The Press THURSDAY, OCTOBER 20, 1955? Colombo Plan

Press, Volume XCII, Issue 27794, 20 October 1955, Page 12

The Press THURSDAY, OCTOBER 20, 1955? Colombo Plan

The Colombo Plan is again under critical examination at the annual meeting of the consultative committee, and the most sanguine delegates are expressing only modest satisfaction at its progress. The trouble, of course, is that achievement must be measured against the magnitude of the task, which is to help in raising to a tolerable level the living standards of an area—from Pakistan to the Philippines—with about 650,000,000 inhabitants. Over the area as a whole, population is increasing at the rate of nearly 2 per cent, a year. In most countries population has grown faster than economic improvement; with very few exceptions, post-war economic growth has barely maintained living standards, which are deplorably low. Political uncertainties in the area are among the most serious obstacles to economic development. With so many parts iof the world competing for it, private risk capital is naturally reluc- ; tant to enter countries politically Dunstable such as the States of the former Indo-China, Malaya, and The Colombo Plan was i never intended to be a substitute 'for private investment capital. But . since what the plan sets out to . accomplish depends upon investment for its fulfilment, the participants of the Colombo Plan must all be vitally interested in the provision of capital. The Colombo Plan has no central funds and all financial assistance granted is the result of bilateral agreements between the receiving countries and the contri- ; butory members. Under these agreements substantial amounts of capital have passed, mostly in the form of government grants and loans. For instance, in the last three years Britain has made grants and loans for development to Malaya and British Borneo totalling , £65,000,000.

The countries in the area are settling aside sums for capital development. (Self-help is a large 1 ingredient of the Colombo Plan, and I la large ingredient of its appeal toi Asian countries.) But very few’ of : the South-east Asian nations are able ito set aside enough capital for I development. Moreover, long-term planning is difficult because their ipcomes depend upon world prices for a small range of exports The largest contributor of capital to South-east Asia since the inception of the Colombo Plan has been the United States, through its own foreign aid programme. American grants and loans have gone chiefly 'to the Philippines, Indonesia, and Thailand. This year the United States has sought to broaden its help to Asia and has tried to get some regional co-operation in the use of United States aid. But when the Indian Government invited 11 Asian I countries which are principally at the receiving end of the Colombo I Plan to confer in Simla on the , American proposal, a striking lack :of enthusiasm for any planning on a regional nature was shown. The delegates preferred that help should be on a bilateral basis.

The Colombo Plan, indeed, seems to have set a pattern to which the Asian nations are firmly attached. But Asia’s need of capital is so great that it must be hoped that the present meeting of the consultative committee will smooth the way to the acceptance of aid from the nation best able to provide it in a substantia] way. Of course, the mere provision of capital will not solve South-east Asia’s problems. The woeful shortage of technicians is as great a barrier to progress as is the lack of capital An important part of the Colombo Plan is its technical co-operation scheme, under which member countries make available to■ each other experts and technicians. Colombo Plan and other technical assistance organisations have already sent 3700 experts into the area and taken over 7000 trainees overseas.

It is reported from Singapore that New Zealand favours greater emphasis on technical aid in the future working of the Colombo Plan. There is danger of capital being wasted unless technicians are available to use it properly; but both capital and technicians needed. There should be no doubt about the outcome of the discussions on continuing the Colombo Plan after its initial term—due to end in June, 1957. Despite its limited success and its acknowledged shortcomings, the Colombo Plan is teaching Asian and Western nations the value of mutual understanding and co-operation. The chief New Zealand delegate (Mr Macdonald) was wise to emphasise this point to the consultative committee.