EFFECT ON FOREIGN COUNTRIES OF US BALANCE-OF-PAYMENTS MEASURES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001500220019-8
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 20
• Document Creation Date: December 16, 2016
• Document Release Date: December 28, 2004
• Sequence Number: 19
• Publication Date: February 5, 1968
• Content Type: IM

 ell4'Ot(2 V/1 ~~'/~ ', L A'
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Confidential
D
'-DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
Effect on Foreign Countries
of US Balance-of-Payments Measures
Confidential
Copy No. 6
ER IM 68-16
5 February 1968
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WARNING
This document contains information affecting the national
defense of the United States, within the meaning of Title
18, sections 793 and 794, of the US Code, as amended.
Its trans:,:..ssion or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
GROUP I
ZXCLUULD PHOM AUTOMATIC
IDONN(11(AIIIN(I AND
OC LA~NIIICATION
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
5 February 1968
Effect on Foreign Countries
of US Balance-of-Payments Measures
Summary
The US program to reduce its balance-of-payments
deficit by $3 billion in 1968 should work no major
hardship on any country, although the impact on the
United Kingdom may be quite significant. Most
foreign.governinents agree that the US program is
necessary, and the economies on which most of the
impact will fall are strong enough to absorb it
without serious repercussions. The largest saving
to the United States and the most adverse effect on
other countries will result from the curtailment
of direct investment overseas by US companies.
The impact from reduced US bank loans and tourism
will be smaller and more easily overcome.
The US program will cause a considerable
reduction in the dollar earnings of Western European
countries. This loss will lead to a tightening of
credit and adversely affect economic activity un-
less offsetting domestic measures are introduced.
How safely the European countries can pursue
expansionary policies in the face of the US restric-
tions depends greatly on the strength of each
country's balance of payments. Germany is in the
most favorable balance-of-payments position; the
French position is marginal but French reserves are
enormous. Prospects in most other continental
countries are greatly dependent on the rate of
economic expansion and on economic policies in France
and Germany.
Note: This memorandum was produced by CIA. It was
prepared by the Office of Economic Research.
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Within Western Europe, the United Kingdom and
Belgium are in a poor position to adjust to the
US measures. The loss in dollar receipts to the
United Kingdom will be painful because the British
are already making a valiant effort to reduce a
large payments deficit. Belgium, which has keyed
its economic development program to American in-
vestment, may experience a decline in its rate of
economic growth if the US program extends over a
number of years.
In areas outside Western Europe, the adverse
effects of the US program will be small. In the
Near East, Lebanon and Iran appear to be the only
countries that might be hurt, although not
seriously. Asian countries will not be greatly
affected. Most of them are less developed countries
where US direct investment is permitted to increase
and where tourist earnings are small. Latin
American countries might actually gain from the US
program because tourism in the Western Hemisphere
is expected to accelerate while no significant
reduction is expected in direct investment. In
Africa the small reduction in dollar earnings from
US tourism and direct investment will impose no
major hardships.
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Introduction
1. In an effort to reduce the net flow of US
dollars abroad, and indirectly to strengthen the
Free World monetary system, the United States
announced on 1 January a comprehensive program to
improve its balance of payments, which has been in
deficit in 17 of the last 18 years. The program
aims to reduce the net dollar outflow by $3 billion
during 1968, as follows:
a. Mandatory controls on new direct
foreign investments by US companies were in-
voked by the President through his authority
under the banking laws. This involves new
funds flowing out of the United States and
reinvested earnings of US companies abroad.
There is a moratorium on all new investment
flows to continental Western Europe (except
Greece and Finland) and to South Africa
(Schedule C countries).* Investment (from
new funds and reinvested earnings) is
limited in a group consisting mainly of
developed countries including the United.
Kingdom (Schedule B countries) to 65 percent
of the 1965-66 average and in most less
developed countries (Schedule A countries)
to 110 percent of the 1965-66 average. More-
o-ver, current earnings abroad by all US
companies must be returned to the United
States at a rate at least as high as in
1964-66.** The controls on investment apply
to individual US companies, not to countries,
and a company is free to invest in any
country provided it does not exceed the
maximum investment permitted in each of the
three country groups. Thus a company may
For the designation of countries in each group,
see the Appendix.
** 4 company's direct investment from transfers and
reinvested earnings cannot exceed the investment
ceiling, and earnings in excess of this amount must
be repatriated even if they are larger than the
1964-66 rates For Schedule C countries, reinvested
earnings must not exceed 35 percent of average
direct investment in 1965-66.
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transfer investments from one country
to another within the same group, but
not from one group to another. Announced
savings goal: $1 billion; probable effect
$1-1/2 billion unless major exceptions
are granted.
b. US lending institutions were
asked to impose voluntary restraints
supervised by the Federal Reserve Board
with power to make the restraints man-
datory if necessary. Banks are asked
to limit lending in 1968 to 103 percent
of foreign loans outstanding 31 December
1964, not to renew outstanding loans of
a year and longer to developed continen-
tal Europe, and to reduce short-term loans
there by 40 percent of the amount outstand-
ing on 31 December 1967. Other financial
institutions, such as insurance companies,
have similar restraints. Savings goal:
$500 million.
c. US citizens are asked to defer
non-essential travel outside the Western
Hemisphere for the next two years. Legis-
lation to help achieve this objective is
bring explored with Congress. Savings
goal: $500 million.
d. The cost of keeping US troops and
civilian personnel abroad is to be reduced,
probably through reduction in the number
of civilian personnel overseas, more off-
set and neutralization agreements with
foreign countries, and lower spending by
US forces and their dependents abroad.
Savings goal: $500 million.
e. Adjustment of non-tariff barriers
to world trade and a long-term program to
increase US exports. Savings goal: $500
million.
2. Only the effects of restrictions on direct
investments, loans, and tourism are discussed in this
memorandum. The restrictions on tourism depend on
Congressional action and may not be adopted or may
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have less effect than planned. The proposed adjust-
ments in US government expenditures abroad and the
hoped-for reductions in non-tariff trade barriers
have yet to be spelled out and depend on complex
negotiations.
3. Although the restrictions weigh more heavily
on Western Europe than on any other area, they are
not likely to cause serious economic disturbance
there in the months ahead. Reactions from foreign
governments, bankers, and businessmen have been a
mixture of mild protest over the impact on their own
economies and a recognition that the US steps are
necessary to strengthen the dollar and ease uncer-
tainty in international exchange markets. In 1966,
direct investment outflows from the United States
were about $3.5 billion, and US companies reinvested
about $1.7 billion of profits earned abroad. US
tourists going abroad spent $4 billion in 1966, some
$2 billion more than US receipts from foreign
tourists.
4. This memorandum considers some of the
general effects that the US program is likely to
have in Western Europe, the Near East, Asia, Latin
America, and Africa. It excludes Canada, Japan,
Australia, and New Zealand, where the effects of the
program are more difficult to discern at present.
Effect on Western Europe
5. Most European governments agree that the US
program is necessary and in fact long overdue, but
officials, bankers, and businessmen on the continent
are anxious about the impact of an abrupt termina-
tion of US direct investments and a reduction in
tourist receipts. The EEC countries, which as a
group for much of this decade have had surpluses
almost equal to the deficit in the US balance of pay-
ments, will be the most affected. The impact on
their combined balance of payments will be on the
order of $1.3 billion (out of a total projected US
balance-of-payments saving of $2 billion). When
added together, reduced dollar flows from the invest-
ment moratorium, reductions in credits from US
banks, and lower tourist expenditures will have a
considerable effect on the balance of payments for
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every European OECD country shown in Table 1. Table
1 compares estimated balance-of-payments losses in
1968 from the US program with the estimated balance
of payments in 1967. Losses in 1968 were calculated
from the actual flows of US direct investment in
1965-66 (1967 for the United Kingdom), and from the
reduction in short-term bank credits outstanding at
the end of 1967 and in tourist expenditures. No
allowance was made for the reduction in long-term
bank loans, because of the lack of information re-
garding the maturities of existing loans. Reductions
in long-term bank loans might account for an addi-
tional loss of $200 million in Western Europe as a
whole. The actual distribution of losses may be
quite different than shown in Table 1 because the
limitations on direct investment, loans, and tourism
apply to groups of countries, and companies and
tourists may distribute their funds among the indi-
vidual countries as they wish.
6. Western European countries will feel the
restrictions on direct investment more than those
on bank loans and tourism, both in terms of the
immediate worsening in their balance of payments
and the secondary effects in their economies. The
reduction in direct investment will represent a sub-
stantial loss of dollars, and the effort to replace
US funds with local financing will make borrowing
more difficult and tend to restrict economic expan-
sion. The loan restrictions will have a similar
effect, but their savings goal is half that for
direct investment. Because restraints on travel
abroad by US tourists have not yet been formalized,
it is difficult to estimate their impact on Western
Europe. Restraint has not been asked in travel by
Americans to Canada and other Western Hemisphere
nations. Therefore, most of the saving of $500 mil.-
lion will have to come from Europe, Asia, and Africa.
Western Europe is traditionally the area of heaviest
US tourist travel, and expenditures in this area may
have to drop by at least $300 million to realize
the program's overall goal. This would imply a re-
duction in spending by US travelers in Europe of
about 40 percent from the 1966 level.
7. Most of the European countries could easily
absorb the loss of dollars caused by the US restric-
tions out of current earnings or out of reserves.
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 Estimated Balance of Payments Effects on Western Europe
of the Key Components of the US Payments Program J
1968
O
z
T1
Estimated Basic Total Estimated Reduced Reduced Reduced
Balance Payments1oss US Direct US Travel US Bank
Country 1967 T/ 1968 c Investment / Outlays J Credits -f/*
Belgium-Luxembourg 220 155 120. 5 30
France 150 / 185 120 40 25
West Germany 1,780 510 400 30 80
Italy 25 240 155 55 0
Netherlands 15 135 115 10 10
Denmark -20 50 25 10 15
Norway 10 40 15 5 20
Spain -150 120 80 20 20
Sweden 10 85 50 5 .0
Switzerland 40 160 90 20 50
United Kingdom -720 400 315 60 25
a. Rounded to the nearest $5 million.
b. "Basic Balance" refers to the balance on current and long-term capital accounts.
c. Based on the assumption that all countries share in the loss in proportion to their Nast scares
of Europe's dollar earnings from these three sources.
d. For all countries except the United Kingdom, the data reflect average capital outflo.,s in
1965-66 from the United States for direct investment by US companies in Europe. Changes in
repatriated earnings are ignored because the actual rate of repatriation in 1964-66 will aprly_n
most cases. Estimates could not be made for 1967. For continental Western Europe as a whole, the
net flow of US funds (after deduction of repatriated earnings) in 1967 probably ,as slightly larger
than the 1965-66 average, so that the calculated loss is slightly understated in comparison with
1967.
For the United Kingdom, the figure shown is the estimated loss of UK net earnings in 1968 in
comparison with the estimated 1967 level. The estimate for 1968 was obtained by calculating total
allowable investment (from US funds and undistributed earnings) and the required repatriation of
profits according to the US regulations. The net loss to the United Kingdom based on the 1965-&
average, rather than the 1967 level, would be about $220 million.
e. Based on the assumption that US tourist expenditures in Western Europe in 1968 will be about
60 percent of such expenditures in recent years.
f. For data on bank credits: all data except those of the United Kingdom represent 40 percent of
outstanding US short-term bank claims at the end of 1967 (estimated). Data for the Unite:
Kingdom represent 6 percent of total US banking claims (long-term and short-term) at th?: cni of
1967, reflecting the required reduction in credits from 109 to 10_ percent of that bac:r rerioi
level.
g. Including the Franc Zone. Metropolitan France alone probably hnd a deficit in
of payments ll4ppPOVed For ear oril rb,66y6ij t, `' t ' after? d1ffM22V019-8 ease 2 1.
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All except the United Kingdom, Spain, and Denmark
had balance-of-payments surpluses in 1967. This
was a year of unusually slow growth, however, and
the more rapid growth expected for 1968 probably
would reduce some surpluses and change others into
deficits even without the US restrictions. West
Germany, whose economic recession in 1967 adversely
affected its trade partners, is in the easiest
balance-of-payments position. The French balance-
of-payments position is marginal, but French reserves
are enormous. The balance-of-payments prospects of
most other continental countries in 1968 depend
greatly on the rate of economic expansion in Germany
and France, which depends in turn on how willing,the
German and French governments will be to pursue
expansionary policies in the face of US restrictions.
The French government is apparently planning a
moderate expansionary program, judging by its
announcement of 24 January to increase both public
and private spending and to run a budget deficit.
In Germany, the issue of fiscal policy is unresolved,
but apparently the Bundesbank intends to follow an
easy money policy in 1968.
8. Although the US regulations treat the United
Kingdom more liberally than continental Western
Europe, their effect on the United Kingdom will be
severe. There may be a drastic decline in new direct
investment flows and an increase in repatriated
earnings. At most, the net loss will be about $300
million for direct investment alone, or about $400
million including short-term credits and tourism.
Such a loss would absorb about one-third of the gain
the British hope for in 1968 as a result of the
devaluation. There is a possibility that the adverse
effects to the United Kingdom will not be as severe
as indicated above. For example, US companies, pre-
vented from transferring funds from the United States
to continental Europe for direct investment, may
divert to the United Kingdom some of their allowable
direct investment under Schedule B. In this way,
facilities that may have been planned for the con-
tinent would be built in the United Kingdom instead.
It is also possible that tourists will find lower
British costs from devaluation attractive enough to
offset an American disincentive to travel abroad.
Even a loss much smaller than $400 million would be
painful, however. The British are already bending
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every effort to increase their foreign exchange
earnings and eliminate their large payments deficit.
They have planned to cut expenditures abroad and to
hold down domestic spending, and the US restrictions
may now force them to take even more drastic &efla-
tionary measures.
9. Germany, France, and several other European
countries are in a sufficiently strong balance-of-
payments or reserve position to expand the domestic
money supply and feed dollars into the Eurodollar
market. Nevertheless, the actions taken by European
governments and central banks may not compensate
entirely for the loss of US funds. Conservative
attitudes are strong, and European capital markets
are narrow and inflexible. Consequently, curtailing
the outflow of dollars to the continent probably
will cause some tightening of credit and a rise in
interest rates. A restriction of credit will tend
to dampen domestic economic expansion in Europe
during 1968. A rough indication of the role of US
direct investment in the total investment of
European countries is shown in Table 2.
10. If interest rates in Europe rise, dif-
ferentials between rates in the United States and
on the continent could cause renewed flows of
short-term funds (owned by foreigners) out of the
United States. This movement of short-term funds
may be impossible to halt by domestic US monetary
measures if European interest rates rise precipi-
tously. The effect would be to reduce the impact
of the US program in Europe and on the US balance
of payments. The Europeans have considerable
resources to shift back to the continent. At the
end of 1967, US short-term bank liabilities alone
to continental Western Europe totaled about $10
billion.
11. Apart from the effect on the balance of
payments, the drop in US tourist expenditures would
not have much overall impact on the European economies.
There would be considerable' localized difficulties
in regions deriving large amounts of their incomes
from tourism, and these difficulties may lead to
intensified political pressures for defensive
action against the US program.
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Total Investment and US Direct Investment
in Western Europe
1966
Country
Total
Investment b
(Million US $)
US Investment
US Direct as Percent of
Investment Total Investment
(Million US $) (Percent)
Belgium-Luxembourg
2,910
120
France
16,060
90
West Germany
23,790
610
Italy
8,150
150
Netherlands
4,330
160
Norway
1,860
10
Spain
4,600
110
Sweden
3,730
60
Switzerland
2,880
30
Denmark
1,820
20
United Kingdom
15,060
380
a. Value figures are rounded to nearest $10 million. Percentages
are calculated on the basis of unrounded figures and may not conform
exactly to those calculated on the basis of rounded amounts shown.
?b. Adjusted to exclude residential construction.
c. Funds transferred by US companies from the United States for
direct investment in Western Europe.
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12. The US program could have considerable
adverse effects if it remains in effect for long.
For example, Belgium has keyed its economic develop-
ment program to foreign investment, particularly
from the United States. Although the immediate
impact on the Belgian economy will be small, the
loss of US direct investment will disrupt plans for
development that are designed to raise the rate of
economic growth. Therefore, continuation of
Belgium's receptive policy toward US funds will
depend on the duration of the US program. If it is
short-lived, Belgium is likely to absorb the loss
of economic growth in anticipation of an early
resumption of US investment. On the other hand, if
the US program continues over a number of years,
Belgian economic policy will be substantially re-
oriented, and the United States may lose the support
of one of Europe's most ardent 'hampions of US in-
vestment.
Effect on the Near East and North Africa
13. Iran and Lebanon appear to be the only
countries in the Near East and North Africa that
will be hurt by the US program, and the damage in
these two countries should not be great. The
operations of US oil companies in Saudi Arabia and
Bahrain may be circumscribed by the direct invest-
ment limitations. Morocco, Tunisia, and Egypt also
could feel some repercussions from US efforts to
limit tourist expenditures abroad. Controls on
commercial bank loans may make Egypt's debt consoli-
dation and servicing activities slightly more
expensive.
14. The countries of the Near East and North
Africa normally run a very large deficit in their
balance-of-payments transactions with the United
States, but most of this flow of funds into the
United States originates in sales to the major oil
importing countries (the United Kingdom, West
Europe, and Japan). A major improvement in the US
balance of payments with the Near East countries
can come only from curtailment of US investment
in the oil industry or by repatriation of bank
balances held abroad. The flow of funds from the
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United States for direct investment in the Near East
and North Africa totaled about $255 million in 1965,
but declined sharply to $100 million in 1966, partly
in response to the US program for voluntary restraints
on overseas investment. As a result the 1965-66
average, the base period for calculating direct in-
vestment in 1968, is a relatively low $210 million
of which $200 million represents the oil industry .
If US direct investment drops substantially in 1968,
the oil companies will be able to obtain non-US
funds from Western Europe and Japan because of the
high profitability of oil investments in that area.
15. Iran will be adversely affected by all
aspects of the US programs; the effect of any one
part may not be great, but the combination of small
hurts may be enough to cause problems. Limitations
on direct private investment -- 65 percent of the
average investment in 1965-66 -- probably will not
hamper the plans of the international consortium
that operates the major portion of Iran's oil
industry, but some other investors may be forced to
curtail or postpone their plans. The Shah has been
hoping to attract more direct US investment in a
TVA-type scheme in southeastern Iran. The develop-
ment plan for the March 1968 - March 1973 period
requires foreign borrowing of $2 billion, of which
$800 million remains to be arranged. The amount
that will be provided by US direct investment
probably will be reduced because of the new program,
and borrowing from other sources will be more
expensive. Iran also can expect some reduction in
tourist revenues, which amounted to about $25 mil-
lion in 1966.
16. Lebanon will experience a reduction of
foreign exchange income as a result of the US pro-
gram, and it also may undergo some recession of
business activity in tourist-related fields and in
banking activity. Lebanon normally derives about
20 percent of its foreign earnings from tourism,
more than half of which is from the United States.
An extended depression in tourism will have reper-
cussions throughout the economy. Total investment
may decline if the drop in tourism causes postpone-
ment of plans for new hotels and restaurants or new
port and airport facilities. The entire banking
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sector in Lebanon (banking accounts for more than
5 percent of GNP) presumably will be affected by
newly adopted US requirements for reduction of bank
loans by US firms operating in Lebanon. As the
financial and commercial center of the Near East,
Lebanon is the natural home for large amounts of
money kept abroad for operating purposes or tax
reasons. Some of these funds will soon be with-
drawn because of the new regulations and will put
strains on the banking sector, which has recently
experienced a loss of confidence following the
failure of IntraBank, one of the largest in the
country.
17. The impact of the US program on Far
Eastern countries will be negligible, except pos-
sibly in Hong Kong and Indonesia. In the base
period 1965-66, the Far East accounted for $120
million out of the $900 million directly invested
by US firms in Schedule A countries, where invest-
ment in 1968 may be 110 percent of the base period.
Most of this investment was highly concentrates, in
a few of the countries: 40 percent in the Philip-
pines and nearly 30 percent in the group comprised
of Taiwan, Thailand, and South Korea. If there is
no change in the distribution of US investment
among Schedule A countries, the Philippines would
receive about $53 million in 1968, an amount that
probably would not have been exceeded even in the
absence of the regulations.
18. US private direct investment in Indonesia
has been quite small and has been confined primarily
to investments by US-owned oil companies. In 1965
the total invested by all foreign-owned oil com-
panies in Indonesia was less than $20 billion.
Because of the great need to stimulate economic
activity in Indonesia, it will be important to
encourage direct US investment on a scale much
higher than 10 percent above the average 1965-66
level. Increased US investment funds for Indonesia
could be made available through some exemptions
from the new regulations or through the redistri-
bution by US firms of their investments among
Schedule A countries.
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19. The value of average annual US investment
in Hong Kong in 1965-66 was $24 million, an amount
equal to perhaps 10 percent of the total foreign
investment in the Colony. Thus a decline of US
investment could have an impact of some significance
on Hong Kong's balance-of-payments position and on
its economic growth potential. Economic growth
in Hong Kong was probably down in 1967 as a result
of political disturbances, and if the political
climate does not improve, lack of confidence may
prevent a resumption of the normal flow of invest-
ment to Hong Kong. If the investment climate
improves sufficiently, however, US firms might shift
some of their investments from other Schedule B
countries to overcome the 65 percent limitation in
Hong Kong.
20. In 1966 the Far East accounted for only
5 percent of expenditures abroad by US tourists.
These expenditures in the Far East probably will
not drop appreciably, because tourists who make the
long and expensive trips to this region can more
easily afford a travel tax or other additional cost
that may be imposed.
21. The US program, as intended, will not
reduce the overall flow of dolle:rs to Latin American
countries. Indeed, the penalties on tourist expen-
ditures probably would permit Latin America to gain
more from an acceleration of tourism than it will
lose from the mild restraints imposed on transfers
of capital. If continued for several years, how-
ever, the new restrictions on Western European
countries might reduce their demand for exports
from Latin America and restrict the flow of credit
to Latin America.
22. Because US direct investment in Latin
America was at a high level in the 1965-66 base
period, the restriction on transfers of capital to
110 percent of the base will not impede investment
in the region as a whole during the next year or
two. Adverse effects might be experienced, however,
by some of the smaller countries such as Panama,
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Surinam, Guyana, and the British West Indies,
where US direct investments recently have been
growing rapidly and comprise a sizable share of
total investment. Even here, the effects could be
mitigated to some extent by the ability of large
US firms operating in several countries to divert
their investments from one country to another.
23. The new restrictions on the extension of
bank credit to Latin American countries are unlikely
to have a major adverse impact in 1968. Any
growth of demand for credit could be supplied by
Western Europe, although at higher interest costs.
However, if the sharp curtailment of US investment
and credit to Western Europe should lead to sub-
stantially higher interest rats for long-term
credit in Europe, or to a significant contraction
of its availability, Latin American countries might
have to postpone large-scale investment projects.
If extended over several years, these delays would
lower the rate of economic growth in a number of
countries.
24. Continued normal growth of US tourist
expenditures in Latin America, the diversion of
expenditures from Europe, and additional spending
in Mexico as a result, of the Summer Olympics prob-
ably will boost total expenditures in 1968 to
between $] 15 billion and $1.2 billion, compared
with $900 million in 1966. The gains in 1968 prob-
ably will have an appreciable economic impact only
in Mexico. Because of Mexico's poor export performance
in 1967, large and rising debt servicing obligations,
and likely strong demand for imports in 1968, increased
US tourist expenditures could help considerably to
avoid strains in the balance of payments this year.
Effect on Africa
25. The role of US private direct investment
and tourism in most African economies is negligible,
and no major problems are likely to arise as the
new US regulations are enforced. US direct invest-
ment averaged $205 million in 1965-66, more than a
third of which was in South Africa. US tourist
expenditures in sub-Saharan Africa in 1966 were ap-
proximately $25 million.
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26. Direct investments in all sub-Saharan
African countries may be 110 percent of the base
period, with the exception of South Africa, which
is under the same moratorium as Western Europe.
The loss to South Africa of investment funds, which
averaged $60 million during 1965-66, would have only
a small adverse effect on the balance of payments,
and the effects on the domestic economy could easily
be made up by local financing. There already is
concern among many South Africans that US invest-
ment is too high. Direct US investment in the rest
of Africa could increase to a maximum of $160 mil-
lion in 1968, but these countries could be adversely
affected if European countries reduce their capital
flows to Africa to compensate in part for the loss
of US funds.
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Appendix
Desi nation of Countries, by Cai;egory'
in the US Direct Investments Pro ram
Schedule C: Developed countries; a moratorium on all
direct investment.
Austria
Belgium
Denmark
France
Germany
Italy
Liechtenstein
Luxembourg
Monaco
Netherlands
Norway
Republic of South Africa
San Marino
Spain
Sweden
Switzerland
Schedule ;s: Developed countries in which a high
level of capital flow is essential;
investment in 1968 is limited to
65 percent of a company's average
investment in these countries during
1965-66.
Abu Dhabi
Australia
The Bahamas
Bahrain
Bermuda
Canada
Hong Kong
Iran
Iraq
Ireland
Japan
Kuwait
Kuwait - Saudi Arabia
Neutral Zone
Libya
New Zealand
Qatar
Saudi Arabia
United Kingdom
Schedule A: All foreign countries designated as
less developed countries; investment in
1968 is limited to 110 percent of a
company's average investment in these
countries during 1965-66.
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