In addition, contributions to international organizations for health activities will total some $24 million. In fiscal year 1967 AID plans to step up its activities to Combat debilitating diseases, particularly malaria, smallpox, measles, and cholera. Seek new ways to combat malnutrition which takes its worst toll on preschool children. Train health technicians. Cooperate with other nations and international organizations to assist developing countries seeking help in population pro grams. For fiscal year 1967 we expect even greater participation of both local and U.S. private resources in the development process. A vigorous private sector is vital to successful development. AID program loans and capital and technical assistance help spur development in the private sector. For example, program loans make it possible for hundreds of small privately owned enterprises in Chile, Pakistan, Brazil, Turkey, and other countries to get American materials and equipment needed for new investment and to utilize existing plant capacity. In many less developed countries, AID-financed American experts-more than 400 in total-are working to help establish cooperatives, credit unions, or savings and loan associations. The participation of U.S. private resources in the development effort continues to grow. As part of the request for a 5-year authorization, we are requesting expansion of our investment guarantee authorities. By the end of calendar 1965 guarantees outstanding totaled nearly $2.6 billion. Continued rapid growth is expected. We are in the process of making further improvements in this program, several of them recommended in the report of the Advisory Committee on Private Enterprise in Foreign Aid. Today 72 countries have agreed to institute the investment guarantee program, including Ceylon and British Honduras, added since January 1. The Foreign Assistance Act now includes a prohibition against assistance to any country which fails to enter an investment guarantee agreement with the United States by December 31, 1966. For a few aid recipients the internal political situation inhibits the institution of these programs. It is unlikely that agreements could be reached. in the near future. Important U.S. interests are at stake in certain of these countries. Therefore, the President is requesting that section 620 (1) of the act be amended to enable him to weigh overall U.S. objectives in determining whether or not assistance should be continued. AID continues to increase its use of private American skills and talents-including universities, business firms, labor unions, and cooperatives. To further this policy we are requesting a new section 211(d) of the Foreign Assistance Act to provide specific authority for AID to make grants on a selective basis to American colleges and universities to develop greater capacity for technical assistance to less developed countries. We will continue to support the many private voluntary efforts engaged in assistance activities overseas. These efforts include the voluntary relief agencies, the International Executive Service Corps program, and the Partners of the Alliance. Vietnam will be the largest recipient of AID assistance in fiscal year 1967. Five hundred and fifty million dollars in supporting assistance is planned, more than 70 percent of the total supporting assistance request of $747 million. The AID program assists the Vietnamese economy sustain the war effort in the face of serious inflationary pressures which could endanger basic economic and political stability. AID assistance, together with strong efforts of the Vietnamese Government, helps restrain these pressures by financing a higher level of essential imports to meet increasing demand for goods. The AID program also supports the Government of Vietnam's vitally important rural construction efforts. About 85 percent of the Vietnamese live in rural areas; their security and progress are the key to success in the effort to defeat the purposes of the Vietcong. The aim of the combined security and development program in the villages there is to gradually expand the area of the countryside within which people can live reasonably secure against assassination and terror and can look forward to some progress toward economic and social improvement. AID also is providing increased support to the Government's refugee relief programs, coordinating assistance from U.S. sources and other countries and helping develop long-range programs of resettlement and rehabilitation. In addition, substantial funds are required to break logistics bottlenecks in the economy-inadequate port facilities, coastal shipping, airlift capacity, and the like. The uncertain situation in Vietnam makes it impossible to make firm projections of requirements for future programs. Therefore, the President is requesting authority for such supporting assistance funds as may be necessary for Vietnam. We also are requesting authority to use supporting assistance funds made available for use in Vietnam to meet special administrative expenses for the Vietnam program. The struggle in Vietnam has intensified the urgency of efforts to eliminate root causes of unrest in southeast Asia. Although this part of the world is potentially rich, realization of this potential will require intensified development efforts by the southeast Asian countries themselves. On April 7, 1965, the President pledged U.S. assistance, invited other developed countries to participate, and called upon the countries of southeast Asia "to associate themselves in a greatly expanded cooperative effort for development." To carry forward these efforts the President requested and received congressional approval for U.S. participation is the Asian Development Bank. The Bank will be a significant step toward regional cooperation. We also are requesting new legislation for regional development. Title VIII-Southeast Asia Multilateral and Regional Programswill authorize the President to furnish assistance to promote social and economic development through multilateral institutions and programs or projects which serve regional development purposes. No appropriations are being specifically requested under this title for fiscal year 1967. Support for these regional activities will be provided from funds appropriated to other accounts. The President's foreign assistance programs for fiscal year 1967 will help strengthen our own security. They state clearly that the United States is prepared to commit its resources to help those nations that will help themselves. If these nations respond in a spirit of cooperation, I believe we can achieve further progress in the struggle to overcome hunger and poverty, to achieve freedom and peace. Mr. Chairman, I now have annex A, which I will submit for the record, and I would be happy to respond to any questions the committee might have. Chairman MORGAN. Thank you, Mr. Bell. Without objection the annex will appear in the record at this point. (The document referred to is as follows:) ANNEX A Authorization and appropriations requested for fiscal year 1967 compared with fiscal year 1966 appropriations 1 Comparable fiscal year 1966 appropriations column includes supplemental request for $415 million ($315 million, supporting assistance; $100 million, contingency fund). 2 Such funds as may be necessary. 3 Includes $89 million appropriated in fiscal year 1966 for southeast Asia contingency fund. No new authorization needed; existing law provides for a permanent authorization for such funds as may be necessary. Chairman MORGAN. Thank you, Mr. Bell. Mr. Bell, the economic authority under this bill for fiscal year 1966 was supposed to be restudied and redirected based on minimum requirements. In my examination of the presentation books last night it revealed to me that three-fourths of the funds programed for 1967 go to approximately 19 countries getting over $20 million apiece. Last year's book showed three-fourths of the funds programed for 17 countries getting over $20 million and this year's presentation they are pretty much the same countries. I have come to the opinion that the program you are proposing today is and does the same things that the program presented last year was supposed to do. Is there much difference? Mr. BELL. There are two or three important differences, Mr. Chairman. The first, of course, is that there is a very large increase during the present year and in fiscal 1967 in supporting assistance funds, primarily for Vietnam. As you will note, sir, in the totals of our request-which are on the top of page 4 of my statement-for the first time in several years, the request for supporting assistance is the largest appropriation request by funding category before the cominittee. That request reflects a development which we are not happy with at all. We had been very pleased over the previous several years to be able gradually to reduce the amounts going into supporting assistance and to increase the amounts going into development assistance. Because of the necessary expansion in our activities in Vietnam, and to a lesser extent elsewhere in southeast Asia, that trend has been temporarily reversed. The first and major difference, therefore, between this year's presentation and last year's is that because of the situation in Vietnam we have had to increase greatly the request for supporting assistance. With respect to the rest of the program, the principal change is the one that you refer to and that I have spotlighted in my statement; namely, that in our development efforts, under the President's instructions, we are placing considerably stronger emphasis on the basic role of agriculture and education and health activities. We are not abandoning at all other important developmental types of activities, but we are increasing the emphasis on those three fields. The magnitude of the program elsewhere in the world apart from southeast Asia is approximately the same as what we are authorized to do in the present year under the programs which the Congress approved last fall. Chairman MORGAN. Mr. Bell, 12 of these countries that were programed last year appear to be getting more this year than they were programed to get in fiscal year 1966. Are these increases due to the educational programs and agriculture increases or are there some other reasons for these 12 countries getting more funds than they got in 1966 ? Mr. BELL. There are several reasons for that, Mr. Chairman, all of which can be gone into in such detail as the committee wishes. In general the increases in the countries where there are increases do reflect the increased emphases particularly on agriculture. Much more money typically goes into agriculture than into education and health. There are also special circumstances. For example, in the case of the Indian subcontinent, our assistance activities for India and Pakistan have been essentially interrupted during the past 6 or 8 months for reasons with which the committee is very familiar. They are gradually and carefully now being resumed. We do not expect to commit for aid to these countries all of the funds which were appropriated for that purpose. The material before you in the book shows the amount that we expect to be carried forward and how that is related to next year's program. But the program for India and Pakistan is expected to be larger in fiscal year 1967 as against fiscal year 1966 for that special reason. There are other similar special cases in various other parts of the world. Chairman MORGAN. Mr. Bell, in the reexamination, restudying this program for fiscal year 1967, was any effort made to reduce our foreign aid to any of these countries in order to have money to meet our increased expenditures in South Vietnam? Mr. BELL. Yes, sir; there was. The requests that came in from our missions in each country-from our ambassadors who have been instructed to consider on a hardheaded basis what would be desirable from the point of view of U.S. interest in each country-came to a substantially larger total than is here before this committee. We made a series of careful reviews and reductions in the various stages of the budget process last fall. The committee sees before it a very much stripped-down version of what perfectly responsible and serious people honestly believed had been important to the United States. In applying the difference between important and necessary or essential, we did in fact reduce the program request in a great many cases. Chairman MORGAN. Mr. Bell, what would be the authorization request this year, $3,367 million Mr. BELL. This would be both economic and military. Chairman MORGAN. Total authorization request. What was the final appropriation last year with the supplemental authorization and appropriation that has already passed the Congress for fiscal year 1966? Mr. BELL. I have before me, Mr. Chairman, the economic assistance. figure which was, including the $415 million supplemental, $2,463 million, plus $1,170 million for military assistance, making $3,633 million. Chairman MORGAN. Three billion Mr. BELL. Yes; $3,633 million appropriated for fiscal year 1966 for economic and military assistance. There is one important difference in coverage, however, between these two figures. It relates to the military assistance program. As originally put before the Congress a year ago and enacted last summer, the fiscal 1966 military assistance program included some funds for Vietnam. At the present time, as the committee knows, in the supplemental bill which the Congress is in process of passing, the additional funds needed for equipment and training for Vietnamese troops are not being carried as part of the military assistance program but as part of the regular Department of Defense program. For fiscal 1967 in the military assistance funds which would be authorized by the bill before this committee there is nothing for Vietnam. Therefore, you would have to make a special calculation to take out of the appropriations for fiscal year 1966 as passed by the Congress, the amount for Vietnam's MAP before you could get the comparable figures. I would be glad to prepare such a tabulation if it would be helpful to the committee and present it for the record. Would that be useful, sir? Chairman MORGAN. Is there any military assistance in this present request this year for South Vietnam? Mr. BELL. No, sir; there is not. |