Evening star., 1955-02-28
Foreign Economic Policy

It is Of the utmost Importance to
world peace that the present Congress
give critical attention to several press
ing issues of foreign economic policy.
Prime among these issues is the prob
for Economic Development (SUNFED)
new plan for raising living standards
in underdeveloped areas by providing
grants-in-aid and low-interest loans
for nonself- -hquidating projects Chealth
and education). After several years
study of this plan, we should like to
make the following remarks:
First. in purely economic sense, the
plan has obvious imperfections. Even
with the help of the World Bank and
the U. N. Technical Assistance Board,
the cost for the International admin
istration Of the fund would be great.
Even greater might be the losses which
such grant-in-aid programs often en-
tail. Balanced against these evident
defects is the overwhelming need of
alleviating human suffering in this
area. Technical assistance alone is
inadequate to meet this need. Indeed.
technical assistance itself can hardly be
expected to become fully effective until
it is geared into such capital financing
as this plan provides.
Moreover, desirable as it might be,
1t seems most unrealistic that United
States private enterprise be expected
to saddle itself with investment in
Asia. The risk-with any sort of guar
antees-is too great. AS a small-busi-
ness man himself in deep sympathy
with the economic difficulties of Asia,
the present writer could nonetheless
not honestly guarantee q prospective
stockholder one nickel's investment in
that continent, even though he would
gladly pay a portion Of his compahy's
taxes for a really comprehensive pro-
gram of Asian relief.
But perhaps we shall be more realis-
tic when we regard Asian aid not pri-
marily as an economic but political
problem. The small fund asked for
SUNFED would not go far in mitigating
the poverty of the smallest of Asian
nations. What 1t would do is clearly
manifest our concern for Asian peoples
and our desire to work with them on
an equal footing in the U. N. This
could. in turn. build deeper sense of
"togetherness" in the free world which
bilateral aid programs will never
supply.
For some time the Communists have
been striving to create this all-im-
portant sense of interdependence and
mutual concern in their own sphere.
They have spent big money in China
and the satellites for industrialization,
with this purpose in mind Now Soviet
Russia is offering cheap loans to India
and Indonesia. With cheap production
by slave labor becoming more abun-
dant, Soviet Russia may be expected
to employ it's economic power increas-
ingly as an instrument of foreign pol
icy. Certainly in the face of this
strategy the United States could not
err far in encouraging greater sense
of mutual concern and dependence In
the free world.
Instead of pursuing this course, how
ever, the United States has sacrificed
considerable political prestige by twice
allowing itself to be represented in the
U. N. as the principal major nation
opposing SUNFED. We feel this policy
deserves the most critical attention Of
Congress. ae
Arthur ID. Pratt, jr.,
Executive Director, Foundation for
international Economic Develop
ment and Education. Inc.
Indianapolis, Ind.