BY MR. HUMPHREY (FOR HIMSELF AND MR. AIKEN:

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01495R000500020014-3
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 14
• Document Creation Date: December 19, 2016
• Document Release Date: August 23, 2005
• Sequence Number: 14
• Publication Date: June 20, 1973
• Content Type: OPEN

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01 3&
CONGRESSIONAL RECORD - SENATE June 20,
By Mr. BELLMON:
S. 2043. A bill to amend the Consolidated
Farm and Rural Development ACt. Referred
to the Committee on Agriculture and For-
es try.
By Mr, HARTKE:
1;. 2044. A bill to extend until September 30,
975, the suspension of duty on certain dye-
ing and tanning products and to include log-
wood among such products. Referred to the
Cmnmittce 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-
nient and Budget, and of certain other offi-
cers in the Executive Office of the President,
le subject to confirmation by the Senatve.
Placed on the calendar. y
STATEMENTS ON INTRODUCED
13ILLS AND JOINT RESOLUTIONS
By Mr. RIBICOFF (for himself,
Mr. IIARTKE, Mr. CHURCH, Mr.
MONDALE, Mr. KENNEDY, Mr.
PASTORE, Mr. HUMPRREY, 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-
nary 1, 1974. Under present law social
security benefits are not scheduled to in-
crease until January 1, 1975.
Tn the past few years Congress has
:>ubstantialiy raised the social security
miefit levels. But the cost of living has
nullified much of these increases. Prop-
crty taxes have jumped by nearly 39
liercent in the last 4 years, nearly twice
fhe 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
uy over 33 percent during this same
period. Here again, senior citizens are
hard hit since many must rely on pub-
lie transit instead of private automobile.-
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
I~ 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 OF 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-
leges 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 J.
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 tlhcin
in their keenly felt role as -World citizens.
I believe that we are failing to represent
our citizens in that 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 Ilearned 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
one paragraph:
One has to be impressed as much by the
ingenuity as the substance of a foreign ail
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 mai'nets
to profit-minded American exporters. It ills
the potential of increasing U.S. employ-
ment. It would not increase taxes, and it ns
politically shrewd in other ways as well.
Mr. President, I believe so strongly tha
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 forc'g ii 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 oL
legislation dealing with forei un economic
assistance. During our joint efforts. I
was always impressed wiLlh Senator
AlKrN's knowledge of the ingredients
needed to make the development pro,,css
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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w;te N~, 1973 CONGRESSIONAL RECORD -SENATE S 'f-T7" V/
for those nations where most of human- ago India imported 10 million tons of terms. Other exporting countries un-
ity lives. I submit that such a policy is grain following a monsoon failure tom derstand this and are supporting their
not only bad morality, it is bad security, avoid widespread famine. During the en- exporters by offering steadily increasing
bad economics, and bad diplomacy as suing years, she was able to accumulate financing on attractive terms with low-
weil. The world is shrinking and econ- nearly 10 million tons of grain reserves interest rates, long maturities and gen-
ourics and societies are growing more from the expanded production made pos- Brous grace periods.
interdependent. We have got to make sible by the green revolution in which This bill would remedy this ,,itu:ition
this world work, and it will not work for American aid programs, public and pri- by setting up a new Export Development
the most fortunate unless it works rea- vate, played such an important role. Credit Fund with authority to make
sonably well for the forgotten majority. Thus, when the Bangladesh crisis credit available to pay for U.S. exports
We have no choice but to meet this arose, India was the principal food do- to the lowest-income countries on terms
challenge. We cannot forget the world's nor, providing nearly 2 million tons of that are competitive. It would be able
majority which is powerless today, but food. Even with this unprecedented gen- to finance about $1 billion per year at in-
can vitally affect our future and our erosity, India has come very close to terest rates of perhaps 3 percent.
children's future tomorrow. Our foreign surviving this year's drought, one of the The difference between such low rates 7 policy will not be whole, nor will it be wgrst in a?century, by using its food re- andidhe pprofund to borrow percent it
viable until it is a policy which takes ac- serves. wou cost the money
count of the developing nations and I A third story is about population. A from the U.S. public, would be paid for
works to make the bounties of the earth decade ago, populations were exploding out of receipts on old aid loans which
available to them as well as to ourselves. throughout the poor lands and nobody are now largely used for relending by
The bill we are introducing today is was doing anything about it, and govern- AID.
by no means all idealism, though it is ments did not even dare to speak of it These receipts, which are increasing
idealistic. It is practical and tough- very openly. Today, although the prob- in volume each year, make it possible to
minded, and it serves the highest na- 1em is far from solved, it is out in the establish such a Fund with borrowing
tional interest- our interest in making open and governments-almost all of authority similar to the Export-Import
this world more livable for all of us and them-have population stabilization as Bank, on a fiscally sound basis, and
our children. an official or semiofficial goal, and they without charge to the U.S. budget. The
First, this bill recognizes a veritable are mounting campaigns to solve popu- Fund would only finance exports which
Intellectual revolt among scholars of de- lation problems. That is real progress in actually helped with development,
velopment who are turning against the one short decade on such a basic and thereby enabling these countries to de-
long-held view that growth alone is the sensitive problem. velop the ability to repay and to become
answer that will trickle benefits down to These three success stories not only better customers for our future exports.
the poorest majority. These scholars, refute some of the recent allegations by There would be no luxury items or mil-
and now this bill, start from the proposi- ill-informed authors to the effect that itary goods. And the Fund's clients
tion that the poorest majority must we do not know how to help in the de- would be the least developed countries
share in the work of building a nation velopment process; they also illustrate where U.S. exports are lagging.
and must share more equitably in the - the worth of the problem-solving ap- Mr. President, the bill we are intro-
fruits of development at the outset- proach to development. That is the ap- ducing today is social statesmanship in
not at some future date after, growth proach where we concentrate enough the highest form, where two very im-
targets have been met. Greater equity resources over enough time on an acute portant U.S. goals can be served simul-
and greater participation, instead of human problem affecting the poorest taneously. I refer to the goal of help-
taking a toll on growth, supports and majority to get some results. That is the ing the development of the lowest-in-
reinforces it. first very basic reform built into this come countries and the goal of helping
Years ago, the Congress took an initia- bill. This new approach to foreign aid U.S. exports, both immediately and in
tive in passing title IX of the Foreign As- will enable the little guy to be reached- building markets for the future. As
sistance Act, which expressed an earlier millions of lower income families will be many as 80,000 U.S. jobs may be created
version of these views. The evidence of affected. once the Export Development Credit
scholarly study and of experience now The second reform Introduced by this Fund gets into operation. Thus, Anier-
bears out the wisdom of that congres- bill, grows out of an interesting piece of lea's role in helping our less fortunate
sional view, and today it reappears in research done by our House colleagues. world neighbors need not be at the ex-
more mature and tangible form in this That reseach shows that the United pense of those in need at home. Father,
bill. It is more tangible because this bill States is doing very well in increasing it can help them to gel; jobs, which we
specifics the fields of endeavor which will its exports to the developing countries will agree is the most basic way to help
most directly benefit the poorest major- as a whole. In fact, these countries have them solve their problems.
lty and commits money to each of those become very important customers, im- There is a third purpose served by the
sectors. And each field is responsive to a porting about as much as the Common bill we introduce today. It recognizes
deeply rooted human problem that per- Market-including the United King- that America's responsibilities with re-
.neates the societies of the low-income dom-plus Japan. spect to the developing countries reach
countries. The three fields of emphasis It is a critical and growing market far beyond our aid programs. U.S. pol-
are first, food, nutrition, and rural de- whose importance is not often appre- icies on trade, investment, science poI-
velopment, second, population planning ciated However, the House committee icy, oceans, debt relief and other sub-
and health, third, education and human looked deeper and found that in the jects may affect very profoundly the
resource development. poorest countries-those with per capita destinies of poor countries.
increasingly, the AID program has GNP of $200 per year or less-U.S. ex- Yet now, tthes hose p policies are made
system-
given sustained attention over a period ports are not doing well at all.
of time to a problem in one of these three Not only are we losing our share of this atically informing ourselves of how they
fields. And there are some stirring sue- market to other exporters, we are losing will affect our interests in development.
cess stories to tell as a result. in absolute dollar volume of sales. Amer- This bill institutionalizes a coordinating
One story is about malaria. Twenty ican exports to these markets are de- procedure that would insure that the
years ago, well over 10 million people in pendent on U.S. Government financing, development factor was always consid-
South Asia alone were afflicted with the mostly AID and Public Law 480. The erect. That factor may not predominate.
disease. More than 1 million died each Export-Import Bank and private loans but at least it has to be heard.
year. Today the disease is under control. are not very large. This is not surpris- In order to do this, the bill sets up a
Another success story is about cereal ing, since these countries cannot afford Development Coordinating Committee
production in South Asia. Seven years to import except on easily repayable and makes as its chairman, the head of
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S 11570 CONGRESSIONAL RECORD - SENATE June 20, 197:"
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 on 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. qt.
course in world affairs in which we can
ain lift our heads and be proud. And
ag-
in my view, it will justly deserve and
receive the support of the people of
America and the Congress.
Mr. 'President, I ask unanimous cony
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
13e it enacted by the Senate and !louse 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
Agericy".
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:
"(h) 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
relicct 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 tics 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 fpi' 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.
"SEC. 105. F?DUCATION 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 Paon-
LEMs.-The President is authorized to fur-
nish assistance on such terms 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 receipieut 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 until
expended.
'SEC. 108. APPLICATION OF EXISTING PROVI-
sions.-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 any 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
SEC. 4. Section 203 of chapter 2 of part I of
the Foreign Assistance Act of 1961 is amended
as follows:
(a) Strike out "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 POSI'iTONS
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.-(a) The Presi-
dent shall establish a system for coordination
of United States policies and programs which
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'hole 20, 1973 CONGRESSIONAL RECORD- SENATE
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
hihn with respect to coordination of United
States' policies and programs affecting the
development of the developing countries. in-
cluding programs of bilateral and multiiat-
eral development assistance. The Committee
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.
"(h) 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
"SEc. 801. GENERAL AuTIIORITY,-(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, tlhe'
President shall establish a fund, to be known
as 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
snail 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.
"! ) The receipts and disbursements of the
lie discharge of its functions shall
-,d for purposes of the budget of the
,1 States Government in the same
..::'.Ilion as the receipts and disbursements of
tike Export-Import Bank of the United States
ender section 2(a) (2) of the Export-Import
Bank Act of 1945, as amended.
"SEC. 802. FINANCING.-(a) 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
tte 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.thc
United States of'America is hereby pledged
to the 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 issued 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 repair: 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.
"SEC. 803. LENDING CEILING AND TERMINA-
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 amount 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
acquiring 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 df 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.-The
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.
"SlI c. 805. ADMINISTRATION. OF FUND.-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 Conh-
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.
"SEO. 806. PROVISION FOR LossEs.-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.
"SEC. 807. EXPORT-IMPORT BANK POwVERS: -
Nothing in this part shall he construed as a
limitation on the powers of the Export-Im-
port Bank of the United States.
"SEC. 808. PsomsiarrION 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.
"SEC. 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 TILE AIU-
TUAL DEVELOPMENT AND COOPERATION ACT
or 1973
1. 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-
visions relating to development assistance
and by adding a separate authority for a
fluid to finance increased U.S. exports to the
lowest income countries. It does not purport
to deal in a comprehensive way with all the
programs authorized by the Act.
IT. PROVISIONS OF THE 13ILL
Section 2. Mutual Development and Coopera-
tion Act
(a) This subsection changes the title of
the basic legislation authorizing the U.S.
bilateral foreign economic and military as-
sistance programs from "The Foreign As-
si:,tance Act of 1961" to "The Mutual Devel-
opment and Cooperation Act of 1973".
(b) This subsection changes the name of
the agency responsible for administering
U.S. bilateral foreign economic assistance
programs from the "Agency for Internatioli-
al Development" to the "Mutual Develop-
ment and Cooperation Agency".
Section 3. Policy; Development Assistance
Authorizations
(a) This subsection changes the name of
chapter 1 of the Act to reflect the fact that
the bill adds authorizations for various cate-
gories of development assistance to the ex-
isting provisions of the chapter, which relate
to policy.
(b) This subsection calls for the restruc-
turing of U.S. relationships with developing
countries, in the light of progress made and
changed conditions, to reflect the new real-
ities, with emphasis on several criteria:
(1) increased concentration of bilateral
assistance programs on sharing American
technical expertise, farm commodities, and
Industrial goods to meet critical development
problems, and less concentration on large-
scale capital transfers, which when made
should be in a multilateral framework;
(2) focus on problems in agriculture and
rural development, education, health, fam-
ily planning, and other areas affecting the
lives of the majority of the people In the
developing countries;
(3) maximum use of the private sector,
especially institutions with ties in develop-
ing areas, such as educational institutions,
cooperatives, credit unions, and voluntary
agencies;
(4) collaborative style of administering
U.S. bilateral development assistance pro-
grains to support recipient countries' own
development goals;
(5) highest priority for programs which
directly improve the lives of the poorest peo-
ple and their capacity to participate in de-
velopment;
(6) availability of bilateral development
assistance until multilateral agencies can
carry on with no loss of development mo-
roentum;
(7) responsibility on the Administrator
of the Mutual Development and Coopera-
tion Agency, under the Secretary of State's
policy guidance, for coordinating (though
not controlling) all U.S. activities relating
to overseas development, advising the Presi-
dent on all U.S. actions affecting develop-
ment, and informing the Congress on U.S.
interests in development progress.
(c) This subsection adds seven new sec-
tions (sections 103-109) to chapter I of the
Act, which together constitute a completely
new system of authorizing the appropria-
tion of funds for bilateral development as-
sistance. Whereas previous authorizations
have provided funds for Development Loans,
Technical Cooperation and Development
Grants, Alliance for Progress, and Programs
Relating to Population Growth, the bill au-
thorizes funds in five categories divided
The bill provides authorizations for the
five categories for the fiscal years 1974 and
1975 in a total amount essentially the same
as that proposed by the Executive Branch,
but with somewhat different distribution
among the five categories. Activities falling
into more than one category may be fund-
ed from one or more categories, as ap-
propriate. Funds are to be used in accord-
ance with existing provisions of law, but the
bill provides for somewhat greater trans-
ferability of funds among the five categories
than is now permitted among present fund-
Ing categories in the Act.
The seven now sections are the following:
Section 103, which authorizes the appro-
priation of $300 million for each of the fiscal
years 1974 and 1975 for agriculture, rural
development, and nutrition.
Section 104, which authorizes the appro-
priation of $150 million for each of the fiscal
years 1974 and 1975 for population planning
and health.
Section 105, which authorizes the appro-
priation of $115 million for each of the fiscal
years 1974 and 1975 for education, public
administration, and human resource devel-
opment.
Section 106, which authorizes the appro-
priation of $93 million for each of the fiscal
years 1974 and 1975 to help solve economic
and social development problems in fields
such as transportation and power, industry,
and urban development.
Section 107, which authorizes the appro-
priation of $60 million for each of the fiscal
years 1974 and 1975 to support the general
economy of selected countries, primarily
through program lending, or to contribute
to certain development programs conducted
by private organizations such as the Inter-
national Executive Service Corps (IESC), the
Asia Foundation, cooperatives, credit unions,
and voluntary agencies, or by international
organizations such as the Organization of
American States (OAS).
Section 108, which requires assistance au-
thorized under this chapter to be furnished
in accordance with the provisions of law ap-
plicable to one of the categories of assistance
'now in the Act (Development Loans, Tech-
nical Cooperation and Development Grants,
Alliance for Progress, or Programs Relating to
Population Growth), and which assures that
the restrictions, criteria, authorities, and
other provisions of law which would have
applied to the provision of this assistance,
if the funding categories had not been re-
structured, are not rendered inapplicable as
a result of the restructuring.
Section 109, which provides for limited
transferability of funds among the five new
categories of assistance, permitting up to
15 per cent of the funds made available for
any of the five categories to be transferred
to any of the other four, provided that the
category to which the funds are transferred
is not thereby increased by more than 25
per cent (leaving transfers between any of
the five new categories and any other funds
appropriated under the Act to be governed
by an existing provision, Section 610 of the
Act) .
Section 4. Development Loan Fund
(a) This subsection amends the existing
loan receipt reuse authority of Section 203
of the Act to include dollar receipts from
loans made under all predecessor foreign as-
sistance legislation.
(b) This subsection extends the loan re-
ceipt reuse authority to fiscal years 1974 and
1975 and authorizes reuse for the restruc-
tured categories of development assistance
contained in the bill as well as for specified
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 it new section
640B 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. exports 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-
mission 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.
pr.... :u..y .w~v.u...S - -- - -....,. ate- Development Credit Fund created by the of Fund) Food and Nutrition, ? Population Section 805 (administration ) re-
Planning andApOro"ldf~ff Re1fse '0m 9 ~,~~ ~ P% 4P5R0(9A ffM20 ' e t to establish cr adesoof
man Resource De lopment, Selected Devel. Rd e z c s st ng of the Secretaries of
opment Problems, and Selected Countries (a) This subsection. puts the United Commerce, Treasury, and State; the Presi-
and Organizations. . States Export Development Credit Fund on dent of the Export-Import Bank; and the
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June 20, 1973
CONGRESSIONAL RECORD - SENATE S 1 573
Adininistrator of. the Mutual Developmentand 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 underforeign assistance legislation may also be used for that purpose. Any amounts bor-
rowed from the reserve would eventually to be repaid, and foreign assistance re- , 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 inthe amount of the loans written or 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 809 (definitions) defines "lowest income countries" as the poorer developing countries with special reference to coun-
tries where national product per capita is tinder $200 a year. Section 7. References to Existing Act and Administering Agency This section assures that the change of title of the Act to "Mutual Development and Cooperation Act of 1973" and of the name of the administering agency to "Mu-- teal Development and Cooperation Agency" will not affect existing or future references to either. May 30, 1973. Mr. HUMPHREY. Mr. 'President, the Development and Cooperation 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, andMr. David Rockefeller, along with two articles in the Christian Science Monitor and one editorial in the New York Times printed at this point in the RECORD. There being no objection, the material ordered to be printed in the RECORD, as follows:STATEMENT OF ORVILLE L. FREEMAN'S Mr. Chairman and Members of the Com-
mittee: First I would like to congratulate Committee for the proposals under dis-
cussion today. In my opinion, they represent kind of bold new approach to foreignassistance necessary both for the develop- meat of the world's less developed nations, and ultimately for the benefit of all na-
tions, rich and poor. PROPOSED EXPORT DEVELOPMENT CREDIT FUND evidence indicates that the "United States is rapidly losing ground to developed nations in the supplying of to the world's poorest nations-thosewith per capita Incomes below $200. In many cases the reason for our lagging position Is our inability to produce the needed goods at competitive prices, but our failure to offer the goods on terms commensurate the ability of the poorest nations to pay. While the Export-Import Bank, which provides credit on only slightly concession-
ary terms, has provided powerful encourage-
meat for American exports to those nations
with incomes above $200, it has had little
impact on sales to the lowest income lra-
Lions. By contrast, Europe and Japan have
their level of conces-
continually increased
sionary financing for the poorer countries.
As
to compete effectively for this growing
market, , which includes about 60 percent of
the world's s people.
wish to express my emphatic
Therefore I
support for the proposed Export Develop-
Credit Fund. This Fund, if estab-
meat
lished
permit the poor countries.
mean tens of thousands of new
This would
jf~bs for American workers. Al the same time
the goods and machinery we can supply
serve as a catalyst for sustained eco-
`could
in many poor nations.
nomic growth
This
in the poor nations can be viewed
as a worthy goal in itself. However, a genera-
eco-
tion of experience also indicates that
can
nomic progress in developing nations
to a future rapid growth in exports
lead
from the more advanced nations. The eco-
nomic mic development which today's financed
can help promote, then, can provide
exports
escalating future benefits both for the poor
for the United States.
countries and
with Public
Our 18 years of experience
Law 480, the legislation which enabled us
farm products to low income coun-
to export
on concessional terms, is instructive in
tries
considering this s legislation. That legislation
had two important objectives:
countries, helping them buy
time with which to modernize their own
agricultural economies. A large number of
these countries have been remarkably suc-
cessful
for food aid over the past
six or eight years.
An important by-product of PL 480 was
of dollar markets for U.S.
the development
farm exports as various developing countries
acquired a capability for commercial irn-
ports. Fortunately for our balance of pay-
meats, U.S. commercial exports of farm
products are soaring, climbing from tinder
to an estimated $11 bil-
$5 billion in 1965
lion in n the fiscal year ending this month.
Law 480 exports meanwhile have de-
Public
hled from $1.32 billion to about $1 bil-
clined
lion.
Countries which became accustomed to us-
log U.S. farm products when they were avail-
coilcessional terms continued to
able under
use them as they switched to commercial
purchases. U.S. exporters also facilitate continu-
ing purchases of U.S. .S. farm products.
, what is being proposed in this
In effect
a program to develop conces
legislation is
sional markets for U.S. where we are losing out to other
industrial exporters. . Those countries where
are below $200 contain a majority of
incomes
's people. Someday they will con-
the world's
a large and lucrative market for our
stitute
exports, , as do a number of the richer devel-
ay. If we can establish
oping countries today.
ourselves as suppliers during the early stages
, then we will have
of economic development
to remain as suppliers in
an opportunity
the e future when markets will be far more
than they are today.
lucrative
we are to ensure the participation of
If
American merican producers in the future growth of
countries, we must act now
the developing
to build the healthy trading relationships
that are needed. Business experience indi-
ing which would be provided by the pr,~posed
Export Development Credit Fund would be
an Important stop 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 see 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 Amer-
ican exports to developing nations which the
Export Development Credit Fund could pro-
vide, our potential future role in many 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.
Finally 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
to opportunity this proposed Fund provides
to bolster our future trading position among
such a large number of countries.
Our mutual interest in agricultural develop-
7nent
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. H. 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-Salia.ran 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.
are those of thew o }~~q~s zQ~( 1~n Z p ces in our own super-
msarily represent thou of dB itsi~ness In et ina witSAln~ c~ilctltibtai'CepF~rlYlade many Americans
tional Corporation, or others of its Directors, ducer familiarity with the particular needs aware for the first time of tile inexorable
oliicers, or staff. of the buying country. The soft-term finane- logic of supply and demand. The new.,, media
 "r"
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h ve correctly pointed to several factors, in-
c:iuding poor harvests in Asia and the Soviet
Union, the disappearance of the anchoveta
oft the coast of Peru, and bad weather in the
iiaiLed States, as contributing to the current
,;iiort supply of important food commodities.
11; is my feeling, however, that these short-
tcrm factors may be diverting our attention
from some more fundamental Monger 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
rood-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 emergenSls
of 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-
Iuand 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.
't'ile 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-
coctly to meet minimum energy needs. Lit-
tle 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
ludirectly, 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-
lest cereals. The remainder is consumed in-
directly in the form of meat, gmilk and eggs.
'Che i,nrt an ~averludi Fldr'Cti' dt'iLrr "W
live times those of the average Indian,
jNiigerian or Colombian.
There is now a northern tier of industrial est of the United States to aid the develop-
countries-be;;inning with Ireland and Brit- ment of agriculture in the developing world.
ain in the West and Including Scandinavia, SMALLER FAMILIES THROUGH SOCIAL PROGRESS
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
1940. 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 is 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 feedgrains 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 belts
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. nice 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-
solves from world scarcity, the situation could
arise where famine and misery take a growing
toll in many poor countries while we in the
United Stater 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-
piles of non-food resources, including energy
Another important factor in the world food
situation is of course population growth.
Slowing rapid population growth will serve
the development interests of the poor coun-
tries, and will also serve the interests 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 birth rates do not
usually decline voluntarily in the absence of
a minimal level of social amenidies, 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, has proven that this is not
necessarily the case. Several Asian countries
have combined rapid economic growth 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 TIIE NEW "PROBLEM
SOLVING" APPROACII
I would like to end my testimony by corn-
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 pier^.onal experi-
ence that a major international effort in a
particular problem area can have dramatical-
ly beneficial consequences. During the mid-
1960's, when I was serving as Secretary of
Agriculture, widespread famine in the near
future in major parts of Asia was seen as P.
real possibility. For many it appeared to be a
certainty. A concerted effort by many in both
the developed and the less developed nations,
however, resulted in the rapid development
{ir_?a=t W J4} "off/} ~~ iigh-yielding varieties of
~g~ fit ciblt `O lick has become known as
world, our own standard of living would suf- the Green Revolution. While the Green Revo-
fer. Clearly, therefore, it is in the self-inter- lution has obviously not been true final an.
 Approved For Relee 2005/09/29 : CIA-RDP80BO1495ROOQ0020014-3
June 20, 1973 CONGRESSIONAL RECORD - SENATE
swcr to the world's food problems, it has nomic and social progress to maintain their met in seeking to answer the question:
enabled several Asian nations to achieve pre- political viability. "Where next with development assistance?"
viously undreamed of levels of grain produc- "Mutual Development and Cooperation" The global community now knows from the
Lion. It has been an essential means of buy- may be a headline writer's nightmare, but it experience of the 1960s how to achieve in-
ing time with which to slow population is a good shorthand way of describing a re- creases in national product when it has the
itrowth and further develop agricultural po- lationship In which the U.S. perceives a di- will to devote international and national
teatial. it is an impressive example of man's rect self-interest in the success of the de- resources to the task. However, to continue
ability to confront successfully a problem of velopment efforts of the low-income coun- to measure development by GNP increases
seemingly super-human proportions, tries. It is also a more suitable clharacteriza- alone is to forget that, after all, the goal is
Such dramatic breakthroughs may not tion of it style of administering development human progress. Development must now be
occur in all of the problem areas specified in assistance which looks to the developing seen as encompassing the minimum human
Lho proposed legislation. Nevertheless, the country to take the lead in setting its own needs of man for food, health and educa-
focusing of energies and purpose on these key goals and planning development activities. tion, and for a job which can give him both
issues holds the promise of greater progress REDIRECTION OF BILATERAL DEVELOPMENT the means to acquire these basic needs as
than the less concentrated approach of the ASSISTANCE well as the psychological sense of participat-
The Committee members have taken a very ing usefully in the world around hint. Last
past has yielded. February in New Delhi, a wise and perceptive
in;lportan? and constructive step in increas- Thai set forth the aspirations of Asian man
-
STATEMENT OF DJAMES 1. EVELOPMENT COUNCIL, G CILPRESIDENT, ing and sharpening the focus of the now
OVP;RSEA5 DEVVELOP, BEFORE as seen through his " cycle from the womb
ram diminished bilateral assistance pro- to the the grave. . His "Ode of a Developing Coun
TIIE HOUSE FOREIGN AFFAIRS COMMITTEE, gram on acute problem areas, and in emplh-
JUNE 12, 1973 sizing especially the importance of assisting try Man" (Annex A) is a most expressive
description of the meaning of development.
Mr. Chairman and Members of the Com- developing countries in programs and proj- dways of achieving this
ity We need develop e concept of ways of achie ag sacs
mittee: I appreciate the invitation to testify - ects which will benefit the poorest major We need to
before this Committee. The proposals made of the people in these countries and which broadened did the global community in -
- in c-
by a bipartisan majority of the Commit- will enable them to participate more effec- celerating as ing growth the global c mm the past a
tee for increasing the effectiveness of U.S. tively in the development process. years.
assistance to developing countries and to The circumstances surrounding bilateral Fortuuatel experience in a number of
establish a new credit facility for expanding development assistance have changed dra- y, ep past 10 years off
our exports to the one billion people who matically In the past 10 years. In the early poor countries during x evidence that as ef-
Africa, in the lowest income countries of Asia, 1960s, not only was bilateral development aid fors some atel encouraging
Africa, and Latin America are possibly the larger both in absolute amounts and in pur- fective combination of domestic as well as
most far-reaching and important of any chasing power, but it also was a much larger international policies can simultaneously
broadly supported Congressional initiative in proportion of the total foreign exchange create new jobs, increase access to health and
this field since the launching of the Marshall available to low-income countries. Now, how- educational services, improve nutrition, re-
Plan 25 years ago. I will address separately ever, the developing countries (excluding duce income disparities, and check popula-
each of the four major proposals in the bill, major oil exporters) have more than doubled tion growth. The possibility is best illu:+trated
their earnings from exports of goods and serv- in East Asia, by countries with very different
NEW NAME AND TITLE ices, to over $50 billion annually in 1972. At political and economic systems; namely, the
Changing the title of the legislation to the the same time the private investment and aid experience of post-1960 China on one side
Mutual Development Cooperation Act and flows from other developed countries have - of the ideological barrier, and the experience
the name of the administering agency to the increased from approximately $4 billion to of South Korea, Taiwan, and the city-states
Mutual Development and Cooperation over $11 billion, and multilateral financial of Hong Kong and Singapore on the other.
Agency would make them reflect more accu- institutions have assumed a much greater Contrary to a common assumption of the
rately the true nature of the relationship now role in transferring? resources. Thus the di- 1950s and 1960s, the development record of
emerging between the United States and the minished amount now available for bilateral these countries indicates that policies that
developing countries. As detailed in the Over- development aid-some $1 billion-has a enhance social equity need not deter overall
seas Development Council's recent publica- much diminished role both in transferring economic growth-and that many such poli-
Lion The United - States and the Developing resources generally and in financing major cies can even speed it tip. Thus, in the small-
World: Agenda for Action (February 1973), capital projects. er East Asian countries just mentioned,
international politics and power relation- Over the same 10 years, the global develop- growth rates over the past decade have aver-
ehips are changing, with security concerns ment effort has had remarkable success in aged an impressive 10 per cent annually. But
giving way to economic issues among na- increasing the rate of growth in national in addition, the income, health, and educa-
tions. This change will require the United product. During the 1960s, the developing tion of the bottom half of the population has
States and other rich nations to pay greater countries average a 5.5 percent increase in improved greatly, the disparity between the
attention to the needs and desires of many GNP-a rate of growth unequalled by the income controlled by the upper and bottom
developing countries than ever before---for rich countries at a comparable stage of their 20 per cent of the population has been re-
reasons of morality, self-interest, and the de- development. A number of developing coun- duced, birth rates have dropped sharply, and
velopment of effective international insti- tries have experienced very substantial ece- the dependence of these countries on foreign
tutions, which we in the United States in nomic growth, attaining GNP growth rates of aid has either ended, or, as in South Korea,
partclular require. 10 per cent or even higher. Some low-income has been greatly reduced. All of these coun-
Development can he a mutually beneficial agricultural societies have been transformed tries have found a way to increase the ability
process both for the low-income countries into industrializing; economies in amazingly of the average worker to participate effec-
in need of outside resources and for the out- short periods, and others are following suit. tively in the development process, thereby
side countries supplying those resources. Exports of manufactured goods have shown helping both the individual and his society.
This is increasingly true as the world grows dynamism; for the developing countries as a This has required not only favoring; use of
more interdpendent and as all countries rely whole, they have been increasing rapidly and plentiful labor over scarce capital-intensive
more on international cooperative efforts to now account for 23 per cent of their total equipment, but also providing the incentives
solve their problems'-and to achieve their world exports. and merclianisms to encourage savings, es-
national goals. For example, improving the Yet unemployment levels in many develop- tablishing or supporting institutions to give
small far
U.S. balance of payments and increasing do- lug countries are still increasing, some even farmers and entrepreneurs ready ae
mestic employment are two goals that do- exceeding those of our own Great Depres- cess to capital and technology, and ensuring
the availability
bend on reform of the international trade sion; the income gap between the poorest of rudimentary but meau-
1 ingful educational and health services for
and monetary systems; in both instances, co- half of the population and those well-off is virtually all. Through such policies, these
operation by developing countries will im- actually widening; the bottom two-thirds of countries have made social justice a major
prove the prospects for success. The ability, the population still have no meaningful ac- ally of growth. The acceleration of growth
and willingness, of developing countries to cess to health facilities; a majority of the through full employment should not sur-
cooperate in these areas is likely to be greater rural population are illiterate; and urban prise us, as it not only means that more
if they are making progress toward achieving settlements are mushrooming because of people have a stake in society, but that
their national development goals and we are massive rural migration. In many areas, these national output is increased by putting idle
assisting in the process. Similarly, our grow- problems become less manageable every day labor resources to work, and that scarce
big need for relatively assured access to their because population growth continues unre- capital and foreign exchange are used more
faw materials frequently requires both im- strained. Finally, If the debt burden that has efficiently. Elsewhere, countries as different
provcments in their Infrastructure to per- built up in a number of major, very low-in- as Israel, Ceylon, and Yugoslavia have dealt
mit physical access and their continued eco- come countries continues to accuuntlate, it effectively with some of the problems dis-
will become insupportable. This situation has cussed here?
led some people to throw up their hands in
*The views expr it LIAPt e ltne a c~es11W~D~jW~jjrr,~SS~~ o $$~Ci~yp~ef~`
i,liose o of the witn ~S'rrxheFll~i'l~t1bO1lidk"1 fi0 ROOAcearailv2~t&t3general discussion of
represent those of the Overseas Development state that development is aggravating global these new policies Is in Development Rccon-
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 (1972).
 Approved For Relea2005/09/29 : CIA-RDP80B01495R000500020014-3
x ~7 CONGRESSIONAL RECORD - SENATE June -'0,
'There also is important Ilew evidence that this Committee's Initiative to address this Japan and the recently enlarged European
it an increasing number of poor countries, range of problems in the rural sector of Community (including the U.K.). These ex-
birtli rates have dropped sharply despite China, when it authorized the Sino-Ameri- 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
laic lack or relative newness of family plan- tion (with its unique collaborative style of 3 facts become apparent if one examines the
ring programs. The common factor in these Chinese and 2 American Commissioners), and statistics on U.S. exports to those develop-
eunntries of Latin America and Asia is that required earmarking of a certain proportion ing countries with the very lowest annual
tlie majority of the population has shared of the funds for its use. I acted as the Com- 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-
ieant national progress to a far greater do- on the mainland, and again later, briefly, in scriptive material released at the press con-
t;ree than in most poor countries-or in most Taiwan. That early Congressional initiative Terence on this bill:
Western countries during their comparable contributed greatly to the subsequent unique First, total U.S. exports to the lowest
ls'riod of development (see Annex B). This combination of accelerated growth and great. income category of developing countries are
evidence demosistates that appropriate poll- ly increased social justice in rural Taiwan, not expanding, but actually decreasing. With
ties for making 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
p;roups in poor countries contribute signif- tries to which considerable discretionary au- 10 per cent of our exports to developing
icantly` toward the motivation for smalleyr. 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- their ex orts to these lowest income coun-
creasingly clear that if the developing coon- The current bill recognizes that the ac- p
tries are to escape the threat posed by rapid tions taken by the United States in such tries along with expanding their aid to these
population growth within an acceptable time fields as import policies, export promotion, countries.
frame, more families must acquire the moti- international monetary policy, environmental Third, American exports to these countries
vation to limit births, not only be provided protection, and a regime for the oceans may are heavily dependent on U.S. Government ii-
with be more important to some developing coun- nancing, which is not increasin ?;.
improved means to do so. Fourth, very little of the financing the 1970s, development planners need tries than our actions o aid. rightly pro- Y 6 for the
to give far more attention that heretofore vides that whenever the United States forma- lowest income countries, approximately $100
fates policies on such subjects, the decision- million in 1972, comes from the Export-Im-
to the effect of alternative development making process should also take into account port Bank-most comes from A.I.D. and PL
strategies on birth rates. Equally important, the effects on the important U.S. interests 480, which are decreasing. This contrasts
the population crisis must be dealt with in in advancing the progress of low-income sharply with the financing pattern for our
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 all major tools affecting the U.S. interest in tries for which the slightly concessional Ex-
poverty, thereby creating the needed motiva- development is not in operation today de- Im terns are suitable, and where its loans
tinn for smaller families. Combining policies spite the fact that President Nixon publicly and medium-term guarantees have increased
Chic 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
laaion 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 possible to stabilize popula- multilateral mechanisms. A.I.D., the U.S. able on sufficiently concessional terms. Hence
Lion in developing countries much faster than agency with the greatest expertise in the de- the idea of a Fund to make credits available
reliance on either approach alone. velopment 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.
cnulbinations of trade, investment, and aid. The need for better coordination was - 1. Where is the line between caLfort credits
Dior is it an accident that the major innova- identified by Edwin Martin, Chairman of and development loans? There is no easy
lions 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 clear, 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 q
tiie programs such as comprehensive rural . agency countries, the development assistance concessional
avalla component, which not pres-
development in Korea and, in particular, agency that is most knowledgeable about de- ently ntly available for American exporters.
Taiwan; the "Green Revolution:" the ax_ velopment matters is not represented in such There is a modest subsidy component in
traordinary spread of public health measures policy decisions-and often is not even di- Export-Import loans, which are usually at
as exemplified by malaria eradication; and rectly involved in all aid decisions. He called a Late lower than that at which lox-Im Bank
the acecptance of the need for large-scale upon governments to correct this anomaly, borrows on the market, with the interest
family planning programs. The coordination proposals in this bill differential being made up from other in-
should meet this need to increase the effec- come available to Ex-Im Batik, There ob-
Time bilateral development aid requested by tiveness of U.S. policy decisions and ex-
the Administration and supported by the pendituies in this important field.
proposed bill is a relative drop in tile.- bucket typical is a large concessional element in the
IDA loan, and a still large but some-
when contrasted with the total needs of the EXPORT D' viLOPMENT CREDIT FUND what smaller element in A.I.D.'s concessional
developing countries (excluding major oil ex- The bill establishes an Export Develop- loans, which are on harder tools-'
porters) for more than $70 billion of foreign ment Credit Fund to make credits available In the United States, Ex-Im 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
iuarily on the critical specific problems of come brackets. The Fund could mean a has extended repayment periods and followed
development (and. particularly on helping major breakthrough for American exports flexible rules. For instance, direct loans by
the poor majority to participate more ef- to a potentially major market and should Ex-Im Bank in FY 1970 for conventional
festively in the development process), this also prove useful to the lowest income coun- electrical equipment had maturities ranging
amount can be of great significance. Press- tries. Quite apart from our long neglect of from 5f/a 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 fl-
of the World, and A.I.D. 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 elements 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 concesslonal 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-
I might add that my personal involvement also increases funds for financing our ex- tries-such as Canada, Germany, .japan, and
with these hard-core development problems ports-thereby creating markets for the im- France-promote exports to lowest income
began some 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, u&ing 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 develo ed count the terms,,an q Qnditions of commercial
graph No. 7, O)&y~G @' DP s1R1 a 0@/12%lie0l l 6Wdh( r1.0OO5OO0a~Q1d1 3
N p to reduce the rate of
(1973). nearly the same: as our combined exports to interest.
 Approved For ReIe 2005/09/29 : CIA-RDP80BO1495R000500020014-3
June 20, 1973 CONGRESSIONAL RECORD -SENATE.
A recent study 3 examining the Interact ion
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 USAID 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
Nuance 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 A.I,D.
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 concesslonal 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 sonic 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 he 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 a contributory factor, but it
S' 11 577
must be remembered' that this factor did not export promotion. Insofar as bilateral aid to
prevent our exports to the more advanced de- be administered by MDCA is concerned, that
veloping countries from rising rapidly. An- is already largely tied and this does nothing
other factor has been that the tied aid of to tie it further.
other countries to these lowest-income coup- 6. Since developing countries are already
tries has been rising while ours has been saddled with a heavy debt burden, Will lend-
failing. Although we do not have comprehen- ing'them more increase theft problems? Of
sive statistics, there is a great deal of mate- course, compared with a grant, any loan is
rlal in the form of known cases of bids lost hard. As a supporter of development, I hope
because of lack of competitive financing. U.S. that an increasing flow of grant funds will
exporters with whom I have talked in recent be. made available. But it is not reasonable
weeks believe that the lack of suitable financ- to suppose that all low-income country im-
ing is a very important factor in the situa- ports could be financed with grants. Some
tion. Many of them point out that exports must be paid for with cash (the hardest
are often lost because Americans do not form of import), and some with commercial
bother to bid-believing that they cannot loans and investments. The Fund would add
win because of inadequately competitive a new dimension between grants and com-
financing. mercial credits. Assuming the imports it fi-
Whatever the history and causes of our nances are of the developmental character
poor export performance to this category of required in the bill and are used productive-
bountries, I think there are two reasons to ly, they should Improve the ability of the
expect that more attractive financing would importing country to manage its debt bur-
help. First, if a line of credit were extended den.
by the Fund to the government of country A In this connection, the question has been
for a particular purpose, such as imports of raised whether these loans will ever be re-
electrical equipment or heavy construction paid. Our experience with the developing
equipment, that government would have an countries is that they do repay their loans.
incentive to make sure that American ex- Occasionally they get into financial trouble
porters were given a fair opportunity to com- and have to ask for debt relief. But they do
pete for business. Otherwise, country A would not normally default on loans. Since the
fail to make use of a valuable resource, and Fund will be extending credit on terms that
in due course the line of credit would be the borrowers can more easily afford to pay,
withdrawn. Second, and much more critical, and for goods and services which strengthen
once it became known that there was a sub- the borrowers' economies, there should be
stantial line of credit available to country A fewer problems of need for debt relief than
for imports from the United States, there would be the case if these credits were not
would be an incentive for U.S. exporters to available or if they were only available on
pay more attention to that market. If this harder terms.
were to happen, some dramatic changes prob- 7. Will Fund-financed exports help de-
ably would take place. U.S. exporters might velopment? This is a critical question, since
be encouraged to send representatives to not all imports do help development. The
importing countries or to arrange, where war- proposed bill sensibly provides that the Fund
ranted, for a local resident representative to may only be used to finance goods that do
insure that they are notified of tenders to advance development. Stating that policy
bid, to secure copies of specifications for may be as far as the law should go, but in
them, and to represent their interests in administering the Fund, care would be re-
general. These basic preliminary steps can be quired to prevent low-utility exports from
very important in increasing U.S. exports on being financed. I believe that the Fund
commercial terms to a particular market on should have a flexible commodity eligibility
a long-run basis. test, designed to make certain that its ex-
Now that there has been a substantial de- ports-support development in the importing
valuation of the dollar, and that U.S. price country. Beyond that, there may be good
indices are trending upward at a slower pace reason for the Fund to verify that the im-
than those of our competitors, there is every, port and investment policies of the import-
reason to expect that American goods will ing country are such that Fund-financed ex-
be able to compete on price and quality for ports to that country have a reasonable pros-
these markets. This is precisely the right pect of being constructively used. Such tests
time for U.S. Government action to make should not lessen the Fund's usefulness as
sure that U.S. exports can compete on fi- a promoter of U.S. exports, since the range
nancing terms as well. of U.S. goods and services helpful to develop-
I hope that the Fund would be admin- ment is very broad and can range from
istered in such a way as to correct more than capital goals to individual raw materials, fer-
the deficiency in U.S. financial competitive- tilizer, and food.
ness. It should also aim to help provide U.S. In order to take these development con-
business with timely information and en- siderations Into account, the Fund should
couragement to seek sales in these markets, have some expertise in the development busi-
and it should analyze other obstacles to U.S. ness. In that connection, the Advisory Com-
exports and make appropriate recommenda- mittee established by the proposed bill
tions as to how they can be removed. should prove valuable, for wherever the
3. Will this create U.S. jobs? The Export- President might locate the Fund adminis-
Import Bank has done some calculations tratively, the Committee would ensure that
which show that each additional $12,500 of the extensive development experience ac-
exports creates one U.S. job. At that rate, cumulated by the U.S. Government was
if the Fund were to stimulate $1 billion of brought to bear on its decisions. The PL
exports each year, some 80,000 additional jobs 480 Inter-agency Committee has proven ex-
would be created. tremely valuable for this purpose with
4. Is this an unwarranted subsidy of U.S. respect to agricultural commodities.
business? It need not be, if properly admin- Despite the need for assessment of the clo-
istered. One object is to make U.S. exports velopmental impact of the U.S. goods and
competitive in financing terms. But they services financed, the Fund should remist the
must still meet the competition from Europe temptation to try to tell the importing coun-
and Japan on price and quality. And there try how to run its, internal affairs. For de-
is plenty of competition. In addition, It might veloping countries increasingly are evolving
prove useful for the Fund to provide a price ways of protecting themselves from wasteful
test prohibiting any exported under Fund and harmful investment decisions. In any
"The Bankers of the Rich and the Bank- financing from charging more for his exports case, the functions of the Fund could be
nrs of the Poor: The Role of Export Credit than for his domestic sales. jeopardized by overly zealous application of
in Development Finance," by Nathaniel Mc- 5. Is this moving in the direction of tying . rigid development criteria.
7iitterlck and B. Jer oFp,*W o. "aI egN gwzng fl!Q}{~ou/CfdIRO M01 -5Wm'95R7 o n of Anaerips ships?
ceDevelopment C ounc onogra n az is neit er a d nor in su e Mai y use of merican ships for cer-
(1072). st1tution of existing aid, but Is financing for tain commodities and certain desthrations
 Approved For Renea 2005/09/29: CIA-RDP80BO1495R0Q ,p0020014-3
CONGRESSIONAL RECORD -SENATE June 20, 197"",
array make U.S. exports sharply more expen-
r;ivo than they would otherwise be. To pre-
vent our exports from thus becoming uncom-
pei;itive, 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.
:drips and other cheaper ships, whenever that
dilcerence is a serious problem.
0. Which countries should be eligible? The
bill provides that lowest-income countries
with less than $200 per capita annual GNP
to be the main recipients of Fund credits,
are,
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 serviAe
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 any 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 Impartsocial values
to me.
When I leave school I want a job, a mean-
ingful one in which I can feel the satisfac-
tion of makin ; 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, to new agricultural
technology, and to markets, and a fair price
for my produce.
As a worker, I would want to have some
share, some 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.
1. 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)
Per capita
Percent
Life
Infant
mortality
Extent of
family
planning
programs
1970
1960
GNP
literacy
Death rate
expectancy
(1,000 birth:)
percent
ent i na
A
-
-------------
-
21
23.0
1 1, 068
91
8
67
5G
20.6
--
------------------
lg
------------------
Barbados
-------------------------------
21
30.0
523(1969)
92
28
465
42
__-----------
-----------------------
Si
ore
-
-
-
2 22
6 35.6
960
75
5
63
621
664.0
ncap
-
-
-------------------------------------------------
as
Unn
------
-
-----
-
-
22
24.0
833
91
9
69
54
2 1.9
e
-
-
-
-
y--------------------------------------
idad-Toba
o
T
i
23
40.0
890
89
6
66
31
2 19. 6
g
r
n
-------------------
T
i
`
3 27
6 37.1
373
85
3 5
68
318
756.0
a
-------
wan ----------------------------------------------
Chi le-------------------------------------------------------
28
29
35.0
32
0
854
280
84
94
9
7
61
69
9,2
841
211.3
n.a.
Cuba----------------------------------------------------------
229
.
6 35
1
169
75
8
62
S0 --------------
Sri Lanka----------------------------------------??---------
ea
th K
S
-
----
a 29
.
6 39. 3
258
71
810
58
00
7 30.0
ou
or
---
-------------------------------------------
C
sta Rica
--------------
---
33
48.0
539
84
7
65
P)
217.4
o
-
------------------------------------
ica
h
--------------
-
36
42.0
630
82
87
65
32
23.3
nia
-
----------------------------------------
13razil
----------------------
9 37
40.0
394
67
99
64
9.1
4
21.1
----------------
(.
-------
37
42.9
9 330
80
7
61
3
--------------
nyana_-_--_--------------------------------------------
iApt-----------------------------------------------_--------
3 37
6 44.2
296
28 26
317
3 16
53
50
3120
317'3
813.0
113.2
India_--------------------------------------------------------
3 10
63
875
0
613
Malaysia-------------------------------------------------------
T
k
------------------
3 38
3 39
6 41.1
641.0
355
257
43
46
3 13
54
3119
.
185.0
ur
ey --------------------------
l
u
V
------------------
41
46.0
1 931
76
7
67
46
26.2
enez
e
a ------ -----------------------------
M
i
-----------------
942
45.0
670
76
99
61
56
2 1.0
7
ex
co ---------------------------------------
il
d
il
---------------
3 42
644.2
174
68
3 9
56
G8
18.7
ia
an
- ---------------------------------------
C
l
bi
---------------
42-44
46.0
320
73
10
60
'
76
34.1
2
o
om
a----------------------------------------
P
------------------
'
9 43
41.0
246
74
9 10
IS
67
2.3
--------------
araguay-----------------------
P
-
----------------------
9 43
46.0
446
61
9 12
54
62
2.2
-
eru -------------------------------
'
l
i
t
-----------------
343
551.3
150
16
16
51
132
---___-------
a
s
(
an-------------------------------------
i
---------
44
44.0
203
40
19
50
lu8
NA
liol
vie-----------------------------------------------
I
d
----------
-
-
44
47.0
2G7
68
11
52
):a
21.8
7
cha
---------
--------
or-------------------------
-------
hili
i
3 44
s 46.6
266
72
3 10
55
3 18
8. 1
pp
P
oes------------------------??---- -_-------
-----------------
ador
1:1 S
l
-
9 41,
50.0
294
1
49
910
58
63
3
210.5
v,
a
v
-
----------------------------------
I
d
ia
-------------------
3 45
6 46.6
105
_
43
3 18
48
1.15
.8
1,
n
ones
----------------------------------
blic
i
i
R
9 42
49.0
356
65
9 14
58
77
6. 8
7
------------ ------------------------
can
epu
Dom
n
-------
3 49
6 50.1
211
14
,a 16
51
3 1%,9
4.0
Morocco------------------------------------------------
49-51
49.0
267
45
17
49
136
25.9
Konduras------- -------------------------------------- -?-----
Kenya--------- ----------------------------------- ------------
3 51
647.0
141
20-25
3 17
48
3 115
11 2. 2
I Income distribution in Argentina is better, and in Venezuela worse, than the average for Latin Sources: AID Economic Data Book, Latin America, Oct. 5, 1972. Selected Economic Data for
America; in Venezuela the poorer half of the population receives a smaller proportion of total the Less Developed Countries, AID, June 1972. Population Pro?rain Assistance, AID, December
income than any other country of the region. ECLA, Income Distribution in Latin America (U.N. 1971, p. 210. 1972 World Population Data Sheet, Population Relerence Bureau, Inc., Population
Publication Sales No. E. 71. 11. G. 2), pp. 41-61. table 19. Statistical Yearbook 1971, United Nations, p. 76. Data on percentages of accumulated
2 Accumulated acceptors as a percentage of women of fertile age, acceptors are from Benjamin Viel, M.D., "Family Planning in Latin America: The Past, Preent,
1971 data. and Future Role of IPFF," n.d., p. 8, prepared for the International Planned Parenthood; Fedora-
Average of male and female life expectancies, 1951-69. Von, Western Hemisphere Region, Inc. United Nat ohs Population Division, Working Paper No. 36,
6 Average 196065 data. "Estimates of Crude Birth Rates, C.rude Death Rates, and Expectations of Life at Birth, Regions
6 Acceptors as a percentage of married women, 15-44 yrs, in 1972. and Countries, 1950-65," February 1971. Agency for International Development, "Population
7 floors as a percentage of married women, 15- 44 yrs, in 1972, Program Assistance, Aid to Developing Countries by the United States, Other Nations, and Inter-
1968 data. national and Private Agencies," forthcoming (1972) issue. Dorothy Nortman, "Population and
oputation/Family Planning, Population
a~ ayff
1n : CIA-Rr~ jpg Oo(~ ~n -
1970 estimate.Al~rovpd Fpr Rene e ? p5/09/29
Acceptors as a p rcnlage o marne women, s, m ,p~yQrip
11 Users as a percentage of married women, 15 44 yrs, in 19711 -
 Approved For Rele 2005/09/29 : CIA-RDP80B01495R000500020014-3
June 20, 1973 CONGRESSIONAL RECORD - SENATE
lion, THOMAS It. MORGAN,
chairman, house Foreign Affairs Committee,
U.S. House of Representatives, Washing-
ton. D.C.
DEAR MR. CHAIRMAN: I regret that I am
not able to appear before your Committee to
testify in person on the encouraging initia-
tive taken by a majority of the mombers to
improve the effectiveness of U.S. support for
lie development of low-income countries.
Nevertheless, I do wish to associate myself
with this endeavor and give it my strong
endorsement.
I 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
lime 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
rio have an important effect on the develop-
iing 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-
mittee 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
iconic 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-
rional rates. Otherwise, U.S. exports to those
areas will continue to decline. As a consc-
quenco, the welfare of American workers also
S i579
However, any such objections are met by members of the House Foreign Affairs Com-
the injunction in the proposal that these mittee are to be commented for their crea-
credits be used for goods and services of a tivity and foresight in proposing a Inecha-
developnmental character so that over the nism which can simultaneously contribute to
extended period of repayment the credits will our need for significantly increased exports
more than increase the ability of recipients and to help accelerate the development of
to meet these obligation. Properly adminis- the lowest income countries.
tered, there is no reason the Fund cannot I also applaud the Committee's der.irc to
improve American exports and at the same have an improved system of coordination for
time significantly p.omote the development United States policies and programs which
of the low-income countries. affect our interests in the development of the
In closing, I would like to say how im- low income countries. This need for improved
pressed I am with this farsighted Initiative coordination has been noted in the past and
which reflects the realities of the future still remains largely unmet. This principle
rather than the outworn dogmas of the past. Is a commendable one at a time when we
Sincerely, must consider the totality of U.S. actions
DOUGLAS DILLON. affecting the developing countries.
Sincerely,
Iron. 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, pa -ticularly 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 planninSuch 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 The new House proposal agrees with the
borrowing authority would have been more Nixon administration's foreign assistance
debatable ten years ago. However, there now bill, now before Congress, that $1 billion
is available from repayments and interest on to bilateral economic
existing aid loans a growing stream of funds should beginning atral July 1.
that can be used to cover the difference be- aid l ld This fiscal iscal allocated l billion is 1974, from military tween the interest the Fund must pay on its the White House. Also
as-
borrowings and the lower rate of interest it sistance separate is the proposed is
administration's pheratio to request e. for
will receive on its credits. If that differ- $600 million for reconstruction work in
once had had to to be e met from annual appropria- Asia.
tions I would have doubts; but given the Southeast Sponsors hea of the House measure, headed
availability of receipts from earlier loans, I
believe public debt authority is a sound pro- by Clement J. Zablocki (D) of Wisconsin,
cedure. do not seek changes in military aid or the
It is interesting to note that this same use Southeast Asia funds, but would channel
of borrowing authority and payments on the $1 billion of economic help into proj-
earlier aid loans was recommended by the eats for the very poor.
Peterson Task Force in 1970. In much the These are defined as "food, rural develop
same manner the Itxport-Import Bank sub- ment, and nutrition; population growth and
sidizes interest on its loans from Its invest- health; and education and human resources
meat income. development."
I am concerned, however, that the defint- "Projects," says a statement by the House
tion of "lowest income countries" not be so sponsors, "would be selected which most
interpreted as to e?clude the poorest coun- directly benefit the poorest majority of the
tries in Latin America. I am particularly people in these countries. . . .
anxious that countries such as Bolivia, Para- "We are learning," the statement adds,
deprived of American goods and services they gray, Haiti, and Honduras be eligible at this "that if the poorest majority can participate
can fruitfully use to advance their develop- time for credits on concesslonal terms since in development by having productive work
meat. they have difficulty meeting with normal and access to basic education, health care,
'life Committee may find some who will. commercial terms. and adequate diets, then increased economic
object to the propoApprQlbeetfc otsRe4easai2DD Y W2 cn miRRP8OBO1495 {? 032dt11jt--Yce can go band in
creating the Fund would increase the already trument for American exports to become I
heavy debt burden of the poorest countries, competitive In this: neglected market, The Experience shows that spurts of economic
[From the Christian Science Monitor, June 3,
19731
REDIRECTING FOREIGN AID TO POOREST Oi THE
Pools
(By Harry B. Ellis)
WASHINGTON.-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 often
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-
 Approved For ReIe : 2005/09129 : CIA-RDP80B01495R00Q Q0020014-3
CONGRESSIONAL RECORD -SENATE Jute 0, 1973
l;rowth in developing lands, spurred by in- standard Exinlbank terns. "In many cases,"
jections of foreign aid, often enrich a rela- states the House committee panel, "lack of
tively small class of people, but do not financing on competitive terms, rather than
"trickle down" to the very poor, price or quality, explains the U.S. inability
'the way that social and economic power to compete for this market."
ie shared in many Asian, African, and Latin Meanwhile, exports by Japan, Canada, West
American countries, experts concur, pre- Germany, Britain, and some other Western
vents newly developed wealth from being lands to developing countries grow faster
shared fairly between the urban elite and than those of the U.S., again partly because
the rural poor. of financing.
PROJECTS AIMED AT POOR Other nations, notes the House study, often
make it easy for
Countless millions of the latter, in the poor countries to borrow
S. McNamara, president of money. Trade flows in the wake of this bor-
words the of World Bank, Robert "lie beyond the reach of .,
traditional market forces and present public "This market of about 1 billion people
(low income countries, excluding Commu-
services." nist areas), whose gross national product has
How to reach them? Neither the WOrI,Fl- been increasing approximately 5 percent an-
Bank, nor the United States Government, nually, Is important at present and promises
nor any other donor, can order a power elite to grow more important in the future.
in a developing land to change its way of
doing business. NEW AGENCY PROPOSED
But a beginning can be made, note the "Europe and Japan," continues the House
house sponsors, if economic aid is aimed committee report, "apparently believe this
specifically at projects directly benefiting and offer vigorous and steadily increasing
the poor. government financing programs which help
'Pile problem of equity, or making the develop their markets in these countries.
"trickle down" work now is universally re- "If the United States wants to avoid fur-
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 TILE HOPPER
Separately the comet ittee majority pro-
poses to change the name of he existing
Foreign Assistance Act to "the Mutual Dc-
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 it soft-loan credit agency.
garded as a challenge facing every Indus- ther losses and perhaps increase its share [From the New York Times, June
1' d ation or a envy giving aid to in this market, there will have to be in- OVERHAULING AID
n
g
t
lla Ize
.
backward lands, creased government financing on terms that
Committees in both houses of Congress
Mr. McNamara, sketching the world at the compete." recent weeks to revise dras-
end of this century, foresees affluent West- At least 26 of the 40 members of the House have deafly President moved in recent s foreign assistance
cru countries enjoying average incomes per Foreign Affairs Committee believe this should ogr P which Chairman ul sista assistance
person in the range of $8,000, while some be done through the creation of a new Pre ram, ich Ch Relations Committee has
2.5 billion people in the developing world agency, the 1Jsport Development Credit Fund. dy dismissed as "a relic of the past."
may receive less than $200 each, and 80 These congressmen, including Clement J. alreaItdnos dismissed aa $2.9-billion aid request
million of these less than $100. Zablocki (D) of Wisconsin and several other is extravagant that the of this quest
So there is a double gap-between rich and Midwesterner:;, have introduced a bill to this try's ability pay terms
or the either edo of the less-
poor nations, and, within the poor lands, be- end. Their measure is offered in the form trydeveloped nations. or in the of th the less-
tween the power elite and the rural majority. Of amendments to the Foreign Assistance Act. event that the portion of the over-all aid
In all effort to keep the rich-poor nation. In addition to creating the new credit budget allocated to economic assistance-
cllasm from widening, the United Nations agency, the amending bill would focus $1
established as a reasonable principle that billion of U.S. economic aid, requested by $ 6esent billion-were a slippage ullin this y funded, it
country's orld
rich countries should give to poor ones 0.7 President Nixon for fiscal year 1974, on the rep helping the poorest people in the ready low position among donor nations in
percent of their gross national product projects aid as a percentage of gross national product.
(GNP). poorest lands. One basic trouble with the President's aid
Collectively, Mr. McNamara told the an- ABOUT 80,000 NEW JOBS? package is that it remains heavily oriented
Waal meeting of the World Bank in Washing- The proposed credit agency would, in the toward military and related assistance, a
ton last year, affluent nations are falling far view of its sponsors, "kill several birds with hangover from an era of politics that has be-
short of that standard, giving, on average, one stone" by enabling U.S. exporters to come increasingly obsolete with the progress
only half of 0.7 percent. compete in the poorest lands and extending of detente, the emergence of multipolar
The United States, whose aid as a per- credit that the latter could afford, world and the supposed windup of the Indo-
centage of GNP has declined steadily in re-' One result, the sponsors believe, would be china war. Much of the $1.31 billion re-
cent years, does even worse. By 1975, at the the creation of "an estimated 80,000 new quested by the President for military assist-
present rate, said Mr. McNamara, the U.S. U.S. jobs," through expansion of American ante is of doubtful utility either for the
is expected to share only 0.24 percent of its exports. United States or for its proposed recipients.
GNP with developing nations. The fund, which would operate at a level Ignoring the President's proposal3, the For-
of about $1 billion yearly, would, like the eign Relations Committee has approved a
[From the Christian Science Monitor, June Export-Import Bank, be authorized to borrow Fulbright-drafted military authorization bill
12, 19731 from the U.S. Treasury or the public. which would drastically reduce arms aid next
EASIER CREDIT TERMS PROPOSED: UNITED STATES This money would be borrowed by the year and would eliminate all military grant
EYES EXPORTS TO POOR LANDS fund at market interest rates. The fund then assistance over the next four years.
(By Harry B. Ellis) would finance U.S. exports to the poorest Equally sweeping and notably constructive
countries on competitive terms, perhaps 30 proposals on the economic side have been
WASIIINOToN.-Last year the United States years' maturity at 3 percent interest, with advanced by a 22-member majority of the
exported $16.3 billion worth of goods to de- 10 years of grace. House Foreign Affairs Committee. Setting
veloping countries, almost as much as the The gap between the fund's soft-term aside for the moment the $600 million ear-
U.S. sold to Japan and the enlarged Common loans and its harder term borrowing would marked for Southeast Asia, which raises spe-
Market combined. be covered by repayments of past foreign aid cial problems deserving close Congressional
Poor countries, in other words, now buy loans now flowing' into the Treasury. scrutiny, the House group has proposed that
about as much from the United States as 10 MARKET Recess WIDER the remaining $1 billion in economic assist-
o.l the world's richest lands together do. once be redirected to focus on the most
American taxpayers would not be shoulder- acute problems of the poorest nations: rural
But there is a curious skew to these sales ing an additional burden. U.S. businessmen
to the "third world," according to a majority would have access to wider markets and, in growoplnent, food and nutrition, population
of members of the House Foreign Affairs the process, new jobs would be created In the growth and health, education and human Committee, who hope to revamp the U.S. resources development.
United States. In addition, the Congressmen would es-
foreign aid program. Over a period of time, according to the bi- tablish a new $1-billion Export Development
Sales of American goods to the "richer" partisan proponents of the measure, aid- Credit Fund for the lowest income countries
developing lands, those with per capita an- recipient nations, as their economies grew, which would have the dual purpose of aiding
noel incomes above $200, indeed are growing. would tend to increase their purchases of development and stimulating United States
llut exports to the poorest countries, those American industrial goods. exports to nations accounting for one-third
with incomes below $200, are shrinking. The sponsors point to Taiwan as an exam- of the world's population.
A major reason is financing. The more pie. In 1960, they note, U.S. exports to that Although these and other new House pro-
affluent developing countries, like Mexico, island nation totaled $100 million, 90 per- posals mark a sharp departure from past aid
Brazil, Korea, and Taiwan, can afford to bor- yy~ i n C t,~IU~1ctices and the Administration's program,
row money t9 Drov f9pl Re4eaei 2 /1111 7ieMtE1 S~h@ tc~~}1 7 ~ Q effect, a i,llou?httlll elab-
the Export-Impbr Bank. million worth of goods to Taiwan, very little oration on recommendations made by it
11ANM TERMS TOO STEEP? of which was financed by U.S. credits on Presidential task force three years ago and
move in a direction Mr'. Nixon himself advo-
The poorest lands, including India, Pakis concessional terms,
_ . __,. .._... -- ~..-..-..,..~ ...,...^,e,. r.... a sa.. -1-7 1:11. to lnaf lY1n t.a l" fi, r.
 Approved For Rele .e 2005/09/29 : CIA-RDP80BO1495R0Q4500020014-3
1
June .?0, 1973 CONGRESSIONAL RECORD SENATE S 11581
If United states foreign aid is to serve rights; it will open the way for a veteran (1) by amending the last sentence of sec-
lJnited States interests and the cause of to take his case to court. tion ) by striking out the pound at
peace in the "radically different world" which Mr. President, I believe that this bill, the end d the) and inserting in lieu thereof
was noted in that Presidential message, Its the following: "; but any such decision is
purposes and structure should be radically if enacted, will go a long way to redress subject to judicial review as provided for in
revised along the imaginative lines that the the legitimate grievances of the young section 4010 of this title.";
two Congressional committees have begun to men who have served this country in its (2) by amending section 4004(b) by : trik-
chart. Armed Forces. ing out "When" and inserting the following:
Mr. President, I ask unanimous con- "Subject to an appeal under section 4010 of
11
h
I.y 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-
i!"11111 wo i1 VE4f+}'it11 (1341 Pay till ?}Glpl?'l y
ic,r the representation of a vatdr ,1 dlajiri,
An identical bill is being introduced in
the Rouse of Representatives by -Con-
gressmen EDWARD I. 1,1,ocir, 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 more
than $10 for legal services. This provi-
sion, purported to safeguard a veteran,
in effect denied him the services of coun-
en ,
sent that this bill be printed at this point this itle, w
in the RECORD. (3) by striking out paragraphs (3), (4), and
There being no objection, the bill was o of section 4005(d) and inserting the fol-
lowing:
ordered to be printed in the RECORD, "(3) Copies of the 'statement of the case'
as follows: 'prescribed in paragraph (1) of this subsec-
g. 2027
Be it enacted by the Senate and House of
Re'presen tatives of the Usrited States of
America in Congress assembled, That section
101(2) of title 38, United States Code, is
amended to read as follows:
"(2) The term `veteran' means a person
who served in the active military, naval, or
air service, and who was discharged or re-
le,ised therefrom other than by a discharge
imposed by a court-martial."
e` e.c! 2: (4) @liYleb ipt@r T of g111pt?1' 1 ag
ttitie 315, tf.:ited ots 69 C06a6 is ianar,paei by
inserting immediately after section 3005 the
following new section:
"I 3006. Treatment of claims
"(a) The Administrator shall provide to
any claimant for any benefit raider law ad-
ministered by the Veterans' Administrator a
list of such documentary information and
other evidence whieli the claimant will likely
need to support his claim.
"(b) If at any time after any claim is made
for any benefit, any officer or employee of the
-Veterans' Administration obtains from any
military department or agency any military
record, including health records, for the pur-
poses of determining eligibility for such
benefit, the Veterans' Administration shall
immediately nail a copy of that record to the
claimant or his representative.
"(c) In the administration of the provi-
sions of this title relating to benefits, any
claimant shall be presumed to be entitled to
the 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:
"fi 3006. Treatment of claims."
sel. This bill, therefore, would permit a SEc. 3. Section 3404 of title 38, United
veteran to pay an attorney up to $100 for States Code, is amended-
legal services rendered and, if the mat- (1) by amending subsection (a) thereof to
ter was the subject of an appeal decided read as follows:
In favor of the veteran, the bill further "(a) The Administrator shall recognize any
individual admitted to practice law before
provides that the Veterans' Administra- the highest court in any State or the District
Lion would be obliged to pay the attor- of Columbia to act as an agent or attorney in
ncy representing the veteran a reason- the preparation, presentation, or prosecution
able fee for services rendered as well as of any claim under laws administered by the
reimbursing the veteran the $100 first Veterans' Administration."
; (2) by striking out "section" in subsection
d b h
d
tion will be submitted to the Board of Vet-
erans' Appeals, to the claimant, and lo 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 Ills case as he deems apprepl'i tie N,c)tid-
log speauin ,tiils? ari0n8 of orfaf e,f 1504. to lhw.
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 case in the same
manner as is prescribed in section 400b. 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 suilicient
evidence of notice."
(5) by adding at the end thereof the fol-
lowing new section:
1
vancey M.
a
Admittedly, lawyers should be pre- (b) thereof and inserting in lieu thereof "? 4010. Judicial review
chapter"; and "(a) Any claimant who disagrees with the
stand par dof his a veteran of a exacting
3) by amending subsection (c) thereof to
taIltial part of hiS benefits by exacting ( decision of the Board of Veterans' Appeals
read as follows: with respect to his appeal may at any time
an exorbitant fee, but the $10 ceiling ef- ?(c) The Administrator shall determine before the sixtieth day after the date on
fectively denies a veteran the assistance and pay reasonable, fees to agents or attor- which the claimant has received notification
of counsel, and quite possibly, therefore, neys recognized under this chapter in allow- in writing of such decision file a petition
benefits. ed claims for monetary benefits under laws with the United States court of appeals for
I was outraged to learn that VA I`eguia- administered by the Veterans' Administra- the District of Columbia circuit or the cir-
tions prevent an attorney for a veteran Lion. Such reasonable fees shall not exceed cuit wherein such claimant resides for a ju-
from contacting a Member of Congress $100 with respect to any one claim except dicial review of such decision. A copy of the
for assistance -in handling a veteran's that in any case In which a claimant for petition shall he forthwith transmitted by
claim. The penalty for seeking such con- monetary benefits prevails upon an appeal the clerk of the Court to the Board. The
to the Board of Veterans' Appeals or upon Board thereupon shall file in the court the
gressional assistance is that the attorney review pursuant to section 4010 of this title, record of the proceedings on which the Board
can be investigated regarding his compe- the Administrator shall pay all reasonable based its decision, as provided in section 2112
teney to represent a claimant and he for- fees." of title 28.
feits his right to a fee. My bilMU Id~ ISQSE ~~qq r o t I c a ant applies to the court
correct this violati W%'J440 tl~a t@tk"Ai reidd B~ 6B'O 4~54W6Atal~k iU "el3itional evidence and