Foreign Aid

Since the days when the Marshall Plan silently and efficiently rebuilt Europe, no phrase has possessed a more magic significance for the policy planner on a grand scale than "foreign aid." The professor who writes a manifesto for American action in foreign affairs, the Presidential candidate who appeals for his country's generosity and sacrifice as the qualities most essential for moving ahead, the President who delivers a moving State of the Union message on the wretched state of the underdeveloped countries: each one prophesies that if the cold war is to be won, and the suffering and poverty of two-thirds of the world lessened, it must be done through brave, bold, ambitious and constructive "foreign aid."

But the magic phrase soon assumes the flavor of a conjuror's patter, with the difference that the trick is neither cleverly nor effectively done. The professor or impartial committee (like that which drafted the Draper Report in late 1959) advises; the President requests an appropriation. Finally, the Congress authorizes and appropriates perhaps $3.8 billion for both military and economic assistance, a mere four per cent of the annual budget.

More money is by no means all the program needs, but this does not mean that its budget for this year is satisfactory. The Budget Bureau has already out Undersecretary Dillon's figure of $5.5 billion to $4.7 billion, and the Administration will be extremely lucky if the combined axes of the House and Senate leave as much as $4.0 billion Unless the President-elect is willing to fight for between $4.5 and $5.0 billion at the expense of other legislation, his subordinates are unlikely to escape their by now traditional frustrations.

Yet even a wonder budget will accomplish no good whatever if the ways in which it is spent and administered 'are not dramatically changed. The question of emphasis is certainly the most talked-of and possibly the most significant of all. Both the Draper and Senate Foreign Relations Committees feel that military aid has been over-stressed in recent years, not necessarily because too much is spent on it, but because the Administration has given too much importance to its value in policy planning. By its very nature, this kind of assistance sets up military hierarchies in countries to which it is given, and offends neutrals who do not want it. By the tone of his campaign speeches, Kennedy has at least shown that he recognizes that poor countries are still far more interested in development than in collective security.

Of course these countries must have well-trained, well-equipped armies large enough to take care of, say, guerilla forces like the Pathet Lao or to repel invaders from North Vietnam. That is where "defense support" assistance--which provides capital and soldier-trainers rather than heavy weapons--can be most useful for local defense, and the Pentagon could well sacrifice some of the military aid budget to pay for it.

There are other economic aid programs already working that have apparently been forgotten by all but their most despairing critics. Point Four, the brilliantly conceived technical assistance program that plays the villain in The Ugly American, badly needs a boost. More important, it needs a staff, and a well-paid professional staff at that. Public Law 480, which authorizes agricultural surplus disposal overseas, must die or wrench itself free of the innumerable squallings that arise when the U.S. subverts the International market by shipping free wheat to India.

Capital is always what a nation fighting to industrialize wants most. Usually, a country sensitive about charity would rather have it in the form of loans, specifically long-term "soft" loans repayable in local currency rather than in dollars. The Development Loan Fund has not been asleep, but it has never had sufficient authority to extend and expand its program.

Clearly, the task of coordinating all these agencies to do what will be required of them during the next President's term is a shudderingly complex one. It need not be so, given Kennedy's adoption of the Draper Committee's admirable suggestion that all these offices be assimilated by a mammoth single agency to administer all foreign economic aid. Another absolutely necessary administrative overhaul is some sort of Congressional authorization to extend the mutual security program beyond the duration of one year. If dollars must be reinjected each year into programs abroad, the sad history of projects left unfinished and nations hesitating to begin projects because of uncertainly about a constant supply of capital, will be repeated over and over while planners sit helplessly at desks in Pnom Penh and Lagos.

A number of small multilateral dispensers of aid have been notably successful with their limited methods of handling development assistance. One reason for this success, of course, is that beneficiary nations have no terrors of binding strings that they feel are often attached to unilateral aid. The U.N. Special Fund (under Paul Hoffmann) and Eugene Black's International Bank for Reconstruction and Development have been nearly paragonally tactful as well as helpful. To these, as well as to the Colombo Pact and the new International Development Association should go an increasing amount of the U.S. foreign aid budget. The bulk, of course, must still be handled from Washington, unless Kennedy can persuade the NATO countries, who are expected to contribute a good deal to the mutual security coffers in the future, to form a large Atlantic Dispenser of development capital.

There is nothing even remotely trivial in these reform proposals. Many of them have been obvious for some time, waiting only for an active President to execute them. The magic in foreign aid must always work slowly, but unless it is conjured with intelligently, it cannot work at all.