Evening star., 1957-04-21
Decisions. 1857: Our Foreign Aid Dilemma
BY MAX F. MILLIKAN

In each of the 10 years since
World War II the United States
has spent from So billion to So bill
lion on what is called foreign aid"
This has represented from to 10
per cent of total Government spend
ing and from ! to per cent of the
total value Of the output of our
country during the entire period.
1t is beginning to look as though
aid programs. originally regarded as
a temporary emergency device to
tide the world over a crisis. are on
the way to becoming a regular part
Of the United States budget which
might 60 on indefinitely.
Is this what the future holds. and
If so why? Have we so accustomed
the world to depending on this ex-
ira margin Of United States re-
sources that other countries are
now chronically unable to stand
on their own feet?
The first step in arriving at an
answer is to recognize that foreign
aid" has included not one program
but several, each with its own ra-
tionale. objectives and methods.
The Postwar Aid
Immediately after World War II.
as after World War /, there was an
urgent problem of direct relief of
the human suffering and destitu-
tion resulting from the conflict.
Our substantial contributions to the
United Nations Relief and Reha-
bilitation Administration were in
tended to feed and clothe people
until they could be put back at
productive work and to supply the
most urgently needed items to get
peacetime production going again.
This task was accomplished soon
after the war.
In 1947 it was recognized that
the failure to maintain industrial
investment in Europe during the
war, combined with the destruc-
ton Of plant and equipment. had
80 reduced the productivity of the
European countries that they faced
two serious problems Of recovery.
First, their output was so re-
duced that they needed almost all
of it simply to keep their people
alive, and had an inadequate mar
gin Of resources to devote to the
rebuilding of their factories. their
transport and their agriculture.
Second, until their economies were
rebuilt they could not produce the
exports to pay for the imports OF
machinery and equipment needed
for reconstruction.
The Marshall Plan was launched
In l947 in the hope that this vicious
circle could be broken by supplying
a margin Of capital from the United
States for a few years to get the
growth process started again.
This second foreign aid program
has now come to close for all
practical purposes. The principal
European economies are all now
maintaining out Of their own re-
sources rates of growth of output
Of from to 6 or 7 per cent per
year, equal to or greater than our
rate Of economic progress in the
United States.
For the European economies,
trade has already replaced aid.
Now they face new problems. II
they are to continue their current
rates Of growth, they will need an
ever-growing volume of imports
Of raw materials and foodstuffs,
and to pay for these they will have
TO find expanding markets for their
export industries.
Thus their future growth will
depend on the further development
Of liberal international trading
system. Our trade policies and our
aid policies to other areas viii
play role in determining their
future.
MiIitory Aid
For the last few years the bulk
Of our foreign aid expenditure has
been part Of what is logically a
different program. with a different
rationale and objectives.
AS the military power of the USSR