A BOLD NEW DESIGN TO HALT THE WASTE OF BILLIONS IN FOREIGN AID

April 6 1963

A BOLD NEW DESIGN TO HALT THE WASTE OF BILLIONS IN FOREIGN AID

April 6 1963

A BOLD NEW DESIGN TO HALT THE WASTE OF BILLIONS IN FOREIGN AID

NIK CAVE LL probably knows more about

foreign aid than any other Canadian. As a businessman, soldier and diplomat he has lived much of his life in Asia. For seven years he headed our Colombo Plan program. For another three he was our high commissioner to Ceylon. Here, he sums up the small achievements and great failures of the West's programs so far, and presents

IN THE LAST DECADE the Western nations have poured billions of dollars in aid into the less developed parts of the non-communist world. So far, little has been accomplished. Millions of people still go hungry; millions of children work for a few cents when they should be in school preparing themselves for the better future our aid was to help attain. We have not succeeded in raising living standards to any extent. In far too many areas we have not even earned ourselves any goodwill. In fact, we face this unhappy paradox: Although Soviet aid has been less — and even less efficient — than ours, the Russians have been able to distort our aims and turn our good intentions against us in the eyes of the very people we are trying to help.

Where have we gone wrong? In terms of international economics, what our aid programs set out to do is to supply development capital to underdeveloped areas which, because of poverty, could not hope to provide it for themselves. Whether a country be communist, socialist or capitalist, the only way to develop its potential wealth is by accumulating capital and using it effectively.

Our trouble is that the capital supplied has not been effectively used in many cases. For these reasons:

Each donor country still has its own

independent program, each country gives what it chooses to give. If it has too much wheat, it dumps as much of the surplus as possible into its aid program. If it has slackness in some parts of its economy, it tries to pull it up by filling its factories with orders paid for by its own aid dollars, regardless of whether the product it is donating makes a real contribution to the development of the country that gets it. In foreign aid, half a loaf can sometimes be as bad as no bread.

I remember being shown, in a struggling country in Asia, a little gem of a power plant. It had been well designed and constructed and great care had been taken of all its machinery which shone from much elbow grease. As I examined it, I noticed there was no maze of unsightly hightension lines leading away from the power plant, and I congratulated the officials.

“I see you have buried your power cables,” I said. “We have not been able to achieve that in Canada yet.”

“Oh, we have no cables yet,” one of the officials told me. For three years this plant had existed — but with no means of sending its power to where it could be used. I was told that occasionally the generators were run and the high voltage was led into a nearby lake, where it proved very efficient in

CONTINUED ON PAGE 30

continued from page 20

We relax while the Communists present their distorted views

killing large numbers of fish. On such “test days” every family in the district had fish for supper — quite the most expensive suppers I have ever heard of anywhere.

The distribution system was eventually installed and today the plant is a valuable asset, but three years had been wasted — because there had been no effective over-all plan. One country had given the plant and long afterwards another — it happened to be Canada — supplied the power lines.

For some reason electrical power plants, which are among the most urgently needed “capital installations,” seem particularly vulnerable to poor planning. In many other places hydroelectric stations lay idle for some years because the installations were not completed. I remember, still with anger and shame, a virtually new electrical standby plant which the Ontario Hydro sold to us (I was then the Canadian aid administrator) at a bargain. We shipped it to East Pakistan, where it was supposed to supply electricity for a very good agricultural project in a depressed area. But other donors failed to supply what they had promised, and the Canadian plant stood idle. Only now, years later, the Pakistan government is using it to carry out at least part of the original scheme. In the meantime, five or six years were wasted.

On another occasion I was shown over a large chemical plant which after several years was still not in production. Inspectors eventually found that the plant had not been assembled properly. Engineers corrected the fault and now the plant produces, but precious years were wasted.

We have mismanaged some much less complicated forms of aid — agricultural equipment, for example. I have seen tractors from various parts of the commonwealth lying around useless because they were unsuitable for the type of farming in the area, or because spare parts or repair facilities were not available.

One result of this kind of bungling is that what might be called the “ideological” values of our vastly expensive aid programs have largely been wasted. We have failed to put across to

the populations of the poor countries that our free system produces more human welfare than does communism.

As I have said, the communists are far less generous with their aid, and far less successful in the administering of it than we are. Where they excel is in disruptive propaganda and political intrigue. They are determined not to let the West’s success with the Marshall Plan in European recovery be repeated in the less well developed countries of the world. The Soviets are grossly misrepresenting our motives, and are generating as much confusion as possible wherever they think our aid programs might be successful.

This was brought home to me when 1 gave a lecture in an Indian University in Assam, in the area of the recent Chinese attacks. A young student rose and most belligerently asked me this question: “Why do your country and other Western nations give us aid? Don’t talk to me about Christian charity; 1 am not a Christian and I don’t believe in such protestations anyway. You must have some motive. What is it? Where is the catch?” I could sense the tension in all his young companions as they waited for my reply.

They were a little startled when 1 answered: “Our motives are almost entirely selfish. We are desperately trying to build up a soundly based free world. In the process we make many mistakes, but you must remember that we are only in the early stages. We realize we cannot build such a world without the co-operation of all you people, if only because you are in the majority by so many millions. If you are to take your rightful place in such a world, you must have capital and since you cannot save enough capital out of your present national income, we are trying to supply it.”

That brought an Indian girl to her feet with the accusation — which the communists are never tired of bringing against the West — that, having lost their empires, the former colonial powers are trying to get them back by enmeshing these new countries in strangling debt. I replied that the old colonial powers obviously had no such intention and that the United Nations Organization was there to see fair play anyway. In any case, Canada had never been a colonial power and her Colombo Plan aid was a gift not a loan. When the meeting ended, these youngsters crowded round, full of questions, eager — and friendly. I have had similar experiences all over Asia and I mention them here only to point up the deplorable fact that we .seem content to sit back and let the communists present their distorted view to these emerging countries.

What can we do about it? We can take a clue from the electrifying effect the declaration of the Atlantic Charter had during World War II when jointly expounded by Churchill and Roosevelt. Another such declaration is long overdue. It should conic from the West’s top leaders, and state clearly what our free world objectives are. Thereafter the message should be repeated constantly down through the ranks of free world representatives working in the field of foreign aid.

Continued on page 34

We are neglecting another very important means of communication. The communists flood the newly free countries with books in local languages. I have, for instance, seen exhibitions of books which cleverly incorporate communist doctrines into children’s stories; it’s almost impossible to find similar books from the free world. I once asked the head of a university why his students were so thoroughly indoctrinated in communism. His reply was-To take me on a tour of the book shops surrounding his campus. They were full of books printed in communist countries and in the local language, beautifully bound and at extremely low prices. What few books come from the free world compared poorly in binding, were in English only and were many times more expensive. Asian students have very little money and a great thirst for books. They love to build little libraries of their own. Need one ask which books they use?

Slowly, the West is recognizing the weaknesses of our costly aid effort. Last October, Lord Franks wrote: “Generally speaking, there is no agreement in the amount or duration of aid, on priorities or methods. To a considerable extent the members of the Atlantic group do not know what the others are doing, at times with unfortunate results in the receiving country. There is a clear need for common policy and common action.”

The well-known British economist and expert on aid economics, Barbara Ward Jackson, had this to say recently: “The chief reason for concern is the fact that behind a good deal of rhetoric and some solid government spending, the shape of a genuine Westfor aid and development

remains very hazy ... the great task of world modernization — to provide a viable international framework for the developing nations — still hangs fire.”

Another confusion that needs clarifying is the question of how much various nations should contribute. Comparisons are constantly being made — Canada’s contributions have come in for a lot of criticism recently, both at home and abroad. The countries vie with one another to make their contributions look as large as possible in their reports to the Organization for Economic Co-operation and Development.

The OECD, formed in 1960, is at present the only central international body dealing with aid to underdeveloped countries, and the total contributions reported to it can look quite impressive. But actually there is no sound basis for these comparisons. Some countries include contributions that other countries consider it more ethical to leave out. Some include payments they make to colonies they still hold, and to former colonies.

Last year the OECD held its annual aid review meeting in Paris at which it examined and compared the amounts and nature of aid from its members. This was a step in the direction of better co-operation, but it did nothing to stop the wasteful practice of each donor country going its own way without regard to what other countries were doing. In its report of the session the OECD itself pointed up the need for better co-ordination.

It has often been suggested that the United Nations should take over the administration of aid. 1 disagree. By its very nature the UN is destined to remain the centre of Cold War con-

troversies, and the delicate matter of aid had better be handled by a noncontroversial body. In any case I doubt whether the vast centralized organization that would result from UN management of aid could work efficiently.

Instead the donor nations should form a permanent body of economists, engineers, agriculturists, industrialists and businessmen to work with the governments and planning boards of the less developed countries. This group could prepare the blueprint within which all aid would be given.The great improvement over our present haphazard system would be that, although the donor nations would still control the spending of their own funds, such expenditures would be made only for purposes that fit into well - planned programs for each country.

It is surprising how elementary some of this well-planned aid would be. Much could be done, for instance, by providing peasants with better and more varied hand tools. Today an Asian peasant has virtually only one tool, the mommoty, a kind of large hoe. But it is useless to introduce better tools unless education is given in their use. The peasant carries everything on his head: baskets of earth, heavy stones, anything that has to be moved. This method is not only inefficient but detrimental to his neck muscles and not particularly good for his head. Many years ago in India I introduced my gardener to the wheelbarrow; 1 showed him how to use it and explained the advantages of pushing a wheelbarrow over carrying things on his head. But the next time I saw my wheelbarrow the gardener was carrying it, loaded with earth, on his head!

We should make much more use of experienced businessmen who have actually built up large Western enter-

prises and know how to go about the job. Why should they be interested? They can look at the prosperity of Europe, which all stems from the first and most successful aid program— the Marshall Plan. They now face the need for expansion, for wider freeworld trading opportunities, and they cannot achieve these things until the millions in the underdeveloped areas have products to trade. Their potential is colossal. But if we cannot respond to the challenge they present, can we blame them if they seek help outside the free world?

Large and complex though the aid problem is, sometimes the rewards show up in surprisingly simple form.

1 once visited a poor Ceylonese village where, under the Colombo Plan, we had installed some pipes and a pump or two to lift water to a plateau normally too dry for fruitful cultivation. It was a small inexpensive project, and the object of my visit was to see how it was getting on. The people were so happy with it that their gratitude was embarrassing. I asked one of the villagers what he was doing with his money — which in our terms was still a pitifully low return. His answer was to dive into his hut and reappear with the most gaudy shirt 1 have ever seen. It was the first new shirt the man had ever owned. Then he dived into the hut again and emerged with the first new sari his wife had ever owned. He proudly showed me their little store of grain which was more than they had ever had for themselves in all their lives. At that moment no communist propaganda could have influenced that man or his wife. They were on the first rung of the ladder leading to personal independence, a natural longing which communism will never destroy and which our free world promotes and encourages. ★

WHERE OUR FOREIGN-AID MONEY GOES

iNTERNATioNAL economists estimate that the Western nations should contribute one percent of their gross national product to aid less developed countries. On this basis

Canada would give about $400,000,000 a year. The following are Canada’s actual aid allocations for the fiscal year ending on March 3), 1963:

Colombo Plan...................................... $41,500,000 (Reduced from $50 million due to the austerity program) Special Commonwealth Africa Aid Program............. 3,500,000 West Indies Assistance............................... 2,452,000 United Nations Special Fund ......................... 2,540,000 UN Expanded Program for Technical Assistance......... 2,320,000 Commonwealth Scholarship Plan ...................... * ,000,000 United Nations Children’s Fund....................... 800,000 UN Relief and Works Agency for Palestine Refugees...... 500,000 Purchase of flour for UNRWA....................... 500,000 Educational Assistance for Independent French-speaking African Students ................................ 300,000 UN High Commissioner for Refugees.................. 290,000 Contribution to International Development Association (Branch of the World Bank) ...................... 8,560,000 World Food Program ............................... 1,080,000 Miscellaneous Contributions .......................... 4,830,000 $70,172,000

(In addition, Canada expects to make loans of around $30,000,000 to needy countries for capital projects.)