Mr. ADAIR. That is for all three risks? Mr. HUTCHINSON. Yes. Mr. ADAIR. That is the guarantee which was the subject of some controversy here a while ago? Mr. HUTCHINSON. That is correct. Mr. ADAIR. It has now been Mr. HUTCHINSON. We have agreed to issue it. The infrastructure which will be financed by the Government of Guinea has been sketched out insofar as the engineering is concerned. A firm has been selected to do it. [Security deletion.] Mr. ADAIR. Has the recent attitude of Mr. Sekou Toure, the threats-I will be specific-that he makes toward the present Government of Ghana changed our thinking in any respect concerning this project or any others in Guinea? Mr. HUTCHINSON. Insofar as this project is concerned [security deletion]. Mr. ADAIR. I am speaking as one individual. I would like to encourage that posture until it is apparent how serious Mr. Sekou Toure is in these threats which are reported in the press. Mr. WILLIAMS. Mr. Adair, I might just like to back Mr. Hutchinson up [security deletion]. We would hope that the problems that are actually raised will subside. [Security deletion.] Mr. ADAIR. What do you think is the relationship between Toure and Nkrumah with respect to the division of power? Who is what, and why? Mr. WILLIAMS. [security deletion.] I don't think that Nkrumah has any power to Mr. ADAIR. You feel he has no real power within Guinea? Mr. ADAIR. Thank you. Mr. ZABLOCKI. Mr. Chairman, will the gentleman yield? I am not sure whether this question was asked, but I wonder if Mr. Hutchinson is prepared to give the committee the number of programs, projects, and other activities in Africa, that are being carried out under contract? Mr. HUTCHINSON. That are under contract? Mr. ZABLOCKI. Contracts with universities, private consulting organizations, and others. Mr. HUTCHINSON. I would have to get you that figure, Mr. Zablocki. I was about to respond as to the number of projects. That we do have. The number that are out on contract Mr. ZABLOCKI. The number of those projects Mr. HUTCHINSON. I can give you the number of contract personnel. Mr. ZABLOCKI. You can provide that information for the record, Mr. Hutchinson. (The information follows:) AID PROJECTS UNDER CONTRACT Of the 394 projects for which funds are requested in fiscal year 1967, an estimated 200 are or will be under contracts. However, about 70 of these 200 projects also contain significant direct AID and other Government agency elements as well as contract. Mr. GROSS. Are we giving aid to the Sudan? Mr. HUTCHINSON. Yes, sir. Mr. GROSS. Last year on December 22 it was announced by the Finance Minister of that country that they had entered into an agreement to purchase $11 million worth of consumer goods from Communist China. Do you know anything about that? Mr. HUTCHINSON. I do not, sir. Mr. WILLIAMS. I would have to look that up, sir. Mr. GROSS. Prime Minister Banda of Malawi spoke of the situation there with respect to the Peace Corps. Has that been straightened out? Last January he said members of the Peace Corps were doing too much beer drinking and too much sleeping in with native girls in the villages, and so forth. Has that been straightened out? Mr. WILLIAMS. Yes, sir. The Department, the Peace Corps, reviewed that carefully and I think that is now on a satisfactory basis. Mr. GROSS. The sleeping in has stopped and the beer drinking in the villages with the natives? At least to the satisfaction of the Prime Minister? Mr. WILLIAMS. Yes, sir. The complaints have been satisfied. Mr. GROSS. The mighty exodus of refugees from South Africa to this country for training purposes-is military training being given to any of these refugees in this country? Mr. WILLIAMS. Not by us, no, sir. Mr. GROSS. It would be by us if they were in this country, wouldn't it? Mr. WILLIAMS. Some of our training is also in Africa. We don't give any military training either in the United States or Africa. Mr. GROSS. If some of these refugees were males and they were at Lincoln or Howard Universities, where there is an ROTC, would they be given military training or wouldn't they? Mr. WILLIAMS. No military training is being given to the refugees by us. Chairman MORGAN. I don't think any foreign students enter into reserve training in any of our universities. Mr. WILLIAMS. I don't think they have a program at Lincoln. The bankers that you are going to take over to Africa, can we expect there will be stopovers for refueling and for refreshment and possible brainwashing in London and Paris on the way? Mr. HUTCHINSON. Sir, I have not seen any itineraries worked out. We haven't progressed that far. We would certainly expect, however, they would be going about their business in a serious way and that they would be paid only the per diem and travel which they would be legitimately entitled to as a part of their duties. Mr. GROSS. I assume they will be properly briefed and told how you distinguish between one-party government and military dictator ships in these African countries; they will be able to find out from you before they go, or on the way, how you distinguish between the two for the purpose of giving them aid? Mr. HUTCHINSON. We will give them a thorough briefing before they go over. It does seem to us, however, if we can get some strength in the private sector in these countries, it will help in connection with the problem of democracy and centralized control, with which you are quite properly concerned. Some building of alternative centers of power, and particularly in the private sector we think is very much in those countries and in our interest for the very reasons that you indicate. Mr. GROSS. They are practically all military dictatorships, oneparty governments, are they not, on the African continent? Mr. HUTCHINSON. There is a heavy proportion of one-party governments and military governments; yes, sir. Mr. GROSS. Someday when we are having a big snowstorm and we can't do much of anything else, I would like to sit down with you and have you tell me how, for all practical purposes, you distinguish between a military dictatorship and a one-party government. Chairman MORGAN. Any further questions? Thank you, Mr. Secretary, Mr. Hutchinson. The committee stands adjourned until 10 o'clock tomorrow morning. (Whereupon, at 12:35 p.m., the committee was adjourned to reconvene at 10 a.m., Thursday, March 24, 1966.) (The following memorandum has been supplied in response to a request by Mr. McDowell. See also p. 124.) LOCAL CURRENCY PROGRAMS FOR INDIA, FISCAL YEARS 1965 AND 1966 In fiscal year 1965, local currency obligations for release to India for economic development purposes were $236.5 million worth of rupees; $92.8 million equivalent were for agricultural programs, $96.3 million equivalent for power and industry projects, and $47.4 million equivalent for education. Major agriculture projects and programs were multipurpose irrigation, flood control and power programs, Rihand Valley development, Agricultural Refinance Corporation, and foodgrains storage. In fiscal year 1966, obligations of local currency will reach about $260 million equivalent an increase over fiscal year 1965 of $23 million equivalent. Agriculture will utilize about $93.6 million equivalent, $37.7 million equivalent will finance power and equipment maintenance training, about $98.5 million equivalent for education programs, and $30 million equivalent to support malaria eradication and other health programs. The planned release of rupees in fiscal year 1966 for agriculture programs will support agricultural universities, rural public works schemes, and soil and water conservation projects. The relatively limited ability of the agriculture sector to rapidly absorb large increases in inputs, the Government of India's priority program to increase its own resources allocation to agriculture, and the time period required to develop sound, viable project activities have to some degree limited the speed with which AID has been able to step up its local currency inputs to agriculture this year. Several fertilizer plant proposals are under consideration by the Government of India and AID. In the case of private sector plants involving U.S. private investment, AID will finance the local costs through a Cooley loan, as has been done in the case of the Coromandel fertilizer plant ($28 million equivalent). (The following information has been supplied in response to a request by Mr. Gross. See also pp. 119-120.) Schedule of delinquent installments, deferred principal, and interest installments, Near East and south Asia region, as of Feb. 26, 1966 1 Under the India Emergency Food Aid Act of 1951 (Public Law 48), the India wheat loan of 1951, loan No. ECA X-86-1, authorized providing up to $190,000,000 in wheat assistance to India on credit terms in accordance with the provisions of sec. III(c) of the Economic Cooperation Act of 1948. The loan agreement originally provided for semiannual repayment over a 35-year period with the 1st repayment on June 30, 1957. Interest was to be paid at 2% percent beginning in 1952. Payments of $3,417,363.28 in principal and $28,321,270.05 in interest were made by the Indian Government through June 30, 1958. The Government of India then requested a moratorium on such payments because of the heavy burden of servicing her external indebtedness. The United States agreed to defer payments of interest and principal due on the loan for 911⁄2 years, payments to be resumed on Dec. 31, 1967. The amount shown is for the period Dec. 31, 1958, through Dec. 31, 1965. 2 There was a 2-year delay in startup due to faulty machinery. In addition, disagreements among the Indian partners led to failure to pay for subscribed shares. AID has been closely following this loan and is currently exploring possible remedial courses of action, including legal. The amount shown covers payments due during the period August 1964 through February 1966. Under TCA loan No. 1 of Sept. 11, 1952, Pakistan was provided a $15,000,000 wheat loan under terms similar to those of the 1951 loan to India. Interest payments totaling $1,687,500 were made through Mar. 15, 1958. In September 1958, State and ICA, with concurrence of the National Advisory Council, agreed to defer further payments until Mar. 15, 1967. Scheduled payments of interest and principal will run to 1988, with the deferred payments of interest and principal paid from 1988 to 1997 with no interest charged because of the deferral. The amount shown covers the period Sept. 15, 1958, through Dec. 31, 1965. 4 Interest and principal payments due between June 30, 1956, and Dec. 31, 1965, were postponed for 10 years as a result of the debt renegotiation accompanying the Turkish Stabilization Agreement of 1958. Turkey was in default on many of its external obligations and its external accounts situation was worsening due to continuing inflation at home and the shutting off of new credits from abroad. In the negotiations Turkey agreed to devalue its currency and impose stringent inflation controls in exchange for debt relief and renewed aid. In 1965 the OECD consortium of aid donors for Turkey sponsored a further debt rescheduling under which it was agreed to postpone certain principal payments due in 1965, 1966, and 1967. The United States agreed to postpone repayments of $2,850,000 due in 1966 and $2,880,000 due in 1967 on the ECA-MSA loans. No repayments were originally due in 1965, however, and none are shown in the table. FOREIGN ASSISTANCE ACT OF 1966 THURSDAY, MARCH 24, 1966 HOUSE OF REPRESENTATIVES, The committee met, pursuant to adjournment, at 10:25 a.m., in room 2172, Rayburn Building, Hon. Thomas E. Morgan (chairman) presiding. Chairman MORGAN. The committee will come to order. The committee meets this morning in executive session for a continuation of the hearings on H.R. 12449 and H.R. 12450. Before we begin the hearings this morning, I want unanimous consent to file the report on the American Research Children's Hospital in Krakow, Poland, as a House report. If there is no objection, it is so ordered. Our witnesses this morning are the Honorable William Bundy, Assistant Secretary of State for Far Eastern Affairs, and the Honorable Rutherford M. Poats, Assistant Administrator for Far East, Agency for International Development. Mr. Secretary, you have a prepared statement, and you may proceed, sir. STATEMENT OF HON. WILLIAM P. BUNDY, ASSISTANT SECRETARY OF STATE FOR FAR EASTERN AFFAIRS Mr. BUNDY. Mr. Chairman, it is a great pleasure to appear again before this committee on this matter. This is my sixth year in appearing before this committee. I have always valued the really great attention and knowledge that you have. If I may, Mr. Chairman, I will submit my statement for the record and confine myself to a very short highlight oral summary, if that is satisfactory to you. Chairman MORGAN. Without objection, it is so ordered. (The statement of Mr. Bundy is as follows:) STATEMENT OF HON. WILLIAM P. BUNDY, ASSISTANT SECRETARY OF STATE FOR FAR EASTERN AFFAIRS It is a great privilege for me to appear before your committee in support of the President's foreign aid program for fiscal year 1967. In his message of February 1, the President has said about these programs: "It is *** the fateful truth of our age *** that our personal and national hopes hang in a balance affected by events and attitudes half a world away The human misery which infects whole nations with a thirst for violent change does not give way to mere slogans ***. The works of peace require courage and foresight. The need knows neither national boundary nor narrow ideology." |