The Gisborne Herald IN WHICH IS INCORPORATED "THE TIMES." GISBORNE, FRIDAY, DECEMBER 17, 1948. ASIA REBUILDING PLAN SHELVED-NO MONEY

Gisborne Herald, Volume LXXV, Issue 22822, 17 December 1948, Page 4

The Gisborne Herald IN WHICH IS INCORPORATED "THE TIMES." GISBORNE, FRIDAY, DECEMBER 17, 1948. ASIA REBUILDING PLAN SHELVED-NO MONEY

hopes held that, the world was on the threshold of a comprehensive live-year scheme to rehabilitate and reconstruct Asia, and the Far East, and thereby set at rest the turmoil which has not only hindered progress but may in the future threaten other nations as well, have not been realised. These nations include Australia and New Zealand. The scheme, a counterpart to the European recovery programme, was discussed at the recent meeting of the Economic Commission for Asia and the Far East held in New South AVales, but was shelved because of insufficient funds from the United States and the International Monetary Bank. It called for an expenditure of 13,600,000.000 dollars. The programme, which no doubt will be put on the agenda again when the int umaliona] future is more certain, is divided into two sections. “Approximately 6.400,000,000 dollars would be required from local sources and would be financed domestically,” it states, “and the balance of 7.200.000,000 dollars is required for the import of goods and for technical personnel which require foreign exchange.”

This estimate, the first of its kind to cover all Asia, was drawn up by a working party assisted by la experts. The International Bank and the European Economic Commission co-operated to the extent of lending staff.

Under the heading of transport a total expenditure of 5.230,000,000 dollars is sought for the reconstruction and development of railways, canals and shipping, and highways. 'Phis sum represents 38 per cent of Ihe planned extension of all industries, 'flic reason is that, the transport industry “lias constituted one of the most serious limiting factors preventing the full utilisation of existing resources in practically all countries of the ECAFE region.” More Electric Power The large sum of 1,820.000,000 dollars is requested for electric power and “represents a sizeable beginning towards the use of the water power resources in Asia.” Many of those hydro-electric works are planned as an integral part of the complete development of water basins, including also irrigation and Rood control. The power scheme would mean an increase in total capacity from 4.000,000 k.w. at present to 6,400,000 k.w. in about five years and to 10,300,000 k.w. over a longer period. There is provision for the expenditure of 1,885,000,000 dollars on the construction of textile plants. This expansion is largely in cotton textiles with an increase from 15.500,000 spindles at present to 26,100,000 in five years and eventually to 29,300,000. Increases are also planned in looms and in other related equipment. Money sought for fertiliser factories to be situated in China, India, Indonesia, Indo-China and the Philippines amounts to a little over 900,000,000 dollars. These plants are mostly for the production of ammonium sulphate but include as well cyanamide and phosphates. The present production capacity of ammonium sulphate, 100,000 tons, is expected to be increased 10 times. The total cost of new iron and steel plants required, mainly m India and China, is put. at 665,000,000 dollars. A total capacity of 4,000,000 tons of steel ingots a year is the target, compared with the present capacity of 1,300,000 tons.

For coal mining the allocation is 118,000,000 dollars. This sum, the report states, although modest in comparison with the estimates for other industries, does not mean that the development of coal resources is any less important than other industries. “But the relatively small size of the estimate for coal mining should permit the countries of Asia to realise their coal programmes promptly, and perhaps accelerate the development of other industries.” The scheme requires 157,000,000 dollars for minerals other than coal, but as Dr. P. S. Lokanathan, the Indian economist and secretary of ECAFE, says, “to give this estimate with any precision would be both dangerous and misleading.”

Dr. Lokanathan admits that some of the above figures are unrealistic in view of the political situation, the time needed for executing the work and the lack of organisation and technicians. The most arresting conclusion, he claims, is that the programme of reconstruction and development, even if drastically curtailed, cannot, be carried out within any reasonable period without financial assistance from outside the region. He says that no amount of active effort towards increasing exports can provide Asia with sufficient exchange to finance the necessary imports. Limit to Aid From Japan

The report comments upon the possibility of using Japanese industry for supplying capital goods to Asia. It reaches the conclusion, however, that while considerable possibilities exist, they cannot be fully utilised unless Japan is provided with food and raw materials,' which now are mainly supplied by the United States. Dr. Lokanathan says the scheme for China has been temporarily suspended because of the internal disorder. The estimates for China are 6,600,000 dollars, consisting of 3,400,000 dollars from domestic resources and 3,200,000 dollars from imports. The question is not whether this ambitious scheme is desirable, for it is clear that something must be done, but whether it is practicable. Present indications are that unrest in Asia may increase rather than diminish. There now seems to be little to prevent the Chinese Communists from taking control of the major part of China, strong French forces are required to keep law and order in Indo-China, political strife continues in Siam and Indonesia, Malaya is in a state of turmoil, Burma is restive, and great problems have yet to be solved in India and Pakistan.

On the practical side, who is to provide the money for reconstruction? The only country which might be able to foot the bill is the United States, but her resources are not unlimited and vast sums have already been found for the rehabilitation of other nations. Moreover, because of past experience of waste, the American taxpayer is becoming increasingly wary of Asiatic ventures. His answer to the new five-year plan may veil be that it is too ambitious, that Rome was not built in a clay, and that the reconstruction of Asia must of necessity be a very long-term undertaking with the burden more equitably shared.