CABLEGRAM FROM DEPARTMENT OF EXTERNAL AFFAIRS TO EMBASSY IN WASHINGTON

Canberra, 22 March 1951

1. SECRET PRIORITY

Your 323.¹

We can see no objection to the U.S.A. gift of food being considered as part of the contribution to the Colombo Plan; in fact, such gifts would be consistent with the assumptions, and the types of assistance considered necessary, in the Colombo Plan report.

1. However, we should not like to see an emergency situation affect significantly reasonable plans for development, or assistance granted to meet such a situation reduce the amount of assistance considered necessary to enable these plans to be carried out.

2. For your guidance in discussions, though we recognise that the estimates of external finance requirements under the Colombo Plan represent ‘the broad dimensions’ rather than precise and fixed needs, it would seem that these requirements should be substantially met if the Plan is to be successful. It appears that the total of all contributions already announced together with present expectations of the U.S.A. contribution would not cover requirements sufficiently to enable programmes to be undertaken with good prospects of success. We do not know on what basis, or assessment of the programmes, the U.S.A. has arrived at a figure of $250m. or has reduced its preliminary estimate of an aid programme for Indian development. Information on this would be most useful to us.

3. In discussing the level of contributions with the United States it will be necessary for you to handle the matter carefully to avoid any suggestion of a further contribution by Australia.

4. The U.S.A. have presumably made calculations regarding requirements of individual countries of South and South-East Asia, and of actual and expected contributions by the various donor governments, the International Bank, etc. We do not know whether the U.S.A. Government contribution will be supplemented by loans from the Import-Export Bank or from other sources, thus filling the apparent gap which would be left if the U.S.A. Government contributed a total of only $250m. in the first year. Information on this point would be welcomed here.

5. We have noted that the State Department is working on a figure of $50m. each for the Philippines and Formosa as against a total of $250m. for India, Pakistan, Ceylon, Burma, Thailand, Indo-China and Indonesia. Obviously, the later figure is out of proportion to the former relatively to needs in the respective areas, though we recognise of course the political significance of aid to the Philippines and Formosa. You might obtain some information discreetly on this proposed distribution.

6. Your last paragraph. Consideration has been given by this Department and others concemed to the type of aid we might give, but no recommendations have yet been made. We are reluctant to start giving aid in a piecemeal way without some co-ordination with other donor governments, and until we know what contributions will be made. and whether they will reasonably cover requirements. We doubt whether we can do very much more until the U.S.A. position is clearer and we have had further discussions with them and other donor governments on this subject.

[NAA: A462, 587/4]