The Development Decade-2
By NICHOLAS DAVENPORT Tins second article is really by special request. So many people had not heard of the United Nations 'development decade' and wanted to know more—feeling guilty, per- haps, in belonging to a rich nation while more than half the world's population is underfed----and so many of mY friends, professionally interested in the work
in- formation the United Nations, smothered me with n- formation that I feel compelled to return to this important subject of aid for the underdeveloped nations. My previow: criticism of the City did not imply that their arranging of dollar loans interfered with or held up the provision of aid tit the underdeveloped. The size, as well as the efficiency, of the capital market in the City—the greatest in the world- is so immense that a small dollar loan for, say, rich Belgium can be a,rranged simultaneously with a large dollar loan
for, say, poor India without any trouble. But In this 'development decade' it is surely bad Publicity for the rich nations when the rich are served and the poor go begging. As Mr. Ian 4Little pointed out in a recent Sunday article on
• "111, not help India more?' the countries with the strongest claims for aid often get the shabbiest treatment.
But I must start at the beginning. This was a
i resolution of .the . UN General Assembly in ,,Deeember, 1961, designating the 1960s as the UN Development Decade. in which the govern- ments of 104 countries agreed to embark on a programme for 'international co-operation.' 1 hey pledged themselves to contribute to the UN h',Pedal Fund (set up in 1959) which is helping tne underdeveloped nations to achieve by 1970 ! rate of growth in national income of at least Per cent a year. As at March 31 last the total contributions pledged to the Fund this year amounted to $72 million, of which the US gave nearly half ($31 million). The UK contributed mill million—a little more than Sweden (551 0h). Other rich nations which made miserly contributions were Germany, $5,350,000, and mrance, only $1,072,079. Portugal gave nothing. .,.-"ext Year the Special Fund managers hope to 60 at least $100 million. It will he a scandal if they fail.
the able Mr. Patti Hoffman and is giving the uderdeveloped nations money to make the all- 1_11?1,0rtant. pre-investment surveys which, show nwtoler,e capital investment is feasible and eco- Prilfilic: that is, what natural resources can an°d-tahlY be developed, what industries set up sar what `infra-structure' investment is neces- ,e 10 make the developMent fruitful. In four sears the Council of the Special Fund has nli3nProved 286 major development projects in nine[ six low-income countries at a cost of $590 locally nn, of which. narly $340 million has been is found. The asesistance of the Special Fund
who to providing the international experts
me? Make the survey, to financing the equip- ihellt, materials and special services essential to protect and to training personnel and endow- orLedowships abroad. Here are some examples elect .working. It spent $300,000 on making the brought Power survey for the Argentine which its forth $300 million of finance towards ' ecornmended $735 million ten-year invest-
ment programme. In Laos it made a survey of the Nam Ngum river and recommended the construction of a storage darn and of the related irrigation and electric power works. This pro- ject could slash the cost of electricity in Laos, open up local industries, double the agricul- tural cropping and reduce or eliminate the country's dependence on imported staple foods. The Government of Laos is now seeking the modest $22 million of external finance required. But where will the money be found in the present political circumstances?
All the UN agencies are, of course. used in carrying through the projects which the Council of the Special Fund has examined and approved. For example. the International Labour Office and Unesco are training technicians and crafts- men in Colombia, running schools of civil en- gineering and architecture in Turkey, giving courses on labour management and technical supervision in Pakistan and training school teachers in the Sudan. All this is done in part- nership with the countries _concerned. There is no question of paternalism or aid with strings. The rich nations should feel thankful that when they finance development schemes approved and 'vetted' by the Special Fund the money will be spent wisely and efficiently and not wasted upon uneconomic enterprise.
Mr. Hoffman estimates that to achieve the Decade target the flow of investment, public and private, into the developing countries must in- crease by an average of 53,000 million a year, of which two-thirds vvil he required for eco- nomic and social 'infra-structure'; that is, for schools, hospitals, sanitation, irrigation, roads, etc. These may not be revenue-producing assets. but they are necessary to provide the conditions basic to economic growth. It is still not clear where the money for this 'infra-structure' will come from. It is not certain that it will come at all—bilaterally or unilaterally. The ideal agency would be the International Development Asso- ciation, an affiliate of the World Bank, for this body makes interest-free loans repayable over fifty years with no repayments during the first ten. But the IDA is within sight of the end of its usable funds! It is really vital that its funds should be replenished this year. Indeed, Mr. Hoffman believes that the IDA should be enabled to lend at the rate of $1,000 million annually throughout the decade. It will be madness if this finance is not made available. It should not wait upon a decision to create international money through the IMF, for this decision is likely to be held up by pelitics: it should be made the immediate task of the financial insti- tutions of the developed nations. The City could he using its brains and its brilliant expertise to devise financial ways and means of rescuing the IDA from paralysis.
A solution of this Special Fund problem would also rescue the Western world from a dangerous predicament. Communism and the cold war feed upon the fact that the gulf separating the rich nations from the poor, the 'haves' from the 'have-nots,' is not narrowing but widening. This is because the poor countries increase their population more rapidly than their wealth while the rich tend to increase their wealth more rapidly than their population. This gulf can only be 'narrowed by education and development finance. Anyone who reads the 1963 report of the UN Special Fund will be con- vinced of this truth.
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