Foreign Aid: The Grand Plan

It was the best of times and the worst of times, to hear President Kennedy tell it in his full-dress message outlining his grand new plan for foreign aid. The best lay in the “historic opportunity” of the ’60s for “the free industrialized nations” of the northern hemisphere to set up a long range program that would “move more than half the people of the less developed nations into self-sustained economic growth” and nudge the rest toward that goal. The worst lay in Kennedy’s verdict that the U.S. foreign aid program, after having passed out a walloping $85.8 billion in 15 years* is now one big mess—”bureaucratically fragmented, awkward and slow, its administration diffused over a haphazard and irrational structure” with “weaknesses that have begun to undermine confidence in our effort both here and abroad.”

Principal Kennedy recommendations for correcting the mess and seizing the opportunity:

¶ Organization of one big aid agency, with authority over half a dozen separate activities now going their separate ways—including the International Cooperation Administration, Point Four programs, Development Loan Fund, Food for Peace and the new Peace Corps. (Probable director: ICA Chief Henry R. Labouisse, 57, an old hand at foreign aid, relief, and economic affairs.)

¶ Congressional authorization for the new agency to borrow from the Treasury up to $7.3 billion in loan funds over the next five years. This would enable it to make long-term aid commitments instead of coming to Congress each year to get programs approved. “Uneven and undependable short-term financing has weakened the incentive for the long-term planning and self-help by the recipient nations that are essential to serious economic development.”

¶ Separation of military from economic aid, placing military requests under Pentagon authority and in the defense budget.

¶ Major support for nations that show political as well as economic promise, and that pledge themselves to necessary social and economic reform “including land reform, tax reform and improved education and social justice.”

For those fellow-Americans who might not buy the sweeping idealism. Kennedy had a hard-nosed reminder: most U.S. economic aid comes back to the U.S. in purchases of American goods. “Cutbacks in the foreign aid program would be felt not only in loss of economic progress and hope abroad,” said he, “but in loss of markets and income for business, labor and agriculture at home.” For the U.S. taxpayer, he had a hope : well-to-do allies should pay more of the foreign aid bill.*

Congress was cool to several parts of the Kennedy program. Kennedy should have little trouble in putting the mixed bag of U.S. aid agencies under a single head. And cold war crises will doubtless warm up support for the President’s request for $4 billion for fiscal 1962. But Congress will be reluctant to authorize long-term loans and to relinquish its own year-to-year grasp on the purse strings. “If we don’t get it,” said the President at his press conference, “I think we’ll continue to see some of the drift we’ve seen in these programs in the past.”

*Of which $60.4 billion has gone for economic aid and $25.4 billion for military aid.

*Up for discussion at this week’s meeting in London of the ten-nation Development Assistance Group which includes the U.S., Japan and key European nations is a U.S. idea for industrialized nations big and small to pledge approximately 1% of their combined gross na tional product to foreign aid.