MUTUAL SECURITY PROGRAM DEPENDENT OVERSEAS TERRITORIES PROGRAM, CONGRESSIONAL PRESENTATION STATEMENT, FISCAL YEAR 1954

I. THE PROGRAM

The executive branch has proposed an overseas territories development program for fiscal year 1954 which will require new obligational authority of $25 million. This will be supplemented by the use of funds provided for under the basic materials program which is being presented separately. This makes possible a single program with three related approaches for making an effective United States contribution to meeting the needs of the dependent overseas terri tories of the European NATO countries for rapid, substantial and balanced development in their political, economic and social life. The three aspects of the program are:

1. Technical assistance.-Technical assistance will make available to the territories the specialized skills and the scientific knowledge which is essential to the solution of problems basic to the welfare of the native peoples in health, housing, sanitation and agriculture. Technical assistance will also be available for resources development, for increasing private investment, for the improvement of administrative practices, for technological advancement and expanding productivity. These are essential elements creating a base for the economic and social growth of the native peoples, which will make possible and justify increased private investment in productive enterprises. The United States, which was so recently an underdeveloped country itself, has had to find solutions to many of the same problems, particularly in the field of agriculture and transport, that are now faced by these underdeveloped territories. Europe, which in some cases has not been faced with the same problems and which has developed over so much longer a period of time, has not developed as fully the techniques and skills necessary to the solutions of these problems. It is because of this unique contribution which the United States has to make that technical assistance is of vital importance in the development of these territories. There is, however, another important reason why technical assistance is necessary. The territories are so numerous and the area they cover so vast that even where European techniques and skills are adequate, in many fields there are not sufficient European technicians available. The required transfer of skills, techniques and knowledge will ordinarily be made by making available United States experts to assist the local administrators in the territories and by furnishing the specialized equipment and materials essential to the effective conduct of the programs.

2. General development.-The general development aspect of this program is closely related to technical assistance. It is the second tool to be used to achieve our objectives as expressed above and is the one which will be most effective in redirecting investment toward projects of high priority interest to the United States. While technical aid consists primarily in meeting the costs of making available the services of experts, general development requires a direct capital investment. The United States contribution will ordinarily be less than half and frequently far less than half; its availability will make possible the early carrying out of projects which might not otherwise be undertaken and will induce substantial investment by the metropole and the territory. Financial assistance for development will generally be made available for essential projects which contribute to the welfare of the native peoples and to the economic growth of the territories. The program will stress, among other things, land development with particular emphasis on utilization of water resources as means of increas ing the supply of food for the local peoples, thus raising them above the subsistence level and improving the labor supply. Methods and techniques more adapted to the local problems in fields such as agriculture, housing, transportation and health will be demonstrated in actual practice on a sufficient scale to show how their adoption would improve living standards and expand production. Assistance for these purposes, as well as in connection with the basic materials program described below, will be made available to meet both the direct dollar costs and a portion of the local currency costs of the projects.

3. Basic materials development.-Funds from the basic materials development program will be available for the third aspect of this program; i. e., for financing

1 The $25 million is included in the fiscal year 1954 Mutual Security authorization request as follows: $1 million for dependent overseas territories in the Far East (sec. 543, proposed legislation) and $24 million for African dependent overseas territories (sec. 206, proposed legislation).

in the overseas territories a part of the cost of transport, power, port development, etc. It will increase the production of raw materials for the United States and countries receiving United States assistance and will assist in the establishment of conditions which will make private investment productive enterprises possible. Projects under this program will be related to technical assistance and general economic development, as a successful materials program depends on general economic and social progress and not just on capital investment in basic facilities. The overseas territories development fund and the basic materials fund will supplement each other and will in turn be supplemented in the total United States approach to territorial development by loans from the IBRD and the Eximbank. It is only through such a rounded approach to these territories that we can hope to maintain our relations with the peoples of the territories and the metropoles in such a fashion that we can be assured over the medium term of their continued cooperation in meeting our mutual needs.

II. WHAT WILL THE PROGRAM ACCOMPLISH?

The investment in men and money, required to meet the development needs of these territories from the standpoint of the aspirations of the peoples of the areas and from the standpoint of the potential contribution the areas could make to the free world, is extremely large. The resources available to the territories from their own revenues are totally inadequate to meet this requirement. The economic condition of the metropoles is such that they are not in a position adequately to supplement the resources of the territories. It is not the purpose of this program to attempt to fill this gap in resources. It is felt, however, that by the use of the minimum funds here proposed it will be possible to do much to meet the development requirements through assuring a better use of existing resources and where a choice of projects is necessary to influence the selection of those projects most necessary from the standpoint of United States objectives.

Though the aid proposed for the territories is small when contrasted with the total annual investment of the European countries in their dependencies, it can mean an effective and essential participation by the United States in the development of these areas. The peoples of the territories, particularly in those areas now approaching self-government, look to the United States for assistance and technical guidance in their economic development, as well as to the metropoles. As a minimum, United States participation is necessary as a demonstration of our interest in their welfare. The objectives and priorities of the United States in the territories are not necessarily the same as those of the metropoles. Through our assistance program, we have the opportunity of influencing the territorial development plans so that they meet United States objectives as well as those of the territories and the metropoles.

Technical assistance not only makes possible a transfer of United States experience in meeting development problems, but places us in a position to show how the limited resources available can be more effectively used; on the other hand, this combined with an actual financial contribution will frequently induce sufficient additional investment by the metropole and the territories to make possible the carrying out of important projects not otherwise possible. In many cases, projects in which we are interested and which are high on our list of priorities will not be undertaken unless the United States is willing to make a financial contribution. As an outsider, we are in a position to promote regional development plans and modify the attitude of the metropoles and the native peoples toward the problems inherent in dependent status. A United States program makes it possible for us to work with the territories and the metropoles alike for an improvement in the health, and the living standards of the native peoples which is a prerequisite to general development and the increased production of materials which will be increasingly essential to the United States and Europe. The expansion of materials production in the territories, which this program furthers, should make possible within a few years substantial dollar savings to the European countries through increasing the availability of materials from nondollar sources. At the same time the DOT exports of materials to dollar areas will undoubtedly increase and so enlarge the dollar receipts accruing to the European monetary systems. The development of production in the territories of tropical timber, oil seeds, manganese, and tungsten will assist materially in lessening the dependence of the free world on imports of these commodities from the Soviet bloc and thus aid in achievement of an important objective of United States economic defense policy.

III. THE PROBLEM OF THE DOTS AND THE INTEREST OF THE UNITED STATES

The immediate interest of the United States in the dependent overseas territories has been determined by the current world situation in which raw material production has failed to keep pace with expanding industrial requirements. The overseas territories are already among the most important producers of materials in the free world and offer the most substantial promise of expanded output. Africa is practically the sole source of supply for such vital items as industrial diamonds, columbite, and cobalt, and in addition is an important exporter of uranium, chrome, manganese, copper, tin, asbestos, graphite, palm oil, and sisal. The continued production of these materials depends not alone on direct capital investment in the producing enterprises but on creating the economic structure within which economic growth is possible.

The territories are deficient in this indispensable economic structure. They lack the basic transportation, power, and other facilities necessary to sustain and increase productivity. They suffer generally from a shortage of labor and they lack adequate technicians and skilled workers, food supplies, public health and training facilities, water supply, etc. In many cases intensive surveys and exploration are still necessary as are detailed studies of the most economic means of solving their transport, power, and agriculture problems.

The dependencies are not only making a contribution to the defense effort in supplying Europe and America with materials, but they are providing strategie bases in Africa and the islands of southeast Asia. The area of Africa, south of the Sahara, is an important buttress to North Africa and the maintenance of our position in the eastern Mediterranean. Malaya, quite aside from its rich resources in rubber and tin, is the most readily defensible area in southeast Asia in the event of a further deterioration of the situation in Indochina, in which event it might be deemed essential that financial assistance be made available for road construction in northern Malaya for defense purpose as well as for economic development.

Europe and the United States are faced with the need of increasing the production of raw materials in the underdeveloped areas of the world to meet industrial requirements either in peace or for war and they are under the military necessity of maintaining their strategic bases in these same areas. This cannot be done without the cooperation of the native peoples. The day is long since past when the native could be persuaded or forced to labor in an enterprise which bore little or no relation to his own needs and aspirations. He is becoming vocal, has developed a political consciousness, and is demanding a place in the sun. The political crises in Kenya, Morocco, and Tunisia are examples of the problem to which a solution must be found while the Gold Coast and Nigeria are examples of steps being taken to solve such problems. Economic stresses in part create and in part aggravate political tensions and cooperative economic measures can moderate their intensity.

It has been the policy of the United States through its assistance programs for the DOT'S to encourage such cooperative measures as will make possible the political stability in these areas which is so essential to our national objectives and interests. This political stability depends in a large measure on our assisting in creating an environment in which the native peoples will feel that their aspirations can best be served by associating and cooperating with the nations of the free world.

APPENDIX-BRIEF SUMMARIES OF SELECTED ILLUSTRATIVE PROJECTS FOR FISCAL YEAR 1954

A. SELECTED ILLUSTRATIVE TECHNICAL ASSISTANCE PROJECTS FOR FISCAL YEAR 1954

1. United Kingdon OT's

Private investment survey, Uganda.-Estimated requests for United States assistance is $21,000. A team to establish opportunities for private capital investment, United States and foreign, in area. It would also be expected to result in decisions on fields in which such investment is possible, recommendations on Government action necessary to improve climate for such investment and recommendation on specific steps to reach potential investors.

Aerial survey of part of Volta River Basin, Gold Coast.-Estimated request for United States assistance is $45,000. TA grant to cover cost of a survey in connection with the proposed hydroelectric scheme for production of aluminum. United States coal expert to advise on expansion of coal production, southern Rhodesia.-Estimated request for United States assistance is $8,000. A United

States coal expert to advise on the expansion of coal production in the Wankie coal fields and the advisability of granting a basic materials loan for the acceleration of the current development program.

Coordination of development planning, southern Rhodesia.-Estimated request for United States assistance is $2,500. A Rhodesian Government agronomist, reclamation specialist, and agricultural specialist to study in the United States the general problem of coordinating development planning in preparation for the Government Sabi Valley plan.

Technical requirements for hydroelectric project, southern Rhodesia.—Estimated request for United States assistance is $50,000. A United States firm or team for advising on the technical requirements to complete a hydroelectric project in the Kariba Gorge on the Zambezi River.

Subtotal, $126,500.

2. French OT's

Survey, exploration, and prospecting for tin, columbium, and wolfram, French West Africa.-Estimated request for United States assistance is $300,000. Exploration, prospecting, and development of over 75,000 square kilometers in FWA for tin, columbium, and wolfram. TA needs are for aerial photography, combined with geological and prospecting team. This would establish mineralized areas and open way for private investment in production facilities.

Animal husbandry and agricultural development, Lake Chad area, French Equatorial Africa.-Estimated request for United States assistance is $85,000. Area has great apparent potential as food source for badly underfed native peoples of the area. United States technicians could help in its development.

Study of problems in organization and planning, French African territories.— Estimated request for United States assistance is $30,000. An undetermined number of small groups and individuals from the upper levels of the French Overseas Territories Administration to study specific problems in organization and planning in the United States.

Subtotal, $415,000.

3. Italian OT's

Shallow-well program for cattle industry, Somalia.-Estimated request for United States assistance is $2,400. A ground-water specialist to visit the United States to learn latest techniques and use of equipment in developing shallow-well program for the cattle industry. This is one of the primary problems facing this area and United States experience appears to be directly usable in solving it.

Port survey, Somalia.-Estimated request for United States assistance is $8,000. An American port and harbor engineer to advise on the rehabilitation and development of port facilities.

Plant insect and disease control, Somalia.-Estimated request for United States assistance is $6,000. A United States expert to advise on the specific plant insect and disease control as basis for extending agriculture in this area now primarily limited to pastoral pursuits.

Private investment potentialities, Somalia.-Estimated request for United States assistance is $6,000. A United States expert to survey private investment potentialities. Same objective as Uganda survey described above.

Subtotal, $22,400.

4. Portuguese OT's

Vocational training, Mozambique.-Estimated request for United States assistance is $125,000 (including demonstration equipment). This project will provide United States personnel to set up vocational training centers to train local teachers in machinery operation, repair and maintenance, simple toolmaking, and other crafts essential to the operation of ports, railroad and motor transport, utility, and industrial plants of the area. It will lay the basis for provision of needed local artisans and mechanics to support the planned economic development program of the Portuguese for Mozambique. This is of primary interest to United States since this area is an outlet for minerals production of the Rhodesias and its transport capacity controls possible expansion of production of cobalt, copper, chrome of that area.

Railroads, Angola.-Estimated request for United States assistance is $8,000. This consists of three phases: (a) A railroad survey to report on the adequacy of railroad line to support increased production of manganese and other basic materials from central Angola to the Port of Luanda; (b) to advise on the present capacity of Mossamedes to Sa da Bandeira railroad line and proposed ex33064-53-71

tension to northern Rhodesia; (c) to justify recommendation for any proposed American loan for improvement of the Benguela railroad.

Private investment study, Angola.-Estimated request for United States assistance is $25,000. A team of experts to study institutional factors which inhibit private investment, availability of private Portuguese territorial and foreign capital for investment, opportunities for investment and means of stimulating flow of private capital into productive enterprises.

Productivity, Mozambique and Angola.-Estimated request for United States assistance is $30,000. A team of three composed of a mining engineer, agricultural economist and an industrial engineer, to be employed for 1 year to advise the governments and members of the industries concerned on ways and means of increasing production of strategic and other basic materials, including food in short supply in Africa, the metropole and Europe.

Expansion of harbor, dock, and port storage facilities, Angola.-Estimated request for United States assistance is $18,000. Two United States experts to advise the Angolan authorities on planning for expansion of harbor, dock, and port storage facilities in Mossamedes Harbor.

Food crop investment, Mozambique.-Estimated request for United States assistance is $18,000. Two United States experts to advise Mozambique agricultural authorities on the improvement of current crops and introduction of new crops.

Urban public utilities, Mozambique.—Estimated request for United States assistance is $10,200. Two United States experts to advise on power and water shortages resulting from outgrown facilities in several of the Mozambique ports. Iron ore survey, Goa.-Estimated request for United States assistance is $36,000 (including aerial surveys and related equipment and supplies). A United States firm or survey team to determine the extent and quality of the iron ore reserves in Goa. Iron from Goa already being shipped to Japan but possibility of considerable expansion.

Manganese and bauxite survey, Goa.-Estimated request for United States assistance is $50,000. A United States firm or geological survey team to deter mine more generally the prospects for developing the mining of manganese and bauxite in Goa. This is a companion survey to the iron ore survey, except it does include an aerial survey and will not concentrate on existing reserves. Subtotal, $320,200.

5. Belgian OT'8

Fertilizer study, Congo.-Estimated request for United States assistance is $3,000. The objectives are to determine by laboratory methods, pot experiments, etc. (and at an early date by field tests) the kinds, quantities, and combinations of plant nutrients that must be added to various soil types for different plants, mostly annual food crops, to obtain optimum results. It is believed that methods recently developed in America for measuring the effects of known and controlled plant nutrients upon plant growth are more efficient and effective than those in use in other parts of the world; hence American technicians are needed for this project.

Agriculture production statistics study, Congo.-Estimated requests for United States assistance is $1,000. An extensive and diversified program of agricultural research is under way at Yangambi (Beltsville of the Congo) and at the several regional research stations in the Congo. Some research studies have been in progress for a number of years. A large amount of data has been and is being accumulated. The valid results of research need to be made available quickly for use in practical agricultural production. No doubt most of the experiments have been well planned and designed. In general, internationally accepted practices and procedures are followed. Nevertheless, some special counseling and advising is needed in order to ensure that experiments are being designed in the best way. But the primary and most urgent reason for this project is to provide technical "know how" in the evaluation, analysis, validation, and presentation of conclusions, of experimental data in the most efficient and economical manner. Americans have made remarkable progress in this field in recent years.

Transport survey, Congo.-Estimated request for United States assistance is $50,000. United States technical aid requested in developing detailed planning for construction of 12.000 kilometers of arterial highways, one of the basic require ments for an expanding economy.

Vocational agricultural training programs, Congo.-Estimated request for United States assistance is $15,000. Agricultural progress in the Congo is depend