Bank of the United States
under section 2(a) (2) of the Export-Import
Bank Act of 1945, as amended,
?
"Sac. 802. FINANCING.? ( ) AS may here-
after be provided in annual appropriation
Acts, the President is authorized to borrow
from, whatever source he deems appropriate,
during the period from the enactment of
this part through December 31, 1977, and
to issue and sell such obligations as he de-
termines necessary to carry out the pur-
poses of this part: Provided, That the aggre-
gate amount of such obligations outstanding
at any one time shall not exceed one-fourth
of the amount specified in section 7 of the
Export-Import Bank Act of 1945, as amended.
The dates of issuance, the maximum rates of
Interest, and other terms and conditions of
the obligations issued under this subsec-
tion will be determined by the Secretary of
tl,te Treasury with the approval of the Presi-
dent. Obligations issued under the author-
ity of this section shall be obligations of
the Government of the United States. of
America, and the full faith and credit of.the
United States of 'Anierica is hereby pledged
to tho full payment of principal and interest
thereon. For the purpose of any purchase of
the obligations issued under this part, the
Secretary of the Treasury is authorized to
use as a public debt transaction the proceeds
from the sale of any securities issued under
the Second Liberty Bond Act, as now or
hereafter in force, and purposes for which
securities may be issued under the Second
Liberty Bond Act, as now or hereafter in
force, are extended to include any purchases
of the obligations issped under this part.
The Secretary of the Treasury may, at any
time, sell any of the obligations acquired by
him under this section. All redemptions, pur-
chases, and sales by the Secretary of such
obligations shall be treated as public debt
transactions of the United States.
"(b) Except as otherwise provided in sec-
tion 806, the amounts borrowed under sub-
section (a) of this section shall be paid into
the Fund and used to carry out the purposes
of this part. Any difference between the in-
terest to be repaid on export credits made
under this part and the interest paid by
the Fund on obligations incurred under sub-
section (a) of this section shall be paid into
the Fund out of receipts specified in sec-
tion 203 of this Act.
? "(a) Receipts from lOans made pursuant
to this part are authorized to be made avail-
able for the purposes of this part. Such
receipts and other funds made available for
the purposes of this part shall remain avail-
able until expended.
"Sac. 803. LENDING CEILING AND TER MINA-
TION.?(a) The United States Export De-
velopment Credit Fund shall not have out-
standing at- any one time loans in an ag-
gregate amount in excess of one-fourth of
the ainount specified in section 7 of the Ex-
port-Import Bank Act of 1945, as amended.
"(b) The United States Export Develop-
ment Credit Fund shall continue to exercise
Its functions in connection with and in fur-
therance of its objectives and purposes until
the close of business on December 31, 1977,
but the provisions of this section shall not
be construed as preventing the Fund from
lacquiring obligations prior to such date
which mature subsequent to such date or
from assuming prior to such date liabil-
ity as acceptor of obligations which mature
subsequent to such date or from issuing
either prior or subsequent to such date, for
purchase by the Secretary cif the Treasury
or any other purchasers, its obligations
which mature subsequent to such date or
from continuing as an agency of the United
States and exercising any of its functions
subsequent to such date for purposes of
orderly liquidation, including the adminis-
stration of its assets and the collection of
any obligations held by the Fund.
"SEC. 804. REPORTS TO TIIE CONGRESS .?T1-1 C
President shall transmit to the Congress
semi-annually a complete and detailed report
of the operations of the United States Export
Development Credit Fund. The report shall
be as of the close of business on June 30
and December 31 of each year.
"Sac. 805. ADMINISTRATION OF FTJND.?The
President shall establish a committee to ad-
vise him on the exercise of the functions
conferred upon him by this part. The com-
mittee shall include the Secretary of Com-
merce, the Secretary of the Treasury, the
Secretary of State, the President of the Ex-
port-Import Bank and the Administrator
of the Mutual Development and Coopera-
tion Agency. ' .
"Sac. 806. PROVISION FOR Lossas.?Ten per
centum of the amount authorized to be
borrowed under subsection 802(a) shall be
reserved and may be used to cover any losses
incurred on loans extended under this part.
Receipts specified in section 203 of this Act
may also be paid into the Fund for the,
purpose of compensating the Fund for any
such losses.
"Sac. 807. EXPORT-IMPORT BANK POWERS.?
Nothing in this part shall be construed as a
limitation on the powers of the Export-Im-
port Bank of the United States.
"Sac. 808. PROHIBITION OF LOANS FOR DE-
FENSE ARTICLES OR SERVICES.?The authority
contained in this part shall not be used to
extend credit in connection with the sale of
defense articles or defense services. This pro-
vision may not be waived pursuant to sec-
tion 614 of this Act or pursuant to any
other provision of this or any other Act.
"Sac. 809. DEFINITIONS.?As used in this
part?
(a) 'Lowest income countries' means the
poorer developing countries, with particular,
but not exclusive, reference to countries in
which, according to the latest available
United Nations statistics, national product
per capita is less than $200 a year.".
REFERENCES TO EXISTING ACT AND
ADMINISTERING AGENCY
SEC. 7. All references to the Foreign As-
sistance Act of 1961, as amended, and to
the Agency for International Development
shall be deemed to be references also to the
Mutual Development and Cooperation Act
of 1973 and to the Mutual Development and
Cooperation Agency, respectively. All refer-
ences in the Mutual Development and Co-
operation Act of 1973 to "this Act" or to
any provisions thereof shall be deemed to
be references also to the Foreign Assistance
Act of 1961, as amended, or to the appro-
priate provisions thereof, and references to
"the agency primarily responsible for ad-
ministering part I" shall be deemed refer-
ences also to the Agency for International
Development. All references to the Mutual
Development and CoOperation Act of 1973 and
to the Mutual Development and Coopera-
tion Agency shall, where appropriate, be
deemed references also to the Foreign As-
sistance Act of 1961, as amended, and to the
Agency for International Development, re-
spectively. !
SECTION-BY-SECTION ANALYSIS OF THE Mu
TUAL DEVELOPMENT AND COOPERATION ACT
or 1973
I. INTRODUCTION
The Mutual Development and Cooperation
Act of 1973, (the "bill") amends the Foreign
Assistance Act of 1961, as amended (the
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"Act") by making certain changes in pro- The bill provides authorizations for the
visions relating to development assistance. five categories for the fiscal years 1974 and
and by adding a separate authority for a 1975 in a total amount essentially the same
fund to finance increased U.S. exports to the as that proposed by the Executive Branch,
lowest income countries. It does not purport but with somewhat different distribution
to deal in a comprehensive way with all 'the among the five categories. Activities falling
programs authorized by the Act. into more than one category may be fund-
IT. PROVISIONS OF TIIE DILL ed from one or more categories, as ap-
Sec lion 2. Mutual Development and Coopera- propriate. Funds are to be used in accord-
tion Act ance with existing provisions of law, but the
. bill provides for somewhat greater trans-
(a) This subsection changes the title of
ferability of funds among the five categories
the basic legislation authorizing the U.S.
than is now permitted among present fund-
bilateral foreign economic and military as-
ing categories in the Act.
sis Lance programs from "The Foreign As-
The seven new sections are the following:
skitance Act of 1961" to "The Mutual Devel-
Section 103, which authorizes the eppro-
opulent and Cooperation Act of 1973".
priation of $300 million for each of the fiscal
( b ) This subsection changes the name of
the agency responsible for administerin,
years 1974 and 1975 for agriculture, rural
U.S. bilateral foreign economic assistance development, and nutrition.
Section 104, which authorizes the appro-
programs from the "Agency for Internation-
priation of $150 million for each of the fiscal
al Development" to the "Mutual Develop-
years 1974 and 1975 for population-planning
ment and Cooperation Agency".
and health.
Section 3. Policy; Development Assistance Section 105, which authorizes the appro-
Authorizations' priation of $115 million for each of the fiscal
(a) This subsection changes the name of years 1974 and 1975 for education, public
chapter 1 of the Act to reflect the fact that administration, and human resource devel-
the bill adds authorizations for various cate- opment.
gories of development assistance to the ex- Section 106, 'which authorizes the appro-
isting provisions of the chapter, which relate priation of $93 million for each of the fiscal
to policy. years 1974 and 1975 to help solve economic
(b) This subsection calls for the restruc- and social development problems in fields
-Wring of U.S. relationships with developing such as transportation and power, industry,
countries, in the light of progress made and and urban development.
changed conditions, to reflect the new real- Section 107, which authorizes the appro-
ities, with emphasis on several criteria; priation of $60 million for each of the fiscal
(1) increased concentration of bilateral years 1974 and 1975 to support the general
assistance programs on sharing American economy of selected countries, primarily
technical expertise, farm commodities, and through program lending, or to contribute
industrial goods to meet critical development to certain development programs conducted
problems, and less concentration on large- by private organizations such as the Inter-
scale capital transfers, which when made national Executive Service Corps (IESC), the
should be in a multilateral framework; Asia Foundation, cooperatives, credit unions,
(2) focus on problems in agriculture and and voluntary agencies, or by International
rural development, education, health, fam- organizations such as the Organization of
ily planning, and other areas affecting the American States (OAS).
lives of the majority of the people in the sec..=
ti 108, which requires assistance au-
developing countries; thorized under this chapter to be furnished
(3) maximum use of the private sector,
in accordance with the provisions of law ap-
especially institutions with ties in develop-
plicable to one of the categories of assistance
tog areas, such as educational institutions, .
now in the Act (Development Loans, Tech-
cooperatives, credit unions, and voluntary
nical Cooperation and Development Grants,
agencies; Alliance for Progress, or Programs Relating to
(4) collaborative style of administering .Population Growth), and which assures that
U.S. bilateral development assistance pro- the restrictions, criteria, authorities, and
grams to support recipient countries' own other provisions of law which would have
development goals; applied to the provision of this assistance,
(5) highest priority for programs which if the funding categories had not been re-
directly improve the lives of the poorest peo- structured, are not rendered inapplicable as
Pie and their capacity to participate in de- a result of the restructuring. ,
vel opmen t; Section 109, which provides for limited
(6) availability of bilateral development transferability of funds among the five new
assistance until multilateral agencies can categories of assistance, permitting up to
carry on with no loss of development mo- 15 per cent of the funds made available for
xi-lent-tun; any of the five categories to be transferred
(7) responsibility on the Administrator to any of the other four, provided that the
of the Mutual Development and Coopera- category to which the funds are transferred
tion Agency, under the Secretary of State'S is not thereby increased by more than 25
policy guidance, for coordinating (though per cent (leaving transfers between any of
not controlling) all U.S. activities relating the five new categories and any other funds
to overseas development, advising the Presi- appropriated under the Act to be governed
dent on all U.S. actions affecting develop- by an existing provision, Section 610 of the
merit, and informing the Congress on U.S. Act).
interests in development progress. Section 4. Development Loan Fund
(c) This subsection adds seven new sec-
(a) This subsection amends the existing
Ideas (sections 103-109) to chapter 1 of the
loan receipt reuse authority of Section 203
Act, which together constitute a completely
of the Act to include dollar receipts from
new system of authorizing the appropria-
loans made under all predecessor foreign as-
tion of funds for bilateral development as- sistance legislation.
sistance. Whereas previous authorizations
(b) This subsection extends the loan re-
lieve provided funds for Development Loans, ceipt reuse authority to fiscal years 1974 and
Technical Cooperation and Development 1975 and authorizes reuse for the restruc-
Gran ts, Alliance for Progress, and Programs tured categories of development assistance
Isolating to Population Growth, the bill au- contained in the bill as well as for specified
thorizes funds in five categories divided purposes of the new United States Export
primarily according to sector or field of ac- Development Credit Fund created by the
tivity: Food and Nutrition, , Population
Planning and Health, ?4 lApprovediFor- R i t ereaLe gong, ,49rdt94-BRU5B?
man Resource Development, -Selected Devel-
ov
opment Problems, and Selected Countries (a) This eubsection. puts the United
flint Organizations. ? States Export Development Credit Fund on
the same footing AS the Export-Import Bank,
the Peace Corps, - and the Mutual Educa-
tional and Cultural Exchange program, by
exempting the Fund from prohibitions on
assistance to any country contained in the
Act.
(b) This subsection adds a new section
610B to the Act, requiring the President to
establish a system for coordinating U.S. poli-
cies and programs affecting U.S. interests in
overseas development and, to that end, to
establish a Development Coordination Com-
mittee to advise the President, chaired by
the Administrator of the Mutual Develop-
ment and Cooperation Agency, with mem-
bers drawn from various interested Execu-
tive Branch agencies; requiring coordina-
tion abroad under the direction of the Chief
of the U.S. Diplomatic Mission; asserting
the Secretary of State's foreign policy guid-
ance of programs authorized by the Act;
and requiring the Chairman of the Develop-
ment Coordination Committee (the Admin-
istrator of the Mutual Development and Co-
operation Agency) to report annually to
the President and the Congress on U.S. ac-
tions affecting development.
Section 6. United States export development
credit fund
This section adds a new part to the Act
(Sections 801-809), creating a fund for the
purpose of increasing U.S. experts to the
lowest income countries.
Section 801 (general authority) establishes
the Fund, to be known as the "United States
Export Development Credit Fund"; author-
izes the President to extend credit or refi-
nance U.S. exporter credits, on terms no
easier than the minimum terms specified by
law for development lending under part I
of the Act, to facilitate the sale of U.S. goods
and services of a devolpmental character to
the lowest income countries; and provides
that the Fund shall be treated in the same
fashion as the Export-Import Bank for pur-
poses of exclusion from budget totals and
exemption from expenditure and outlay lim-
itations, including requirements for trans-
missien of an annual budget and an annual
report to the Congress.
Section 802 (financing) authorizes the
President, as may be provided in appropria-
tion acts, to borrow up to one-fourth (cur-
rently $5 billion) of Export-Import Bank
? loan, guaranty, and insurance authority, dur-
ing the period from the enactment of this
legislation through December 31, 1977, to be
used (except for $500 million of reserves) for
the puposes of the Fund. Any difference be-
tween the interest the borrowers are to pay
to the Fund or export credits extended (at
low rates of interest) and the interest the
Fund pays on the funds it borrows (at higher
rates of interest), which constitutes an "In-
terest subsidy", must be paid into the Fund
from dollar receipts from loans made under
foreign assistance legislation. Receipts from
loans made by the Fund, if not needed to
pay interest or repay the principal on the
Fund's obligations, may be reused for the
purposes of the Fund, and all deobligated
funds may be reobligated for the purposes
of the Fund.
Section 803 (lending ceiling and termina-
tion) places a lending ceiling on the principal
amount of loans by the Fund outstanding at
any one time amounting to one-fourth (cur-
rently $5 billion) of the Export-Import Bank
loan, guaranty, and Insurance ceiling, and
authorizes the Fund to operate until Decem-
ber 31, -1977.
Section 804 (reports to the Congress) re-
"quires a detailed report on the operations of
the Fund to be transmitted to the Congress
semi-annually.
Section 805 (administration of Fund) re-
G
Oish an advisory
corn PA9.9111199M Secretaries of
Commerce, Treasury, and State; the Presi-
dent of the Export-Import Bank; and the
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CONGRESSIONAL RECORD ? SENATE S 11573
Administrator of the Mutual Development
and Cooperation Agency.
Section 806 (provision for losses) reserves
10 per cent ($500 million) of the Fund's bor-
rowing authority to cover losses and pro-
vides that receipts from loans made under
foreign assistance legislation may also be
used for that purpose. Any amounts bor-
rowed from the reserve would eventually
have to be repaid, and foreign assistance re-
ceipts could be used for that purpose. Losses
may include loans written off or payments
suspended or deferred, or the interest pay-
ments required to service funds borrowed in
the amount of the loans written off Or pay-
ments suspended or deferred.
Section 807 (Export-Import Bank powers)
provides that this part does not 'limit the
powers of the Export-Import Bank.
Section 800 (definitions) defines "lowest
income countries" as the poorer developing
countries with special reference to coun-
tries where national product per capita is
under $200 a year.
Section 7. References to Existing Act and
Administering Agency
This section assures that the change of
the title of the Act to "Mutual Development
and Cooperation Act of 1973" and of the
name of the administering agency to "Mu-.
tual Development and Cooperation Agency"
will not affect existing or future references
to either.
May 30, 1973.
Mr. HUMPHREY. Mr. President, the
Mutual Development and Cooperation
Act of 1973 has received widespread bi-
partisan support which I would like to..
bring to the attention of my colleagues.
During the testimony on this legislation
in the House Foreign Affairs Committee,
several witnesses with considerable ex-
perience in the problems of development
made statements in support of this new
approach to foreign aid.
I ask unanimous consent that state-
ments by Mr. Orville Freeman, Mr.
James P. Grant, Mr. Douglas Dillon, and
Mr. David Rockefeller, along with two
articles in the Christian Science Monitor
and one editorial in the New York Times
be printed at this point in the RECORD.
There being no objection, the material
was ordered to be printed in the RECORD,
as follows:
STATEMENT OF ORVILLE L. FREEMAN*
Mr. Chairman and Members of the Com-
mittee: First I would like to congratulate
the Committee for the proposals under dis-
cussion today. In my opinion, they represent
the kind of bold new approach to foreign
assistance necessary both for the develop-
ment of the world's less developed nations,
and ultimately for the benefit of all na-
tions, rich and poor.
THE PROPOSED EXPORT DEVELOPMENT CREDIT
FUND
Available evidence indicates that the
United States Is rapidly losing ground to
other developed nations in the supplying of
goods to the world's poorest nations?those
with per capita incomes .below $200. In many
cases the reason for our lagging position is
not our inability to produce the needed
goods at competitive prices, but our failure
to offer the goods on terms commensurate
with the ability of the poorest nations to
pay. While the Export-Import Bank, which
provides credit on only slightly concession-
*The Views expressed in this testimony
are those of the witness, MAKIN69,*?.ffritb
sadly represent those of B
tional Corporation, or others of its Directors,
officers, or staff.
ary terms, has provided powerful encourage-
ment for American exports to these nations
with incomes above $200, it has had little
impact on sales to the lowest income na-
tions. By contrast, Eurjape and. Japan have
continually increased their level of comes-
Nsionary financing for the poorer countries.
As a result, the United States has not been
able to compete effectively for this growing
market, which includes about 60 percent of
the world's people.
Therefore I wish to express my emphatic
support for the proposed Export Develop-
ment Credit Fund, This Fund, if estab-
lished, would permit a significant growth
in American exports to the poor countries.
This would mean tens of thousands of new
j6bs for American workers. At the same time
the goods and machinery we can supply
'could serve as a catalyst for sustained eco-
nomic growth in many poor nations.
This economic growth which is so badly
needed in the poor nations can be viewed
E4s a worthy goal in itself. However, a genera-
tion of experience also indicates that eco-
nomic progress in developing nations can
lead to a future rapid growth in exports
from the more advanced nations. The eco-
nomic development which today's financed
exports can help promote, then, can provide
escalating future benefits both for the poor
countries and for the United States.
Our 18 years of experience with 'Public
Law 480, the legislation which enabled ns,
to export farm products to low income coun-
tries on concessional terms, is instrtfetive in
considering this legislation. That legislation
had two important objectives: to reduce
U.S. farm surpluses and to alleviate hunger
in the recipient countries, helping them buy
time with which to modernize their own
agricultural economies. A large number of
' these countries have been remarkably suc-
cessful as. is evidenced by the pronounced
decline in requests for food aid over the past
six or eight years.
An important by-product of PL 480 was
tne development of dollar markets for U.S.
farm exports as various developing countries
acquired a capability for commercial im-
ports. Fortunately for our balance of pay-
ments, U.S. commercial exports of farm
products are soaring, climbing from under
$5 'billion in 1965 to an estimated $11 bil-
lion in the fiscal year ending this month,
Public Law 480 exports meanwhile have de-
clined from $1.32 billion to about $1 bil-
lion.
Countries which became accustomed to us-
ing U.S. farm products when they were avail-
able under concessional terms continued to
use them as they switched to commercial
purchases. Established working relationships
with U.S. exporters also facilitate continu-
ing purchases of U.S. farm products.
In effect,- what is being proposed in this
legislation is a program to develop conces-
sional markets for U.S. industrial exports
in markets where we are losing out to other
industrial exporters. Those countries where
Incomes are below $200 contain a majority of
the world's people. Someday they will con-
stitute a large and lucrative market for our
exports, as do a number of the richer devel-
oping countries today. If we can establish
ourselves as suppliers during the early stages
of economic development, then we will have
an opportunity to remain as suppliers in
the future when markets will be far more
lucrative than they are today.
If we are to ensure the participation of
American producers in the future growth of
the developing countries, we must act now
to build the healthy trading relationships
that are needed. Business experience indi-
cates that export potential will be maxi-
rilOVRART ? VPrid WARRIVo5120gtetaVirtraggilyTliesrli=
131.1
ing which would be provided by the proposed
Export Development Credit Fund would be
an important step in the right direction.
Furthermore, if American firms achieve a
stronger position as suppliers of developing
country markets, then as these markets
grow we can expect to sec added opportuni-
ties for American investments in many na-
tions. Once countries are using a given piece
of imported equipment extensively, whether
It be a machine tool or a computer, they
often become interested in having it pro-
duced domestically once the market becomes
sufficiently large. Not surprisingly, invest-
ment frequently follows exports.
Recent studies of U.S. corporations with
holdings abroad show that significant num-
bers of jobs at home in the United States,
as well as a sizable level of exports, are gen-
erated through the need to supply the fac-
tories abroad with necessary inputs. Estab-
lishment of a position as a supplier of goods
is often the prerequisite of successful in-
vestment in a foreign country, however.
Thus without the kind of impetus to Ainer-
lean exports to developing nations which the
Export Development Credit Fund could pro-
vide, our potential future role in ninny na-
tions may be foreclosed by the actions of
other developed nations, which are current-
ly building profitable economic relationships
in these nations with greater care and fore-
thought than we are.
Filially on this subject, I would like to
point out the proposed Fund's potential in
improving our long-term balance of trade
'position. Many feel that our growing trade
deficits constitute the greatest single threat
to the welfare of the United States today. I
do not think we would be wise to pass up
te opportunity this proposed Fund provides
to bolster our future trading position among
such a large number of countries.
Our mutual interest in agricultural develop-
ment
At this point I would like to turn to an
additional aspect of the new foreign assist-
ance proposals?the focus on solving cer-
tain key problems with a particular effort
to reach the poorest sectors of the popula-
tion within developing countries. For many
reasons, I think that the new emphasis is
highly desirable. Since I have a special in-
terest in the development of agriculture and
the world food situation, I will first make
some observations on these crucial subjects.
This year, while acting to meet the threat
of famine in parts of Africa and India, those
concerned with the global food situation
have seen world reserve stocks of essential
grains sink to their lowest level in more than
two decades. The Director-General of the
Food and Agriculture Organization of the
United Nations, Dr. A. IL Boerma, has noted
that the world is currently just one bad
harvest away from widespread famine and
critical shortages of foodstuffs. Fortunately,
the outlook for this season's crops is good
In many crucial areas of the world and, out-
side of portions of sub-Saharan Africa, star-
vation may be largely avoided.
But while keeping our fingers crossed dur-
ing the coming year, we need to look forward
to the next decade and beyond. In my opin-
ion, the world food outlook is not a bright
one. It seems very likely that global food
reserves will not soon be rebuilt to the rather
consistently high levels of the 1950's and
1960's. The capacity of food donor countries,
including the United States, to aid those
which are having difficulty meeting their own
food needs will'be severely diminished. Such
a new situation is likely because global de-
mand for many important food commodities
may rise considerably faster than our ability
to expand supplies in the coming years.
ducer familiarity with the particular needs aware for the first time of the inexorable
of tho buying country. The soft-term financ- logic of supply and demand. The news media
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CONGRESSIONAL RECORD ? SENATE June 20, 1973
have correctly pointed to several factors, in-
cluding poor harvests in Asia and the Soviet
Union, the disappearance of the anchoveta
off the coast of Peru, and bad weather in the
United States, as contributing to the current
enort supply of important food commodities.
le is my feeling, however, that these short-
term factors may be diverting our attention
from some more fundamental longer term
trends which are altering the dimensions of
the world food situation.
Throughout human history, population
growth has accounted for nearly all the grow-
ing demands which were made on the earth's
food-producing capacity. During the seven-
ties rapid population growth continues to
generate demand for more food, but in ad-
dition we are now witnessing the emergenee.
or rising affluence as a major new claimant
on world food resources.. Historically there
was only one important source of growth in
world demand for food, but now there are
two.
At the global level, population growth is
still the dominant source of growth in de-
mand for food. Expanding at nearly 2 per-
cent per year, it will double in a little more
than a generation. Merely maintaining cur-
rent per capita consumption levels will there-
fore require a doubling of food output over
the next generation.
Population growth is slowing in most rich
countries and in a few poor countries, but
throughout most of the world it continues
to be very rapid. The world currently divides
Into essentially two groups of countries in
demographic terms: the rich countries, which
have low rates of population growth, and the
poor countries, most of which have rapid
rates of population growth. Fully four-fifths
of the annual increment in world population
of an estimated 70 million occurs in the poor
countries. ?
Some of the relatively small poor countries
add more to the world's annual population
gain than the larger rich ones. Mexico, for
example, now contributes more to world pop-
ulation growth than does the United States.
The Philippines adds more people each year
than does Japan. Brazil adds 2.6 million addi-
tional people in a year while the Soviet Union
adds only 2.4 million.
The effect of rising affluence on the world
demand for food is perhaps best understood
by examining its effect on grain requirements.'
Grain consumed directly provides 52 percent
of man's food energy supply. Consumed indi-
rectly in the form of livestock products, it
provides a sizeable share of the remainder.
In resource terms, grains occupy more than
70 percent of the World's crop area.
In the poor countries the annual availa-
bility of grain per person averages about 400
pounds per year. With only this much grain
available, nearly all must be consumed di-
rectly to meet minimum energy needs. Lit-
he can be spared for conversion into animal
protein.
Throughout the world, per capita grain
requirements rise with incomes. The amount
of grain consumed directly rises with income
until per capita income approaches $500 per
year, whereupon it begins to decline, eventu-
ally leveling off at about 150 pounds. How-
ever, total grain consumed, directly and
indirectly, continues to rise rapidly as per
capita, income climbs. As yet no nation ap-
pears to have reached a level of affluence
where its per capital grain requirements
have stopped rising.
Within the United States and Canada,
per capita grain utilization is currently ap-
proaching one ton per year. Of this total,
only about 150 pounds is consumed directly
In the form of bread, pastries, and break..
iast cereals. The remainder 'is consumed in-
There is now a northern tier of industrial
countries?beginning with Ireland and Brit-
ain in the West and including Scandinavia,
Western Europe, Eastern Europe, the Soviet
Union and Japan?which are more or less
where the United States WAS in terms of its
economic advancement and dietary habits in
1910. As incomes continue to rise in this
group of countries containing some two-
thirds of a billion people, a sizable share of
the additional income 1.s being converted
into demand for livestock products, Partic-
ularly beef. These countries (many of them
densely populated, such as the Western
European countries and Japan, or suffering
from a scarcity of fresh water, as is the Soviet
Union), lack the capacity to satisfy the
growth in demand for livestock products
entirely from indigenous resources. The result
Is growing imports of livestock products,
or of feedgrain.s and soybeans with which to
expand indigenous livestock production.
From both continuing population growth
and spreading affluence, then, we can expect
pressures on the world's food resources to
continue increasing rapidly. I believe that
it will be very difficult to adequately meet
these rising pressures within the world's
present pattern of food production. Interna-
tional stocks of important grains are likely to
remain at a dangerously low level. Perhaps
two thirds of the roughly 50 million acres of
cropland in the United States which were
idled under farm programs through much of
the sixties, and which in a very real sense
have served as the world's food safety valve,
are likely to be brought back into near-
permanent production. If this situation
comes about, developing countries will have
nowhere to turn for food aid when bad
weather, insects or a disease outbreak sharply
diminish or even destroy a year's crop, or
if population growth greatly outstrips indig-
enous producing capacities. Global food
scarcity may force us to tighten our bolts
but in the poor countries it may require
forfeiture of life itself.
This unpleasant possibility underscores the
need for promoting agricultural development
in the developing countries with a special
urgency, I support very strongly the inclu-
sion of explicit attention to the problem
of food production in the current legislative
proposals. The world's greatest reservoir of
unexploited food potential is in the develop-
ing countries. Rice yields per acre in India
and Nigeria are only one-third those of Japan.
and corn yields in Thailand and Brazil are
less than one-third those of the United
States. In ,these countries and many others,
dramatic increases in food supply are pos-
sible if farmers are given the necessary eco-
nomic incentives, agricultural inputs, and
technical know-how. The United States has
proven its ability to play a valuable role in
aiding agricultural development abroad, and
we should take even fuller advantage of
our expertise in this domain.
If the food producing capacities of many
important developing countries do not in-
crease substantially within the next decade,
there are likely to be many unfortunate con-
sequences for the United States. A growing
worldwide increase in demand relative to
supply will tend to drive food prices upward,
not only in international markets, but at
home as well. If we should try to isolate our-
selves from world scarcity, the situation could
arise where famine and misery take a growing
toll in many poor countries while we in the
United States consume a disproportionately
large share of the world's food production?
clearly an unpalatable alternative. A policy
of isolation on the food front might also se-
riously jeopardize many crucial foreign sup-
plies of nn-foo d resources, including energy
est of the United States to aid the develop-
ment of agriculture in the developing world.
SMALLER FAMILIES THROUGH SOCIAL PROGRESS
Another important factor in the world food
situation is of course population growth.
Slowing rapid population growth will servo
the development interests of tho poor coun-
tries, and will also servo the interuits of the
world community by helping to reduce the
ultimate number of claimants on the world's
finite resources, both food and non-food. In
this context, the focus in the proposed law
on reaching the poorest sectors within de-
veloping countries, and the complementary
emphasis on rural development, represent a
sophisticated and necessary comprehensive
approach to the urgent need for slowing pop-
ulation growth.
History has shown that birthrates do not
usually decline voluntarily in the absence of
a minimal level of social amenities, includ-
ing literacy, an assured food supply, a re-
duced infant mortality rate, and at least
rudimentary health services. By placing an
increased emphasis on meeting these basic
needs, particularly in the rural areas?where
the majority of the world's people live?the
United States can simultaneously help the
world's forgotten majority attain a more de-
cent life and stem the rapid population
growth which threatens the well-being of
everyone. At the same time, rural agricultural
development will help reduce the massive
employment and rural-urban migration prob-
lems confronting many poor countries.
In the past some have suggested that there
is a conflict between the goals of rapid eco-
nomic growth and the widespread distribu-
tion of the benefits of growth among the
population. Recent evidence from several na-
tions, however, hes proven that this is not
necessarily the case. Several Asian countries
have combined rapid economic grovrth with
greatly improved income distribution, and
have also experienced considerably reduced
unemployment and falling birth rates, which
have been brought down further with the
introduction of effective, national family
planning programs.
Looking specifically at agriculture, evidence
from various parts of the developing world
indicates that intensively farmed small hold-
ings are generally considerably more pro-
ductive on a per acre basis than larger hold-
ings. Thus the goal of widespread, employ-
ment-creating agricultural development goes
hand in hand with the need to significantly
expand food production in the developing
countries and to increase the motivation for
smaller families.
POTENTIAL BENEFITS OF THE NEW "PROBLEM
SOLVING" APPROACH
I would like to end my testimony by com-
menting on an aspect of the proposal which
struck me?the notion of "problem solving"
in specific fields which is substituted for
overall country programming and the more
general idea of resource transfers of the past.
I think the change in approach is a good one.
It helps focus more attention on the critical
areas which could improve the welfare of
the majority of mankind, rather than on.
GNP totals alone which, while important,
have failed to reflect adequately the needs of
the poor, in many developing countries.
Furthermore, I know from personal experi-
ence that a major international effort in a
particular problem area can have dramatical-
ly beneficial consequences. During the mid-
1900's, when I was serving as Secretary of
Agriculture, widespread famine in the near
future in major parts of Asia was seen as a
real possibility. For many It appeared to be a
certainty. A concerted effort by many in both
the developed and the less developed nations,
directly in the form of meat, milk and eggs. o however, resulted in the rapid development
The agricultural reso and kee .
PeniF
port an average Nor sP let@ ?reagtaktatiY: tig415Meeave3akaitaffhblikti;idbiencgmnvearki
North are near
en
five times those ler the average Indian, world, our own standard of living would suf- the Green Revolution. While the Green Revo-
Nigezian or Colombian. fer. Clearly, therefore, it is in the self-inter- hrtion has obviously not been the final reean-
l n eter ?f
i
June 20, 1973 .
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CONGRESSIONAL RECORD ? SENATE S 11575
swer to the world's food problems, it has
enabled several Asian nations to achieve pre-
viously undreamed of levels of grain produc-
tion. It has been an essential means of buy-
ing time with which to slow p'cvpulation
growth and further develop agricultural po-
tential. It is an impressive example of man's
ability to confront successfully a problem of
seemingly super-human proportions.
Such dramatic breakthroughs may riot
occur in all of the problem areas specified in
the proposed legislation. Nevertheless, the
focusing of energies and purpose on these key
issues holds the promise of greater progress
than the less concentrated approach of the
past has yielded.
-----
STATEMENT OF JAMES P. GRANT,* PRESIDENT,
OVERSEAS DEVELOPMENT COUNCIL, BEFORE
TIIE HOUSE FOREIGN AFFAIRS COMMITTEE,
JUNE 12, 1973
Mr. Chairman and Members of the Com-
mittee: I appreciate the invitation to testify
before this Committee. The proposals made
by a bipartisan majority of the Commit-
tee for increasing the effectiveness of 'U.S.
assistance to developing countries and to
establish a new credit facility for expanding
our exports to the one b4llion people who
live in the lowest income countries of Asia,
Africa, and Latin America are possibly the
most far-reaching and important of any
broadly supported Congressional initiative in
this field since the launching of the Marshall
Plan 25 years ago. I will address separately
each of the four major proposals in the bill.
NEW NAME AND TITLE
Changing the title of the legislation to the
Mutual Development Cooperation Act and
the name of the administering agency to the
Mutual Development and Cooperation
Agency would make them reflect more accu-
rately the true nature of the relationship now
emerging between the United States and the
developing countries. As detailed in the Over-
seas Development Council's recent publica-
tion The United States and the Developing
World: Agenda for Action (February 1973),
International politics and power relation-
ships are changing, with security concerns
giving way to economic issues among na-
tions. This change will require the United
States and other rich nations to pay greater
attention to the needs and desires of many
developing countries than ever before?for
reasons of morality, self-interest, and the de-
velopment of effective international insti-
tutions, which we in the, United States in
partciular require.
Development can be a mutually beneficial
process both for the low-income countries
In need of outside resources and for the out-
side countries supplying those resources.
This is increasingly true as the world grows
more interdpendent and as all countries rely
more on international cooperative efforts to
solve their problems" and to achieve their
national goals. For example, improving the
U.S. balance of payments and increasing do-
mestic employment are two goals that de-
pend on reform of the international trade
and monetary systems; in both instances, co-
operation by developing countries will im-
prove the prospects for success. The ability,
and willingness, of developing countries to
cooperate in these areas is likely to be greater
If they are making progress toward achieving
their national development goals and we are
assisting in the process. Similarly, our grow-
ing need for relatively assured access to their
raw materials frequently requires both im-
provements in their infrastructure to per-
mit physical access and their continued eco-
nomic and social progress to maintain their
political viability.
"Mutual Development and Cooperation"
may be a headline writer's nightmare, but it
is a good shorthand way of describing a re-
lationship in which the U.S. perceives a di-
rect self-interest in the success of the de-
velopment efforts of the low-income coun-
tries. It is also a more suitable chargcteriza-
tion of a style of administering development,
assistance which looks to the developing
country to take the lead in setting its own
goals and planning development activities.
REDIRECTION OF BILATERAL DEVELOPMENT
ASSISTANCE
The Committee members have taken a very
ivmortant and constructive step in increas-
ing and sharpening the focus of the now
much diminished bilateral assistance pro-
gram on acute problem areas, and in enaplia-
sizing especially the importance of assisting
developing countries in programs and proj-
ects which will benefit the poorest majority
oif the people in these countries and which
will enable them to participate more effec-
tively in the development process.
The circumstances surrounding bilateral
development assistance have changed dra-
matically in the past 10 years. In the early
1960s, not only was bilateral development aid
larger both in absolute amounts and in pur-
chasing power, but it also was a much larger
nge
proportion of the total foreign excha
available to low-income countries. Now, how-
ever, the developing countries (exclud
major oil exporters) have more than doub
their earnings from exports of goods and serv-
At
aid
ave
to
cial
ater
di-
ices, to over $50 billion annually in 1972.
the same time the private investment and
flows from other developed countries h
increased from approximately $4 billion
over $11 billion, and multilateral finan
institutions have assumed a much gre
role in transferring resources. Thus the
minished amount now available for bilateral
development aid?some $1 billion?has a
much diminished role both in transferring
resources generally and in financing major
capital projects.
Over the same 10 years, the global develop-
ment effort has had remarkable success in
increasing the rate of growth in national
product. During the 1960s, the developing
countries average a 5.5 percent increase in
GNP?a rate of growth unequalled by the
rich countries at a comparable stage of their
development. A number of developing coun-
tries have experienced very substantial eco-
nomic growth, attaining GNP growth rates of
10 per cent or even higher. Some low-income
agricultural societies have been transformed
into industrializing economies in amazingly
short periods, and others are following suit..
Exports of manufactured goods have shown
dynamism; for the developing countries as a
whole, they have been increasing rapidly and
now account for 23 per cent of their total
world exports.
Yet unemployment levels in many develop-
ing countries are still increasing, some even
exceeding those of our own Great Depres-
sion; the income gap between the poorest
half of the population and those well-off is
actually widening; the bottom two-thirds of
the population still have no meaningful ac-
cess to health facilities; a majority of the
rural population are illiterate; and urban
settlements are mushrooming because of
massive rural migration. In many areas, these
problems become less manageable every day
because population growth continues unre-
strained. Finally, if the debt burden that has
built up in a number of major, very low-in-
come countries continues to accumulate, it
will become insupportable. This situation has
led some people to throw up their hands in
*airste ir oth
met in seeking to answer the question!
"Where next with development assistance?"
The global community now knows from the
experience of the 1960s how to achieve in-
creases in national product when it has the
will to devote international and national
resources to the task. However, to continue
to measure development by GNP increases
alone is to forget that, after all, the goal is
human progress. Development must now be
seen as encompassing the minimum human
needs of man for food, health and educa-
tion, and for a job which can give him both
the means to acquire these basic needs as
well as the psychological sense of participat-
ing usefully in the world around him. Last
February in New Delhi, a wise and perceptive
Thai set forth the aspirations of Asian man
as seen through his life cycle from the womb
to the grave. His "Ode of a Developing Coun-
try Man" (Annex A) is a most expressive
description of the meaning of development.
We need to develop ways of achieving this
broadened concept of development as suc-
cessfully as did the global community in ac-
celerating growth in output over the past 10
years.
Fortunately, experience in a number of
poor countries during the past 10 .years of-
fers some encouraging evidence that an ef-
fective combination of domestic as well as
international policies can simultaneously
create new jobs, increase access to health and
educational services, improve nutrition, re-
duce income disparities, and check popula-
tion growth. The possibility is best illustrated
In East Asia, by countries with very different
political and economic systems; namely, the
experience of post-1960 China on one side
of the ideological barrier, and the experience
of South Korea, Taiwan, and the city-states
of Hong Kong and Singapore on the other.
Contrary to a common assumption of the
1950s and 1960s, the development record of
these countries indicates that policies that
enhance social equity need not deter overall
economic growth?and that many such poli-
'cies can even speed it up. Thus, in the small-
er East Asian countries just mentioned,
growth rates over the past decade have aver-
aged an impressive 10 per cent annually. But
in addition, the income, health, and educa-
tion of the bottom half of the population has
Improved greatly, the disparity between the
Income controlled by the upper and bottom
20 per cent of the population has been re-
duced, birth rates have dropped sharply, and
the dependence of these countries on foreign
aid has either ended, or, as in South Korea,
has been greatly reduced. All of these coun-
tries have found a way to increase the ability
of the average worker to participate effec-
tively in the development process, thereby
helping both the individual and his society.
This has required not only favoring use of
plentiful labor over scarce capital-intensive
equipment, but also providing the incentives
and merclianisms to encourage savings, es-
tablishing or supporting institutions to give
small farmers and entrepreneurs ready ac-
cess to capital and technology, and ensuring
the availability of rudimentary but mean-
ingful educational and health services for
virtually all. Through such policies, these
countries have made social justice a major
ally of growth. The acceleration of growth
through full employment should not sur-
prise us, as it not only means that more
people have a stake in society, but that
national output is increased by putting idle
labor resources to work, and that scarce
capital and foreign exchange are used more
efficiently. Elsewhere, countries as different
as Israel, Ceylon, and Yugoslavia have dealt
effectively with some of the problems dis-
cussed here?
The views expressed in tlAs testim
those of the witness, and d Prigat?44411446iMtuidts
nthak.ai
Mc-tte#BOOMEIR900,604117A065fi-2iscussionof
represent those of the Overseas Development state that development is aggravating global these new policies is in Development Becon-
Council, or others of its Directors, officers, or environmental and population problems. sidered, by Edgar Owens and Robert Shaw,
staff. These are the real issues which must be D.C. Health (1072).
Cl 3 1:1576
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CONGRESSIONAL RECORD ?SENATE June 20, 1973
There also is important new evidence that this Committee's initiative to address this Japan and the recently enlarged European
le an increasing number of poor countries, range of problems in the rural sector of Community (including the U.K.). These ex-
birth rates have dropped sharply despite China, when it authorized the Sino-Ameni- ports have been growing at about 10 per cent
relatively low per capita income, and despite can Joint Commission on Rural Reconstruc- a year over the, past few years. Yet several
the lack or relative newness of family plan- tion (with its unique collaborative style of 3 facts become apparent if one examines the
iiing, programs. The common factor in these Chinese and 2 American Commissioners), and statistics on U.S. exports to those develop-
countries of Latin America and Asia is that required earmarking of a certain proportion ing countries with the very lowest annual
the majority of the population has shared of the funds for its use. I acted as the Coin- income?below $200 per capita?and as one
in the economic and social benefits of signif- mission's Executive Secretary for its first year reviews the background analysis and de-
icant national progress to a far greater de- on the mainland, and again later, briefly, in scriptive material released at the press con-
gree than in most poor countries?or in most Taiwan. That early Congressional initiative ference on this bill:
Western countries during their comparable contributed greatly to the subsequent unique First, total U.S. exports to the lowest
period of development (see Annex B) . This combination of accelerated growth and great + income category of developing countries are
evidence demonstates that appropriate poli- ly increased social justice in rural Taiwan, not expanding, but actually decreasing. With
cies for snaking health, education, and jobs and I hope we will witness the establish- 'over 60 per cent of the population of the
more broadly available to lower income ment of similar joint groups in Other coun- poor countries, this category now takes only
groups in poor countries contribute signif- tries to which considerable discretionary au- 10 per cent of our exports to developing
icantly. toward the motivation for slimily, thority can be delegated. countries.
. families that is the prerequisite of a major COORDINATION - Second, other rich countries are expanding
reduction in birth rates. It is becoming in-
The current bill recognizes that the tic-
their exports to these lowest income coun-
creasingly clear that if the developing coun- tions taken by the United States in such tries along with expanding their aid to these
tries are to escape the threat posed by rapid
population growth within an acceptable time countries.
fields as import policies, export promotion,
Third, American exports to these countries
protection,
monetary policy, environmental
frame, more families must acquire the met!- are heavily dependent on U.S. Government fi-
protection, and a regime for the oceans may
vation to limit births, not only be provided nancing, which is not increasing.
with improved means to do so. be more important to some developing coun-
tries than our actions on aid. rt rightly pro- Fourth, very little of the financing for the
In the 1970s, developthent planners need lowest income countries, approximately $100
vides that whenever the United States formu-
to give far more attention that heretofore million in 1972, comes from the Export-Im-
lates policies on such subjects, the decision-
to the effect of alternative development port Bank?most comes from AID. and PL
making process should also take into account
strategies on birth rates. Equally important, 480, which are decreasing. This contrasts
the effects on the important U.S. interests
the population crisis must be dealt with in sharply with the financing pattern for our
in advancing the progress of low-income
the broader context of the development countries, rapidly growing exports to the much less
crisis?with more emphasis on the possible A mechanism for assuring efficient use of populous, more advanced developing coun-
ways of treating the basic "disease" of tries for which the slightly concessional Ex-
poverty, thereby creating the needed motiva- development is not in operation today de-
Im terms are suitable, and where its loans
Lion for smaller families. Combining policies and medium-term guarantees have increased
spite the fact that President Nixon publicly
that give special attention to improving the recognized in 1971 the need for better co- to over $2.5 billion in 1972.
well-being of the poor majority of the popu- ordination, with particular reference to the Many U.S. exporters believe that a major
lation and policies that provide large-scale, different U.S. entities involved in the aid factor behind our poor performance in these
well-executed family planning programs process through bilateral, international, and markets is the shortage of financing avail-
should make it posaible to stabilize popula- multilateral mechanisms. AID., the U.S. able on sufficiently concessional terms. Hence
tion in developing countries much faster than agency with the greatest expertise in the do- the idea of a Fund to make credits available
reliance on either approach alone.2 ? veloprnent process, is not even a member of to these markets at more attractive terms
It is no accident that most of the non- the President's Council on International Eco- appears sound, Nevertheless, a number of
socialist "development successes" have taken nomic Policy or of the National Advisory questions about the proposed Fund need to
place in societies with broad access to varying Council chaired by the Treasury. be answered.
combinations of trade, investment, and aid. The need for better coordination was 1. Where is the line between export credits
Nor is it an accident that the major innova- identified by Edwin Martin, Chairman of and development loans? There is no easy
tions introduced through development co- the Development Assistance Committee of answer to this question, other than the in-
operation have resulted primarily from U.S. the Organization for Economic Cooperation tention of the lender. It is olear, however,
assistance programs?private and public? and Development, in his most recent report. that large-scale export promotion to the low-
which explicitly concentrated on particular Ambassador Martin points out that in many est income countries requires a substantial
functional areas. These innovations include donor countries, the development assistance concessional component, which is not pres-
the programs such as comprehensive rural. agency that is most knowledgeable about de- ently available for American exporters.
development in Korea and, in particular, velopment matters is not represented in such
Taiwan; the "Green Revolution:" the ex-
There is a modest subsidy component in
policy decisions?and often is not even di-
traorclinary spread of public health measures Export-Import loans, which are usually at
racily involved in all aid decisions. He called
as exemplified by malaria eradication; and a rate lower than that at which Ex-Im Bank
upon governments to correct this anomaly.
Ilse acceptance of the need for large-scale borrows on the market, with the interest
The coordination proposals in this bill
family planning programs. differential being made up from other in-
should meet this need to increase the effec- come available to Ex-Im Bank. There ob-
Tile bilateral development aid requested by tiveness of -U.S. policy decisions E1, n d ex-
the Administration and supported by the penditures in this important field, viously is a large concessional element in the
typical IDA loan, and a still large but some-
proposed bill is a relative drop in the bucket
EXPORT DEVELOPMENT CREDIT FUND what smaller element in A.I.D.'s concessions,"
when contrasted with the total needs of the
oeveloping countried (excluding major oil ex- The bill establishes an Export Develop- loans, which are on harder terms.'
porters) for more than $70 billion of foreign ment Credit Fund to make credits available In the United States, Ex-lin Bank loans to
exchange. However, if bilateral assistance is for financing U.S. exports having a develop- developing countries have increasingly begun
looked at as a 'weapon to be targeted pri- mental value to countries in the lowest in- to resemble development finance as the Bank
manly on the critical specific problems of conic brackets. The Fund could mean a has extended repayment periods rind followed
development (and. particularly on helping major breakthrough for American exports flexible rules. For instance, direct loans by
the poor majority to participate more of- to a potentially major market and should Ex-Im Bank in FY 1970 for conventional
fectively in the development process), this also prove useful to the lowest income coun- electrical equipment had maturities ranging
amount can be of great significance. Fred- tries. Quite apart from our long neglect of from 51/2 years to 16, with a median of about
dent Nixon in his May 3 report on the State China, the United States in recent years has 10. At the same time, A.I.D. development 11-
of the World, and Ain. in its Congressional increasingly neglected the future market nancing has begun increasingly to incorpo-
presentation have both recognized the need potential of the poorest billion people liv- rate elernents from export credits, e.g. to
for such a greater focus. The proposal now ing elsewhere in the developing world. The shift from untied to tied procurement, from
before the Committee will ensure that this Fund can help to correct this neglect by pro- largely grants to mostly loans, and from
shift takes place more rapidly, and more ex- viding financing which is competitive with highly concessional loans to credits on in-
tensively than otherwise might be the case, that of other industrial nations and which creasingly hard terms. Other industrial coun-
t might add that my personal involvement also increases funds for financing our ex- tries?such as Canada, Germany, Japan, and
ports?thereby creating markets for the ins- France promote exports to lowest income
with these hard-core development problems
began seine 25 years ago as the result of mediate future and for follow-on orders, as countries by blending a "cocktail" for in-
well as helping build stronger economies that dividual transactions, using their public aid
can develop into better customers for U.S. funds in combination with commercial term
See Smaller Families Through Social and goods over the long run, funds so as to bring about modifications in
Economic Progress, by William Rich, Mono- 'U.S. exports to less developed countries the terms and conditions of commercial
graph No. 7' Overseas 1141701MtdcParReltage?21304/08/130* Pe PAIRDP 7/MBOONCOR00060131370055.12ce the rate ef
(1973). nearly the same as our combined exports to interest.
June 20, 1973
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CONGRESSIONAL RECORD ? SENATE. S 11577
A recent study 3 examining the interaction
between development finance and export
credits notes:
"Unlike other donor countries, the U.S.
government has sought to maintain a fairly
rigid line between its foreign aid program
and the activities of the Export-Import Bank
of the United States. The line is based less
on a clear distinction between what the two
agencies actually do than on their stated
motivations. What Eximbank does is labeled
export credit, because the mission of that
agency is to promote exports, despite the fact
that Eximbank has been making long-term
direct, loans to developing countries (among
others) for a longer time than any other de-
velopment finance or national export credit
agency. What TJSAID and the World Bank do
is called development finance, or foreign aid,
because here the motivation is to be bankers
of the poor. Yet the loans of these agencies
finance exports too, and, as far as the World
Bank is concerned, often on terms comparable
to those of the national export credit
agencies."
It is clear from the text of the proposal
that the Export Development Credit Fund is
designed to increase U.S. exports that have
a developmental character to the populous
lowest-income countries. In addition, these
credits should help to strengthen the econ-
omies of these countries, thus bringing a bet-
ter life to their people, increasing their
ability to meet these future obligations, and
assisting them to become increasingly bet-
ter markets for U.S. industry.
2. Would the availability of credit on softer
terms actually increase U.S. exports? Or
might it merely displace existing financing?
Nobody can be certain what will happen in
this inexact science, but the bulk of the
credit used from this Fund should result in
additional exports. We do know that the vast
bulk of financing for the market represented
by countries with annual per capita GNPs
under $200 now comes from PL 480 and AID.
loans and grants. Since the Fund is not in-
tended for financing exports of agricultural
surpluses, there should be no effect on PL
480. Since A.I.D. loans and grants will be
made available on terms generally better
than those of the Fund, and since most of
the developing countries need more rather
than less concessional terms, A.I.D. financing
should not be displaced unless the U.S. Gov-
ernment chooses?as a matter of deliberate
policy?to withdraw them and substitute
Fund credits. It is possible that the $116
million loaned in the most recent year by the
Export-Import Bank would be displaced by
the Fund, but if so, it would again be a mat-
ter of deliberate U.S. governmental decision.
Given the heavy debt burden some of the
poorest countries carry, it might be good if
the softer terms of the Fund were substituted
for the harder terms of the Export-Import
Bank: in any case, a small amount of exports
Is involved. There is no way of knowing
whether the rather small amount of private
financing (about $250 million) might be dis-
placed by Fund credits. To the extent this
financing covers sales from parent companies
to subordinates, it probably would not be
affected. Likewise, exports financed by private
equity capital probably would not be affected.
My own guess is that the residue of private
loan financing that might be displaced by
the Fund would be very small indeed.
Is the poor performance of U.S. exports to
these markets relative to others due to un-
competitive financing?or to other causes?
Clearly the overvaluation of the dollar until
recently was is contributory factor, but it
"The Bankers of the Rich and. the Bank-
ers of the Poor: The Role of Export Credit
in Development Finance," by Nathaniel Mc- 5. Is this moving in the direction of tying
Fritteriek and B. Jenkins miApprovettcForfkletritieng tf,08/?2?. Bcp3Sii g
(1972). stitution of existing aid, but is financing for tamn. commodities and certain destinations
must be remembered' that this factor did not
prevent our exports to the more advanced de-
veloping countries from rising rapidly. An
other factor has been that the tied aid of
other countries to these lowest-income coun-
tries has been rising while ours has been
falling. Although we do not have comprehen-
sive statistics, there is a great deal of mate-
rial in the form of known cases of bids lost
because of lack of competitive financing. U.S.
exporters with whom I have talked in recent -
weeks believe that the lack of suitable financ-
ing is a very important factor in the situa-
tion. Many of them point out that exports
are often lost because Americans do not
bother to bid?believing that they cannot
win because of inadequately competitive
fi n ancing.
tWhatever the history and causes of our
poor export performance to this category of
Countries, I think there are two reasons to
expect that more attractive financing would
help. First, if a line of credit were extended
by the Fund to the government of country A
for a particular purpose, such as imports of
electrical equipment or heavy construction
equipment, that government would have an
incentive to make sure that American ex-
porters were given a fair opportunity to com-
pete for business. Otherwise, country A would
fail to make use of a valuable resource, and
in due course the line of credit would be
withdrawn. Second, and much more critical,
once it became known that there was a sub-
stantial line of credit available to country A
for imports from the United States, there
would be an incentive for U.S. exporters to
pay more attention to that market. If this
were to happen, some dramatic changes prob-
ably would take place. U.S. exporters might
be encouraged to send representatives to
importing countries or to arrange, where war-
ranted, .f or a local resident representative to
insure that they are notified of tenders to
bid, to secure copies of specifications for
them, and to represent their interests in
general. These basic preliminary steps can be
very important in increasing U.S. exports on
commercial terms to a particular market on
a long-run basis.
Now that there has been a substantial de-
valuation of the dollar, and that U.S. price
indices are trending upward at a slower pace
than those of our competitors, there is every
reason to expect that American goods will
be able to compete on price and quality for
these markets. This is precisely the right
time for U.S. Government action to make
sure that U.S. exports can compete on fi-
nancing terms as well.
I .hope that the Fund would be admin-
istered in such a way as to correct more than
the deficiency in U.S. financial competitive-
ness. It should also aim to help provide U.S.
business with timely information and en-
couragement to seek sales in these markets,
and it should analyze other obstacles to U.S.
exports and make appropriate recommenda-
tions as to how they can be removed.
3. Will this create U.S. jobs? The Export-
Import Bank has done some calculations
which show that each additional $12,600 of
exports creates one U.S. job. At that rate,
if the Fund were to stimulate $1 billion of
exports each year, some 80,000 additional jobs
would be created.
4. Is this an unwarranted subsidy of U.S.
business? It need not be, if properly admin-
istered. One object is to make U.S. exports
competitive in financing terms. But they
must still meet the competition from Europe
and Japan an price and quality. And there
is plenty of competition. In addition, it might
prove useful for the Fund to provide a price
test prohibiting any exported under Fund
financing from charging more for his exports
than for his domestic sales,
export promotion. Insofar as bilateral aid to
be administered by MDCA is concerned, that
IS already largely tied and this does nothing
to tie it further.
6. Since developing countries are already
saddled with a heavy debt burden, will lend-
ing 'them more increase Vied- problems? Of
course, compared with a grant, any loan is
hard. As a supporter of development, I hope
that an increasing flow of grant funds will
be made available. But It is not reasonable
to suppose that all low-income country un-
ports could be financed with grants. Some
must be paid for with cash (the hardest
m
for of import), 'and some with commercial
loans and investments. The Fund would add
a new dimension between grants and com-
mercial credits. Assuming the imports it fi-
nances are of the developmental character
required in the bill and are used productive-
ly, they should improve the ability of the
importing country to manage its debt bur-
den.
In this connection, the question has been
raised whether these loans will ever be re-
paid. Our experience with the developing
countries is that they do repay their loans.
Occasionally they get into financial trouble
and have to ask for debt relief. But they do
not normally default on loans. Since the
Fund will be extending credit on terms that
the borrowers can more easily afford to pay,
and for goods and services which strengthen
the borrowers' economies, there should be
fewer problems of need for debt relief than
would be the case if these credits were not
available or if they were only available on
harder terms.
7. Will Fund-financed exports help de-
velopment? This is a critical question, since
not all imports do help development. Tho
proposed bill sensibly provides that the Fund
may only be used to finance goods that do
advance development. Stating that policy
may be as far as the law should go, but in
administering the Fund, care would be re-
quired to prevent low-utility exports from
being financed. I believe that the Fund
should have a flexible commodity eligibility
test, designed to make certain that its ex-
ports-support development in the importing
country. Beyond that, there may be good
reason for the Fund to verify that the im-
port and investment policies of the import-
ing country are such that Fund-financed ex-
ports to that country have a reasonable pros-
pect of being constructively used. Such tests
should not lessen the Fund's usefulness as
a promoter of U.S. exports, since the range
of U.S. goods and services helpful to develop-
ment is very broad and can range from
capital goals to individual raw materials, fer-
tilizer, and food.
In order to take these development con-
siderations into account, the Fund should
have some expertise in the development busi-
ness. In that connection, the Advisory Com-
mittee established by the proposed bill
should prove valuable, for wherever the
President might locate the Fund adminis-
tratively, the Committee. would ensure that
the extensive development experience ac-
cumulated by the U.S. Government was
brought to bear on its decisions. The PI,
480 Inter-agency Committee has proven ex-
tremely valuable for this purpose with
respect to agricultural commodities.
Despite the need for assessment of the de-
velopmental impact of the U.S. goods and
services financed, the Fund should resist the
temptation to try to tell the importing coun-
try how to run its. internal affairs. For de-
veloping countries increasingly are evolving
ways of protecting themselves from. wasteful
and harmful investment decisions. In any
case, the functions of the Fund could be
jeopardized by overly zealous application of
rigid development criteria
rican ships?
Development Council Monograph No. C in ai -giving is is ne t eigiltbarMiM e ? OUTIVO, hips for cer-
S 11578
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CONGRESSIONAL RECORD - SENATE June 20, 1973
may make U.S. exports sharply more expen-
sive than they would otherwise be. To pre-
vent our exports from thus becoming uncom-
petitive, I propose that the bill be amended
to permit the Fund to use aid receipts to pay
for the difference between the cost of U.S.
ships and other cheaper ships, whenever that
difference is a serious problem.
9. Which countries should be eligible? The
bill provides that lowest-income countries
with less than $200 per capita annual GNP
are to be the main recipients of Fund credits,
but avoids making per capita GNP a rigid
test of eligibility. Although per capita GNP
Is the best measure we have of poverty, it is
not a perfect measure. Nor does it measure
Precisely the relative ability of countries to
borrow on commercial terms or to serviefe
debt. Finally, it does not measure accurately
the countries where U.S. exports are having
particular difficulty. For those reasons, the
record on the legislation should make clear
the Congressional intent that the Fund be
administered flexibly to take account of all
relevant factors, including ability to pay,
poverty, and the need for a subsidy to sup-
port U.S. exports.
CONCLUSION
Finally, Mr. Chairman, I would like to ex-
press my support for this work of the major-
ity of the members of your Committee. Their
labors have produced. a bill which is a vast
improvement in substance over present legis-
lation-and which warrants, and I believe
will attract, the support of important seg-
ments of the U.S. public. In my view, their
initiative is, in the words of Congressman
Zablocki in introducing this bill on May 30,
". . in the best tradition of Congressional
lawmaking. It embodies a bipartisan consen-
sus on how future foreign aid programs
should be structured."
ANNEX A: ODE OF A DEVELOPING COUNTRY MAN
(As told by an Asian humanist to James
Grant)
While in my mother's womb, I want her
to have good nutrition and access to maternal
and child welfare care.
I don't want to have as many brothers and
sisters as my parents had before me, and I
do not want my mother to have a child too
soon after me.
I want good nutrition for my mother and
for me in my first two to three years when
my capacity for future mental and physical
development is determined.
I want to be able to go to school, together
with my sister, and to learn a usable trade,
and to have the school impart social values
to me.
When I leave school I want a job, a mean-
ingful one in which I can feel the satisfac-
tion of making a contribution.
I want to enjoy good health; .for this to
be possible I need access to low-cost, readily
available drugs and medical services, and
I expect my government to provide free pre-
ventive health services.
I want to live in a law and order society,
without molestation.
I want my country to relate effectively and
equitably to the outside world so that I can
have access to the intellectual and technical
knowledge of all mankind, as well as to cap-
ital from overseas.
I would like my country to get a fair price
for the products that I and my fellow citizens
create.
As a farmer, I would like to have my own
plot of land, with a system which gives me
easy access to credit, Co new agricultural
technology, and to markets, and a fair price
for my produce.
As a worker, I would want to have some
share, sonic sense of participation, in the
factory in which I work.
As a human being, I would like inexpensive
newspapers and paperback books, plus access
to radio and TV.
I need some leisure time for myself, and
to enjoy my family, and want access to some
green parks, and to the arts, and my cultural
heritage.
I would like to have the security of coop-
erative mechanisms in which I join with
others to do things which we cannot do
alone.
I want clean air to breathe and clean water
to drink.
I need the opportunity to participate in
the society around me, and to be able to
help shape the decisions of the economic and
social as well as the political institutions
that so affect my life.
I want my wife to have equal opportunity
with me, and I want both of us to have
access to the knowledge and means of family
planning.
In my old age, it would be nice to have
some form of social security to which I have
contributed, but best of all would be to have
my children able and desirous of providing
for me.
These are the fundamentals of life, and
what development should seek to achieve
for all.
ANNEX B
FERTILITY LEVELS AND SOCIAL INDICATORS FOR DEVELOPING COUNTRIES, 1970
Crude birth rate
(birth/thousand)
1970 1960
Per capita Percent
GNP ' literacy
Death rate
Infant
Life mortality
expectancy (1,000 births)
Extent of
family
planning
programs
percent
Argentina 21
Barbados 21
Singapore 022
t.1 ruguay 22
;Trinidad-Tobago 23
Taiwan 3 27
Chile 28
Cuba 29
Sri Lanka a 29
South Korea 029
Costa Rica 33
Jamaica 36
Brazil 937
Guyana 37
Egypt 537
India 3 38
Malaysia.. 038
Turkey . a 39
Venezuela 41
Mexico 042
Thailand 3 42
Colombia 42-44
Paraguay 943
Peru 943
Pakistan ? 0 43
Bolivia.. 44
Ecuador 44
Philippines 244
Ft Salvador 9 44
Indonesia 545
Dominican Republic . 2 48
Morocco 3 49
Honduras 49-51
Kenya 3 51
_ . .
23.0
30. 0
35. 6
24. 0
40. 0
1 37.1
35.0
32.0
6 35.1
939. 3
48. 0
42. 0
40. 0
42. 9
5 49. 3
O 44. 2
u41. 1
5 41. 0
46. 0
45. 0
a 44. 2
46. 0
41.0
46, 0
5 51, 3
44. 0
47.0
6 46. 6
50.0
5 46. 6
49.0
O 50, 1
49. 0
5 47.0
1 Income distribution in Argentina is better, and in Venezuela worse, than the average for Latin
America; in Venezuela the poorer half of the population receives a smaller proportion 00 10101
income than any other country of the region. ECLA, Income Distribution in Latin America (U.N.
Publication Sales No. 6.71. 11. 0.2), pp. 41-61.
Accumulated acceptors as a percentage of women of fertile ago.
1971 data.
Average of male and female lifo expectancies, 1951-69.
Average 186065 data.
o Acceptors as a percentage of married women, 15-44 yrs, in 1972,
7 Users as a percentage of married women, 15-44 yrs, in 1972.
o 1968 data. 1970 estimate. Approved For Re ease 2001/08/30
10 Acceptors as a percentage of married women, 15-94 yrs, in Iva,
II Users as a percentage of married women, 15-44 yrs, in 1971,
'1,068
523(1969)
960
833
890
373
854
280
169
258
539
630
394
6 330
200
96
355
257
1931
670
174
320
246
448
150
203
267
266
294
105
356
211
267
141
91
92
75
91
89
85
84
94
75
71
84
82
67
80
26
28
43
46
76
76
68
73
74
61
16
40
68
72
49
43
65
14
45
20-25
8
38
5
9
6
05
9
7
8
2 10
7
67
99
7
17
3 16
o 10
O 13
7
99
09
10
6 10
9 12
16
19
11
3 10
o 10
18
'14
16
17
17
67
4 65
68
69
66
68
61
69
62
58
65
65
64
61
53
50
63
54
67
61
56
60
58
54
51
Si
52
55
58
48
58
51
49
48
56
42
621
54
37
18
92
a 41
50
00
60
32
94
43
a 120
2 128
O 75
119
46
66
3 68
76
67
62
132
108
80
378
63
135
72
5 149
136
115
2 0. 6
6 64. 0
01.9
2 19.6
7 5, 0
2 11.3
0.9
7 30. 0
2 17. 4
3. 3
11.1
0 13. 0
7 13.2
6 13.0
10 9.
2 6. 2
2 1. 0
15.7
a 4. 1
22. 3
2 . 2
NA
2 1.8
7 8,1
10.5
10 .8
19 6.8
7 4.0
2 5. 9
u 2.2
Sources: AID Economic Data Book, Latin America, Oct. 5, 1972. Selected Economic Data for
the Less Developed Countries, AID ,June 1972. Population Program Assistance, AID, December
1971, p. 210. 1972 World Population Data Sheet, Population Reference Bureau, Inc., Population
table 19. Statistical Yearbook 1971, United Nations, p. 76. Data on percentages of accumulated
acceptors are from Benjamin Vie!, M.D., "Family Planning in Latin America: The Past, Present,
and Future Role oil PFF,' n.d., p. 8, prepared for the International Planned Parenthood; Federa-
tion, Western Hemisphere Region, Inc. United Nations Population Division, Working Paper No. 38,
"Estimates of Crude Birth Rates, Crude Death Rates, and Expectations of Life at Birth, Regions
and Countries, 1950-65," February 1971. Agency for International Development, "Population
Program Assistance, Aid to Developing Countries by the United States, Other Nations, and Inter-
national and Private Agencies," forthcoming (1972) issue. Dorothy Nortman, ''Population and
phipMigebnippso58tripkyobottiogrlood8isiLF2mily Planning, Po pill at i on
how, 20, 1973
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CONGRESSIONAL RECORD ? SENATE S 11579
Hon. Tuomns E. MoReax,
Chairman, House Foreign Affairs Cominittee,
U.S. House of Representatives, Washing-
ton, D .0 .
DEAR MR. CHAIRMAN: I regret that I SIm
not able to appear before your Committee to
testify in person on the encouraging initia-
tive taken by a majority of the members to
improve the effectiveness of U.S. support .for
!he development of low-income countries.
Nevertheless, I do wish to associate myself
with this endeavor and give it my strong
endorsement.
welcome the emphasis on the human
problems of the poorest majority of people
living in the developing countries. From my
association with the Rockefeller Foundation
and the Pearson Commission I can attest to
the value of U.S. support for efforts to fight
disease, malnutrition, overpopulation and
ignorance. These are the most pervasive
problems of the developing countries, and
the Congressmen wisely emphasize their de-
sire to direct U.S. programs at them.
I also support the effort to assure that the
U.S. Government consider the total impact
of all its decisions that affect the developing
countries. The economic and political power
of this country is so great that many of our
actions in trade, monetary and investment
policies, or our proposals for the regime of
the seas or in the international environment
do have an important effect on the develop-
ling countries. Given our interest in sup-
porting their development, it is well to de-
velop a better procedure for taking into ac-
count the totality of those effects.
Finally, I strongly favor the imaginative
proposal to create the Export Development
Credit Fund. The United States is falling
behind other industrialized countries in ex-
ports to the lowest income countries and
steps should be taken immediately to remedy
this decline. I personally believe that many.
U.S. exporters can improve their perform-
ance in this market. Clearly other countries
believe that the poor countries have a mar-
ket well worth pursuing and have developed
their policies accordingly. We should do like-
wise.
I find particularly appropriate the proposal
for financing the interest differential between
what is borrowed and what is loaned from
repayments on old aid loans. That innova-
tion makes it perfectly feasible to finance
these export credits from public debt au-
thority. I recall that in 1957 the Administra-
tion submitted to the Congress a proposal
for public debt authority to finance the De-
velopment Loan Fund, It was passed by the
Senate and the House Foreign Affairs Com-
inittee but failed on the floor of the House.
The weakness with that proposal was that
annual appropriations would have been re-
quired in increasing amounts to cover the
differences between the interest the DLF
paid and what. it charged its borrowers. Now,
however, with receipts from previous DLF
and other loans coming in, there will be
ample funds to meet the costs and make the
Fund financially viable without recourse to
annual appropriations of new funds. Since
we use borrowing authority and investment
icome to finance exports to Europe, Japan
and the more developed low-income coun-
tries such as Brazil and Taiwan at slightly
subsidized rates, it only makes sense to use
a similar authority to finance exports to the
poorer countries as well, but-at more conces-
sional rates. Otherwise, U.S. exports to those
areas will continue to decline. As a conse-
quence, the welfare of American workers also
will suffer-'?and the poorest countries will be
deprived of American goods and services they
can fruitfully use to advance their develop-
However, any such objections are met by
the injunction in the proposal that these
credits be used for goods and services Of a
developmental character so that over the
extended period of repayment the credits will
more than increase the ability of recipients
to meet these obligation. Properly adminis-
tered, there is no reason the Fund cannot
improve American exports and at the same
time significantly promote the development
of the low-income countries,
In closing, I would like to say how im-
pressed I am with this farsighted initiative
which reflects the realities of the future
rather than the outworn dogmas of the past.
Sincerely,
non. THOMAS E. MORGAN,
Chairman, House Foreign Affairs Committee,
U.S. House of Representatives, Washing-
ton? D.C.
DEAR MR. CHAIRMAN: When I learned of the
initiative by a bipartisan majority of your'
Committee on the foreign aid bill, I was most
encouraged and wanted to testify in person.
Regrettably; previous commitments prevent
that. But I believe this letter will record my
vigorous support, particularly of two features
of the proposal.
First, I believe that it is important that the
now reduced American bilateral development
aid program concentrate on priority areas in
which we have, or can develop, a special ex-
pertise, and particularly on those problems
so basic to the broad modernization of the
developing countries, including food produc-
tion, rural development, education, health,
and family planning. Such programs should
help a larger proportion of the people in these
countries participate more effectively in the
development process. The Committee's ap-
proach commendably gives sharp priority to
these fields and actually authorizes funds ac-
cording to those categories.
Second, I applaud the proposed Export De-
velopment Credit Fund. U.S. exports to the
lowest income countries with a population of
apparently one billion people are doing poor-
ly, in part because these countries, lack for-
eign exchange but also because financing on
terms that meet our competition is not avail-
able. On price and quality I think our ex-
ports would do well now and better in the
future, provided financing is available on
favorable terms.
The proposal to finance this Fund with
borrowing authority would have been more
debatable ten years ago. However, there now
is available from repayments and interest on
existing aid loans a growing stream of funds
that can be used to cover the difference be-
tween the interest the Fund must pay on its
borrowings and the lower rate of' Interest it
will receive on its credits. If that differ-
ence had to be met from annual appropria-
tions I would have doubts; but given the
availability of receipts from earlier loans, I
believe public debt authority is a sound pro-
cedure.
It is interesting to note that this same use
of borrowing authority and payments on
earlier aid loans was recommended by the
Peterson Task Force in 1970. In much the
same manner the Export-Import Bank sub-
sidizes interest on its loans from its invest-
ment income.
I am concerned, however, that the defini-
tion of "lowest income countries" not be so
Interpreted as to exclude the poorest coun-
tries in Latin America. I am particularly
anxious that countries such as Bolivia, Para-
guay, Haiti, and Honduras be eligible at this
time for credits on concessional terms since
they have difficulty meeting with normal
The Committee may find some who will. conunercial terms.
DOUGLAS DILLON.
JUNE 11, 1973.
members of the House Foreign Affairs Com-
mittee are to be commented for their crea-
tivity and foresight in proposing a mecha-
nism which can simultaneously contribute to
our need for significantly increased exports
and to help accelerate the development of
the lowest income countries.
I also applaud the Committee's desire to
have an improved system of coordination for
United States policies and programs which
affect our interests in the development of the
low income countries. This need for improved
coordination has been noted in the past and
still remains largely unmet. This principle
is a commendable one at a time when we
must consider the totality of U.S. actions
affecting the developing countries,
Sincerely,
DAVID ROCKEFELLER-
[From the ChristianSe3ie Ince Monitor, June 8,
1n
REDIRECTING FOREIGN AID TO POOREST OF TIIE
POOR
(By Harry B. Ellis)
Wastinvorox.?Getting United States for-
eign aid down to the poorest people in the
poorest countries is the thrust of a sweeping
new proposal by key congressmen.
Growth rates of developing nations of ten
are impressive, the sponsors point out. But
generally, within those same countries, the
income gap between rich and poor steadily
widens.
The existing structure of U.S. foreign aid.
experts agree, does little to help millions of
Asians, Africans, and Latin Americans mired
in the deepest poverty.
A proposal by a majority of the House
Foreign Affairs Committee would revamp
United States bilateral foreign aid by zero-
ing in. on the root problems?nutrition,
health, education, population control, rural
development?linked with poverty.
Their bill, introduced as amendments to
the Foreign Assistance Act, would not cost
American taxpayers more money, but it
Would redirect the flow of U.S. aid.
? IN LINE WITH NIXON
The bipartisan sponsors, numbering at
least 26 of the committee's 40 members,
stress that their recommendations are in
line with President Nixon's own suggestion,
voiced in his "state of the world" message
of May 3, that aid should move in this direc-
tion.
The new House proposal agrees with the
Nixon administration's foreign assistance
bill, now before Congress, that $1 billion
should be allocated to bilateral economic
aid in fiscal year 1974, beginning July 1.
This $1 billion is apart from military as-
sistance proposed by the 'White House. Also
separate is the administration's request for
$600 million for reconstruction work in
Southeast Asia.
Sponsors of the House measure, headed
by Clement J. Zablocki (D) of Wisconsin,
do not seek changes in military aid or the
Southeast Asia funds, but would channel
the $1 billion of economic help into proj-
ects for the very poor.
These are defined as "food, rural develop-
ment, and nutrition; population growth and
health; and education and human resources
development."
"Projects," says a statement by the House
sponsors, "would be selected which most
directly benefit the poorest majority of the
people in these countries. . . .
"We are learning," the statement adds,
"that if the poorest majority con participate
in development by having productive work
and access to basic education, health care,
and adequate diets, then increased economic
object to the proposal on t prowadifor Ratleaved20 01 /08#303,:. MIRbl3PrpOrga0 Wag& irttitY5gT2 gohand in
creating the Fund would increase the already trument for American expo eoo
heavy debt burden of the poorest countries, competitive in this neglected market. The Experience shows that spurts of economic
Approved For Release 2001/08/30 : C1A-RDP75600380R000600170055-2
11580 CONGRESSIONAL RECORD ? SENATE
growth in developing lands, spurred by in-
jections of foreign aid, often enrich a rela-
tively small class of people, but do not
"trickle down" to the very poor.
The way that social and economic power
Is shared in many Asian, African, and Latin
American countries, experts concur, pre-
vents newly developed wealth from being
shared fairly between the urban elite and
the rural poor.
PROJECTS AIMED AT POOR
Countless millions of the latter, Hi the
words of Robert S. McNamara, president of
the World Bank, "lie beyond the reach of
traditional market forces and present public
services."
How to reach them? Neither the Worla-
Bank, nor the United States Government,
nor any other donor, can order a power elite
in a developing land to change its way of
doing business.
But a beginning can be made, note the
House sponsors, if economic aid is aimed
specifically at projects directly benefiting
the poor.
The problem of equity, or making the
"trickle down" work, now is universally re-
garded as a challenge facing every indus-
trialized nation, or agency, giving aid to
backward lands.
Mr. McNamara, sketching the world at the
end of this century, foresees affluent West-
ern countries enjoying average incomes per
person in the range of $8,000, while some
2.5 billion people in the developing world
may receive less than $200 each, and 80
million of these less than $100.
So there is a double gap?between rich and
poor nations, and, within the poor lands, be-
tween the power elite and the rural majority.
In an effort to keep the rich-poor nation ?
chasm from widening, the United Nations
established as a reasonable principle that
rich countries should give to poor ones 0.7
percent of their gross national product
(GNP) .
Collectively, Mr. McNamara told the an-
nual meeting of the World Bank in Washing-
ton last year, affluent nations are falling far
short of that standard, giving, on average,
only half of 0.7 percent.
The United States, whose aid as a per-
centage of GNP has declined steadily in re- '
cent years, does even worse. By 1975, at the
present rate, said Mr. McNamara, the U.S.
is expected to share only 0.24 percent of its
GNP with developing nations,
[From the Christian Science Monitor, June
12, 19731
EASIER CREDIL TERMS PROPOSED: UNITED STATES
:EYES EXPORTS TO POOR LANDS
(By Harry B. Ellis)
WASHINGTON.?Last year the United States
exported $16.3 billion worth Of goods to de-
veloping countries, almost as much as the
U.S. sold to Japan and the enlarged Common
Market combined.
Poor countries, in other words, now buy
about as much from the United States as 10
of the world's richest lands together do.
But there is a curious skew to these sales
to the "third world," according to a majority
of members of the House Foreign Affairs
Committee, who hope to revamp the U.S.
foreign aid program.
Sales of American goods to the "richer'
developing lands, those with per capita an-
nual incomes above $200, indeed are growing.
But exports to the poorest countries, those
with incomes below $200, are shrinking.
A major reason is financing. Tho more
affluent developing countries, like Mexico,
Brazil, Korea, and Taiwan, can afford to bor-
row money to pay for
the Export-Import Ban
BANK TERMS TOO STEEP? ?
The poorest lands, Including India, Pakis-,
es r.c111,,+. nfrorel
standard Eximbank terms. "In many cases,"
states the House committee panel, "lack of
financing on competitive terms, rather than
price or quality, explains the U.S. inability
to compete for this Market."
Meanwhile, exports by Japan, Canada, West
Germany, Britain, and some other Western
lands to developing countries grow faster
than those of the U.S., again partly because
of financing.
Other nations, notes the House study, often
make it easy for poor countries to borrow
money. Trade flows in the wake of this bor-
rowing.,
"This market of about 1 billion people
(low income countries, excluding Commu-
nist areas), whose gross national product has
been increasing approximately 5 percent an-
nually, is important at present and promises
to grow more important in the future.
NEW AGENCY PROPOSED
"Europe. and Japan," continues the House
committee report, "apparently believe this
and offer vigorous and steadily increasing
government financing programs which help
develop their markets in these countries. ,
"If the United States wants to avoid fur-
ther losses and perhaps increase its share
In this market, there will have to be In-
creased government financing on terms that
compete."
At least 26 of the 40 members of the House
Foreign Affair Committee believe this should
be done through the creation of a new
agency, the Export Development Credit Fund.
These congressmen, including Clement J.
Zablocki (D) of Wisconsin and several other
Midwesterners, have introduced a bill to this
end. Their measure is offered in the form
of amendments to the Foreign Assistance Act.
In addition to creating the new credit
agency, the amending bill would focus $1
billion of U.S. economic aid, requested by
President Nixon for fiscal year 1974, on the
projects helping the poorest people in the
poorest lands.
ABOUT 130,000 NEW JOBS?
The proposed credit agency would, in the
view of its sponsors, "kill several birds with
one stone" by enabling U.S. exporters to
compete in the poorest lands and extending
credit that the latter could afford.
One result, the sponsors believe, would be
the creation of "an estimated 80,000 new
U.S. jobs," through expansion of American
exports.
The fund, which would operate at a level
of about $1 billion yearly, would, like the
Export-Import Bank, be authorized to borrow
from the U.S. Treasury or the public..
This money would be borrowed by the
fund at market interest rates. The fund then
would finance U.S. exports to the poorest
countries on competitive terms, perhaps 30
years' maturity at 3 percent interest, with
10 years of grace.
The gap between the fund's soft-term
loans and its harder term borrowing would
be covered by repayments of past foreign aid
loans now flowing 'Into the Treasury.
NUUNCET ACCESS WIDER
American taxpayers would not be shoulder-
ing an additional burden. U.S. businessmen
would have access to wider markets and, in
the process, new jobs would be created in the
United States.
Over a period of time, according to the bi-
partisan proponents of the measure, aid-
recipient nations, as their economies grew,
would tend to increase their purchases of
American industrial goods. ?
The sponsors point to Taiwan as an exam-
ple. In 1960, they note, U.S. exports to that
Island nation totaled $100 million, DO ,per-
cent of which were U.S. aid-financed. Last
elease020134/00130 DalkdaDR17l51300
million worth of goods to Taiwan, very little
of which was financed by U.S. credits on
concessional terms.
791,1 rwoonsori nose': Its nnonsorm
June 20, 1973
suggest, might be administered by the Ex-
port-Import Bank, by the Department of
Commerce, or independently. An inter-
agency advisory committee would oversee its
operations.
PROPOSALS IN TIIE 'TOPPER
Separately the committee majority pro-
poses to change the name of the existing
Foreign Assistance Act to "the Mutual De-
velopment Act," administered by the Mutual
Development and Cooperation Agency.
All these proposals now go into the con-
gressional hopper, along with President
Nixon's request for $1 billion in economic
aid, $600 million for reconstruction work in-
Southeast Asia, and $1.31 billion for military
assistance.
The last two figures are not affected by
the proposals emanating from the House
Foreign Affairs Committee, which concen-
trates on the agreed figure of $1 billion for
bilateral economic aid.
The committee sponsors want to see that
$1 billion redirected to help the poorest
Asian, Africans, and Latin Americans, and
supplemented by a soft-loan credit agency.
[From the New York Times, June 5, 1973]
OVERHAULING AID
Committees in both houses of Congress
have moved in recent weeks to revise dras-
tically President Nixon's foreign assistance
program, which Chairman J. W. Fulbright of
the Senate Foreign Relations Committee has
already dismissed as "a relic of the past."
It is not that the $2.9-billion aid request
is extravagant In terms either of this coun-
try's ability to pay or the needs of the less-
developed nations. Even in the improbable
event that the portion of the over-all aid
budget allocated to economic assistance?
$1.6 billion?were fully funded, it would
represent a slippage in this country's al-
ready low position among donor nations in
aid as a percentage of gross national product.
One basic trouble with the President's aid
package is that it remains heavily oriented
toward military and related assistance, a
hangover from an era of politics that has be-
come increasingly obsolete with the progress
of detente, the emergence of a multipolar
world and the supposed windup of the Indo-
china war. Much of the $1.31 billion re-
quested by the President for military assist-
ance Is of doubtful utility either for the
United States or for its proposed recipients.
Ignoring the President's proposal, the For-
eign Relations Committee has approved a
Fulbright-drafted military authorization bill
which would drastically reduce arms aid next
year and would eliminate all military grant
assistance over the next four years.
Equally sweeping and notably constructive
proposals on the economic side have been
advanced by a 22-member majority of the
House Foreign Affairs Committee. Setting
aside for the moment the $600 million ear-
marked for Southeast Asia, which raises spe-
cial problems deserving close Congressional
scrutiny, the House group has proposed that
the remaining $1 billion in economic assist-
ance be redirected to focus on the most
acute problems of the poorest nations: rural
development, food and nutrition, population
growth and health, education arid human
resources development.
In addition, the Congressmen would es-
tablish a new $1-billion Export Development
Credit Fund for the lowest income countries
which would have the dual purpose of aiding
development and stimulating United States
exports to nations accounting for one-third
of the world's population.
Although these and other new House pro-
posals mark a sharp departure from past aid
_psactices and the Administration's program,
GRa006004700552thoughtf ul dab -
oration on recommendations made by a
Presidential task force three years ago and
move in a direction Mr. Nixon himself advo-
cat.nri 1mm his Inst. Stato of tin' Wnyiri mossnr+o
,Imie 20, 1973
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CONGRESSIONAL RECORD ? SENATE S 11581
If United States foreign aid is to serve
United States interests and the cause of
peace in the "radically different world" which
was noted in that Presidential message, its
purposes and structure should be radically
revised along the imaginative lines that the
two Congressional committees have begun to
chart.
By Mr. MONDALE:
S. 2027. A bill to amend title _38 of the
United States Code to make more equita-
ble the procedures for determining
eligibility for benefits under the law ad-
ministered by the Veterans' Administra-
tion, and for other purposes. Referred to
the Committee on Veterans' Affairs.
JUDICIAL REVIEW FOR VETERANS
Mr. MONDALE. Mr. President, I am
introducing today legislation which would
allow veterans judicial review over their
disputes with the Veterans' Administra-
tion, and would raise to $100 the maxi-
mum fee a veteran can pay an attorney
for the representation of a veteran claim.
An identical, bill is being introduced in
the House of Representatives by Con-
gressmen EDWARD I. Kocir, Democrat of
New York and LES ASPIN, Democrat of
Wisconsin.
Under current law, all differences of
opinion on veterans' claims are deter-
mined administratively. No appeals out-
side the Veterans' Administration are
possible.
.This legislation is necessary to extend
the right of judicial review, which every-
one else enjoys, to veterans. Under the
present system, the Veterans' Adminis-
tration is both a party to a dispute and
the judge. It is difficult for the veteran,
therefore, to obtain an impartial review
of his claims.
Mr. President, this bill also seeks to
improve the existing situation with re-
gard to representation by counsel Of the
veteran. Present law provides that an,
attorney may charge a veteran no mor
than $10 for legal services. This proV -
sion, purported to safeguard a veter
in effect denied him the services of coin
sel. This bill, therefore, would peri t a
veteran to pay an attorney up to $10,01 for
legal services rendered and, if theuat-
icr was the subject of an appeal decided
in favor of the veteran, the bill flurther
provides that the Veterans' Administra-
tion would be obliged to pay th6 attor-
ney representing the veteran at reason-
able fee for services rendered ds well as
reimbursing the veteran the $100 first
advanced by him.
Admittedly, lawyers should be pre-
vented from depriving a veteran of a sub-
stantial part of his benefits- by exacting
an exorbitant fee, but the $10 ceiling ef-
fectively denies a veteran the assistance
of counsel, and quite possibly, therefore,
benefits.
I was outraged to learn that VA regula-
tions prevent an attorney for a veteran
from contacting a Member of Congress
for assistance in handling a veteran's
claim. The penalty for seeking such con-
gressional assistance is that the attorney
can be investigated regarding his compe-
tency to represent a claimant and he for-
feits his right to a fee. My bill would also ' SEC. 4. (aY Chapter 71 of title 38, United ? " If the claimant a
correct this violation of firsApprovedfarReleaises
rights; it will open the way for a veteran
to take his case to court.
Mr. President, I believe that this bill,
if enacted, will go a long way to redress
the legitimate grievances of the young
men who have served this country its
Armed Forces.
Mr. President, I ask unanimous con-
sent that this bill be Printed at this poi
in the RECORD.
There being no objection, the bill as
ordered to be printed in the R ORD,
as follows:
S. 2027
Be it enacted by the Senate an House of
Rwresentatives of the Unite States of
America in Congress assembled hat section
101(2) of title 38, United S ates Code, is
amended to read as follows:
"(2) The term 'veteran' eans a person
who served in the active ilitary, naval, or
- air service, and who via discharged or re-
lensed therefrom other -Ian by a discharge
imposed by a court-in tial."
SEC. 2. (a) Subcha or I of chapter 51 of
title 38, United Stat Code, is amended by
inserting immediat after section soo5' the.
following new sec on:
"i 3006. Treatme of claims
"(a) The Ad inistrator shall provide to
any claimant f any benefit under law ad-
ministered by he Veterans' Administrator a
list of such ocumentary information and
other evidei e which the claimant will likely
need to st ort his claim.
'(b) If any time after any claim is made
for any b lent, any officer or employee of the
-Veterai Administration obtains from any
militar department or agency any military
recor including health records, for the pur-
poses of determining eligibility for such
ben t, the Veterans' Administration shall
im cdiately mail a copy of that record to the
cl nant or his representative.
(c) In the administration of the provi-
s ns of this title relating to benefits, any
laimant shall be presumed to be entitled to
he benefit claimed. Such presumption must
be rebutted by clear and convincing evidence?
to the contrary."
(b) The analysis of such subchapter I is
amended by adding at the end thereof the
following:
"? 3006. Treatment of claims."
SEC. 3. Section 3404 of title 38, United
States Code, Is amended?
(1) by amending subsection (a) thereof to
read as follows:
"(a) The Administrator shall recognize any
individual admitted to practice law before
the highest court in any State or the District
of Columbia to act as an agent or attorney in
the preparation, presentation, or prosecution
of any claim under laws administered by the
Veterans' Administration."
(2) by striking out "section" in subsection
(b) thereof and inserting in, lieu thereof
"chapter"; and
(3) by amending subsection (c) thereof to
read as follows:
"(c) The Administrator shall determine
and pay reasonable,fees to agents or attor-
neys recognized under this chapter in allow-
ed claims for monetary benefits under laws
administered by the Veterans' Administra-
tion. Such reasonable fees shall not exceed
$100 with respect to any one claim except
that in any case in which a claimant for
monetary benefits prevails upon an appeal
to the Board of Veterans' Appeals or upon
review pursuant to section 4010 of this title;
the Administrator shall pay all reasonable
fees."
(1) by amending the last sentence of sec-
tion 4004(a) by striking out the period at
the end thereof and inserting in lieu thereof
the following: "; but any such decision is
subj to judicial review as provided for in
sec 4010 of this title.";
by amending section 4004(h) by strik-
ig out "When" and inserting the following:
"Subject to an appeal under section 4010 of
this title, when";
(3) by striking out paragraphs (3), (4) , and
(5) of section 4005(d) and inserting the fol-
lowing:
"(3) Copies of the 'statement of the case'
"prescribed in paragraph (1) of this subsec-
tion will be submitted to the Board of Vet-
erans' Appeals, to the claimant, and to his
representative, if there is one. Submission
of the statement of the case by an employee
of the Veterans' Administration to the Board
of Veterans' Appeals shall initiate review by
the Board of Veterans' Appeals. The claimant
will be afforded a period of 60 days from the
date the statement of the case is mailed to
provide to the Board of Veterans' Appeals
such supplemental information with respect
to his case as he deems appropriate, includ-
ing specific allegations of error of fact or law.
Such 60-day period may be extended for a
reasonable period on request for good cause
shown.
"(4) After the 60-day period, or longer pe-
riod if such 60-day period is extended, has
expired, and regardless whether or not sup-
plemental information ? has been submitted
to the Board of Veterans' Appeals by the
claimant, the Board of Veterans'. Appeals
shall review the case and will base its deci-
sion on the entire record.";
(4) by amending section 4005A (b) to read
as follows:
'(b) Upon the filing of a notice of dis-
agreement, the Board of Veterans' Appeals
and all parties in interest will be furnished
with a statement of the ease in the same
manner as is prescribed in section 4005. Fur-
nishing of the statement of the case- to the
Board of Veterans' Appeals shall constitute
notice of appeal- by the party in interest who
filed notice of disagreement. The party in
interest who filed a notice if disagreement
will be allowed thirty days from the date of
mailing of such statement of the case to
provide to the Board of Veterans' Appeals
such supplemental information as he deems
appropriate. Extension of time may be
granted for good cause shown but with con-
sideration to the interests of the other parties
involved. The substance of the supplemen-
tal information will be communicated to the
other party or parties in interest and a period
of thirty days will be allowed for filing a
brief or argument in answer thereto. Such
notice shall be forwarded to the last known
address of record of the parties concerned,
and such action shall constitute sufficient
evidence of notice?'
(5) by adding at the end thereof the fol-
lowing new section: '
"I 4010. Judicial review
"(a) Any claimant who disagrees with the
decision of the Board of Veterans' Appeals
with respect to his appeal may at any time
before the sixtieth day after the date on
which the claimant has received notification
In writing of uch decision file a petition
with the United States court of appeals for
the District of Columbia circuit or the cir-
cuit wherein such claimant resides for a ju-
dicial review of such decision. A copy of the
petition shall be forthwith transmitted by
the clerk of the Court to the Board. The
Board thereupon shall file in the court the
record of the proceedings on which the Board
based its decision, as provided in section 2112
of title 28,
les to the court
5eilience and
2 02430 : CIA-RDP75B0 flOtR00060047
II ?
IIP
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S 8318 CONGRESSIONAL RECORD - SENATE May 7, 1973
STATEMENTS ON INTRODUCED
BILLS AND JOINT RESOLUTIONS
- By Mr. SCOTT of Pennsylvania:
1 S. 1711. A bill to amend the Foreign
Assistance Act of 1961, and for other
purposes. Referred to the Committee on
Foreign Relations.
FOREIGN ASSISTANCE ACT 05 1973
Mr. SCOTT of Pennsylvania. Mr.
President, I submit today, for appropri-
ate reference, the foreign assistance bill
of 1973, to amend the Foreign Assistance
Act of 1961 and for other purposes, and
ask unanimous consent that it be printed
in the RECORD. Mr. President, I also ask
unanimous consent that a section-by-
section analysis of the bill be printed in
the REconn.
There being no objection, the bill and
analysis were ordered to be printed in
the RECORD, as follows:
S. 1711
Be it enacted by the Senate and House of
Representatives of the United States of
America in Congress assembled, That this
Act may be cited as the "Foreign Assistance
Act of 1973".
DEVELOPMENT LOAN FUND
SEC, 2, Title I of chapter 2 of part I of the
Foreign Assistance Act of 1961, relating to
the Development Loan Fund, is amended
as follows:
(a) In section 202(a), relating to. author-
ization:
(1) immediately after "fiscal year 1972,"
strike out "and";
(2) immediately after "final year 1973,"
insert "$201,400,000 for the fiscal year 1971,
and $201,400,000 for the fiscal year 1975";
(3) immediately after "June 30, 1972,"
strike out "and"; and
(4) immediately after "June 30, 1973,"
insert "June 30, 1974 and June -30, 1975,".
(b) In section 203, relating to fiscal pro-
viaions, strike out "for the fiscal year 1970,
for fiscal year 1971, for the fiscal year 1972,
and for the fiscal year 1973" and insert in
lieu thereof "for the fiscal year 1974 and
for the fiscal year 1975";
TECHNICAL COOPERATION AND -DEVELOPMENT
GRANTS
SEC. 3. Title II of chapter 2 of part I of
the Foreign Assistance Act of 1961, relating
to technical cooperation and development
gran Is, is amended as follows:
(a) In section 211(5), relating to general
authority, in the last sentence immediately
after the word "assistance", insert the word
"directly".
(b) In section 212, relating to authoriza-
tion, strike out "$175,000,000 for the fiscal
year 1972 and $175,000,000 for the fiscal
year 1973" and insert in lieu thereof "$165,-
090,000 for the fiscal year 1974 and $165,600,-
000 for the fiscal year :1975".
(c) In section 214, relating to authoriza-
tion for American schools and hospitals
abroad:
(1) subsection (c) is amended to read as
follows:
"(c) To carry out the purposes of this sec-
tion there is authorized to be appropriated to
the President for the fiscal year 1974 $10,-
000,000, and for the fiscal year 1975 $10,-
000,000, which amounts are authorized to
remain available until expended."; and
(2) subsection (d) is repealed.
HOUSING GUARANTIES
SEC. 4. Title III of chapter 2 of part I of the
Foreign Assistance Act of 1961, relating to
housing guaranties, is amended as follows:
(b) In section 222(c), relating to Latin
American housing guarantees, strike out
"$550,000,000" and insert in lieu thereof
"$591,900,000".
(c) In section 223(1) relating to general
provisions, strike out "June 30, 1974" and
insert in lieu thereof "June 30, 1976".
OVERSEAS PRIVATE INVESTMENT CORPORATION
SEc. 5, Title IV of chapter 2 of part I of the
Foreign Assistance Act of 1961, relating to
the Overseas Private Investment Corporation,
is -amended as follows:
.(a) In section 231(d), relating to insur-
ance operations, immediately after the word
"risks" insert the words "with other insur-
ers, public or private, and seek to assure that
with respect to insurance issued after enact-
ment of the Foreign Assistance Act of 1973
all costs of the insurance program will, over
the long term, be borne by the private users
of the services".
(b) In section 231(i), relating to the pro-
tection of the economic interests of the
United States, immediately after the words
"balance-of-payments" insert the words "and
employment".
(c) In section 234(c), relating to direct in-
vestment, strike out "(1) accept as evidence
of indebtedness debt securities convertible
to stock, but such debt securities shall not be
converted to stock while held by the Corpora-
tion" and insert in lieu thereof "(1) in its
financing programs, acquire debt securities
convertible to stock or rights to acquire
stock, but such debt securities or rights shall
not be converted to stock while held by the
Corporation".
(d) In section 235(a) (4), relating to issu-
ing authority, strike out "June 30,1974" and
insert in lieu thereof "June 30, 1970". a
(e) In section 239(d), relating to general
provisions and powers, immediately after the
phrase "in the conduct of its business"
insert the words "including, notwithstand-
ing any provision of law, contracts of coin-
surance and reinsurance with insurance
companies, financial institutions, or others,
or groups thereof, employing the same, where
appropriate as its agent in the issuance and
servicing of Insurance, coinsurance and rein-
surance and the adjustment of claims aris-
ing thereunder, and pooling arrangements
and similar agreements with other national
or multinational insurance or financing
agencies or groups thereof".
(f) In section 240(h), relating to agricul-
tural credit and self-help community de-
velopmentprojects, strike out "June 30, 1973"
and insert in lieu thereof "June 30, 1975".
(g) In section 210A(b), relating to re-
ports to the Congress, strike out "March 1,
1974" and inSert in lieu thereof "February 1,
1975".
ALLIANCE FOR PROGRESS
SEC. 6, Section 252(a) of title VI of chap-
ter 2 of part I of the Foreign Assistance Act
of 1961, relating to authorization, is amended
as follows:
(a) Strike out "for the fiscal year 1972,
$295,000,000, and for the fiscal year 1973,
$295,000,000" and insert in lieu thereof "for
the fiscal year 1974, $236,100,000 and for the
fiscal year 1975, $236,100,000".
(b) Strike out "$88,500,000 for each such
fiscal year" and insert in lieu thereof
$86,100,000 for each such fiscal year".
PROGRAMS RELATING TO POPULATION GROWTII
Sec. 7. Section 292 of title X of chapter 2
of part I of the Foreign Assistance Act of
1961, relating to authorization, is amended
by striking out "1972 and 1973" and in-
serting in lieu thereof "1974 and 1975".
INTERNATIONAL ORGANIZATIONS AND PROGRAMS
SEC. 8, Section 302 of chapter 3 of part I
of the Foreign Assistance Act of 1961, relat-
fiscal year 1973, $138,000,000" and insert in
lieu thereof, "for the fiscal year 1974,
$124,800,000 and for the n seal year 1975, such
sums as may be necessary".
(b) In subsection (b) (2), strike out "for
use in the fiscal year 1972, a1.5,000,000, and
for use in the fiscal year 1973, $15,000,000"
.and insert in lieu thereof "for uae in the
fiscal year 1974, $15,000,000, and for use in
the fiscal year 1975, $15,000,000".
CONTINGENCY FUND
SEC. 9. Section 45-1(a) of chapter 5 of part
I of the Foreign Assistance Act of 1961, relat-
ing to the contingency fund, is amended as
follows:
(a) Strike out "for the fiscal year 1972 not
to exceed $30,000,000, ani for the fiscal year
1973 not to exceed $30,000,000" and insert in
lieu thereof "for the fiscal year 1971 not to
exceed $30,000,000, and for the fiscal year
1975 not to exceed $30,000,000".
(b) Strike out all that follows immedi-
ately after the colon through the end of the
subsection and insert in lieu thereof the
following:
"Provided, That, in. addition to the amounts
authorized to be appropriated by this subsec-
tion, there is authorized to be appropriated
such additional amounts, as may he required
from time to time to provide relief, rehabili-
tation, and related assistance in the case of
extraordinary disaster situations. Amounts
appropriated under this section are author-
ized to remain available until expended.".
INTERNATIONAL NARCOTICS CONTROL
SEC. 10. Section 4132 of chapter 8 of part I
of the Foreign. Assistance Act of 1901, relat-
ing to authorization, is amended by striking
out "1973" and all that follows and insert-
ing in lieu thereof "1974, and for the fiscal
year 1975 such sums as may be necessary,
which amounts are authorized to remain.
available until expended.".
MILITARY ASSISTANCE
SEC, 11. Chapter 2 of part II of the For-
eign Assistance Act of 1961, relating to mili-
tary assistance, is amended as follows:
(a) In section 504(a), relating to author-
ization, strike out "$500,000,000 for the fiscal
:year 1972" and insert in lieu thereof "$652,-
000,000 for the fiscal year 1971".
(b) In section 500(a), relating to special
authority, strike out the words "the Sac-al
year 1972" wherever they appear and insert
in lieu thereof "any fiscal year".
(c) Section 514 is hereby repealed.
SECURITY SUPPORTING ASSISTANCE
Sac. 12. Section 532 of chapter 1 of part II
of the Foreign Assistance Act of 1961, relat-
ing to authorization, is ammded by striking
out "for the fiscal year 1972 not to exceed
$618,000,000, of which not less than $50,000,-
000, shall be available solely for Israel" and
inserting in lieu thereof "for the fiscal year
1974 not to exceed $100,000,000".
INTERNATIONAL MILITARY EDUCATION AND
TRAINING
SEC. 13. (a) Part II of URI Foreign Assist-
ance Act of 1961 is amended by adding at the
end thereof the folldwing DCW chapter:.
"Chapter 5--INTERNATION AL Mil ITArtY
- EDUCATION AND TRAINING
"Sac. 511. STATEMENT OP PURPOSE.-The
purpose of this chapter is to- establish an
international military education and train-
ing program which will:
(1) improve the ability of friendly foreign
countries, through effective military educa-
tion and training programs relating particu-
larly to United States military methods,
procedures, and techniques, to utilize their
own resources and equipment and systems of
United States origin with maximum effcc-
(a) In section 221, relating to worldwide Ing to authorization, is amended as follows: tIveness _for Vile magrice of their de-
housing guarantees, strilacreatr.
y 'prnelve1120-riefitne)i cm. RD PIM BO 0380 -66:110110
- n.41 security, there-
and insert in lieu thereerlil fi ca year 9 2, $138,000,000 and for the by contributing to enhanced professional