1 Very substantial increases are presently under consideration and in all probability will be approved. Counterpart Funds FOA-financed commodity imports develop counterpart funds which augment Chinese Government resources for essential military and civilian expenditures. For such expenditures during fiscal year 1955, it is estimated that a total equivalent of $93.7 million in counterpart funds will be needed. Part of these funds will be developed through the sale of commodities financed by FOA in fiscal year 1955. Part will be derived from corresponding programs of prior fiscal years, and from repayment of loans previously made from counterpart funds. The $93.7 million equivalent in local currency will be used during fiscal year 1955 as follows: The Chinese are devoting 80 percent of their national budget and nearly 60 percent of the combined National Provincial Government's budgetary resources to the military effort. They are increasingly assuming the administration and costs of American-sponsored technical assistance projects in such fields as health, education and rural development. A new foreign investment law is nearing enactment which, it is hoped, will improve the climate for private investment sufficiently to attract United States and other private capital. Relationship of the Program to UN Projects in Formosa Several projects are being carried out in Formosa by certain U. N. specialized agencies-the U. N. Educational, Scientific and Cultural Organization (UNESCO); the World Health Organization (WHO); and the United Nations Children's Welfare Fund (UNICEF). These projects are coordinated with the United States assisted education and health programs. Two of the U. N. projects in the fields of malaria and tuberculosis control are conducted jointly with the Joint Commission on Rural Reconstruction (JCRR). Some idea of the character and magnitude of major projects approved and sponsored by United States aid programs in Formosa during recent years is suggested by the following tabulation provided by Foreign Operations Administration: 3 From FOA sources. FOA Industrial Projects Approved, Procurement Authorization Amount, and Status of Projects as of June 30, 1954 Description Installation of 2 generating units of 26,500-kw. capacity each in power station con- Rehabilitation of station heavily damaged by floods. Station is now being lo- Increasing dry season peaking capacity of this station by 59,300 kw., through Development of 40,000-kv-a steam power to meet growing demand for power in Completion of 31-span, 2-km. bridge to eliminate highway gap at the center of Expansion of plant capacity from 7,200 tons to 60,000 tons annually. Technical FOA Industrial Projects Approved, Procurement Authorization Amount, and Status of Projects as of June 30, 1954—Con. Establishment of a 70,000-ton annual capacity nitro-chalk plant on original site of a Installation of equipment to rehabilitate and modernize paper mills so as to increase Installation of equipment to convert the Hsinying Pulp Mill from a sodium sul- Installation of equipment to manufacture a high-grade, two-side finished hard- 1,150 VII. Personnel The Taipei Embassy Economic Staff consists of seven persons costing $49,085 per year as against a total staff of 38 persons for all purposes costing $208,510 per year. The Department of Defense as of November 1954 had a total of 977 persons in Formosa of which 836 were United States military personnel and 141 foreign nationals. FOA as of November 1954 had a total of 150 persons in Formosa of which 94 were broadly classified as administrative and 56 charged to the program. A further breakdown of this total indicates that of 80 United States nationals, 24 were administrative, 47 technical assistants, 9 on reimbursable detail while 70 foreign nationals were listed as acting in administrative capacities. VIII. Joint Commission on Rural Reconstruction This Commission is unique to Formosa. It is a jointly operated Chinese-American organization with two American commissioners appointed by the President and three Chinese commissioners, including the chairman, selected by the Government. It was originally created to operate on the mainland. Since moving to Formosa it has been largely responsible for the outstanding success of the agricultural programs. It is financed to a limited extent by FOA but largely by Chinese Government currency derived from the counterpart fund. Its activities include programs in rural health and sanitation, land rent reduction and land reform, crops and livestock production, irrigation, improvement of farmers' associations, analysis of rural economic problems, and supervision of storage, distribution and utilization of chemical fertilizers and beancakes. Its success in maximizing self-help by the Chinese with limited supervision by American personnel affords an example which might well be followed in other areas. Its continuance is authorized under Section 536 of the United Security Act of 1954. IX. J. G. White Engineering Corp. In a somewhat similar fashion, the J. G. White Engineering Corp. serves the industrial and defense segment of the United States aid program in Formosa. Originally under contract to the Nationalist Government on the mainland for engineering and technical advisory services beginning in 1948 this organization moved to Formosa in 1949 with Government of Chiang Kai-shek. Its contract has been successively financed since 1948 by ECA-MSA and FOA. It now costs 347789-55-50 775 |