‘Improper use of aid funds'

Press, Volume CXI, Issue 32788, 13 December 1971, Page 17

‘Improper use of aid funds '

fN.Z.P.A.-Ketrter— Copyright) WASHINGTON, December 12. A Congressional investigating committee alleged yesterday that a multimillion dollar international fund set up to help the economy of Laos had led to improper use of aid dollars, including use for purchases of luxury items from Communist nations.

The House Government Operations Committee sharply criticised lack of control over use of hard currency channelled to the Royal Laotian Government through the Foreign Exchange Operations Fund (F.E.0.F.). The fund was set up eight years ago to provide foreign exchange assistance to help . stabilise the Laotian currency, ' the kip. The foreign aid donors par- • ticipating are Australia, . France, Japan, Britain and ’ the United States the larg- ' est contributor. The committee’s report said ! that the fund had generally ■ accomplished the goal of fin- ! ancial stability for the Laotian ! economy which was strained ! by the fighting with Commun--1 ist-backed Pathet Lao. . But it added: "There are absolutely no controls over use of foreign exchange ob1 tained from the fund.” ! The committee said that its • investigation found that 1 “through F.E.0.F., dollar ex- ! change was available to ahy- ‘ one Communist and non- ' Communists alike for any purpose.” I The report did not estimate ! the amount of funds impor-, : perly diverted or discuss the I nature of goods purchased ■ from Communist nations. But ’ it noted that the United States alone provided Laos with $750

•million either in direct eco- ’ nomic aid or through contri- • buttons of dollars through the • fund. i A total of $134 million had • been channelled through the i fund by 1970, Britain and France contributing nearly : $l2 million each. Japan coni tributing $9 million and Aus- > tralia $4.4 million. > The panel proposed that the American .Agency for Inter- • national Development recom- ■ mend to Congress within 90 1 days a new assistance pro- • gramme which would assure the Laotian people a supply 1 of. essential commodities ’ while eliminating the corrupt ' practices which have occur- | red in the past 1 The report said that the • other nations contributing to the fund had “never really : bought the programme” and • had been unwilling to increase ■their contributions. The report added: “France, i for all practical purposes, has : been using F.E.O.F. to acquire ■ the kip needed for its local ■ expenses in Laos. Japan has • reserved its kip being ac- ' quired through F.E.O.F. for future uses and has indicated s it will not increase its con- •, tributions.. s “Australia and the United I Kingdom are in all probabilityalso looking for sways to gracefully ridthemI selves of F.E.0.F.”