UNITED STATES POLICY TOWARD ASIA THURSDAY, FEBRUARY 3, 1966 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON THE FAR EAST AND THE PACIFIC, Washington, D.C. The subcommittee met, pursuant to adjournment, at 2:05 p.m., in room 2172, Rayburn Building, Hon. Clement J. Zablocki (chairman of the subcommittee) presiding. Mr. ZABLOCKI. The Subcommittee on the Far East and the Pacific will please come to order. First, let me announce that, under the Rules of the House of Representatives, photographs and tape recordings may not be made while the hearing is in session. Today's meeting is the sixth in a series of public hearings on U.S. policy toward Asia. These hearings are designed to obtain information largely from independent, non-Government sources concerning Asia, its current problems, and future trends, as well as on U.S. economic and political policies aimed at that area. For today's session we have representatives of two well-known organizations, the Business Council for International Understanding (BCIU) and the American Friends Service Committee. First, we will hear from the representatives of BCIU. They will testify concerning economic policy objectives of a developing country and the incentive conditions necessary to encourage foreign private investment. These gentlemen are members of BCIU's Committee on India, so their testimony will largely relate to that country. However, their observations and conclusions are pertinent to the task of encouraging and promoting private investment in the other developing countries of Asia. We are privileged to have with us today Mr. Willem Holst, member of the BCIU and a vice president of Esso Standard Eastern, and Mr. Robert F. Meagher, consultant to BCIU's Standing Committee on India, and associate director, international legal research, Columbia University. When the subcommittee has finished hearing BCIU's representatives, we will call upon Mr. Bronson P. Clark, who will testify on U.S. Asian policy, on behalf of the American Friends Service Committee and the Friends Committee on National Legislation. For the benefit of the witnesses and others, let me say the subcommittee operates under a 5-minute rule, during which each member is allowed, in turn, 5 minutes to question the witnesses. After all members present have had an opportunity to question the witnesses, they will be permitted to ask additional questions if they so desire. It is my understanding that prepared statements are not available Mr. ZABLOCKI. Dr. Kintner, Dr. Brennan, on behalf of the subcommittee I want to thank you for braving the weather and coming here to Washington to appear before the subcommittee. I also want to offer the apologies of those members who were prevented from being here by the business on the floor today that has disturbed our proceedings. Thank you again for coming. We stand adjourned until tomorrow at 2. (Whereupon, at 5:10 p.m., the subcommittee was adjourned, to reconvene Thursday, February 3, 1966. at 2 p.m.) UNITED STATES POLICY TOWARD ASIA THURSDAY, FEBRUARY 3, 1966 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON THE FAR EAST AND THE PACIFIC, Washington, D.C. The subcommittee met, pursuant to adjournment, at 2:05 p.m., in room 2172, Rayburn Building, Hon. Clement J. Zablocki (chairman) of the subcommittee) presiding. Mr. ZABLOCKI. The Subcommittee on the Far East and the Pacific will please come to order. First, let me announce that, under the Rules of the House of Representatives, photographs and tape recordings may not be made while the hearing is in session. Today's meeting is the sixth in a series of public hearings on U.S. policy toward Asia. These hearings are designed to obtain information largely from independent, non-Government sources concerning Asia, its current problems, and future trends, as well as on U.S. economic and political policies aimed at that area. For today's session we have representatives of two well-known organizations, the Business Council for International Understanding (BCIU) and the American Friends Service Committee. First, we will hear from the representatives of BCIU. They will testify concerning economic policy objectives of a developing country and the incentive conditions necessary to encourage foreign private investment. These gentlemen are members of BCIU's Committee on India, so their testimony will largely relate to that country. However, their observations and conclusions are pertinent to the task of encouraging and promoting private investment in the other developing countries of Asia. We are privileged to have with us today Mr. Willem Holst, member of the BCIU and a vice president of Esso Standard Eastern, and Mr. Robert F. Meagher, consultant to BCIU's Standing Committee on India, and associate director, international legal research, Columbia University. When the subcommittee has finished hearing BCIU's representatives, we will call upon Mr. Bronson P. Clark, who will testify on U.S. Asian policy, on behalf of the American Friends Service Committee and the Friends Committee on National Legislation. For the benefit of the witnesses and others, let me say the subcommittee operates under a 5-minute rule, during which each member is allowed, in turn, 5 minutes to question the witnesses. After all members present have had an opportunity to question the witnesses, they will be permitted to ask additional questions if they so desire. It is my understanding that prepared statements are not available from Mr. Holst and Mr. Meagher, but Mr. Clark has filed a prepared statement. You may proceed, Mr. Holst. STATEMENT OF WILLEM HOLST, MEMBER, BUSINESS COUNCIL FOR INTERNATIONAL UNDERSTANDING, STANDING COMMITTEE ON INDIA Mr. HOLST. Mr. Chairman, the BCIU is an organization which has as its membership various representatives of large business corporations. Their purpose actually is to develop with both governments abroad and with the U.S. Government a broader understanding of each other's problems, and in order to do so they not only have private meetings in New York for that very purpose, but they also have an extensive service by which they schedule U.S. Foreign Service officers for individual meetings with top management of U.S. companies doing business in the country of assignment of such officers. This has been so favorably received that I think during the past year there have been no less than 1,000 such visits arranged by BCIU where business and government people have come together for mutual consultations. BČIU has also introduced visiting foreign statesmen to appropriate U.S. companies, both individually and in small groups for mutual consultation. A highly successful dinner meeting was arranged, for example, for the Prime Minister of Malaysia to consult with a score of U.S. business leaders. I think you must also be familiar with the training program for international business executives under BCIU direction at the American University, where groups of executives and their wives take 4week courses to prepare them better to understand other cultures and better to represent the United States in their international responsibilities. In our own case we have formed a committee which is specifically devoted in its efforts to understanding more about India. This standing_committee was selected from a group of companies which went to India 2 years ago. This standing committee has a membership of about 15 and for the record I would like to leave here a list which indicates the kind of companies that are represented on the India Committee. It includes Union Carbide, Allied Chemical, International Minerals & Chemicals, and so forth. It represents a very broad cross-section of business in the United States. Mr. ZABLOCKI. Without objection, that will be a part of the testimony. (The list referred to is as follows:) Name N. D. Abbey- J. G. Copelin C. S. Dennison___. R. M. Dorman__ J. R. Galloway. Willem Holst___ T. Keeling-- EXHIBIT B MEMBERSHIP OF BCIU'S INDIA COMMITTEE A. T. Knoppers, M.D. E. H. Schulenberg---. E. K. Stilbert_. For BCIU: John Habberton.... R. F. Meagher (counsel for BCIU).... Title and company President, Abbey Etna Machine Co. Vice president, International Tele- Vice president, International Minerals Vice president for Asia Bechtel Corp. Vice president, Union Carbide Corp. Vice president and director, Esso Vice president, Koppers Co., Inc. Executive vice president, Firestone Vice president, Dow Chemical Co. Mr. HOLST. In our testimony today I would like to have Mr. Meagher give an historical perspective of the historical background which serves which will provide a broader perspective of what I am to say later about the specifics of the current situation in India. STATEMENT OF ROBERT F. MEAGHER, COUNSEL FOR THE BUSINESS COUNCIL FOR INTERNATIONAL UNDERSTANDING, STANDING COMMITTEE ON INDIA Mr. MEAGHER. Mr. Chairman and members of the subcommittee, I would like to make a brief presentation on the evolution of industrial policy in India with some of the side elements which have affected private investment in that country. As you know, India today has almost 500 million people, one-sixth of the population of the world. Their population is increasing at the rate of 2.4 percent annually, or approximately 12 million additional people each year. The per capita income is very low, at about $70 per annum, and though there are small segments which are very wealthy, in general the country is very poor. However, it is one of the largest potential markets for investors. Total foreign investments today are equal to a little less than $2 billion, with the Americans having investments of approximately $234 million. Other principal investors are the United Kingdom, which is the largest investor, Western Germany, Japan, and Switzerland. In addition to this vast potential market, India has had political and financial stability, strongly supported by one of the most sophisticated civil servant cadres in the world. However, a complex of conditions dilutes these basic advantages and foreign investment is not 58-523-66--13 |