The governments of the area naturally are in a better position to measure what has been accomplished by public action and to assess what needs to be done through public development projects. Likewise the aid that is given by governments and received by governments is easier to measure than the less tangible benefits of private foreign investment.

Nevertheless, this natural tendency to concentrate upon what is done in what these countries call "the public sector" does not reflect any unhealthy bias in favor of public projects. Indeed, the countries of this area are fully aware of the benefits of and their need for private foreign capital. They have, for example, included prominently in their calculations of sources and possibilities of external assistance an assessment of what can be borrowed on the private international capital markets and of what steps need to be taken by them to improve their credit-worthiness. Many of the countries in the area have taken specific measures to improve the climate for foreign investment. They have issued official declarations welcoming foreign enterprise either in general or at least in specific fields. They have publicly recognized also that government measures are not the only factors governing the import of capital, and, for that matter, that the mere absence of discriminatory government measures is not in all cases sufficient to overcome the shyness of foreign capital. Hence they recognize further that if they desire foreign participation in specific fields they will probably have to take positive steps to attract it.

Therefore, in the various annual reviews the Colombo Plan countries have recognized and welcomed any evidence that may have developed during the preceding year of willingness on the part of foreign investors to undertake enterprises in the countries of the area, especially if these enterprises happen to be undertaken jointly with local capital-as was the case, for example, with the Sui gas project in Pakistan and the oil refinery investments in India and as promises to be the case in the investment finance corporations being established in India and Ceylon.

PRIVATE CAPITAL MOBILIZED

The countries of the area have not only, therefore, recognized the need and the scope for private foreign participation in the development process; they have also recognized the overwhelmingly urgent problem of mobilizing private domestic capital. In the most recent annual report, for example-that which was just prepared at Ottawa and which has not yet been published-they have noted that governments can help to mobilize private capital by seeking to minimize the hindrances to initiative arising from such factors as burdensome governmental regulations and irksome methods of tax administration. In the annual meetings the countries of the area are prepared to face frankly the difficulties that exist and the shortcomings which have manifested themselves. These meetings are by no means a eulogy upon the accomplishments of the year just finished. They

are rather a frank and friendly review of what has been done and what still needs to be done.

The prevailing tone, for example, of the annual report just drafted at Ottawa is one of optimism combined with stark realism. The countries, when they reviewed the pace and the content of economic development during the year just passed, were able to conclude that significant and encouraging progress had been made in a number of important respects but that there was no room for relaxation of effort. They recognized that in some countries the progress realized was relatively small; that throughout the region as a whole the population has been growing rapidly (indeed, at an annual rate of slightly over 9 million) and that, therefore, food production per capita (despite very creditable increases in total food output) was still below prewar levels; that underemployment in rural areas was widespread and that unemployment in urban areas, particularly of educated persons, presented a serious social problem; that trained personnel in many fields was not yet available in sufficient numbers; that in some of the countries of the area the process of formulating balanced development programs was still not far enough along; that there was only a narrow margin of production over consumption. and that, therefore, the level of savings and the level of tax revenues provided on the whole only a precarious base for development financing.

This is indeed a formidable enumeration of problems to be faced and difficulties to be overcome. It is, of course, not the whole story. Just as I did not want you to think that the annual meetings of the Colombo Plan group of countries were limited to an uncritical eulogy of results achieved, neither did I want you to think that they represent a session of breastbeating and complaining over the hardness of the task. Indeed, at this same Ottawa meeting which produced the catalogue of problems which I summarized a few minutes ago, the countries of the area were able also to record that their own outlays on development had increased considerably over those for the preceding year. In India, for example, development expenditures by public authorities for the year 1951-52 were roughly $550 million. For the year 1953-54, they had increased to $705 million and are expected for the year ending June 30 next to approximate $1,170 million if financing is available. For Pakistan the comparable figures are for the fiscal year 1951-52, $125 million; for the fiscal year 1953-54, $275 million.

These, indeed, are very creditable results and expectations. I mention them merely lest you think that the sessions of the Colombo Plan meetings are devoted entirely to lamenting over the difficulties of the economic development problems of the area. But to return to the summation of the problems, the frankness with which the countries of the area have discussed among themselves and with us their problems and difficulties and shortcomings is in its aggregate a most gratifying experience. I am reminded of the remark made at the 1953 Colombo Plan meeting by Indian Finance Minister C. D. Deshmulh (who was the chairman) that the Colombo Plan was "a

great experiment in human relations." It is very rarely that governments are able to come together and with so much freedom and honesty and openness to say what they have done, what they have failed to do, what they still need to do, what they intend to do, and what are the political and cultural limitations upon what they can do. If there is any conclusion to be drawn as concerns what the members of this Far East-America Council might learn from the experience, at governmental level, in the Colombo Plan, it is, I should think, that there are almost limitless possibilities of fruitful cooperation between the United States and the countries of Asia if there is evidenced the same frankness, the same patience, and the same understanding. We in government know that there are difficulties in the way of establishing business connections in the countries of Asia. We know that there are frictions, there are uncertainties, there are difficulties of mutual understanding. However, from our experience at the governmental level we are quite certain there is a great fund of common interest and of common viewpoint. We conclude, therefore, that there is much which should be done and can be done to accomplish the objective stated as the theme of this conference: "Strengthening Economic Ties Between the United States and Asia."

The Afro-Asian Conference

9. COMMUNIQUE OF THE CONFERENCE OF AFRO-ASIAN COUNTRIES, ISSUED AT BANDUNG, INDONESIA, APRIL 24, 1955 1

The Asian-African Conference, convened upon the invitation of the Prime Ministers of Burma, Ceylon, India, Indonesia and Pakistan, met in Bandung from the 18th to the 24th April, 1955. In addition to the sponsoring countries the following 24 countries participated in the conference:

1 Report on Indonesia (published periodically by the Embassy of Indonesia at Washington), vol. 6, No. 9, June 1955, pp. 28-31. The Afro-Asian conference had been suggested at a meeting at Colombo, Ceylon, of the Prime Ministers of Burma, Ceylon, India, Indonesia, and Pakistan held from Apr. 28 to May 2, 1954; for the May 2, 1954, communiqué of this meeting, see Documents on American Foreign Relations, 1954 (New York, 1955), pp. 272–276. Detailed plans for the conference were worked out at a subsequent meeting of the Prime Ministers at Bogor, Indonesia, Dec. 28-29, 1954; the Dec. 29, 1954, communiqué of this meeting is printed ibid., pp. 370-372.

The Asian-African Conference considered problems of common interest and concern to countries of Asia and Africa and discussed ways and means by which their people could achieve fuller economic, cultural and political cooperation.

A. Economic Cooperation

1. The Asian-African Conference recognized the urgency of promoting economic development in the Asian-African region. There was general desire for economic cooperation among the participating countries on the basis of mutual interest and respect for national sovereignty. The proposals with regard to economic cooperation within the participating countries do not preclude either the desirability or the need for cooperation with countries outside the region, including the investment of foreign capital. It was further recognized that the assistance being received by certain participating countries from outside the region, through international or under bilateral arrangements, had made a valuable contribution to the implementation of their development programmes.

2. The participating countries agreed to provide technical assistance to one another, to the maximum extent practicable, in the form of: experts, trainees, pilot projects and equipment for demonstration purposes; exchange of know-how and establishment of national, and where possible, regional training and research institutes for imparting technical knowledge and skills in cooperation with the existing international agencies.

3. The Asian-African Conference recommended: the early establishment of the Special United Nations Fund for Economic Development;1 the allocation by the International Bank for Reconstruction and Development of a greater part of its resources to Asian-African countries; the early establishment of the International Finance Corporation which should include in its activities the undertaking of equity investment, and encouragement to the promotion of joint ventures among Asian-African countries in so far as this will promote their common interest.

4. The Asian-African Conference recognized the vital need for

'See United Nations General Assembly Resolutions 724 A (VIII) and 724 B (VIII) of Dec. 7, 1953, and 822 (IX) of Dec. 11, 1954; U. N. General Assembly, Official Records, Eighth Session, Supplement No. 17 (A/2630), pp. 10–11, and ibid., Ninth Session, Supplement No. 21 (A/2890), pp. 11-12.

* See United Nations General Assembly Res. 823 (IX) of Dec. 11, 1954; ibid.,

stabilizing commodity trade in the region. The principle of enlarging the scope of multilateral trade and payments was accepted. However, it was recognized that some countries would have to take recourse to bilateral trade arrangements in view of their prevailing economic conditions.

5. The Asian-African Conference recommended that collective action be taken by participating countries for stabilizing the international prices of and demand for primary commodities through bilateral and multilateral arrangements, and that as far as practicable and desirable, they should adopt a unified approach on the subject in the United Nations Permanent Advisory Commission on International Commodity Trade and other international forums.

6. The Asian-African Conference further recommended that: AsianAfrican countries should diversify their export trade by processing their raw material, wherever economically feasible, before export; intraregional trade fairs should be promoted and encouragement given to the exchange of trade delegations and groups of businessmen; exchange of information and of samples should be encouraged with a view to promoting intraregional trade and normal facilities should be provided for transit trade of landlocked countries.

7. The Asian-African Conference attached considerable importance to Shipping and expressed concern that shipping lines reviewed from time to time their freight rates, often to the detriment of participating countries. It recommended a study of this problem, and collective action thereafter, to induce the shipping lines to adopt a more reasonable attitude. It was suggested that a study of railway freight of transit trade may be made.

8. The Asian-African Conference agreed that encouragement should be given to the establishment of national and regional banks and insurance companies.

9. The Asian-African Conference felt that exchange of information on matters relating to oil, such as remittance of profits and taxation, might eventually lead to the formulation of common policies.

10. The Asian-African Conference emphasized the particular significance of the development of nuclear energy for peaceful purposes, for the Asian-African countries. The Conference welcomed the initiative of the Powers principally concerned in offering to make available information regarding the use of atomic energy for peaceful purposes; 2 urged the speedy establishment of the International Atomic Energy Agency which should provide for adequate representation of the Asian-African countries on the executive authority of the Agency; and recommended to the Asian and African Governments to take full advantage of the training and other facilities in the

3

1 See United Nations Economic and Social Council Resolutions 512 A (XVII) of Apr. 30, 1954, and 557 F (XVIII) of Aug. 5, 1954; U. N. Economic and Social Council, Official Records, Seventeenth Session, Supplement No. 1 (E/2596), p. 1, and ibid., Eighteenth Session, Supplement No. 1 (E/2654), pp. 25–27.

2 See the report of progress in international use of atomic energy made by Ambassador Lodge before Committee I of the U. N. General Assembly, Nov. 5, 1954; Department of State Bulletin, Nov. 15, 1954, pp. 742–750.

3 See U. N. General Assembly Res. 810 (IX) of Dec. 4, 1954; infra, pp. 2823