V. General Considerations Affecting United States Aid Several general restrictions and conditions have generally been applied to United States aid programs and projects. These considerations have been designed to increase the impact and success of the program. The basic consideration is that every effort should be made to insure optimum use of Pakistan's own resources. In addition, the general requirements which Pakistan must fulfill in connection with United States aid are applied as set forth in the Mutual Security Act of 1954 (Public Law 665). VI. Extent and Nature of United States Aid Approval of the recommendations of the Heinz mission for a greatly expanded aid program for fiscal year 1955 occasioned a legal and financial exercise of considerable dimensions in order to finance the $105 million program on a basis consistent with the terms of the Mutual Security Act of 1954 and the Agricultural Trade Act of 1954. Funds were obtained from military assistance authorizations in chapter 1 of title I and were transferred under the provisions of section 401 ($20 million) and section 501 ($35.6 million) to the Pakistan program to supplement the $20 million for development assistance and the $5.3 million for technical cooperation provided by the act. The balance of the program was apparently provided by sale of surplus agricultural commodities under Public Law 480. This complicated method of financing also led to a complex series of bilateral agreements with Pakistan, the negotiation of which was not completed until January 18, 1955. With the exception of a relatively small emergency flood relief program, none of the 1955 program for Pakistan was covered by the required program agreements until after January 1, 1955, halfway through the fiscal year. In the face of a delay of these proportions, it would seem difficult to carry out a fivefold expansion of the program in the remaining 6 months of the fiscal year. Considering what might be called the basic aid program, consisting of outright grants for technical assistance and economic development, projects in the field of agriculture and natural resources, understandably, have received the lion's share of the aid, amounting, for instance, to 83 percent of the total in 1955. In the future, however, it is expected that this percentage will drop in view of the progress being made in this field. Industry and mining has been the next largest category and it appears to be rising in importance, and the same is true with transportation and communication. Projects in the field of health and sanitation, and community development appear to be receiving about 5 percent of the funds each. On the basis of budget information prepared by FOA, it appears that 85 percent of the technical assistance funds for fiscal year 1953 were obligated for supplies and equipment, although it appears that the figures on which this percentage is figured include United States contracts as well as obligations for supplies and equipment. In fiscal year 1954, 37.7 percent of the technical assistance appropriation was obligated for supplies and equipment and 33.5 percent for United States contracts of all types. United States personnel costs, other than contract personnel, appear to be taking a slightly rising percentage of the total obligations for technical assistance. They were 14.7 percent in fiscal year 1953, 15.5 percent in 1954, and are estimated at slightly over 25 percent for fiscal year 1955. Pakistan trainees, coming to the United States or other countries for technical training, account for a very small percentage of the program, there being no funds obligated for this purpose in fiscal year 1953 and only $2,000 in fiscal year 1954. It appears that for fiscal year 1955 and later years that about 4 percent of the total technical assistance funds will go for this purpose. It may also be of interest to note that there is evidence of considerable slippage in the Pakistan program with respect to the number of United States personnel and Pakistan trainees. Estimates submitted to Congress in May 1954 indicated an anticipated obligation of $1,716,000 for United States personnel for fiscal year 1954. Later figures, dated October 1954, well after the close of the 1954 fiscal year, listed obligations of $1,261,000 for this purpose, a reduction of more than 25 percent from earlier estimates. With respect to financing of trainees, the figures submitted to Congress in May 1954 estimate obligations of $500,000 for this purpose in fiscal year 1954. The figures of October 1954, show obligations for this purpose of only $2,000 in fiscal year 1954. Unexpended Balance The fiscal rate of progress of the program is probably best illustrated by the unexpended balances, bearing in mind that the Pakistan program has been increasing each year and in 1955 was increased fivefold. The unexpended balances, estimated, are shown in the following table. In view of the past history of the Foreign Aid program, the expenditure estimates may easily be overstated and the balances could be considerably larger than those shown above. It appears from these figures that the Pakistan program was relatively slow in getting under way initially. From the 1951 inception of the aid program until |