THE PRESIDENCY: New Thoughts on Foreign Aid

Out of the secrecy that surrounds Washington’s policy planning on the Khrushchev visit, news sifted that hinted at a major U.S. policy shift. President Eisenhower, though he has said that he does not intend to “negotiate” with Khrushchev, intends to suggest to Khrushchev that the U.S. and U.S.S.R. ought to work out ways of cooperating in economic aid to underdeveloped nations.

The President’s decision represents a compromise of sharp differences of opinion inside the Administration on how the U.S. foreign-aid program ought to be modified. Nearly everybody is agreed that the U.S. has to get out from under its lonely foreign-aid load (estimated 1959 spending: $5.5 billion) in one way or another. The President backs Treasury Secretary Robert Anderson’s concept that the U.S. ought to join with prospering Western allies to create a pool of foreign-aid capital clearly identified with free nations. He has approved Anderson’s plan for a new International Development Association (IDA), capitalized with a joint $1 billion, which will get its first public airing week after next, when the governors of the World Bank meet in Washington.

But Ike, much to Treasury’s surprise, has also heeded the arguments of Ambassador to the United Nations Henry Cabot Lodge, who supports IDA, but also wants the U.S. to handle some foreign aid through the U.N. Last year Lodge won the President’s approval for a U.S.-sponsored “U.N. Special Fund,” which provides modest sums for pre-investment surveys in underdeveloped countries, also for technical training. Since then, the U.S. has contributed $5,000,000 to the U.N. Special Fund. Lodge now believes that this U.N. Special Fund is the logical mechanism for U.S.-U.S.S.R. cooperation in foreign aid, if Khrushchev is interested in Eisenhower’s new initiative. Says one U.S. hand at the U.N.: “It would be a good thing if both the U.S. and the Soviets decided to get into the Special Fund in a bigger way.”

Most U.S. planners are doubtful that Khrushchev will be any more cooperative on joint economic development than he has been in the past; moreover, the technical obstacles to U.S.-U.S.S.R. foreign aid—e.g., project control, currency convertibility—are large. But the President, buoyed up by the success of his personal diplomacy to date, intends to press hard for his new approach with Khrushchev this week. As he said in his TV talk with Prime Minister Macmillan in London, “There are millions of people today who are living without sufficient food, shelter, clothing and health facilities. They are not going to remain quiescent. There is just going to be an explosion if we don’t help.”