For the

AGENCY FOR INTERNATIONAL DEVELOPMENT

PRESS

INFORMATION STAFF

AID-68-34

For Release: 4 P.M. Thursday, June 20, 1968

FOREIGN AID TODAY: FACTS AND FANCIES

ADDRESS BY THE HONORABLE WILLIAM S. GAUD, ADMINISTRATOR
AGENCY FOR INTERNATIONAL DEVELOPMENT, DEPARTMENT OF STATE
BEFORE THE

NATIONAL FOREIGN POLICY CONFERENCE FOR EDUCATION LEADERS
INTERNATIONAL CONFERENCE ROOM, DEPARTMENT OF STATE

June 20, 1968

Department of State
WASHINGTON, D.C. 20523

The United States has conducted a foreign aid program since
the end of World War II - a span that covers four Presidents,
11 Congresses and more than 20 years. Yet today a great
many Americans still have no clear or accurate picture of
what foreign aid is, how it works or why we provide it.

The biggest single misconception about the foreign aid program
is that we send money abroad. We don't. Foreign aid consists
of American equipment, raw materials, expert services and
food - all provided for specific development projects which we
ourselves review and approve. Ninety-six percent of A.I.D.
funds are spent directly in the United States to pay for these
things. Just last year some 4,000 American firms in 50 states
received $1.3 billion in A.I.D. funds for products supplied as
part of the foreign aid program.

A.I.D. funds also go to pay the salaries of American experts,
both those who work directly for the government and employees
of American labor unions, business firms, cooperatives and
universities that carry out technical assistance on contract with
the Agency. A.I.D. pays for the training of foreign nationals
in this country. Earlier this week we celebrated the

graduation of the 100,000th person to be trained in the United
States under A.I.D. financing. He is George S. G. Leone of
Brazil, who has just earned his master's degree in business
administration at the University of Southern California. Mr.
Leone is returning home to teach cost accounting and to organize
new curricula in public administration. Development is the
work of people - dedicated, skilled people; we give a lot of atten-
tion to their training.

Another widely held notion is that the foreign aid program sprawls
all over the world, that it is spread thin. The fact is that foreign
aid is concentrated. Of the program for this fiscal year, 87 per-
cent is scheduled for just 15 nations. Over four-fifths of all
development loans will go to eight countries. Three quarters of
all loans in Asia and Africa will go to just three countries - India,
Pakistan and Turkey: not many countries, but they contain half
the people whom American foreign aid seeks to help.

Many Americans are impatient that aid goes on for so long. They
have a hard time adjusting to the fact that we are working on a
long-term job. David Rockefeller, the President of the Chase
Manhattan Bank, points out that we are used to "instant coffee,

instant lawns, even instant money." We find it hard to realize
that there is no such thing as "instant development." Our ex-
perience with the Marshall Plan spoiled us. We could see to
the end of the Marshall Plan program almost as soon as it
started; Europe was back on its feet five years after our assist-
ance began.

But in today's development programs, we are not working to
rejuvenate established societies and economies. We are helping
to shape viable political, social and economic institutions in
backward countries. We forget that it took the United States from
the middle of the 18th to the early 20th century to become a de-
veloped country. The less developed countries today are not like
the Marshall Plan countries of 1944. They are still at a very
early stage of modernization.

The large time frames in which we work have helped to foster
the idea of foreign aid as a kind of charity - a give-away program.
It is not charity. The idea is not to support countries. It is to
stimulate and support their efforts to achieve what the econo-
mists call self-sustaining growth. It is to assist countries whose
governments and the people have the determination and the will

to make progress. The countries which receive the bulk of
our development aid today invest more than $5 of their own
for every dollar's worth of help they get from outside.

We give top priority to two problems: food and population.

This is by necessity. At present rates, the world's population
will double by the end of the century. Most of the increase is
occurring in the nations which can afford it least - in the less
developed countries, the hungriest countries.

Food aid from nations like the United States, which grow more
food than they consume, can bridge the food gap in these coun-
tries for a few more years. But it cannot do so indefinitely,
and food aid is the least desirable answer to the problem anyway.

The right answer is to help these countries grow more food them-
selves. This we do. We encourage and help them expand their
food production in every way we know how. We help finance ex-
ports of US-made chemical fertilizer to the developing nations.

We offer incentives to American companies - Esso, Amoco and
others - to construct fertilizer plants in the developing countries.

We promote and support policies that will get fertilizer distrib-
uted to farmers at prices and on credit terms they can afford.

We help and encourage the developing countries to maintain prices

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that give farmers incentives to grow more food, and to produce
consumers goods which farmers can buy with their higher in-
come.

We also help the developing countries acquire and use the new
miracle seeds. You may have read about these; they are double-
bling and tripling yields of wheat and rice in India, Pakistan,
Turkey and the Philippines. Last year these new seeds were
planted on 3 million Asian acres. This year the total
will be 20 million, and in 1968-69 it could go up to 25 or 30
million acres. These countries have launched what I call a
"Green Revolution." World food output set a new record in
1967, and the developing nations accounted for most of the in-
crease - their per capita food production increased by 6 percent.

Some people doubt that the Green Revolution can succeed.

This spring a Stanford population biologist wrote that "the battle to feed humanity is over," that "sometime between 1970 and 1985 the world will undergo vast famines. Hundreds of millions of people are going to starve to death... in spite of any crash program we might embark on now..."

I disagree. Over the medium term - say, between now and 1985 - their new agricultural efforts can enable India, Pakistan and other developing countries to meet their needs for food.

Over the longer run - beyond 1980 or 1985 - increased food production alone cannot provide the answer. Rising population curves and higher living standards mean that lower birth rates are absolutely essential. This is why A.I.D. gives first priority to assisting family planning programs, along with efforts to expand food production.

These twin problems - food and population - can be licked.

The main effort, obviously, must come from the developing countries themselves. But they cannot succeed without outside help. This is why fully a third of the total aid we

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propose for the coming year will provide American fertilizer,
pesticides, equipment and technical assistance required to
sustain the Green Revolution.

Is our help effective? The Green Revolution itself is one
important answer to that question. Progress in family
planning is another part of the answer. Today the govern-
ments of 26 of the developing nations have policies to reduce
birth rates; we help a number of them with materials and with
technical assistance. Another answer is the progress of
countries like Taiwan and Iran - both former aid recipients
which are now making their way without AID help. There is
also the solid progress of countries like Turkey and Korea -
they expect to achieve self-supporting growth by the early
1970s. And there are other answers: the protection of a
billion people against malaria since 1950, and the training
of 400,000 teachers with AID help.

The opportunity is clear: the world can feed itself; development
is possible. What is less clear is our will to do the necessary,
to do our share. I am often asked whether we can afford the
foreign aid program. The answer is that the American economy

is currently growing by about $50 billion each year, whereas
our total foreign economic aid now amounts to about one-half
of one percent of our Gross National Product - one twenty-
fifth of our economic growth last year alone.

The impact of foreign aid on our balance of payments is also
negligible - $50 million in 1967, compared to $3 billion for
our military expenditures. In 1968 repayments and interest
on earlier foreign aid loans will completely offset the small
dollar drain which results from the program. Remember -
foreign aid dollars are spent in the United States; it is
American goods and services, not dollars, that go overseas.

Can we afford to assist international development at a time
when the United States is confronted by pressing problems of
domestic development? Again, the answer is clear. We have
already learned at home the price a society pays for ignoring
the problems of the disadvantaged - for telling the poor and
hungry that they must wait. At home we can no longer seg-
regate ourselves from the problems of the poor. And in
today's world, the advanced countries can no longer isolate
themselves from the problems of the developing countries.

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President Johnson has made it plain that the United States has a dual commitment to development. "Let there be no mistake," the President has said, "about our intention to win the war against poverty at home, and let there be no mistake about our intention to fight that war around the world." The wall between rich and poor is a wall of glass through which all can see."

Often, we are asked about the connection between foreign aid and foreign policy. Some people persist in the notion that foreign aid is somehow supposed to buy friends for the United States. The fact is that it couldn't, even if we wanted it to. Aid will not win votes for the U.S. in the U.N. Aid cannot even be counted on to earn us the gratitude of the people and governments it helps.

But votes and gratitude are not the point. We are looking for progress, not for love. We are helping the poor two-thirds of the world because it is right. Hunger is wrong. Ignorance, disease and hopelessness are wrong.

And we are helping because the selfish interest of the United States are involved. Immediately after World War II it was

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very much in our interest to help re-construct the war-ravaged
economies of Western Europe. In the 1950s our concern focussed
on security - particularly on the security of the countries rimming
the Sino-Soviet bloc from Turkey to Korea. The great bulk of our
aid in those years went to help build a shield against direct
Communist pressure.

The emphasis in the 1960s has been on development, and once
again, our national interest is involved. Today we live in a
tight little world. The developing nations are our new neigh-
bors. They are going to change whether we like it or not, and it
is in the interest of the United States to support constructive
change. If the Indias and the Pakistans have only hunger and
ignorance and disease to look forward to, the odds on their
holding together as nations will grow very long indeed. So will
the chances for international stability and peace. Hungry people
are angry people. "Development" Pope Paul has said, "is the
new name for peace." The development progress of countries
in Asia, Latin America and Africa bears very much on the long-
term security interests of the United States. This is a fact of
international life today. We cannot escape it.

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An interviewer recently asked me one of those "if you were king..." questions: what would I change in our aid programs if I had it in my power to make any change I wanted. What would make the biggest contribution to a more effective aid program?

My answer was very simple: improved public understanding of what development is, and what foreign aid is doing about it

I say the same thing to you. If there is one thing I have learned in two years as Administrator of A.I.D. it is that the future of foreign aid depends heavily on the work of the men and women in this audience and on your fellow educators. Over the long run, foreign aid hasn't a chance if the young people whom you teach grow up ignorant of the problems of development and of the nature and purposes of the aid program.

So I ask you to ask yourselves and your colleagues some questions when you return to your universities and your school systems. How well do your curricula cover the needs and aspirations of the developing world? What are your students learning about the realities of foreign policy and foreign aid -

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how both work, what aid is, where it goes and why? Do
they know that aid programs are conducted by 18 other
developed countries in the free world - and by every Com-
munist country that can afford one? Are they getting the
information on which they can base intelligent and informed
opinions as to what the United States should be doing in the
developing world?

To me these are important questions. I hope you agree.
Now I will be happy to answer any questions you have of
me. Thank you.

* * *

For the

PRESS

INFORMATION STAFF

For release to papers of
Sunday, Nov. 3, 1968

AID-68-67

SOLVING THE WORLD FOOD PROBLEM -
ARE WE REALLY PREPARED TO HELP?

BEFORE THE
AMERICAN ASSEMBLY ON WORLD HUNGER
ARDEN HOUSE, HARRIMAN, NEW YORK

November 2, 1968

Next to the pursuit of peace, the world faces no more urgent problem
than that of feeding itself.

This is not a new problem. But the extent to which it affects us in
the United States is new.

When the world was less compact than it is today, food shortages
around the globe caused us no particular concern. If we learned
about a famine in time, we might send food to its victims. But we
felt no responsibility for trying to eliminate the conditions which
gave rise to food shortages.

Things are different in the tight little world of today. We can no
longer insulate ourselves against what goes on elsewhere. Woodrow
Wilson said fifty years ago that "hunger does not breed reform; it
breeds madness, and all the ugly distempers that make an ordered
life impossible." This is increasingly true. And today we know we
cannot prosper in a hungry and disordered world.

Also, the dimensions of the food problem have grown enormously in
recent years. We live in an era of falling death rates, rapid population
growth, rising standards of living and growing expectations - all factors
which threaten to push the demand for food beyond the supply.

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The United States and other countries which produce a surplus of food
can fill the food gap for a time. But they cannot do so indefinitely.

Nor- for many reasons - should they try to do so. Throughout the
developing world, wherever the potential for productive agriculture
exists, everything possible must be done to increase food production.

We may have once thought that the developing nations could and should
solve their food problems on their own - and that to do so they need
only bestir themselves, abandon their outmoded agricultural practices
and behave like sensible and industrious people. We now know better.
Their own efforts are essential, yes. But they must have outside help
to win through.

* * *

Systematic efforts to deal with the world food shortage on the basis of
a working partnership between the rich and the poor nations might be
said to date back a quarter-century. It was in 1943 that the Rockefeller
Foundation started work in Mexico to improve the production of corn,
wheat and beans. Twenty years later, in 1963, the Rockefeller and Ford
Foundations set another landmark with the decision to establish the
International Rice Research Institute in the Philippines.

- 3 -

The new varieties of wheat and rice developed at Chapingo and Los Banos showed what technology could do to help the developing nations solve their food problems. These high-yielding seeds gave new substance to the old dream of food sufficiency.

But new seeds alone could not fulfill the dream. Fertilizer, proper use of water, price incentives, farm credit - all these and more were needed if the miracles of Chapingo and Los Banos were to be transplanted on a massive scale to the wheat and rice fields of the world.

Many questions had to be answered. Would the governments of the developing nations adopt policies to encourage their citizens to change their ways? Would they provide credit, price incentives, storage facilities, markets, distribution systems and all the other components of a modern agricultural system? Could peasants be persuaded to abandon the habits and customs of centuries and adopt new farming practices and techniques? Would they make the necessary investments and take the risks inherent in planting new and unknown varieties?

A number of Asian countries are now answering these questions with dramatic improvements in their agricultural production. There is no longer any doubt that the food problem of the developing countries can be solved. The only question now is whether it will be solved.

The most recent Indian wheat crop exceeded the previous record by more than a third. The total grain harvest - 100 million tons by our reckoning - was up 11 percent over the previous best year. The weather was unusually good. But even with normal weather, a crop of 98 million tons had been estimated. Despite the pessimistic reports on the current monsoon, we expect the current crop year to bring a harvest of 90 - 93 million tons - well above 1965, which was the second-best in history. When Deputy Prime Minister Desai was in Washington a few weeks ago, he said that India should be able to do without wheat imports on any substantial scale within three years.

In Pakistan, the 1967-68 rice crop was up 15 percent over the previous high. The May-June wheat harvest was up 50 percent. Pakistan estimates that with bad weather next year, it will still be able to match this year's record-breaking performance. There is a real question whether Pakistan will require PL 480 wheat from the United States after this year.

The Philippines appears to have ended more than a half-century of dependency on rice imports. This year, it became a rice exporter. High-yielding varieties accounted for nearly one-fifth of the 1967-68 harvest and more will be planted next year.

- 5 -

Good weather alone does not explain these record crops. Pakistan planted nearly seven times as much acreage to the new varieties this year as in 1967. In 1969 it hopes to have all its irrigated wheat land under high-yielding seed. India this year increased to 15 million acres the area sown to the new seeds. The target for next year is 21 million. Fertilizer consumption in India this year rose by one-third, in Pakistan by about 40 percent. Each year, about 25,000 tubewells are being drilled in India, 8,000 to 9,000 in Pakistan. Ten thousand threshing machines appeared in the Punjab this year, many of them elementary. They worked off jeep power take-offs, bicycles and the like. But they did the job.

New government policies, including price incentives, have helped induce the farmer to take the extra risk and make the extra investment which all these inputs require. If the Indian farmer has developed new confidence and self-reliance, this in no small measure reflects the fact that the government has kept its word and bought his grain at the promised price.

* * *

Encouraging as these developments are - and they are very encouraging indeed - much more needs to be done if the Green Revolution is to take firm hold in the soil of Asia and also spread to Africa and Latin America. Furthermore, while the developing nations can greatly increase their food production, they cannot grow enough to meet the food

needs of an infinitely expanding world population. Over the long run,
better health and nutrition will lower death rates and lengthen life
spans. Lower birth rates are vital.

The population problem poses more delicate issues and is even harder
to solve than the problem of food production. Dr. Notestein says
that 20 years ago when he headed the UN Population Division, he and
his people "walked softly, like a cat on a wet pavement." They had to.
The issues were that sensitive.

They still are. Today, though, we can do more. Over half the people
in the world now live under governments whose policy it is to reduce
birth rates. Eleven of these governments are in East and South Asia.
On this issue, as in agriculture, Asia is out in front.

Pakistan now gives population work top priority. Recently, despite cut-backs in other budget categories, the allocation for family planning was increased. IUD insertions are proceeding on schedule. Additional policy and program changes - increased use of the pill, among others - will be required if Pakistan is to meet its goal for fertility reduction. But the overall picture is hopeful.

It is still too early to say whether the Indian government will be able
to mount a program adequate to the Indian population problem. Dr.
Chandrasekhar, the Minister of Health and Family Planning, talks in
terms of reducing the national birth rate by 40 percent in a decade.

- 7 -

Newspaper advertising and thousands of posters and billboards now proclaim that "The Power to Prevent Birth Is In Your Hands" - in competition with the traditional Indian saying about birth, that "it's in God's hands."

A half million Indian shops are to sell condoms at the new subsidized price of 2¢ for three. There is talk about raising the legal marriage age from 15 to 18. Last month the State of Maharashtra, with a population of 46 million, began using financial disincentives to limit families to three children. Couples "crossing the line" to four children, as they put it, will have to pay higher rents if they live in public housing. Only the first three children are eligible for free delivery in state hospitals. Free schooling for low income families will be available only to the first three children.

At present, nearly 11 percent of all eligible Indian couples are protected either by IUDs or by sterilization. Some observers believe that at their current rate of progress the Indians will achieve only about one-third of their 1975-76 target. But their program has had tremendous impact during the past three years, and India is continuing to move in the right direction. The question is whether she will be able to move fast enough soon enough.

Korea's family planning program is now six years old, well-staffed and well run. Distribution of pills is increasing. The goal of the program - to reduce population growth to 2 percent by 1972 - will require the participation of nearly half of Korea's fertile couples. Thus far, the Korean birth rate has been dropping on schedule.

Most people now accept without question the need to expand agriculture in the developing nations. More and more people are coming to accept the need for progress in family planning and in lowering the rate of population growth. Fewer people, however, buy an equally important proposition, namely, that progress - whether in agriculture or in family planning - will occur only if there is development across the board. Agriculture can flourish and expand only if the whole economy flourishes and expands, and vice-versa.

When the Indian monsoon failed for two years running, declining farm incomes brought on an acute industrial recession. Conversely, the agricultural progress now being made will stimulate industrial recovery and growth. Indian industry is already feeling the good effects of the recent bumper crops. This year the Indian private sector made and sold 11,500 tractors - seven times as many as in 1962. A backlog of orders for tens of thousands more has accumulated. As late as 1964, India produced no spray motors for plant protection. This year, 30,000 were made and sold to individual farmers.

- 9 -

In the population field, too, progress in overall development is vital.
Dr. Revelle recently pointed out that "smaller families will be
acceptable only if the chances that the children will die are noticeably
lowered." More and better food - better child nutrition in particular -
improved health, sanitation and medical care - all these are essential
if couples are to have fewer children.

The less developed countries are right in giving first priority to food
production, family planning and population work. Progress in these
fields is vital to the success of their development programs. But they
cannot afford to ignore the other sectors of their economies. Piece-
meal development will not work.

So far I have been talking about what the developing nations are doing.
What about their partners in this struggle? What about us?

The hungry countries cannot solve the problems of development - in
the time they need to solve them - without outside help. Development
progress will continue to depend on the flow of outside resources, on
the availability of fertilizer, seeds, chemicals, equipment, technical
assistance - and foreign exchange to buy all these.

In carrying out its overall development program, A. I. D. gives first priority to increased food production and family planning. Attention to agriculture and food production have been made a key index of the self-help we require from recipients of our development aid. We use our assistance to induce the governments of developing nations to adopt more effective policies. We have developed devices like program and sector loans to encourage needed policy reforms. We now condition food aid agreements on the steps countries take to produce more of their own food.

Direct assistance to agriculture is now much the largest item in the aid program. Fertilizer is the largest single A. I. D. -financed commodity. Through guaranty and other incentive programs, we encourage private American investment in such things as fertilizer production, food processing and distribution, and the marketing of high-protein products. We are subsidizing the first commercial production of fish protein concentrate here in the United States and putting more money into agricultural research.

Last June we were delighted to be able to provide a grant to help expand the work of the International Rice Research Institute at Los Banos.

Teams from 30 American colleges and universities are at work overseas providing technical assistance in agriculture under A. I. D. contracts.

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We are moving much faster than before in the population field. In April 1967, I announced that A. I. D. would begin financing contraceptive devices and machines to make them. During the fiscal year ending last June 30, we provided family planning assistance to 25 countries, including major aid for programs in India, Korea, Pakistan and the Philippines. Some of our assistance is direct. Some is provided through such organizations as the International Planned Parenthood Foundation, the Pathfinder Fund and the Population Council. We have also made grants to The Johns Hopkins University, the University of Michigan and the University of North Carolina to help them build up their capacity to work in the population field.

We have _not_ made family planning a condition of aid, and we support only those programs in which individuals are free to participate or not. But we _do_ make clear that we attach the highest importance to the population problem and to efforts to solve it.

* * *

Our intentions are perfectly clear. What about our performance? The hard fact is that we are providing less, not more, development aid. Our economic assistance is being sharply reduced. And this at

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the very time that some of the most important, most promising and hardest-pressed of the developing nations are doing what they should be doing, and can use far more aid than they are getting.

This year the appropriation for foreign assistance hit an all-time low. This will have a direct and substantial effect on the ability of the developing nations to expand their agriculture and grow more food. The cuts affect all our programs. But the heaviest impact will be in South Asia, where the need to increase food output is most acute, where the prospects are most promising and where there is now the will to act.

Take fertilizer - which, as you know, the new seeds need and can absorb in far larger amounts than the traditional varieties. In India, we estimate that every $50 million in A. I. D. -financed fertilizer yields an additional harvest of 2,250,000 tons of food grains. Yet at the end of the last fiscal year, when India needed and asked for $100 million in fertilizer for the spring planting, A. I. D. was able to meet less than one-quarter of this request.

For the current fiscal year, we had planned a total of $408 million in development loans to India. Over half that amount was for direct

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aid to increase food production: $200 million for fertilizer together
with smaller amounts for improved seed varieties and pesticides
and for part of the cost of a new fertilizer plant. The balance was
for industrial equipment, raw materials and spare parts to fuel
India's economy.

However, the Congress reduced the President's total development
loan request from $765 million to $300 million - less than what we
had planned for India alone. You can imagine what this does to the
Indian program. It will be cut by more than half - far too little to
sustain and expand either agricultural or industrial progress in
this critical nation. Pakistan will fare no better.

At our urging, and at the urging of others, India and Pakistan
staked their future on the expansion of agriculture and industry.
They did so in the expectation that we would help. Now we are
falling short.

* * *

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Why are we falling short? Some say that between the needs of Vietnam and those of our cities, we cannot afford foreign aid. The rhetoric is effective, but the arithmetic is wrong. We are easily the richest nation on earth. Yet we rank seventh in the percentage of national income that we devote to foreign aid. Our total foreign economic aid comes to a small fraction of the amount by which our economy grows each year. The difference between an adequate program and an inadequate one is even less.

Others say that we should concentrate aid where the prospects are best, rather than spreading it indiscriminately and inefficiently thin. This overlooks the facts. In 1968 over 80 percent of all development loans went to eight countries. Three-fourths of our loans in Asia and Africa went to three countries - India, Pakistan and Turkey. We passed the point of concentration some time ago. From here out it is a matter not of concentration but of elimination.

Still others say that while development aid is laudable, it should be divorced from national political relationships. De-nationalize foreign assistance, provide it through multilateral channels, it has been said, and the program could be doubled in size.

- 15 -

Multilateral institutions - the World Bank, IDA, the regional banks - have contributed immensely to development and will continue to do so. But again, let's face facts: the Congress has shown no more enthusiasm for multilateral aid than for bilateral aid. The IDA bill never made it through the Congress this year. Neither did the bill to authorize a United States contribution to the Special Fund of the Asian Development Bank. And when the Congress cut the aid bill, the axe fell on the funds which the United States contributes to such international agencies as the United Nations Development Program.

The loudest signal that I get from Capitol Hill is not that the program is insufficently concentrated; not that it is insufficiently multilateral; not that it isn't working and not that aid is ineffective. The main signal from the Hill, it seems to me, is one of indifference.

Attribute this indifference to anything you like: Vietnam, the problems of our cities, higher taxes, lack of understanding of what development means, dissatisfaction with the state of the world, general frustration, neo-isolationism. You name it. The result is the same: our foreign assistance efforts are lagging badly and nobody seems to care.

- 16 -

For many years the center of our concern has been the Third World
itself. The roadblocks to development seemed to be "out there"
the reluctance of governments to make the necessary policy changes,
the backwardness and distrust of the peasant, the unwillingness of
the developing countries to engage in effective self-help, and the
difficulties that people from richer, more sophisticated countries
have in learning how to be really helpful in poorer and less advanced
countries.

The problems "out there" have monopolized the attention of those of us
concerned with development and with the food problem - whether we
serve in government, in the foundations, in industry, in the universities
or in the voluntary agencies. This is understandable. But the situation
"out there" has been changing. In India, in Pakistan, in Turkey, in
Korea and elsewhere, governments have carried out policy changes of
critical importance to food production, family planning and overall
development. They have done so at considerable political risk and
with greatly beneficial results. Tradition and custom _have_ given way
to change. Backward peasants _have_ been quick to adopt new ways, try
new seeds, pesticides and fertilizer.

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The results have been both surprising and ironic. Today for the first time, a number of the so-called backward countries are able to change and modernize at a pace faster than the advanced nations are willing to support.

The biggest roadblock to development in these countries today is not "out there" - it is right here at home. Today, it is not the backward Indian peasant who blocks the road to food self-sufficiency - it is the indifferent American. Today, it is not the rice farmer in the Philippines or in Pakistan who needs prodding - it is you and I and our fellow taxpayers.

We have learned a lot about how to help underdeveloped countries move off dead-center. We have learned less about how to help Americans visualize the grim future that faces them and their children so long as more than half the world ends each day hungry and hopeless.

* * *

In my view our basic difficulty stems from our failure to adopt and carry out a clear national policy on international development.

Over half the world today has a burning obsession with development. Development, modernization, is the one goal the countries of Asia, Africa and Latin America prize above all others. It is a goal which

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they - and we - know that they cannot reach by themselves.

Are we truly committed to helping them? Is it our policy to support
development?

I would say not - not when we take whacking large cuts out of the
fraction of one percent of our GNP represented by the A.I.D. budget.
Not when we fail to contribute to IDA, the soft loan window of the World
Bank. Not when we fail to contribute to the Special Fund of the Asian
Development Bank.

Development has not yet become a legitimate goal of American foreign
policy. In the House of Representatives, friends of aid doubt they
could pass an economic aid bill without marrying it to a military aid
bill. We ask for money to put out fires in Vietnam, in the Congo, in
the Dominican Republic, and we get it. We ask for money to prevent
fires, and are accused of carrying on a give-away program.

- 19 -

If there is to be an American policy for the developing world - if
American assistance in solving the world food problem is to be
assured - we must first of all decide that development is a primary
foreign policy objective of the United States. We must decide that
development is an end sufficiently important in itself to justify a
stable continuing contribution of public funds.

We as a nation have not yet made this decision.

No nation has done more for the long-term development of other
countries than the United States. But achievements do not add up
to a policy, and by and large, development has been a secondary,
or tertiary, consideration. We have not worked at development as
a matter of national policy.

Second, we should make up our minds, once and for all, that we know
enough about the aid business to be trusted to get on with it. Taking
just one example, United States assistance _has_ been effective in
supporting the agricultural break-through. So has aid from other
countries, from international organizations, from foundations and
private groups. Paul Hoffman was right when he compared our foreign
aid programs with a plant that kept getting yanked from the ground to
see why it hadn't taken root. It's an apt comparison. All aid programs
can be improved. But ours is good enough to deserve confidence and
support.

- 20 -

Finally, we must accept the fact that this country and the other aid-giving nations are going to be involved in the business of development for a long time. Just to solve the basic food-population problem will take many years. It is foolish to continue the agony of an annual authorization battle. Development aid simply must be placed on a long-term basis.

A national commitment to support development is easier to discuss than to achieve. It can only come as Americans acquire a better understanding of their place in the world. Without a broader notion of where our national interest lies, without a much longer view of national security, without a greater realization that the fate of the new nations directly affects our own future, our efforts to assist development could atrophy altogether.

For a time following World War II it seemed that this country was equal to the demands of the mid-twentieth century. In the days of the Marshall Plan and the Cold War we were afraid, and we mustered the political will to mount a substantial and continuing program of foreign assistance.

- 21 -

Today there is less fear. But there is no less need for foresight.

If we devote anything like the purpose, the energy and the wit we

have devoted to motivating people in other countries to work at

development, we should be able to re-generate, in our own country,

the political will and sense of national interest we achieved 20 years ago.

The cause of development aid needs political leadership at home -
and not only from within the government, but from outside it.

Whether we succeed will depend not only on Presidents, A. I. D.

Administrators and the Congress. The voices of the universities
and the foundations, of business and labor, and of the churches and
the voluntary agencies - your voices - must also be heard.

- 20 -

- 19 -

# FOREWORD

To All A.I.D. Employees:

I am sure you already appreciate the importance of programs relating to family planning and population growth. Rapid population growth must be controlled if the world is to be able to feed itself in the future, and if the economic development efforts of the developing countries and ourselves are to pay off. As President Johnson said in his State of the Union message of January 17, 1968:

> But unless the rapid growth of population in developing countries is slowed, the gap between rich and poor will widen steadily. Governments in the developing countries must take such facts into consideration. We in the United States are prepared to help assist them in those efforts.

Programs relating to family planning and population growth, together with programs aimed at increasing food production, enjoy the highest priority in our Agency.

On February 1 I testified before the Gruening Subcommittee on Foreign Aid Expenditures concerning A.I.D.'s policies and activities in this field. A copy of my opening statement is attached. I urge you to read it and be guided by it as you go about the Agency's business.

William S. Gaud

February 10, 1968

Statement of
The Honorable William S. Gaud, Administrator
Agency for International Development
Department of State
Before the Subcommittee on Foreign Aid
Expenditures
Of the Senate Government Operations Committee
February 1, 1968

Mr. Chairman and Members of the Committee:

I am happy to appear before you to discuss a subject of the highest importance to the Agency for International Development—the rapid growth of population in the developing nations.

## The Problem

I need not burden you of all people, Mr. Chairman, with a lengthy description of the problem which confronts us. Nearly two years ago in April 1966, you asked what A.I.D. was doing to help solve the population problems of the less developed world. You stressed the need to "face forthrightly the multiplying problems of our multiplying populations."

The population of the world is now growing at the unparalleled rate of 2% a year. This is a new problem for the world. It took us from the beginning of time until 1830 to reach our first billion of world population. One century later, in 1930, we had two billion. Only thirty years later, by 1960, we had the third billion. Currently, we are adding something like 65 million more people annually, more than the equivalent of a new West Germany or United Kingdom each year. At this rate, the present world population of 3.5 billion will double in the next 35 years.

This adds a radically new dimension to a host of problems which are already difficult enough: how to feed and house the world's people, how to educate them and find jobs for them, how to deal with the problems of urban growth, how to get on with the business of economic development and—above

all—how to secure and maintain a lasting peace. President
Johnson put it plainly when he said that:

> Next to the pursuit of peace, the really greatest
> challenge to the human family is the race between
> food supply and population increase.

The greatest and most immediate pressure will be felt by
the two-thirds of humanity living in the less developed areas
of Asia, Latin America and Africa. These are already areas
of need and want. Yet they enjoy—if that is a proper use of
the word—the fastest population growth in the world, and they
cannot afford it.

## A.I.D.'s Population Policy

In November 1967 I issued to all A.I.D. offices here and
abroad a formal Policy Determination directing them to give
*the highest priority*—along with food production—to encourag-
ing, supporting and strengthening family planning programs
in the developing countries (P.D. 39, November 3, 1967).

*Our population policy is based on four fundamental prin-
ciples.*

*The first principle* is that overpopulation and underdevelop-
ment go hand-in-hand. This tie is both biological and eco-
nomic. Overpopulation in the less developed countries leads
to malnutrition, which cuts energy and kills initiative. Mal-
nutrition also shortens the life span and saps productivity.
These personal deprivations add up to national failures in
development. We have evidence, too, that infant and maternal
malnutrition can cause mental retardation—again, personal
tragedies which hobble national growth. Finally, national re-
sources used to care for weak, ill, overcrowded, under-employed
people are resources diverted from development.

In sum, when a country's production gains are matched by
population gains—*nothing is gained*. The country is not
moving ahead. It is treading water, and it is in trouble. The
progress of the poor nations will depend largely upon their
success in slowing down their rates of population increase.

2

They will not be able to offer their people better lives and opportunities until their resources and populations are in proper balance.

*The second principle* is that the government of every nation with a population problem—whether developed or developing—should do its utmost to increase the knowledge and practice of family planning among its citizens. Our role is to encourage and help the developing nations with this task.

*The third principle* is respect for the sovereignty and the sensibilities of the nations we assist. The population question is as delicate as it is urgent. Over half the people in the developing world now live under governments that have policies of reducing birth rates. But some countries, even though they are aware of the seriousness of the problem, and are working on it, either do not welcome outside help in this field or do not want it on a large scale. Our work in the population field must be carried on in such a way as not to raise political problems. The family planning programs we assist must be host nation programs—not our programs. They should avoid labels marked "made in the USA."

This principle is based upon Section 291 of the Foreign Assistance Act of 1967. It declares that "every nation is and should be free to determine its own policies and procedures with respect to problems of population growth and family planning within its own boundary." Consistent with this, we will not assist any program unless we are asked to do so.

*The fourth principle* is that A.I.D. will support no family planning or population program unless it is voluntary. This means several things. For one thing, each developing country must decide for itself what types of programs best suit its requirements and its people. We will not force a particular type of program on any country. For another, we will assist only those programs in which individuals are free to participate or not as they see fit, and where they have a choice of means. In short, Mr. Chairman, we want no part of either international coercion or individual coercion. We do not make family planning a condition of aid.

Guided by these principles, and acting in accordance with our determination to give programs relating to population

3

growth the highest priority, A.I.D. is determined to do everything it can to help the developing countries face up to and overcome their population growth problems.

## Program Expansion

The Agency for International Development has financed population and family planning programs in some 30 countries. One year ago, this Committee asked A.I.D. to submit a country-by-country report of our activities in the population field. We did so. I now have a further report, entitled "Population Program Assistance" which I am submitting for the record, bringing the earlier report up to date.

In the main, our contributions have been modest. This is so for several reasons. For one thing, some nations do not want outside help in dealing with this problem. Others, while tentatively exploring the problem and sniffing at it around the edges, are not yet ready to embark on large-scale programs. Also, as I have already mentioned, A.I.D. has only recently reached a stage of substantially expanding its activities in this area.

Our dollar obligations for family planning and population programs over the past few years were as follows:

FY 1964 $ None
FY 1965 2,292,307
FY 1966 5,487,192
FY 1967 4,252,988

In the current fiscal year, FY 1968, our obligations will be far higher. Section 292 of the Foreign Assistance Act provides that $35 million of economic aid funds may be used only for programs relating to population growth. This year's Authorization Act did not become effective until November 14, 1967, the Appropriation Act did not become effective until January 2, 1968, and we operated through much of the fall without benefit of a continuing resolution. Nevertheless we have obligated or committed $8.7 million for dollar projects. Moreover,

4

we have programmed over $30 million ($20.5 million in dollars and more than $10 million in local currency).

We will fund additional family planning and population projects before the end of the fiscal year. I hope our dollar funding will reach $35 million. We will do our best to see that it does. All A.I.D. Missions have been advised that additional funds are available for these programs, and they have been encouraged to submit proposals to us. Our staff in Washington is also working on developing additional projects, and we have been exploring with the Ford Foundation, the National Institute of Health and the Department of Health, Education and Welfare and others the possibility of putting additional funds into technological research.

My expectation is that, whatever we obligate in FY 68, we will obligate an even larger amount in FY 69.

I have taken a number of actions within A.I.D. to increase the effectiveness of our activities relating to population growth. I will mention three of the most important.

First, in March 1967, I established the Population Service within the Office of the War on Hunger to provide expert leadership and support for our population work (A.I.D. General Notice of February 10, 1967). It is headed by Dr. R. T. Ravenholt who has made a distinguished record in public health work, both in this country and overseas. The Service has an authorized staff of 28, of whom 25 are now on board.

Second, in May 1967 the Agency removed contraceptives from the Ineligible Commodity List, thereby allowing them to be financed with A.I.D. funds. A message went to all A.I.D. offices here and overseas announcing this action and noting that, "By removing contraceptives and equipment for their manufacture from the list of ineligible commodities, greater freedom is afforded the Agency to consider fully all the needs of family planning programs and related activities for each country concerned." (Manual Circular 1454.3, dated May 11, 1967.)

Finally, in November 1967 I issued the Policy Determination to which I have already referred, giving these programs highest priority along with food production. (P.D. 39, November 3, 1967.)

5

The Agency has taken great pains to see that these policy
changes are recognized and enforced by our entire staff both
here and abroad. This is done through staff meetings, published
guidelines and policy determinations, airgrams and cables. The
Regional Administrators, in particular, devote considerable
time and effort to this undertaking. In a further effort to keep
the Agency's employees up-to-date and informed on develop-
ments in this field, I propose to reprint this statement and see
that it is distributed to all A.I.D. employees with the request
that they read it and be guided by it in carrying on the Agency's
business.

In April 1966, when this Committee last heard from A.I.D.,
there were 8 people in the Agency spending all or a major
part of their time on population matters. Today there are 52.
Twenty-five of these are in the Population Service. The rest are
either in our Regional Bureaus or are serving overseas. For
example, there are 10 American professionals in the Health
and Family Planning Division in our India Mission, and 7 in
the comparable office in our Pakistan Mission. Every overseas
Mission has at least a part-time Population Officer.

Research Expansion

The entire field of population problems and family plan-
ning in developing countries is still largely uncharted. We have
a great deal to learn about motivating people to practice birth
control, about how best to administer family planning programs
and about other problems. More research is vital.

This is why I am pleased to announce, today, that A.I.D.'s
first two grants under Section 211 (d) of the Foreign Assistance
Act will be for research here and abroad in the family planning
and population field. Section 211 (d) is the provision which
authorizes us to strengthen the capacity of American research
and educational institutions to carry out programs concerned
with economic and social development in the less developed
countries.

6

We are planning a grant of $1 million to allow the Carolina Population Center of the University of North Carolina to expand its research and teaching activities over a two-year period. The Population Center provides special family planning training, population research and population consultants to a number of developing countries. A.I.D. funds will enable the Center to expand its training work and its research programs in India, Thailand, Latin America and elsewhere. The new grant will also be used to improve the Center's Population Information Services.

The second grant will provide $400,000 over two years to strengthen the Johns Hopkins Population Unit. This institution has already provided training for A.I.D. field personnel and performed important population research in India, Nigeria and Latin America. The new grant will finance further research on effective administration of family planning programs and on the relationship between population control and economic development.

I might add that the Johns Hopkins Population Unit and the Carolina Population Center were among the earliest recipients of A.I.D. grants for population work. Indeed, these two institutions were started with our help. Section 211 (d) will allow us to expand further the capabilities of these and other research centers.

A.I.D. has also supported or is supporting population research by such institutions as the University of Hawaii, the Pathfinder Fund, and the International Planned Parenthood Federation. This year we plan to do much more research work than we have in the past. As an example, within one week we will sign a contract with the University of Pennsylvania calling for a practical cost-benefit analysis of family planning programs. We also plan to finance a number of population "field laboratories" run by the University of North Carolina, which we hope will produce reliable data on births, deaths, fertility and family planning practices. These data will give us more accurate measures of population growth and family planning results in the developing world.

7

Country Programs

I would like to refer briefly, Mr. Chairman, to our programs
in a few of the countries which are making substantial efforts
to deal with the problem of population growth.

Pakistan

Pakistan has 118 million people and is the fifth most popu-
lous nation in the world. Its population is growing at an ex-
tremely high rate.

Pakistan has an active, expanding and well-administered pop-
ulation program. To the best of my knowledge there is no head
of state in the developing world with a greater awareness of
the importance of this problem—or more determined to do
something about it—than President Ayub. The head of his
Family Planning Program told me when he visited Washington
some time ago that President Ayub has given family planning
such high priority that he has no trouble getting all the funds,
people and material that he needs. I wish the United States
foreign aid program could get this kind of blank check.

Pakistan's goal is to reduce its birth rate from 50 per 1,000 to 40 per 1,000 by 1970. I believe this goal can be met. More than 1 million IUD's had been inserted by the end of 1967, 40,000 were taking oral contraceptives and voluntary sterilizations of males were increasing. There were 23,000 of the latter during last September alone.

Pakistan is bearing most of the cost of this program. Sweden
has been giving some support since 1961. Since 1966 this has
consisted of $1 million worth of contraceptives a year. Since
1964 A.I.D. has provided technical help, training and com-
modities in the aggregate amount of approximately $500,000.
We have also made a Cooley loan of $168,000 in rupees to a
Pakistan subsidiary of G. D. Searle of Chicago which will make
and market contraceptives and other drug products in Pakistan.

Our A.I.D. Mission in Pakistan includes a seven man Health
and Family Planning Team. This year we plan to finance
training in the United States in population work for about 40
Pakistanis, and provide pills, clinical supplies, training equip-
ment and other commodities. All told, in FY 1968 we expect to

8

obligate more than $6 million—$750,000 in dollars and $5.3
million in rupees—for family planning work in Pakistan. We
estimate that from its own budget, Pakistan will spend approxi-
mately $12 million on its program during this fiscal year.

India

India's population problems are clear and pressing. There
were 340 million Indians in 1947. In 1967 there were more
than 515 million. Population is growing by more than 1,000,000
people monthly—a new Netherlands every year.

The Indian Government has had a national family planning
policy and program since 1951. It has not been a dynamic or
effective program. But now, under vigorous leadership from a
new Family Planning Minister, the program appears to be mov-
ing.

India's family planning budget for this year is about $41 mil-
lion—2% of the total Indian budget and five times the size of
the 1965-1966 budget. The Government has opened 5,400 rural
Family Planning Centers and 8,500 subcenters. Approximately
25,000 people are now working on family planning. More and
more Indian couples now use conventional contraceptives.
More IUDs are being inserted and more voluntary steriliza-
tions are taking place. Plants for the manufacture of condoms
are being set up and modernized.

In addition, there is legislation pending to raise the mini-
mum age for marriage in India. This could be most significant.

All this is a start. But much more is required if India's pop-
ulation problem is to be brought under control. The number
of couples in the child-producing age groups, practicing con-
traception, must increase ten-fold. Some 95,000 existing family
planning jobs have to be filled. Enormous problems of supply
and administration must be solved. Family planning informa-
tion must be effectively circulated over a vast country. It is
the view of the Indian Government that couples must be mo-
tivated not only to practice contraception but to plan smaller
families—many who presently practice contraception already
have four or more children.

A.I.D. is helping in a number of ways. This year we will ob-
ligate $1.9 million to finance contraceptives, research, organ-
izational help and advanced training in the United States. We
have already obligated $4 million worth of rupees, generated
by P.L. 480 sales, for family planning projects. We are also pro-
viding resident experts. Our A.I.D. Mission in New Delhi now
has a Health and Family Planning Team which includes ten
American and four Indian professionals.

So much for what is already under way in India. Looking to
the future, our Mission in New Delhi is currently discussing
with the Government of India new assistance which would
more than double currently planned U.S. dollar aid to the
Indian family planning program. Less than a month ago, when
the new Indian Family Planning Minister, Mr. Chandrasekhar,
was in Washington, we discussed what additional assistance
A.I.D. might usefully provide to quicken the pace of India's
program. The Minister showed us a list of possible projects
which are the subject of the current discussion in New Delhi.

The new package totals $4 million in dollars and $22 million
in rupees. It would provide condoms and pills in addition to
the quantities I announced last year, as well as equipment for
packaging condoms, jeeps for family planning workers, and vis-
ual aid and printing equipment for the Indian education and
advertising effort.

Our preliminary review gives us confidence that mutual
agreement on the bulk of this additional assistance will be
reached quickly.

Korea

South Korea, with 30 million people, is conducting a sub-
stantial population program at a cost of around $2 million a
year. There are now more than 2,200 Korean paid family plan-
ning workers, over 28,000 family planning volunteers, 1,100
IUD clinics, 700 vasectomy (male sterilization) clinics and 11
mobile clinics. The Koreans are doing well. It is estimated that
over 20% of all Korean families are now practicing family
planning of one kind or another. Since 1963 the population
growth rate has been cut from 3% to 21/2%. The Koreans in-
tend to reduce it to 1.9% before the end of 1970.

10

In FY 1966 A.I.D. helped the Korean Government equip ambulance-type vehicles for IUD insertions and vasectomy operations. In the next year we provided approximately $100,000 to finance vehicles, health centers and central family planning expenses. This year, under an A.I.D. contract with the Population Council, $235,000 will be granted to the Planned Parenthood Federation of Korea for field workers, evaluation teams, data processors and oral contraceptives for some 900,000 women—women who are expected to be “drop-outs” from the IUD program over the next two years. We have also made a $40,000 grant through the Population Council to a Korean university for a study which we hope will indicate how family planning services can be offered most effectively throughout the country.

## Latin America

Latin America's population growth rate of 3% is the highest in the world. There is an awareness of increasing food shortages, malnutrition, unemployment and overcrowding, but family planning is a very sensitive subject and Latin America leaders have been cautious and slow in developing effective programs.

Underlying much of this reluctance to take action has been the notion that Latin America has the room to accommodate larger and larger populations. This view of the problem mistakes room for resources.

Today, however, Latin American leaders are becoming increasingly concerned with the problems of uncontrolled population increase. Eight countries in Latin America now have official programs to lower birth rates: Barbados, Chile, Costa Rica, the Dominican Republic, Honduras, Jamaica, Nicaragua and Venezuela.

Last April, the Eighth World Conference of the International Planned Parenthood Federation was held in Chile, the first meeting of this kind in Latin America. President Frei attended. Latin American response to the Conference was encouraging, suggesting new attitudes in leadership and new initiatives in the making.

A.I.D. has provided over $1.9 million for the Latin American program of a number of private international organizations

11

such as the International Planned Parenthood Federation, the Latin American Demographic Center, the Latin American Center for Studies of Population and Family, and the Pan American Health Organization. Our A.I.D. Regional Office for Central America and Panama provides help for country population programs and for the population programs of the Organization of Central American States and the Central American Institute for Economic and Social Development.

This work must go forward on a vastly expanded scale. It is my view that there are some countries in Latin America in which the goals of the Alliance for Progress will be most difficult to achieve unless and until their governments and people face up to the problem of rapid population growth.

## Aid to Private Organizations

In October 1967 A.I.D. granted $3 million to the International Planned Parenthood Federation. $1 million of the grant will finance contraceptives, medical supplies, vehicles and other materials for family planning programs. $500,000 will support IPPF work in Latin America. The remainder will finance enlarged family planning training, demonstration and other activities in Asia and Africa.

In FY 1967 A.I.D. provided $375,000 to the Population Council for expansion of its family planning activities in East Asia, plus $300,000 for study and expansion of the Council's highly successful postpartum family planning program. This program now operates in 27 hospitals in 15 countries around the world. It offers family planning information, contraceptives and practical instruction to obstetrical patients during the lying-in period. About 40% of the women in the program hospitals have accepted family planning. What's more, by their word-of-mouth advertising, an equal number of other women have been introduced to family planning. These women are relatively young and have small families, another important consideration. This fiscal year A.I.D. plans to provide the Population Council with $500,000 for a three year expansion of this program in many developing countries.

12

Conclusion

Mr. Chairman, I would like to end on a personal note.

It is a matter of great satisfaction to me to be Administrator of the Agency for International Development at a time when we can move vigorously ahead in the family planning and population fields. My predecessors were not so fortunate. Whatever their personal views, they operated in a far less favorable climate than prevails today.

For many years before coming to the Government in 1961 I was an active supporter of the Planned Parenthood League of my home State of Connecticut—a State which had more trouble than most in adopting a Twentieth Century view of this all important problem. My own views have not changed. Indeed, greater familiarity with conditions in the developing world has sharpened my awareness of the problem and heightened my sense of urgency. I am eager to do what I can to increase the volume and momentum of our programs relating to population growth, and thereby help the developing nations reduce their population growth rates.

* * * * *

I have with me today Mr. Herbert J. Waters, Assistant Administrator of our War on Hunger Office; Dr. Ravenholt; and Mr. Maurice J. Williams, Assistant Administrator for Near East and South Asia. The first two are familiar with all our programs in this field. Mr. Williams is particularly familiar with our programs in Pakistan, India and the other countries of the NESA Region. We will all be happy to respond to your questions.

Thank you.

13

VOICE OF AMERICA
UNITED STATES INFORMATION AGENCY

THIS RECORDING IS THE PROPERTY OF THE UNITED STATES OF AMERICA

Commercial use or reproduction is prohibited

THE GREEN REVOLUTION -
ACCOMPLISHMENTS AND APPREHENSIONS

ADDRESS BY
HONORABLE WILLIAM S. GAUD
ADMINISTRATOR
AGENCY FOR INTERNATIONAL DEVELOPMENT
DEPARTMENT OF STATE

BEFORE THE
SOCIETY FOR INTERNATIONAL DEVELOPMENT
SHOREHAM HOTEL, WASHINGTON, D.C.

MARCH 8, 1968

GPO: 1966 O-212-154

For Release: 12:00 Noon, Friday, March 8, 1968

THE GREEN REVOLUTION: ACCOMPLISHMENTS AND APPREHENSIONS

ADDRESS BY THE HONORABLE WILLIAM S. GAUD, ADMINISTRATOR,
AGENCY FOR INTERNATIONAL DEVELOPMENT, DEPARTMENT OF STATE

MARCH 8, 1968

Contact: (202) DU3-7544

Montanari

Five months ago today I addressed another meeting of professionals in the field of development. The International Development Conference, which was then meeting here in Washington, asked me to discuss "What We Have Learned in Fifteen Years of Development Assistance." I said that one of the lessons we have learned is the paramount importance of the world food problem. And, I added, the developing nations are beginning to apply this lesson. They are making their agriculture "more intensive, more productive."

Over the last five months we have seen new evidence of their progress. Record yields, harvests of unprecedented size and crops now in the ground demonstrate that throughout much of the developing world - and particularly in Asia - we are on the verge of an agricultural revolution.

- In May 1967 Pakistan planted 600,000 acres to new high-yielding wheat seed. This spring, the farmers of Pakistan will harvest the new wheats from an estimated 3.5 million acres. They will bring in a total wheat crop of 7 1/2 to 8 million tons - a new record. Pakistan has an excellent chance of achieving self-sufficiency in food grains in another year.

-2-

- In 1967 the new high-yielding wheats were harvested from 700,000 acres in India. This year they will be planted to 6 million acres. Another 10 million acres will be planted to high-yield varieties of rice, sorghum and mullet. India will harvest more than 95 million tons in food grains this year - again a record crop. She hopes to achieve self-sufficiency in food grains in another three or four years. She has the capability to do so.

- Turkey has demonstrated that she can raise yields by two and three times with the new wheats. Last year's Turkish wheat crop set a new record. In 1968 Turkey will plant the new seed to one-third of its coastal wheat growing area. Total production this year may be nearly one-third higher than in 1965.

- The Philippines have harvested a record rice crop with only 14% of their rice fields planted to new high-yielding seeds. This year more land will be planted to the new varieties. The Philippines are clearly about to achieve self-sufficiency in rice.

-3-

These and other developments in the field of agriculture contain
the makings of a new revolution. It is not a violent Red Revolution
like that of the Soviets, nor is it a White Revolution like that of the
Shah of Iran. I call it the Green Revolution.

This new revolution can be as significant and as beneficial to
mankind as the industrial revolution of a century and a half ago. To
accelerate it, to spread it, and to make it permanent, we need to
understand how it started and what forces are driving it forward.

Good luck - good monsoons - helped bring in the recent record
harvests. But hard work, good management, sound agricultural policies
in the developing countries and foreign aid were also very much involved.

## The New Seeds

Today's developments have been more than a few seasons in the
making. Twenty-five years ago, the Rockefeller Foundation began its
highly successful work to strengthen wheat production in Mexico. The
Foundation concentrated next on rice, the most important crop in the
world. More people eat rice than any other food. Over 90% of the billion
and a half people of Asia live mostly on rice, and about 80% of them
spend most of their time growing it.

In 1962 the Rockefeller and Ford Foundations established the International Rice Research Institute at Los Banos in the Philippines. Their object was to develop new varieties which would increase rice production in countries such as India, Thailand, Pakistan, the Philippines, Cambodia and Laos - countries where rice was important but yields were low.

The Institute canvassed the world for samples of rice seed, looking for varieties to cross in order to form the hardiest, most adaptable, most nutritious strain. 10,000 varieties were collected. Peta, a tall Philippine variety which originated in Indonesia, was crossed with a short variety from Taiwan, Dee-geo-woo-gen. The result was named IR-8. By 1966 it was fully developed.

IR-8 has a stiff, strong, short straw. It does not fall over, or lodge, when the plant is heavily fertilized or when it is buffeted by wind and rain. It matures quickly, allowing for two - sometimes three - crops in a single year. Some call it the "miracle rice." Under favorable conditions, each planting yields four to six times as much as most traditional varieties.

High-yield varieties of wheat, maize, sorghum and millet have also been developed in recent years. The best known - and most important - of these are the "Mexican wheats" developed by the Rockefeller Foundation which have quadrupled Mexican yields from 11 to 40 bushels per acre.

-5-

It is a long way, however, from break-throughs in laboratories and test fields to the record crops now being harvested by tens of thousands of farmers in half a dozen or more countries. Transforming the new seeds into food for millions of mouths requires many things. Some of these the developing countries can supply, some they cannot.

To begin with, of course, there must be a *will for improvement* in the developing countries themselves. In many of them such a will exists - particularly in Asia, where the pressures of food and population are so intense. Given this will, the people of the developing nations can put the new seeds, the fertilizer and the pesticides to work. And their governments can provide the credit, the price incentives and the market that will begin to change their lives.

But the developing nations - their governments, their institutions and their farmers - cannot sustain the Green Revolution without outside support. They lack the skills to do the necessary adaptive research. They lack the foreign exchange to import fertilizer. They lack the capital to build fertilizer plants. They lack the facilities and the technicians needed to train their people in the new ways.

If this agricultural revolution is to succeed, it can only do so as the result of a working partnership between the advanced and the developing nations.

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Fertilizer

Take fertilizer. To produce their high yields, the new seeds require far more fertilizer than traditional varieties can absorb. Fertilizer - inducing a demand for it, supplying it, teaching farmers to use it and putting it to work - is one key to the Green Revolution.

In 1960 Pakistan used little fertilizer - 30,000 tons - and practically none on food crops. In 1969 Pakistan will need 420,000 tons, most of it for food crops. Only foreign assistance can satisfy this need. A.I.D., which over the past three years has made over $70 million in Development Loans available for fertilizer exports to Pakistan, proposes to lend Pakistan $60 million for this purpose in 1969 alone.

In 1963 much of India's meager supply of domestically manufactured fertilizer was backed up in warehouses - unused.

Today, India is using the equivalent of one-fifth of its foreign exchange earnings to import fertilizer and raw materials to produce the stuff.

A.I.D. will finance $200 million worth of fertilizer on a loan basis for India in 1969.

- 7 -

By 1980 the world demand for fertilizer will probably increase two and one-half times or more. This is why fertilizer is rapidly becoming the largest single element in the A. I. D. program. This is why A. I. D. is backing a growing number of American companies in their efforts to put up fertilizer plants in countries which are seeking to expand their production of food. And this is why the program which A. I. D. has proposed to Congress for FY 1969 emphasizes Development Loans and Alliance Loans to finance exports of American fertilizer: $200 million to India, $60 million to Pakistan, and lesser amounts to Brazil, Chile, Morocco, Tunisia, Indonesia and Laos among others.

## New Attitudes

You are familiar with the physical requirements of the new agriculture - seeds, fertilizer, pesticides, farm-to-market roads, irrigation, and so forth. You know, too, that the success of the new agriculture will depend as much on attitudes as on tangible inputs and infrastructure.

To the farmer, the new seeds and fertilizer represent an untried and expensive investment. The high yields

- 8 -

of IR-8 depend on a combination of intensive labor and ma-
terials which makes it four times as costly to grow as
ordinary rice. Only when the farmer sees that the added
investment will increase his profit will he give them a try.

In the Philippines, a "do-it-yourself" rice kit de-
signed by the A. I. D. Mission has helped persuade him.
It contains IR-8, fertilizer, pesticides and instructions.
It gives farmers a chance to try out the new agriculture on
a small scale. A. I. D. financed the first 100 kits. Over
22,000 have been sold since.

In our own Middle West in the 1930s, Mr. Roswell
Garst of Iowa sold hybrid corn to American farmers by
demonstrating its high yield when the seed is properly
fertilized. Thirty years later in El Salvador, Mr. Garst
and Dr. Benjamin Birdsall of A. I. D. re-applied this
technical assistance lesson by starting a mass fertilizer
demonstration program to induce the farmers of El Salvador to
grow more corn.

Each dollar invested in seed, fertilizer and in-
secticide gave the farmer a return of $3.50 to $7.50.

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The demonstrations spread. In 1966-67 total corn pro-
duction in El Salvador increased nearly 22% over the
previous year - double that year's average gain in Latin
America. Total cost of the demonstrations over three
years: only $50,000. More than half this amount was
contributed by private industry, the balance by A. I. D.
and the El Salvador Ministry of Agriculture.

The higher investments required by the new agri-
culture also make farm credit essential. In the Philippines,
many of the IR-8 rice kits have been distributed on credit
extended by private rural banks receiving A. I. D. support.
Similarly, Turkish farmers now get high-yield seed on
credit. And to get seed on credit, they must also take the
necessary amount of fertilizer on credit.

Farmers are responding to these new opportunities.
In Pakistan where they have never before paid a premium for
seeds, they are now doing so. They want the high-yield
varieties. There have been reports of seed riots in India.
At times the demand for fertilizer in India has been strong
enough to create a black market.

## New Policies

New government policies are also essential to the new agriculture. Since the early 1960s we have pressed the developing nations to invest more in agriculture, to introduce price incentives and other measures which favor and stimulate food production, to shift fertilizer manufacture and distribution from public channels to more efficient private outlets, and to liberalize import quotas on raw materials for fertilizer production.

Increasingly, we have made such policy reforms conditions for receiving both food aid and A. I. D. program loans. The message has been getting through. More resources are going to agriculture - in India, for example, where a change in priorities was plainly in order. In 1966-67 India increased its budget allocation to agriculture by more than one-third.

In Pakistan until recently, fertilizer was distributed through government outlets even at the retail level. A. I. D. urged that private dealers be allowed to take over. One of our fertilizer loans was conditioned on wider private distribution. By last summer there were over 10,000 private fertilizer dealers in East Pakistan - an increase of nearly 50% in one year - and more private dealers are entering the field.

## Prospects

New inputs and infrastructure, new attitudes, adequate farm credit and sound policies - these are the active ingredients of the Green Revolution. And they are paying off. World agricultural production

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in 1967 set a new record, and the less developed countries accounted for most of the increase. Total agricultural output in the developing nations rose by 7 to 8 per cent over 1966. Per capita food production increased by 6 per cent.

This year, an estimated 16 million Asian acres are being planted to the improved varieties. Next year, the total could be 30 to 35 million acres or more.

The world is on the brink of an unprecedented opportunity. The critical food problem of the next 20 years can be solved. A growing number of developing nations are now moving to solve it.

The question is whether this promising state of affairs will continue - whether the growth of food production in the developing world will continue to accelerate - whether this burgeoning agricultural revolution will become a part of the permanent order of things.

Too many people think this question can be answered only by the developing nations. They are wrong. The answer depends as much upon us as it does upon them.

Their governments and their people are increasingly committed to development. But how about us? How sure is our support? How firm is our resolve? How strong is our will? Is our commitment as strong as that which we demand of the countries to which we are giving aid?

Can anyone in this room give convincing affirmative answers to these questions? I doubt it.

Foreign aid is not without friends in this country. However, too many of the supporters of the program tend to be "one-stop" shoppers. They admire and advocate the one part of the program which happens to touch them most - research, family planning, technical assistance, incentives for private enterprise, whatever it may be. Too few of the friends of foreign aid seem to realize that there is no single panacea for development. Too few of them understand that progress in agriculture - or in any other high-priority field - cannot be isolated from overall economic development.

We welcome the good intentions of all the friends of foreign aid. We ask for their fighting support for the entire program over the next months - as I now ask for yours.

We need it. The foreign assistance program for this fiscal year passed the House by just eight votes. The President's economic aid request was cut by nearly 30 per cent. Last week and this, at hearings on the program for the coming year, members of the House Foreign Affairs Committee - supporters and critics alike - warned me that last year's rough sledding would only get rougher.

The developing countries, thanks to their efforts and ours, are on the verge of unprecedented success - while our foreign aid is on the verge of unprecedented trouble.

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Why? Not, I think, because of the admitted limitations and imperfections of the program. Nor do I believe that our deepest trouble stems from the scandals, some of them going back several years, which have given foreign aid as much publicity over the past couple of months as the program normally receives in the course of a year. I am not minimizing these matters, but they must be weighed against the merits of the program as a whole.

Is the aid program in trouble because economic development does not matter - because it is not important? Nonsense! Development is the burning obsession of more than half the people in the world. Development, as Pope Paul has said, is the new name for peace. Development _does_ matter and it _cannot_ wait.

Is it because foreign aid will not work? Hardly! There is far too much evidence to the contrary. The story of the Green Revolution is not a story of failure, it is a story of success.

Is it because we cannot afford the foreign aid program? Absurd! We are the richest and the most affluent nation on earth. Our Gross National Product has been increasing by tens of billions of dollars each year. We can afford what we _want_ to afford.

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The real answer why foreign aid is in trouble lies in the single
word "frustration." We have discovered that the plush world of the
1960s is not the easiest of all possible worlds. It is far more complicated
and bewildering than the relatively simple two-camp world of the 1940s
and early '50s. The rough spots of today's world are very rough indeed.
We are repeatedly called upon to solve problems to which there are no
easy or total solutions.

Vietnam is the epitome of these problems, and Vietnam has a
great deal to do with the troubles of foreign aid.

The feelings of many about Vietnam typify their growing frustration
with the world role of the United States: uncertainty about our course,
discouragement with our progress and doubt whether the duties of service
and leadership justify the costs.

Disagreement with United States policy in Vietnam also serves as
a pretext for opposing foreign aid. This strange mixture of apples and
oranges - is no basis on which to make national policy. This is no way to
judge foreign aid or to determine the nature and size of our program.

Disagreement over Vietnam is no excuse for withholding support
from the new Asian Development Bank. Disagreement over Vietnam is no
excuse for undercutting the efforts which the Indians and the Pakistanis

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are making to feed their people. Disagreement over Vietnam is no excuse for abandoning the peoples of Africa in their struggle for progress. Disagreement over Vietnam is no excuse for short-changing the Alliance for Progress and telling the people of Central and South America they must wait for help which they need and can use now.

Yet this is the kind of talk which we hear increasingly on Capitol Hill, in parts of the press and elsewhere.

These lame excuses for cutting foreign aid reject reality: the reality that for the rest of this century the aspirations which have inspired the Green Revolution will continue to be the dominant interest of more than half the free world. There is no better hallmark of today's world than the determination of the emerging nations to develop, and to feed and care for their people.

Our foreign assistance programs must be judged on their merits. We cannot allow them to be brushed aside because we do not like what is going on in Vietnam, in Paris, or even in Watts - frustrating as these vital problems may be.

Our size and wealth endow us with the obligation to lead and to serve. We cannot stay on the sidelines.

It is time to stop making excuses - time to look squarely at the foreign aid program - time to pull ourselves together and do what is both responsible and right.

The goals of the United States foreign assistance program have changed profoundly in its twenty-two year lifespan. The Marshall Plan was the first aid program. Its object was to assist the rebuilding of Europe. Then, in the '50s, our aid extended our wartime alliances into the period of the Cold War. Today, the paramount objective of aid is neither recovery and reconstruction, nor security in a physical or military sense. The main goal of our aid program now is to help the underdeveloped nations strengthen their economies and modernize their societies.

The United States still relies on military aid and some types of economic assistance to deal with short-term security situations. But the great bulk of our aid is today directed at development over the longer term, and it is that which I propose to discuss.

Why does the United States have a development aid program? Very broadly, for three reasons.

First, our own tolerance for hunger, suffering and hopelessness is lower than it used to be. Domestic poverty, we now say, is "unacceptable." We are not quite so sensitive about poverty overseas. But as the world has grown smaller, more and more of us have come to realize that we can no longer take inequity anywhere for granted.

Second, the standards of the poor have also changed. Disadvantaged people everywhere are raising their sights. People in the developing countries now have an idea of what life is like in the advanced parts of the world. They are no longer prepared to be hungry and ill, hopeless

- 2 -

and ignorant. There is political pressure within their countries for
progress - fast progress. There is also the pressure for development
which comes from rapidly growing populations. High rates of population
growth require the low income countries to modernize at a faster pace
than we in the West did in the last century and the early part of this
century.

The third reason we support the development of the low income
countries is that it is in the national interest of the United States
to do so. I shall discuss this in more detail later on. For the
moment, suffice it to say that the problems of development are not
just national problems to be dealt with by the government of this or
that developing country. The basic shortcomings which development
aid seeks to overcome - not enough food and too little education, too
many people and too much sickness - are world problems. They transcend
national boundaries. They perpetuate conditions which can and do affect
the well-being of us all.

* * * * *

Much must be done if the developing countries are to modernize
their economies, achieve social reforms and build viable social and
political institutions. But no task is more urgent than that of
enabling these countries to meet their growing demands for food.

Food aid from the United States and other surplus food
producers can fill the food gap for a time. But we cannot go on
indefinitely trying to make up food deficits with food aid. Nor - for
many reasons - should we try. Throughout the developing world,

- 3 -

wherever the potential for productive agriculture exists, everything
possible must be done to increase food production. If the world is
to have any future worth talking about, it must at the very least be
capable of feeding itself.

For years the development of agriculture was badly neglected.
But no longer. With outside help - and with self-help - a number of
countries have launched an agricultural revolution. India, Pakistan,
Turkey, the Philippines - these and a few others are in the forefront
of this Green Revolution. They are using the so-called "miracle" seeds
developed largely by the Rockefeller and Ford Foundations in Mexico and
the Philippines. Combined with intensive use of fertilizer and water,
and assisted by new agricultural policies and practices, these new,
high-yielding varieties are doubling and tripling yields of rice and
wheat.

Aid to agriculture and to family planning and population work
are now the two top priorities of the Agency for International Development.
The Agency has increased its support for agricultural development from
$200 million a few years ago to more than a half-billion dollars last
year. Direct assistance to agriculture is now much the largest item
in the United States aid program. Fertilizer is the largest single A.I.D.-
financed commodity. Teams from 30 American colleges and universities
are working overseas, providing technical assistance to agriculture.

Other aid donors are likewise emphasizing agriculture. Taiwan
is providing technical assistance in Africa, Japan in Asia and the Pacific.

- 4 -

Eight years ago, the World Bank and its affiliate, the International Development Association, devoted only 7.5% of their lending specifically to agricultural projects. By last year, this allocation had increased two and one-half times, and Robert McNamara - the President of the World Bank - is planning still further increases.

The developing nations are also increasing their investments in agriculture. For India, 1966-67 was a tight fiscal year. Budget allocations were slashed in practically every category. But the agricultural budget was increased by more than one-third. In Turkey this year, fertilizer will probably be the largest single import. Pakistan has increased its fertilizer supplies several-fold in the last half-dozen years, and by the end of the decade they are likely to double again.

These efforts have been paying off. Yields - and crops - have been growing at explosive rates. The 1968 Pakistan wheat harvest was up 37% over the previous record. India's 1968 wheat crop was up 35% over the previous record, and her total food grain harvest was up 12%. This year, although India is experiencing poorer weather than last year, she expects an even larger harvest.

Still further crop increases can be expected. Last year, Pakistan planted nearly seven times as much acreage to the new varieties as the year before. This year she hopes to have all her irrigated wheat fields planted to high-yielding seed. In 1968 India increased

- 5 -

the area sown to miracle seed to 15 million acres. This year her
target is 21 million acres.

Within three or four years the Indians should be able to
do without wheat imports on any substantial scale. Pakistan may have
already reached the point of requiring no further PL480 wheat from
the United States. The Philippines became a rice exporter last year,
and still more Philippine acreage is being planted to the high-yielding
varieties.

Important as it is to increase agricultural production,
it is equally important for the developing countries to reduce their
rates of population growth. Increased food production can avert
famine in the short and medium terms but not in the long run.
Population growth rates must turn downward.

Most of the developing countries - like many of us - have
only recently come to realize this. Some are working on it vigorously.
Others are not. The United States aid program gives family planning
and population programs top priority along with programs for increasing
food production. And properly so. For the time is already late.

* * * * *

Thus far, the Green Revolution has taken hold in only a part
of the developing world. It has yet to spread on any substantial
scale from Asia to Africa and Latin America. But there is no reason
why it cannot do so.

- 6 -

However, the poor countries cannot continue to move ahead -
they cannot solve their agricultural or their other problems in the
time they must solve them - if they fail to get outside help.
Development still depends on the flow of outside resources - resources
which the low income countries lack and cannot afford to buy:
fertilizer, seeds, chemicals, equipment, technical assistance, and
foreign exchange with which to acquire all these.

This is not to say that outside aid by itself can do the job.
It can't. Foreign aid cannot replace self-help. Outside help by itself
will not grow more food, or limit families, or spread essential skills,
or build marketing systems, or strengthen institutions. Only the
developing nations themselves can make these changes. Only they can
offer incentives to farmers, education to children, enlightenment to
parents and opportunity to businessmen. Only they can adopt and
enforce the investment, tax, import and other policies needed to
mobilize resources for development.

It is only in countries that are prepared to make substantial
sacrifices that our development aid is now concentrated. There are
not many of them - well under a dozen.

Take India, which has been getting more outside aid than any
other country - close to a billion dollars a year. The United States
has been putting up about 40% of this. The rest has come from the
Western European nations, Canada, Japan and the USSR. A billion
dollars in outside assistance is a lot of money. But it constitutes
less than 20% of the total funds being invested under India's development
plan. The remaining 80% - four billion dollars - is generated through

taxes on the Indian people, a people with an average annual income
of less than $100.

In this respect, India is fairly typical of the countries
to which the United States is providing substantial development aid.
In each of them, outside aid amounts to only a small share of the
total amount being invested in development. But this assistance is
critical. It provides foreign exchange to buy from abroad urgently
needed goods and services which they cannot buy with their own
currencies.

Korea provides a dramatic example of what can be done through
a combination of local effort and outside assistance. In the late
1950's and early '60's, American aid did little more than keep the
Korean economy barely afloat. A raging inflation, shortsighted
monetary and economic policies and ineffective leadership all but
dissipated our help.

In the early 1960's a new government with pride and a sense
of nationhood set out to stabilize the Korean economy. Tight ceilings
limited credit, government deficits, the use of foreign exchange and
the incurring of foreign commercial debt. United States aid was
conditioned on the performance of these and other stabilization and
reform measures.

It worked. Inflation abated. Savings rates are now up to
more than 14 percent. Manufacturing has shot up. Exports in the

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period 1962-66 grew at twice the rate of the previous four years.
Recently they have been increasing at the astonishing annual rate
of 40%. Internal leadership, supported by outside aid, has been
making a booming success of Korean development.

* * * * *

These are some of the things that development aid can do,
when combined with sensible self-help policies. It can help meet
the world's food needs. It can help dampen down the population
explosion. It can help individual countries modernize their economies
and their societies. In a word, it can help create the kind of world
we want to live in.

To accomplish these objectives, however, there must be a
working partnership between the aid-receiving countries and the aid-
giving countries. Many aid recipients are doing reasonably well.
The roadblocks to development "out there" - in the developing nations -
have been receding. Leaders in many countries have been biting
the bullet, making policy changes of critical importance to food
production, family planning and overall development. The backward
peasant, as we used to call him, has shown that he can count even
if he cannot read. He has been surprisingly quick to try new ways
and to invest in new and costlier seeds, pesticides and fertilizers.
Governments and farmers alike have taken new risks and reaped new
profits. Increasingly, the poor countries think enough of their
future to want to change it.

- 9 -

What about us? How are we doing?

The harsh fact is that as the United States has been able to afford to do more for international development, we have done less. Twenty years ago, out of a gross national product of $260 billion, we committed $5.5 billion to foreign assistance. In the intervening two decades, while our GNP tripled to more than $800 billion, our aid commitments have shrunk by more than a third. Today our GNP is increasing by about $50 billion per year - and our entire aid program amounts to less than one-tenth of this annual increase.

We have also been doing badly compared to the rest of the free world. Among the free world aid givers, the United States now ranks seventh - tied with the United Kingdom - in the percentage of income devoted to official foreign assistance. Australia, Belgium, France, Germany, the Netherlands and Portugal are all ahead of us.

We do even worse counting the flow of aid from private as well as public sources. On that basis we rank tenth - behind the countries listed above plus the United Kingdom, Japan and Switzerland.

This is a mighty poor showing for the richest nation on earth. Many explanations are offered for it - none of them persuasive.

One is that the poor of America have a prior call on America's resources. Of course they do. But this explains nothing. Our total foreign economic aid comes to a small fraction of the amount by which our economy grows each year. It is preposterous to say that we cannot afford an adequate foreign aid program.

- 10 -

There are those who say that an aid program is necessary, but that it should be put on a multilateral rather than a bilateral basis. Aid funds should be appropriated to the World Bank, for example, rather than to a United States aid agency.

Multilateral aid has a great deal to recommend it. But, even if we want to multilateralize aid, we cannot do so unilaterally. And a number of the major aid donors are not prepared to multilateralize their programs. They prefer to decide for themselves where and how their aid funds will be spent.

Furthermore, the record of the last year or two indicates that our own Congress is no more enthusiastic about appropriating funds for multilateral aid than for bilateral aid. We should do what we can to increase the activities of the multilateral aid agencies. But it is at least premature to talk of their taking over the whole job.

Many of the other reasons given for the decline in the fortunes of foreign aid arise out of deficiencies - both real and imagined - in the foreign aid program itself. Some deficiencies do exist, no question about it. But let's work at curing them rather than using them as an excuse to eliminate the whole program.

Aid is also faulted for failing to meet objectives - particularly foreign policy objectives - it was never designed to meet. When an aid recipient fails to support this country in the United Nations, or differs from us on a matter affecting its vital interests,

- 12 -

presence in South Asia. The United States works for the survival
of the Indian nation because it believes that the survival of the
Indian nation is in our own political interest. We seek a pluralistic
world in which a free, independent and viable India will play an
important role.

Many of us sputter when India acts with what seems to be
ill grace and ingratitude toward the United States. But grace and
gratitude, much as we may dote on them, are not our main goals.
Development - without which the Indian nation cannot survive - is
what we are after.

Impatience - a demand for instant results - an unwillingness
to stay the long and often frustrating course - these account for
much of the disenchantment with the aid program. Too few people
realize that development is a slow and halting process. Its course
will rarely be smooth and never fast enough.

To revert once more to India, her future is still far from
assured. Cyrus Sulzberger said in the New York Times last month that
"India has managed to contain centrifugal forces and totter from the
heroic age of Gandhi and Nehru, learning to think politically for
itself once the giants disappeared. During 21 independent years,
despite the blight of continued population explosion, India has
improved agricultural and industrial output, raised the percentage
of literacy, curbed a pride of princes, possibly lessened the ghastly
influence of caste and escaped disintegration in three wars."

- 13 -

One may feel that this is too harsh a judgment, too
lenient a judgment or an accurate assessment of the situation. But
that is beside the point. The point is that the world - and this
includes India - is going to be a messy and frustrating place for
years to come. But we cannot leave the world, and we cannot live
alone. The modern world is too small and too interdependent.

More than ever, our well-being depends upon the well-being
of our neighbors. And our neighbors include a billion and a half
people living under conditions that are intolerable by today's
standards. Whether out of idealism or realism we and the other high
income countries must concern ourselves with their welfare, and we
must do so on a scale that will produce results.

Development aid can guarantee neither our own security nor
the stability of the Third World. But without development there
will be neither security for this country nor stability among the
poorer nations.

********

What, then, is the major question facing American foreign
assistance? It is not whether aid works. It does. The story of
Taiwan, the story of Korea, the headway being made in a number of other
developing countries, the progress of the Green Revolution - there is
ample evidence that aid can work and does work.

- 14 -

In my view, the major question before us is whether we in
the United States are prepared to commit ourselves to a national
policy of supporting international development.

Development has yet to be recognized as a legitimate goal
of American foreign policy. As a nation we have yet to decide that
development is a matter of sufficient priority to justify a steady
and continuing contribution of public funds.

You may answer by saying that we have had an aid program
for a long time - that we have done much for the development of
the poorer countries. That is true. But have we accepted development
aid as an important arm of our national policy? I would say we have
not.

Consider, for example, the situation that faces the
Administration this year as it does every year. It must go to the
Congress for authority to carry on an aid program. And it gets this
authority - or such has been the case to date - for a period of one
year only.

Furthermore, this limited authority is granted grudgingly.
The aid program has its Congressional supporters just as it has its
detractors. But the chief reaction is one of indifference - of
apathy.

The aid bill is not treated as a matter of much importance
or priority. If its critics want to cut it to the bone - or even
into the marrow - let them. What real difference does it make?
The affairs of these other nations are of no great concern to us.

- 15 -

We have our own business to attend to.

This, I fear, accurately describes the attitude of many
of our fellow citizens. And in view of their attitude we are forced
to ask ourselves whether the United States will rise to the challenge
of the times.

In the late '40s and throughout the '50s there was a
dramatic simplicity to the external problems confronting us. We
were afraid - afraid of Communism - and we summoned the will and
the courage to meet the threat. A substantial and continuing
program of foreign assistance was one of the key instruments with
which we did so.

Today the world seems much more complex, and we ourselves
are much more confused. Not only are we troubled by confrontations
at home, but we are uncertain about our relationships and objectives
overseas. We are doubtful about the importance of foreign affairs,
frustrated by the untidiness of the world and skeptical of the
chances for progress.

But the choice is not, as some would have it, between
more Vietnams on the one hand and a new isolationism on the other.
There is a third alternative: to tackle the problems of the developing
world head-on in a straightforward, sensible way instead of trying to
shove them under the rug.

- 16 -

The United States should take the lead in a sustained
development effort. It should continue to encourage and support a
solid working partnership between the rich countries which have so
much and the developing world which has so little. Only in this way
can we hope to remove the danger to peace - and the affront to
decency - represented by the poverty of the Third World.

The necessary commitment on our part can come only as
Americans acquire a better understanding of their place in the world.
We need a broader notion of where our national interest lies, a
longer view of our national security, and a greater realization
that the fate of the developing nations directly affects our own
future. You in this audience can do much to bring about this
understanding. I urge you to take on the task.

- 2 -

* * * * *

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* * * * *

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* * * * *

To accomplish these objectives, however, there must be a working partnership between the aid-receiving countries and the aid-giving countries. Many aid recipients are doing reasonably well. The roadblocks to development "out there" - in the developing nations - have been receding. Leaders in many countries have been biting the bullet, making policy changes of critical importance to food production, family planning and overall development. The backward peasant, as we used to call him, has shown that he can count even if he cannot read. He has been surprisingly quick to try new ways and to invest in new and costlier seeds, pesticides and fertilizers. Governments and farmers alike have taken new risks and reaped new profits. Increasingly, the poor countries think enough of their future to want to change it.

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********

- 14 -

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