Capital Shortage May Hinder Colombo Plan

Press, Volume XCVI, Issue 28415, 23 October 1957, Page 15

Capital Shortage May Hinder Colombo Plan

(N.Z Press Association—Copyrightj

SAIGON. October 21. i Countries of Asia were warned I today that they should use flexibility in putting economic plans into practice to keep them within the range of economic resources and to consolidate existing achievements. The warning was given by Lord Reading, the United Kingdom delegate to the Colombo Plan conference, who told the delegates. “Hard and painful decisions have been taken and others will have to be taken in the future.”' A more optimistic viewpoint was taken by the New Zealand Minister of External Affairs (Mr T. L. I Macdonald). He said: “The problems before us do not arise from the despair of stagnation, but are indicative of essentially dynamic growth. In part they reflect the confidence of the peoples of this great region in their own destiny.”

The two men were speaking at the opening session of the Ministerial meeting of the ninth Colombo Plan conference. The conference is attended by 21 Asian and Western nations and territories. Mr Macdonald said that New Zealand and many Asian countries which wanted expanding export markets would watch with close and anxious interest the proposals for European economic integration Expansion Rate Falls Senator C. Wijeslnghe, leader of the Ceylon delegation, said that no government in the Colombo Plan area could sit back and feel complacent about the economic progress made in 1956. Senator Wijesinghe said: “Even though economic activities continued to expand, the rate of expansion in 1956 was not as fast as in 1955.” He told the delegates that Ceylon would welcome foreign private capital and there would be no restrictions on the remittance of profits and dividends. Senator Wijesinghe said that external assistance would be most welcome in the development of technical skills and in providing consultant and. engineering services for the preparation of development plans. Nai Sukit Nimanheiman, the Thai Minister of Economic Affairs, said that Thailand would most welcome the setting up of institutions of higher learning in southern Asia under the Colombo Plan.

British Investment Lord Reading said that British private and public investment in the Commonwealth and the colonies and in Colombo Plan aid averaged about £2OO million a year. He said the total British investment in South and South-east Asia could not be estimated accurately, as the volume of private investment was not known. But

.[British investment in the area in 1 the form of grants had risen by - £6 million in the last year. Much > of this was directed to Malaya, i Singapore, and the British terri- » tories in Borneo. I He told the Asian countries that to maintain the maximum momen1 turn, it seemed important to do 1 everything possible to attract as much private capital as possible, but he warned that the primary : consideration with investors was : safety for their investment. Lord Reading reported that Bri- : tain had recently taken firm measures against domestic inflation ■ and had checked the rate of investment in Britain in order to ' secure the international position of sterling. “The Government’s ■ efforts restored sterling to its ■ proper parity and they will not ' be relaxed.” he said. Mr Macdonald said lhe economic problems of the area reflected in part “the confidence of this region in their own destiny.” Referring to the desirability of mobilising even larger amounts of domestic savings for Asian development, Mr Macdonald said: “We must also recognise the need to balance further demands for development against the need for ' increased consumption.” He said that in the long run growing capital expenditure on development projects could be offset only by a great increase in external trade. On New Zealand’s Colombo Plan aid, he said there had been a gradual move in emphasis towards greater concentration on technical assistance. “Independence Not Enough” President Ngo Dinh Diem of South Vietnam told the delegates that the Colombo Plan had been born of a revolution that was sweeping Asia—the rising expectations of the Asian peoples. He said the dream of generations of Asian people—independence—had become a reality. But independence was not enough. “Man can be politically free and yet lose the essence of his freedom in the throes of want,” the President said. “Lacking adequate capital, technical personnel and managerial skills, we are underdeveloped countries and our road ahead stretches long and hard. “Like no other institution, the Colombo Plan demonstrates that dominance, arrogance, and imposition can be replaced by mutual respect, free negotiation, and cooperation.” Of his own country, he said: “Now that the nation has survived its ordeal, we are not concerned with the past and we do not waste our emotional substance on past wrongs. Our efforts are rivetted upon the future with but one resolve: to strengthen our nation, enrich our freedom, and secure our lasting peace.”