Basin. Two smaller projects in Thailand are, in fact, nearly completed, and engineering work for the Nam Ngum Dam in Laos will shortly get underway.

We do not stand alone in our efforts to spur development of this river basin. Six other donors-Japan, the Netherlands, Canada, Denmark, Australia, and New Zealand-have joined with the United States with pledges totaling over $23 million for the Nam Ngum project, which will be administered by the World Bank.

Another important development is the founding of the Asian Development Bank, which has been in the planning stage since 1963 and is expected to begin operations later this year. Thirty-one countries have joined in providing funds for the Bank. The initial capitalization of the Bank is $1 billion-$650 million from regional members, from Asian members, and $350 million from nonregional members. Subscriptions to date are only $3 million short of this goal. Japan has subscribed $200 million, the same amount as the United States.

The need for closer regional cooperation is particularly great in southeast Asia. Accordingly, the legislation before this committee contains a new title for multilateral and regional programs in southeast Asia. This new title is evidence of U.S. willingness to respond to new Asian initiatives which will accelerate social and economic progress and development and strengthen cooperation among the countries of southeast Asia.

The proposed southeast Asia title is a further step toward the realization of the President's goal spelled out in his speech at Johns Hopkins University on April 7, 1965; a broadly based international cooperative effort for the accelerated development of southeast Asia-an effort which will offer the peoples of the area an alternative to violence and which would replace "despair with hope and terror with progress," as the President put it.

This past year has been one of crisis and turmoil in the Dominican Republic, but since last September there have been signs of progress. The Provisional Government, with the help of the Inter-American Peace Force, has retained control of the divided country. We are working with the peoples of the Dominican Republic to assure the peaceful transition to power of a freely elected democratic government. We are also working with the people and providing economic assistance which will help to direct the energies and the policies of the country toward peaceful reform and a better life.

As you know, we have just announced our willingness to negotiate certain economic development loans with India and Pakistan from funds provided in the current fiscal year. We are prepared to continue to help if these two countries demonstrate their willingness to take necessary self-help measures in the fields of agriculture and other priority areas and find a way to live at peace with each other.

We are heartened by the progress of reconciliation shown at the United Nations and at Tashkent, and in the announcement of troop withdrawals. We look forward to the day when the full energies of these two great peoples can, with our assistance, be devoted to the task of building for the future.

That job, as we all know, will be a staggering one, as the current food shortages in India so starkly remind us. But it must be successful, and we are prepared to do our part in that great subcontinent.

One of the most encouraging signs of the past year has been the continuing economic progress in Korea. For example, Korean exports in 1965 were 50 percent larger than in 1964 and five times greater than in 1960. Industrial production rose by 15 percent last year. Korea's gross national product increased by 9 percent in both 1963 and 1964.

This progress has been a demonstration of what can happen to a country after the smoke of battle has cleared and the energies of the people are turned to the great task of peaceful development. Our aid program was once largely in the form of grants to support the Korean economy. The grant economic aid program has been declining steadily while our development lending has increased, including loans to private projects, reflecting the ability of the country to make positive use of the capital goods. Korea has provided an excellent example of what can be done when self-help is accompanied by strong U.S. support.

In Africa in recent months there has been some further movement toward regional cooperation. More and more of Africa's leaders are recognizing that peace and economic growth receive great impetus from a cooperative approach to development. We would be glad to see the achievement of certain steps being taken to further subregional cooperation and institutions such as in the proposed Economic Community of East Africa. We look forward to cooperating with the new African Development Bank and other regional institutions which can play a vital role in drawing together the countries of this great continent. As the means for cooperation develop, the United States intends to make greater use of regional institutions and arrangements as channels for our assistance.

Last November I took part in the Second Special Inter-American Conference at Rio de Janeiro where I had the valuable assistance of Congressman Selden and Congressman Mailliard of this committee. I conveyed to the Conference the intention of the United States to extend its commitment to the great joint effort to promote peaceful change through the Alliance for Progress. In a personal message to the Conference, President Johnson said:

Recognizing that fulfillment of our goals will require the continuation of the joint effort beyond 1971, I wish to inform the Conference-and through you, your respective governments-that the United States will be prepared to extend mutual commitment beyond the time period foreseen in the Charter of Punta del Este. In determining the scope of the U.S. effort, we will want to examine carefully with you at that time the requirements of the hemisphere, in the light of progress made through self-help measures and the contributions which by then some of your countries will be able to make to one another to further the common effort.

The leaders of the hemisphere demonstrated their commitment to progress by adopting the Economic and Social Act of Rio de Janeiro last November. This act added an important new element to the Alliance: a commitment by all members of the Alliance to help one. another and to provide assistance to achieve economic and social objectives set forth in the act. Although many members of the committee may have read it, I would like to submit for the record, Mr. Chairman, the text of the act.

The Alliance is moving ahead. Brazil, as a result of far-seeing and courageous decisions involving difficult measures for stabilization,

development and reform, has greatly reduced its inflation rate, restored its credit, encouraged private investment, set its economy moving forward and pressed forward the modernization of its economic institutions. Chile is making important strides, and Colombia and Peru are taking the self-help steps which are expected to result in more rapid progress and therefore would justify greater support from the United States.

We will continue our strong support for successful regional integration in Central America, and are hopeful that the movement toward greater cooperation of all the economies of Latin America will gain. momentum in the years ahead. In addition, we will continue to work with the Inter-American Committee on the Alliance for Progress (CIAP) and the Inter-American Development Bank to increase regional cooperation.

There is a growing awareness among aid-giving and aid-receiving countries of the advantages of cooperation and mutual assistance. I have indicated the increasing spirit of cooperation among developing countries. Donor nations are also moving toward closer relationships in their aid-giving efforts. Particularly encouraging is the growing number of arrangements for the coordination of aid among donors.

We are continuing our efforts to strengthen bilateral coordination. For example, the United States recently agreed to engage in regular consultations at the Cabinet level on these matters with Japan and the Federal Republic of Germany.

Formal coordination arrangements have been established for a number of aid-recipient countries. Aid to India and Pakistan is provided through World Bank consortia which include Western European countries, Japan, Canada, and the United States. Aid to Turkey is provided through a consortium of the OECD.

The World Bank also sponsors less formal coordinating mechanisms called consultative groups.

There are now World Bank consultative groups for six countries including Colombia, Thailand, and Tunisia.

These arrangements-consortia and consultative groups-bring together donor countries and international financial institutions. They provide an effective form for reviewing the requirements of a recipient country, for evaluating self-help performance, and providing aid on a more orderly basis.

The foreign aid program which this committee is now considering is essential to U.S. security and national interest in both their short and long-range aspects.

For the short range, the program provides direct support to Vietnam, assists self-defense and internal security efforts in other countries, and helps to build the stability essential to a peaceful future.

For the long range also, we need our foreign aid program because as the President said, "we are concerned with the kind of world our children will live in."

We seek a world of progress and of peace, where each nation lives in independence. This is no dream; it is a necessity. For in this age of rapid communication, rockets and nuclear power, what happens. half a world away is of vital concern to us and our security.

Only as others grow in freedom, progress and security can we here in the United States be truly free and secure to enjoy the blessings of a better life.

As I mentioned, Mr. Chairman, I have the text of the Economic and Social Act of Rio de Janeiro, which I would like to present for the record at this time.

Chairman MORGAN. Thank you, Mr. Secretary.

Without objection, it will appear in the record at this point.

(The text of the Economic and Social Act of Rio de Janeiro is as follows:)

ECONOMIC AND SOCIAL ACT OF RIO DE JANEIRO

PREAMBLE

Whereas

Freedom, security, and the improvement of democratic institutions are the best means of satisfying man's aspirations for obtaining employment and social justice, land and housing, education and health, and no system can guarantee true progress unless it affirms the dignity of the individual;

Freedom, security, and the improvement of democratic institutions in the hemisphere require the elimination of the serious obstacles to achievement by the American peoples of a rising level of well, being;

The Act of Bogotá, the Charter of Punta del Este, and the Charter of Alta Gracia set forth economic and social aspirations and goals that are important expressions of the interest in finding a satisfactory hemisphere answer to the demands of the new American realities, and that should be noted in the course of evolving hemispheric cooperation;

Also, the studies by IA-ECOSOC, CIAP, IDB, and other regional agencies, whose activities are carried out within the framework of the objectives of the documents mentioned in the preceding paragraph, have made it possible to identify specific problems that the countries of Latin America face in their economic and social development, and propose ways of overcoming those problems, which should be taken into consideration;

The need is recognized, in accordance with the principles of inter-American cooperation and mutual assistance, to extend the duration of the Alliance for Progress for as long as may be needed to ensure sustained and adequate growth, social progress consonant with the goals of the Act of Bogotá and the Charter of Punta del Este, and hence the basic ideas that inspired these documents should be incorporated into the permanent structure of the system;

For the extended duration of the Alliance it should be accompanied by renewed efforts to mobilize national resources to the maximum and to insure an adequate flow of mutual and external financial and technical assistance, from both public and private sources of capital;

Modernization of rural life and the more equitable distribution and better use of land are essential to national progress, to fulfilling the aspirations of the rural population and the ever-increasing need for food in the hemisphere, and to promoting national development through market expansion;

Economic and social development planning and domestic price stability compatible with such development are national objectives requiring the understanding, the support, and the participation of the various sectors of the national community;

International trade is a determining factor of economic and social development of the countries of the hemisphere and should evolve in the direction of providing developing countries, especially, with a system of fair prices, increasing earnings, and free access to world markets;

External and mutual technical and financial assistance granted on flexible and suitable terms is also a determining factor of economic and social development; Based on the democratic principles and institutions of the inter-American system, each member country will freely foster its development in accordance with its own methods and procedures;

In order to give impetus to development of the hemisphere, it is essential to accelerate economic integration, looking to the creation of a Latin American common market, taking into account the differing degrees of development of the Latin American countries and the process already initiated in this field by the Latin American Free Trade Association and the General Treaty on Central American Economic Integration;

The hope shared by the member states for a hemisphere made up solely of free and democratic nations is intimately linked to the success of the Alliance for Progress; and

The effectiveness of the inter-American system depends upon respect and active support by its member countries for the principles of the system and, reciprocally upon the support given by the inter-American system to national policies based on these principles,

The Second Special Inter-American Conference declares:

That it is essential to incorporate into the economic and social field of the interAmerican system, as juridically binding, principles of mutual security, solidarity, cooperation, and assistance; however, the member states may nevertheless adopt pertinent measures immediately to implement the principles set forth in this act; and

Resolves

1. To reaffirm the principles and objectives stated in the Declaration to the Peoples of America and in the Charter of Punta del Este, approved by the InterAmerican Economic and Social Council on August 17, 1961, as the fundamental policy of the Organization of American States and of the governments of the member states with regard to the economic and social development of the hemisphere; and,

2. To instruct the special committee charged with drawing up the preliminary draft amendments to the Charter of the Organization of American States to prepare, with the advice of the Inter-American Committee on the Alliance for Progress and other regional bodies, the additional standards in the economic and social field required to be incorporated into the said Charter, in accordance with the guidelines set forth below.

CHAPTER I. POLITICAL SECURITY AND ECONOMIC AND SOCIAL DEVELOPMENT

1. The principles of solidarity that inspire the activities of inter-American cooperation in the political field and in that of mutual security must, of necessity, be applicable also to the economic and social field, inasmuch as the American Republics have resolved to unite in a common effort to enable their people to attain the greater social justice and more rapid and balanced economic progress essential to the security of the hemisphere.

2. Freedom, security, and democratic institutions are the best means of satisfying individual aspirations for progress through employment, social justice, improvement in education and health, better land distribution, adequate housing, and protection of the family and children. No system can guarantee true progress unless it affirms the dignity of the individual.

3. To achieve the objectives of the Alliance for Progress, the obligation to cooperate in the solution of economic and social problems is essential, inasmuch as these problems can disturb relations among peoples, limit the opportunities to affirm the dignity of the individual, limit the full exercise of democracy, and endanger the peace and security of the nations.

CHAPTER II. THE NATIONAL SOCIAL AND ECONOMIC EFFORT

4. The economic and social progress of the countries depends fundamentally on mobilizing their national, human, and material resources.

5. The improvement of health, education, housing, and the system of land tenure, as well as the protection of the family and children, and the right to work, should be the fundamental objectives of social development, and to achieve these objectives it is essential, among other things, to generate national resources and establish an adequate domestic institutional structure.

6. The growing urban concentration in the hemisphere makes it increasingly important to focus attention and effort on providing the services and the means essential to an urban life of dignity, healthful and productive; at the same time, national policies may be pursued in order to achieve an appropriate geographic distribution of the population.

7. An effort should be made to achieve a more equitable distribution of national income through measures such as, among others, an appropriate fiscal policy. 8. Increased agricultural productivity and yields, as well as agricultural diversification through the application of modern techniques, credit expansion, systems for the marketing and processing of agricultural products, and reform of inefficient and unjust land-tenure systems, are basic elements for sustained development in the hemisphere.

9. The requirements for accelerated economic development and the need to create new employment opportunities for the growing population of Latin America