BRIEF FOR AUSTRALIAN DELEGATION TO THE CONSULTATIVE COMMITTEE, COLOMBO

Canberra, February 1951

SECRET

A. GENERAL

1. The full sessions of the conference will comprise representatives of participating Commonwealth Governments, (the U.K., Canada, India, Pakistan, Ceylon, New Zealand and Australia) and of the Governments of the U.S.A., Indonesia, Philippine Islands, Laos, Viet-Nam, Cambodia (Burma* and Thailand*).¹ The status of the representatives of most of the non-Commonwealth Governments (except the U.S.A. and Laos) will probably be that of observers.

2. The International Bank for Reconstruction and Development will be represented by Mr. Antonin Basch² of the Economic Department of the Bank.

3. In view of the fact that both Commonwealth and non-Commonwealth countries will be participating in the normal full sessions of the meetings considerable care must be exercised on all occasions in expressing views on subjects which are obviously of a very delicate nature, e.g. participation by non-Commonwealth countries not in the region of South and South-East Asia, and on the provision of financial or economic aid, its supervision etc., so that no suggestion is made or implied of interfering with the internal domestic economics or policies of the prospective recipient countries.

4. In view of the wider representation at the meeting and of the fact that one of the main subjects for discussion will be the provision of financial and economic assistance, it is considered that this subject can best be covered in the main by private discussions firstly among donor countries (with the I.R.B.D. where appropriate) and by discussions between donor and participating recipient countries, and that carefully prepared rather formal statements may be made during the full meeting, for the benefit of the non-participating Governments.

5. Obviously therefore prior to any statements being made in full session on the agenda item “Review of developments since the last meeting’ pre-conference discussions should be held by the Australian Delegation with the representatives of other Commonwealth donor Governments to determine the manner in which the statement on contributions is to be presented, and to consider the way in which contributions might be made available to recipient or prospective recipient countries. Notes on these points are given below under the appropriate item of the proposed agenda.

6. The Delegation will keep constantly in mind that two of the chief objectives of our policy are to secure the active participation in the Plan of all South and South-East Asian Governments and to secure the participation of, and subsequent financial and economic assistance for the region from, the Government of the United States of America.

7. In full session, therefore, the Delegation should avoid making any statements which might have the effect of creating discord among representatives of Commonwealth countries. The impression to be given is that the participating Governments—Asian and non-Asian—are working on a basis of complete equality and independence in a thoroughly co-operative way. Anything critical of the development programmes (or of any of their details) of India, Pakistan and Ceylon should to the fullest possible extent be kept out of open session, and discussed privately among donor countries and with the particular country concerned.

8. The delegation will realise of course that the non-Commonwealth Asian Governments not yet participating will approach the subject of joining in the Plan from the viewpoints of how much they stand to obtain by way of financial or economic assistance, what commitments and obligations would participation involve, and what danger or possibility would there be of interference with their economic and political independence, in other words to what extent might the Plan lead them into a new form of ‘colonialism’.

9. Australia, as a ‘middle’ power free from possible charges of trying to maintain or encourage a system of ‘colonialism’, and in a position quite different from that of the U.K, the U.S.A., the Netherlands or France, can do a great deal to remove any possible misgivings regarding the motives behind the Colombo Plan. The Delegation is aware of the fact that the attitude of the U.K. Government towards the problems of South and South-East Asia is considerably different from our own and is strongly influenced by financial (dollar-earning) motives, and that Canada, remote from the region, has different interests also, to a large extent influenced by considerations of trade promotion. In the ‘behind the scene’ discussions, which will probably be much more important than those at the formal sessions, the Australian Delegation is expected to take an active and important part.

10. In particular, in private discussions with the U.K. (with or without Canada and New Zealand) the Delegation is, if necessary, to defend our contribution of £25m. stg. by pointing out that:—

(a) this represents a completely new obligation on the part of the Australian Government:

(b) the U.S.A. have already commented that this shows that Australia ‘is not taking a cheese-paring attitude’ towards the Plan;

(c) we announced our contribution promptly;

(d) the U.K. have not yet indicated whether it will give anything for South-East Asia apart from their own territories;

(e) the main U.K. contribution is the liquidation of debts which they would have had to meet in any case—plan or no plan.

1. The Delegation should point out that the Australian contribution is for both Commonwealth and non-Commonwealth countries, and that a reasonable contribution by the U.K. towards non-Commonwealth countries in the area would be proper in itself and consistent with the spirit of the Plan. If the atmosphere were appropriate it could be suggested to U.K. officials that such a contribution might forestall Congressional suspicion that the U.K. is looking at this as only a Commonwealth or a British territory problem, as a convenient way of being quit of her sterling balance problem in relation to India, Pakistan and Ceylon, and possibly as a means of herself deriving certain financial advantages.

2. The following instructions are specifically related to the items of the proposed agenda,

B. THE AGENDA

1. Chairman

The Delegation may use its discretion in regard to the appointment of a Chairman, but it will probably be necessary to conform to the precedent of appointing the representative of the host government.

1. Agenda

We have no further items to add to the Agenda proposed by Ceylon, (with the addition suggested by the U.K.)—viz:—

(i) Review of developments since the previous meeting of the Committee, e.g. action taken by each country since the meeting;

(ii) Position of non-Commonwealth Governments in the area which have not yet agreed to participate:

(iii) Relations with the International Bank;

(iv) Position of non-Commonwealth Governments outside the area which wish to participate;

(v) Future organisation for continuing consultation;

(vi) Review of progress of technical co-operation scheme.

1. The following comments are made on each agenda item.

(i) Review of developments since the last meeting

As stated above, the Delegation is to confer with other Commonwealth donor countries prior to discussion of this item. Discretion may be used regarding the form of presentation of a statement covering agreed contributions, e.g., it may be thought useful to present a joint statement setting out the individual and the total contributions. Each Delegation may, however, be required to make a formal statement regarding the contribution of its Government. In making such a statement, the Australian Delegation is to follow the lines of the Minister’s press statement (attached—Annexure I).³ The points to be emphasised are:–

(1) The Australian Government’s contribution will be £31¼ million Australian.

(2) The contribution will be available to assist both Commonwealth and nonCommonwealth countries of the region.

(3) The Commonwealth Government has large and increasing demands on its financial resources under its own development programme, and Australia is already subject to severe inflationary pressure.

(4) The Commonwealth Government has already contributed very substantially to many relief and rehabilitation programmes, e.g., Korea, Palestine Children, U.N.I.C.E.F.

(5) The size of the contribution will, however, be kept under review.

(6) The form the contribution will take, its distribution among the countries concerned, and other relevant details will be determined by the Government in the light of the recommendations arising from this meeting, and of subsequent discussions at a Ministerial conference of the Consultative Committee.

(ii) Position of non-Commonwealth Governments in the area which have not yet agreed to participate

1. The only non-Commonwealth Government of the region which at present has agreed to participate in the Plan is that of Laos. The other Governments concerned are those of Indonesia, Burma, Thailand, the Philippines, Cambodia and Viet-Nam respectively. These countries will probably be represented at the meeting by observers.

2. It is expected that when this item comes up for discussion, the non-Commonwealth representatives of the region will be asked to state the position of their Governments in regard to participation 1n the Plan.

3. The Australian Delegation should make an appropriate statement, during discussions of this item, designed to encourage these Governments to join in the Plan, and to allay any fears they may have regarding the benefits or the obligations arising from such participation. It should do all it can privately behind the scenes to bring them in. This particularly applies to Indonesia.

(iii) Relations with the International Bank

1. The Australian Government wishes that close liaison be maintained between the Consultative Committee and the International Bank. A representative of the Bank could be Invited to attend appropriate sessions of the Consultative Committee in future conferences and to participate where necessary in any centralised or decentralised co-ordinating machinery established for the purpose of making available the financial or economic aid agreed upon.

2. This matter might best be determined following discussion on the agenda item dealing with the organisation for continuing consultation.

3. See also the supplementary notes at the end of this document dealing with ‘Finance’ and ‘Form of Australia’s Contribution’.

(iv) Position of non-Commonwealth Governments outside the area which wish to participate

1. The Governments concerned are those of France and the Netherlands respectively. The question of participation of the U.S.A. Government is of course a parallel one, though obviously such participation would be for reasons and interests different from those of the above-mentioned countries.

2. With regard to the participation of the U.S.A. Government the Australian Delegation is to support and to encourage its continuation. It is, of course, obvious that the U.S.A. is the only country which can render sufficient financial and economic assistance to bridge the gap between contributions by Commonwealth countries and the total amount required for implementing the development plans of countries of the region. The U.S.A. has already had considerable experience in this field and their participation is necessary for the success of the Plan.

3. Both the French and Netherlands Governments have requested that they be invited to join the Colombo Plan.

4. The Australian Delegation should discuss this question privately with the representatives of both Commonwealth and non-Commonwealth Governments prior to the discussion in full session. Our views are contained in the attached telegram—Annexure II.⁴

5. Should the subject be discussed in full session, it would be preferable that the views of Asian countries be heard first (India, Pakistan and Ceylon) and that non-Commonwealth Asian representatives be invited to indicate the attitude of their Governments on this subject. (We have already been advised by Mr. Critchley that the Ceylon representative at Djakarta has advised his Government that the Indonesian Government would react unfavourably to participation by the Netherlands Government.) It is clear that the Asian countries view is vital in the sense that if they were opposed it would be difficult for the scheme to function were countries admitted to which they had strong objections. Consequently in private discussion, should an opportunity present itself and the atmosphere be not unfavourable, Australia’s viewpoint could be cautiously canvassed.

6. The Australian Delegation is to take the following admitted line. (It is to be remembered that there will probably be present a French adviser to the Indo-Chinese States who will report discussion to the French Government).

(1) The Australian Government’s chief concern 1s to encourage a co-operative and concerted approach to the economic development of South and South-East Asia, and a necessary pre-requisite 1s the participation firstly and most importantly of the countries of the region itself.

(2) The Government, however, recognises the importance of the interest of the French and Netherlands Governments in the region, particularly in so far as they are able to provide certain forms of technical and other assistance.

(3) The Government is of the opinion that it should be possible for these Governments to be included in the Committee dealing with the Colombo Plan, and that at some date to be determined they could be invited to participate.

(4) The Netherlands Government, for example, has indicated many fields in which it is most competent to provide specialists and training facilities which in view of the world shortage would be of inestimable value in promoting the success of the Programme in countries that wish to use them.

(5) The main matter to be determined is the time at which it would be most appropriate for these Governments to participate. The Australian Delegation could, if the matter is the subject of a full discussion, proffer the view that if it is not unanimously agreed that France and the Netherlands should participate in the full plan at least it might be appropriate at this stage to invite the French and Netherlands Governments to participate in the Council for Technical Co-operation. These Governments could also be asked to indicate what amount and type of financial or economic assistance they would be prepared to make available generally for the whole region in the same manner that the Commonwealth donor Governments have done.

General Note. The Delegation should try in the pre-conference discussions with other representatives of the Commonwealth to arrive at a formula so that discussion on this point by our Delegation in the conference in the full session is reduced to a minimum; the Delegation will avoid making any statement which might give offence to either the French or the Netherlands Governments.

(v) Future organisation for continuing consultation

1. The form of consultation and of administrative machinery will, to a large extent, be determined by the size and scope of the Plan (e.g. whether certain South-East Asian countries come in or not), the amount of financial and economic assistance which will be granted, and by the way in which contributions are to be made. It is considered that it would be premature at this stage to define too precisely the type of administrative machinery to be set up or the standard and qualifications of staff required. The question of whether an experienced economist is necessary (as Director-General or Secretary-General of the proposed Council of Economic Co-operation) could best be considered when these points are settled.

CONSULTATIVE COMMMITTEE

1. It is clear, however, that it would be useful to continue the meeting of the Consultative Committee at both official and Ministerial levels, with at least two ‘meetings each year. The Consultative Committee should include representatives of all participating Governments, and, where appropriate, representatives of the International Bank or other United Nations Specialised Agencies.

2. Meetings of the Consultative Committee could be held successively in the capitals of the participating countries. The chair would normally be taken by the representative of the host Government.

The following remarks are made subject to paragraph 29 above

STANDING

1. There would be two Standing Councils of the Consultative Committee—the Council of Technical Co-operation and the Council of Economic Co-operation. There should be sufficient overlap in representation on these Councils to ensure adequate liaison at membership level as well as in the administrative organ or organs.

THE COUNCIL OF TECHNICAL CO-OPERATION

1. A constitution has already been adopted in regard to this body.

2. It is suggested that meetings of the Council be held in the capitals of participating countries from time to time to assist the promotion of technical assistance efforts among the countries concerned and to help avoid duplication between donor countries or with United Nations Specialised Agencies, etc.

3. We are of the opinion that the appointment of a Director should be deferred until such time as the scope and size of the whole Plan (technical assistance and economic development) are more precisely determined, and it is decided what over-all administrative organisation is required. It may be necessary, for example, to consider the appointment of a person qualified to head both technical assistance and economic development activities, and to centralise administration of both Councils in one Secretariat or Bureau.

COUNCIL OF ECONOMIC CO-OPERATION

1. There should be established a Council of Economic Co-operation, the main functions of which will be to ensure that economic aid programmes for the region are co-ordinated both among donor countries and with United States Specialised Agencies, the International Bank, etc., and to prepare progress reports for the Consultative Committee. Other functions may be determined as the programmes develop.

2. The Council should meet, according to its requirements, in the capitals of participating countries.

3. It is considered unnecessary at this stage, if at all, to draw up a formal constitution for the Council of Economic Co-operation.

SECRETARIAT

1. It is suggested that in the meantime both Councils and the Consultative Committee be served by one small Secretariat until such time as the scope of the Plan, contributions, etc., are Clearer. The organisation should be left flexible enough to enable the appointment to be made, if necessary, of a top-ranking economist as Director or Secretary-General, who might also be Director of the Bureau of Technical Co-operation. (The Bureau could in this case enlarge its functions and its name to ‘Bureau of Economic and Technical Cooperation’).

2. As stated above we are of the opinion that the type of organisation required cannot be properly defined until the amount of financial or economic aid to be given, and the methods of making contributions available, are determined. It is suggested that the best way of securing co-ordination of assistance is by having appropriate machinery ‘on the spot’, i.e. in the country to which technical[,]⁵ financial or economic assistance is being granted. This might take the form of a Committee consisting of representatives of the U.S.A., the U.K., Canada, New Zealand, Australia, of the International Bank, and of any other Government granting assistance. This Committee would work closely with the Government authorities concerned with the particular country’s technical and development programmes, e.g. Planning Board, Ministry of Finance, etc. The Committee would in collaboration with the Government authorities of the country make a periodic report which would be incorporated into a general report on the region by the Council of Economic Co-operation, assisted by the Secretariat or Director. Each member of the Committee could of course report individually, and directly, to his own Government on the use of its particular contribution and related matters. The general report for the region would be the subject of review by the Ministerial Consultative Committee.

3. The Secretariat should be located at Colombo, though, if all the South-East Asian Governments agree to participate in the Plan, consideration should be given to locating it at Bangkok which is nearer to the centre of the region, and has the additional advantage of having a F.A.O. Regional Office there.

SCIENTIFIC LIAISON OFFICER

1. The United Kingdom has suggested that a Scientific Liaison Officer of high standing should be appointed to the staff of the Bureau of Technical Co-operation, possibly under the title ‘Scientific Adviser to the Director’. We are not in favour of this suggestion. We believe that one officer holding this position would not be sufficiently well informed to be able to undertake the work suggested and we believe that it could more adequately be done by discussions among scientists in donor and recipient countries working on particular projects who would themselves be in the best position to determine where suitable further assistance could be obtained. We firmly believe that bilateral negotiations on scientific and technical problems, and assistance by specialists, should be carried out on the basis of the procedure already developed and that we should avoid the sending of too many exploratory missions or study groups. In certain cases scientists could be borrowed where possible from specialised agencies. The Delegation should argue that the staff of the Bureau be kept to a minimum, and examine critically and oppose any suggestion which might immediately or ultimately have the effect of providing a basis for building up various types of liaison and other officers. We do not need to point out the possible danger of establishing the nucleus of an organisation which might very well with the addition of scientific, legal, economic, technical and other officers develop at least too soon into a replica of a fairly large-scale specialised or regional agency. We do not think that at this stage any useful purpose would be served by arranging a conference of leading scientific authorities in participating countries. There have already been several conferences of this sort. We prefer to work in the meantime at least, on an ad hoc basis meeting such requests as we can, sending our own specialists individually or in groups to the country requesting assistance. We feel that advances in granting and receiving assistance will be made more expeditiously in this way.

(vi) Review of developments on technical co-operation

The High Commissioner’s Office and Mr. Critchley have been provided with copies of a comprehensive progress report showing action taken by the Australian Government in regard to the provision of technical assistance.⁶ Mr. Critchley was asked to confer with the Chairman of the Council of Technical Co-operation regarding the section of the progress report dealing with Australia’s contribution.

No further comment is necessary at this stage. Should any particular matters be raised in discussion which involve policy or major questions of procedure instructions should be requested by telegram.⁷

[NAA: A1838, 851/18/8 part 3]