in Turkey. We also are helping the Ministry of Education in Afghanistan modify its primary school curriculum and we continue to provide support to the various centers of the Southeast Asian Ministers of Education Organization. The Korean Ministry of Education, with A.I.D.'s help, is testing methods of teaching which recognize the need to find lower cost alternatives to vastly more expensive formal education systems. While middle-level management and vocational skills can be learned on the job and in local institutions, advanced professional training still must often be obtained in developed countries. Our country programs include "general development training" projects to finance advanced training in such fields as economics, statistics, budgeting, industrial engineering, project analysis, business administration, and accounting. On return participants generally are employed in positions of enhanced responsibility in development agencies. About 1200 participants will be financed in FY 1974 under the education and training projects; most of them will be going to American institutions of higher learning and other training locations, including state and federal agencies. We will also finance participants at the American University of Beirut and at a number of outstanding Asian institutions. SELECTED DEVELOPMENT PROBLEMS-$72.4 MILLION The shortage of power is a critical limitation on the expansion of industrial output, including small industry. When more power is available, particularly in rural areas, many small scale production processes are electrified. Power shortages also limit the use by small farmers of cheap pumps for crop irrigation. As a result, we have undertaken a major power investment in heavily populated Java in Indonesia and a cooperative rural electrification effort in the Philippines. In Nepal AID will finance in this sector labor intensive projects to build a road and upgrade an existing airstrip in Western Nepal, supporting the government's efforts to develop remote sections of the country. SELECTED COUNTRIES AND ORGANIZATIONS-$156.5 MILLION If a country is going to provide its population with expanding social services in education and health, as well as jobs for its growing population, a vigorous and growing economy will be a major asset. AID donor consortia have recognized the importance of contributing foreign exchange loans to help key developing countries finance essential imports. Our general commodity loans, which represent 34% of the proposed FY 1974 program, will finance imports of raw materials, spare parts and manufactured goods for Indonesia, Pakistan and possibly India. These imports help maintain the growth of private sector production and investment. In the past such loans have also contributed in Indonesia and elsewhere to a substantial expansion of U.S. exports. NEW PROGRAMS It is our intention in FY 1974 to initiate development lending in Bangladesh and Yemen and to be prepared to resume loan assistance to India. Financing of relief and rehabilitation in Bangladesh, which began last year, will end in FY 1973 and be followed by the proposed $50 million loan program to support enhanced rural development programs. The $5 million loan proposed for Yemen would permit an expanded water supply and sewer system to be built in Taiz. We have made no loans to India in the past two years. The suspension of $87 million of prior year loan funds was lifted in March. We have completed discussions with the Indians on the use of these funds. As President Nixon said in his latest report on U.S. Foreign Policy for the 1970's, "Both the United States and India are interested in defining a new basis for a mature economic relationship between us over the longer term." The elements of that relationship include the possible role of development assistance. We have included in our request to the Congress a figure of $75 million for possible economic assistance to India. President Nixon has indicated the framework in which we will be considering the assistance question: "The donor must not expect special influence in return; the recipient must acknowledge a mutuality of interest, for only in a relationship of acknowledged common purpose are assistance programs sustainable." Thank you, Mr. Chairman. I would be happy to answer any questions you may have. STATEMENT OF HON. SAMUEL C. ADAMS, JR., ASSISTANT ADMINISTRATOR, BUREAU FOR AFRICA, A.I.D. Mr. Chairman and Distinguished Members of the Committee, I appreciate the opportunity to appear before you to discuss development problems in Africa and the program which A.I.D., in concert with the international donor community, proposes to carry out during FY 1974. Africa, you are aware, is the poorest and least technologically advanced region of the world. It contains, by a wide margin, the largest group of "least developed" countries to achieve independence since the Second World War. Of the 25 countries identified by the United Nations as the least developed, 16 are in Africa. Several other African countries are barely above the least developed level. Despite the problems of poverty, Africa as a whole has made considerable sacrifice and self-help towards building nations. African leaders are preoccupied with their countries' survival and development, and the well-being of their peopies. Development is a highly important issue for all Africans. Nearly all African countries face the basic development challenge of achieving a productive agriculture sector to satisfy increasing need for food, obtaining increased revenues and expanding health and educational services for all people. There are, however, wide technical and economic variations among the countries. Yet generally, if African countries are successfully to achieve a better life for the masses of people, they must have greater productivity, expanded markets with increased revenues, and means to develop job opportunities and better income distribution for the majority of the population. These countries face immense tasks of creating appropriate institutional, social and capital infrastructures to meet the needs of very poor people now largely living at the margin of subsistence. To assist African nations to meet these development challenges an A.I.D. program of almost $160 million is proposed for FY 1974. The major problems on which our programs will focus are: (1) an insufficiency in quantity and quality of food production, the distribution of which is complicated by excessively high costs, (2) education and health family planning delivery systems which are inadequate to meet the needs of the vast majority of Africans, (3) severely limited basic infrastructure (lack of roads, communication, including negligible investment in soil conservation, water uses, etc.) which increases the costs of services and acts as a brake on agricultural development. Two countries-Ghana and Sudan-require particular assistance approaches for they face severe balance of payments problems that limit their opportunities for development. A.I.D., with other donors, will provide them balance of payments support through program lending. The diversity of problems faced by Africans, as well as assistance donors, in attempting to bring about development in the rural areas where most Africans live, is almost as varied as are the particular countries. In Lesotho, an independent enclave of about 12,000 square miles situated within the Republic of South Africa, about 85% of the country is not under cultivation except for a narrow lowland strip on its western border. There is a major problem of enormous soil erosion. Growing pressures place marginal land into cultivation which, along with overgrazing and heavy seasonal rains, combine to create erosion problems equal to or possibly exceeding similar conditions anywhere on the globe. Pressures on the land have resulted in large numbers of Lesotho's men and women seeking employment in South Africa. If the people of Lesotho are to improve their lot, the basic problem of erosion and land pressure must be dealt with. If Lesotho is going to be able to feed itself, generate income for basic social and economic infrastructure and lessen its dependence on South Africa, the problem of erosion must be met in an imaginative way. A.I.D. has joined the World Bank in a closely integrated dry-land farming project in a 300,000 acre area involving some 13,000 participating farmers. This effort, designed to increase the production of staple crops such as maize, wheat and beans while instituting vitally needed soil conservation practices to curb erosion, attempts to deal with the cluster of problems involving erosion, food production, employment and institution of new methodologies and skills training. In a different setting across the continent, the development problem of the countries of Central and West Africa immediately south of the Sahara has been made urgent by periodic droughts and the deterioration of the subsistence base over an area almost as large as the United States. The process of further encroachment of the desert on land that was once productive renders almost the death knell of traditional ways of survival, customary life styles for 25 million subsistence farmers and nomadic herders, in an area practically void of roads, or irrigation even where major rivers flow. The current drought in the Sahel region, (Mauritania, Senegal, Mali, Upper Volta, Niger, Chad) can only bring destitution to human well-being and an overwhelming handicap through losses of cattle in the drought regions. The margins between life and death for millions of African people are indeed thin. While there are no easy answers to problems of this magnitude, it is clear that fresh thinking and full commitment from donors is required if we are to even approach a first step in the solution of this problem. The U.S. response to the immediate requirements of the emerging disaster situation is about $24 million in food and non-food aid. About 80% of the people in the region of Central and West Africa earn their livelihood from agriculture, especially through foodcrop and livestock production. Stimulating increased food production is the most critical challenge facing this region of Africa. Increased productivity means not only more food to meet growing consumption requirements, but also more income for the vast majority of African farmers, and is required immediately as a hedge against the droughts which affect this region. The urgency of the program has increased as cities grow, as droughts recur and the complexity of modern agriculture— contrasted to traditional farming-makes more important the effective use of scarce budget and manpower resources. We are now on the threshold of some new departures in regional as well as broad sector approaches. I refer to the bilateral and international agency donor group consultations, for example, which are looking at the problems of livestock development in Africa south of the Sahara and the general problems of the transportation sector. In addressing development problems, we consult with other donors, mainly the French, British, Canadians, West Germans, Belgians, the IBRD, and the European Common Market Community. A specific instance of A.I.D. multidonor cooperation is a regional program for the Francophone countries of the 5 Entente States, Ivory Coast, Upper Volta, Niger, Dahomey, and Togo, which embodies a three prong approach to the food production problem, to the need for increased revenues, and the ever pressing requirement to expand job creation and employment. In this region, dependence on livestock production for income and for nutritional reasons is a key to development. In a grain deficit region, where grain is essential both for human nutritional need and for support of livestock production, stabilizing the marketing situation and stimulating production of improved cereal varieties can make a critical difference to the well-being of the people. Throughout this region one can see hundreds of thousands of petty traders-they have the aptitude, there is the need, and certainly they can be assisted towards greater entrepreneurial productivity. Our efforts in improving livestock and grain production open new opportunities for supporting industries and activities and now our new programs to help small entrepreneurs may give them the ability to benefit from these opportunities. Let me emphasize that the diversity and the magnitude of the development problems Africans face, as well as the widening gaps which separate Africa's progress from other regions of the world, requires flexible combinations of assistance resources. The development of agriculture in Africa in a manner which brings the benefits to the poor rural population will require substantial inputs of both technical and capital assistance. Technical assistance is required to train Ministry of Agriculture personnel to give effective advice to small farmers. Research is needed on new seed varieties, soil management and fertilizer requirements. Farm policies need to be developed which will insure that the earnings from increased production are equally distributed among small farmers. Marketing systems must be developed and personnel must be trained to provide required credit. Capital must be furnished on concessional terms to maximize utilization of water supplies, furnish credit for small farmers, make available supplies of fertilizer and farm implements, develop farm to market roads and provide the necessary storage and distribution facilities for improved marketing systems. African nations came into independence with decidedly less infrastructure than many LDCs in other regions and continue to require large investments of manpower and capital. These inputs must be provided in an integrated fashion to assure the maximum returns from both capital and manpower investments. It is essential that our assistance programs in Africa allow fullest coordination with other donors and be structured so they can help Africans meet their needs for both technical and capital assistance. As further illustration of the diversity of African development problems, I would now like to cite additional examples of Nigeria, Ghana and the Sudan where the U.S. AID assistance approach reflects the special problems and potentials of these economies. Nigeria, with its unusually abundant cultivatable land and its rapidly growing petroleum industry and broadening industrial base, possesses most of the elements necessary to bring about significant economic development. However, severe constraints on the chances for orderly rational progress are created by high birth rates, continued inflationary pressures, inadequate performance of the agriculture sector and, perhaps most important, an increasingly insufficient supply of trained administrative and technical manpower. The more than $1.4 billion revenues received by Nigeria from oil exports this year is not insignificant when considered in isolation. However, when put in context of a country of 55-60 million people with a per capita income of a little over $100, it is far less imposing, is barely above the level of one of the criteria of the UN for determining least developed countries, and is not sufficient to meet Nigeria's development requirements. Nigeria, in spite of its potential for increasing revenues from oil production, has only one doctor for every 24,000 persons, a literacy rate of only 25%, and a life expectancy among its people of only 40 years. As I mentioned earlier, the requirement for administrators and technical personnel to plan and manage the Nigerian economy poses one of the most critical constraints to its development. Through our A.I.D. program we are assisting the several institutions of higher learning-e.g. Ahmadu Bello University, University of Lagos and the University of Ife to develop trained manpower. We are also providing a program grant to allow Nigeria flexibility in the selection of training and technical services to meet critical development problems as determined by the Nigerians themselves. As a final illustration of the range of AID assistance approaches necessitated by the diversity of the development problem on the continent of Africa, I would like to briefly mention two cases where the absence of foreign exchange to finance a level of imports consistent with a growing economy's needs is a primary constraint to development. In the case of Ghana on the West Coast of Africa, and Sudan in the east part of Africa, severe balance of payments problems exist. For both Ghana and the Sudan, a multilateral Consultative Group under the leadership of the World Bank has identified the balance of payments problem as the immediate constraint to development which must be relieved if progress in the various sectors of the economy is to move forward. As part of this multilateral undertaking, A.I.D. is planning to participate in these efforts through the provision of program loans. A further important aspect of our assistance to Africa has been our increasing attention to the least developed countries. THE LEAST DEVELOPED COUNTRIES A.I.D. and other donors have a growing concern for assisting a group of poor nations which the United Nations, following the UNCTAD meeting in 1972, designated as the least developed countries. Sixteen of the 25 countries placed in this category are in Africa. Other African countries, not on the official list, are nearly in similar conditions of poverty. Our FY 1974 program responds to the UN urgings that special attention be given to these countries. We are proposing $8 million for several integrated project grants to finance interrelated capital and technical assistance requirements for selective types of projects. These projects will expand basic institutions and strengthen production-oriented efforts. In Tanzania, we propose a grant to provide rural credit to small farmers and advisory services to strengthen the rural development bank. In Central West Africa, we plan to assist a rice production project in Chad and livestock production activities in Chad and Mali, and in Swaziland we will support a food production and marketing project. In addition to integrated project grants, we are proposing $1 million in FY 1974 to finance special advisory teams of planning experts for the least developed. These countries badly need the technical capacity to plan and execute development activities. These advisory teams will provide expertise which is in short supply in countries of eastern and southern Africa where they are planned to work. The funds for the teams will be provided through the Economic Commis sion for Africa which will provide management support for the units. Sweden is funding similar teams in Central and West Africa. In the coming year, we anticipate close collaboration with the IBRD, U.N., and other donors in overcoming the special difficulties which affect development activities in these poorest of countries. COORDINATION WITH OTHER DONORS Given the magnitude of the problems the African people face, and given the levels of technical and capital aid required for reasonable progress towards solutions, no one donor can expect to alter the destiny of these poor people. Our aid to the maximum extent possible is based upon consultation, cooperation and coordination with other donors. Coordination among donors for 9 African countries is achieved through the World Bank-led Consultative Groups. Group coordination maximizes the effectiveness of assistance by ensuring that such aid is directed at priority needs and is mutually reinforcing rather than duplicative. Donor groups are also being organized functionally and geographically for African countries; for example, transport for Central Africa and livestock development for Central and West Africa. Outside the donor group meetings, a continuing dialogue is maintained by both headquarters and field staffs with individual donors. The Africa Bureau meets regularly with donors such as the U.K.. France, Canada, European Economic Community, UN and the World Bank to discuss approaches for development in Africa. In addition, we are attempting to strengthen African regional organizations which serve as the focal point for directing development efforts in selected problem areas which affect more than one country. Assistance to the West Africa Rice Development Association, the East African Community, the Association of African Universities, the African Development Bank and the Entente Fund are examples of such efforts. Further progress in donor coordination begins to have greater urgency with our awareness of how unmanageable would be the organization of assistance to meet problems of certain African creeping disasters, e.g. the Sahel drought. THE SAHEL DROUGHT The Sahelian region of Africa stretching from Mauritania and Senegal on the West Coast of Africa through Chad in Central Africa encompasses a geographic area approximately the size of the United States with a population of 25 million. As a result of several years of inadequate rainfall capped by a particularly poor season this year, the lives and livelihood of the people in the entire region are threatened. There is an immediate need to feed those who have depended on grain crops that failed or on the livestock that have died or are dying due to a lack of water and forage. The U.S. has, as a part of a large international effort to furnish emergency relief assistance made available $21 million of food grain and $3 million of non-food assistance. Other donors have included the European Economic Community, Belgium, France, U.S.S.R., Germany, Zaire, Canada, and the United Kingdom. So far the Africans and others have concerned themselves foremost with the problems of immediate human needs. But there is no question this drought will have economic consequences which will endure for years. An important recovery program will be needed. Livestock herds have been depleted and must be rebuilt. Rangelands must be restored. New water resources must be developed and dry wells improved. A resettlement program may be required. Those whose lives have been torn asunder must be given a hand to start again. And all this must be done when budgetary resources available to the governments are diminished because of the drought. We believe our disaster relief efforts are now moving smoothly. Along with other donors, we are now turning to the question of recovery. The United Nations has asked others to join with it at an initial meeting in Geneva later this month for this purpose. FAO has already organized study groups to begin developing concepts upon which a recovery program might be based. The French Government has announced its willingness to work with Africans and other donors in such a recovery effort. The IBRD has expressed its interest in revising its programs to support recovery needs. We are now formulating plans on how we, in conjunction with the efforts of other donors, might play a role in such an effort. As that becomes clearer, we will know better just what resources may be needed. |