SPECIAL ASSISTANCE

For fiscal year 1960, $88.3 million in special assistance is proposed for the north African countries of Morocco, Tunisia, and Libya, and for Somalia, Liberia, and Ethiopia. Three of these countries, Morocco, Libya, and Ethiopia, are sites of important U.S. military facilities. The fiscal year 1960 special assistance total for Africa is a modest increase over the level of $83 million submitted to Congress last year for fiscal year 1959. So for this year, total programs approved amount to $83.4 million with the possibility that an additional amount may be required from this year's contingency fund to meet program requirements for which special assistance funds are no longer available.

The Moroccan economy has suffered serious disruptions in the past 2 years. Total output since 1956 has fallen about 2 percent, while population increased rapidly, directly lowering the personal consumption of the Moroccan people, leaving many unemployed and creating serious internal political problems. With its fertile land and mineral resources, Morocco has a good development potential. The present situation, however, must be corrected if the country is to maintain political and economic stability. Morocco looks to the United States for assistance in helping finance and carry out its development budget. Special assistance funds proposed for fiscal year 1960 will be used to finance general commodity imports, a portion of which will be agricultural commodities surplus in the United States. Local currency sales proceeds will be applied to selected projects within the Moroccan development budget. A small portion of the total may be used for dollar financing of special projects. Other sources of assistance, such as Public Law 480 and the Development Loan Fund have been carefully explored. There are now several projects under consideration for Development Loan Fund financing though none have been approved to date.

Economic problems in Tunisia parallel those of Morocco. Since independence, French assistance in capital and managerial skills has declined, aggravating chronic problems of low productivity and poor natural resources. Unemployment has reached serious proportions. Special assistance to Tunisia to date has succeeded only in preventing further economic deterioration but it is hoped that with the special assistance proposed for fiscal year 1960 there can be a slight upturn in economic activity and a strengthening of Tunisia's economic position. Special assistance funds recommended for fiscal year 1960 will help Tunisia continue, through the Tunisian development budget, the level of investment essential to economic growth. The two Development Loan Fund loans, totaling $8.65 million, which have been approved for the national railways and paper pulp manufacturing, will also help toward this end.

In Libya, the third major special assistance country within the African region, progress is being made to raise the country from its deep-rooted problems of poverty and low productivity. Yet there are still substantial requirements to be met with external assistance if this country is to survive as a nation. Libya is dependent upon external assistance for about 30 percent of its ordinary budget and for all of its development budget. The United Kingdom and the

United States, who have strongly supported Libyan independence, have a major interest in helping Libya become a self-sustaining nation. Proposed special assistance for fiscal year 1960 will be directed at continuing requirements of the Libyan development budget. We consider the amount proposed to be the minimum, after taking into account other sources of assistance, essential to provide rising standards of living and concomitant conditions of stability. The special assistance funds recommended will be used, in part, to provide basic commodity assistance and project aid principally in the fields of agriculture, education, transportation, and health.

For Ethiopia and Liberia, the special assistance proposed for fiscal year 1960 will be used for projects primarily in support of technical assistance activities. In this way there can be an important intensification and broadening of impact in key areas of these economies. For example, in Ethiopia funds are earmarked for farm-to-market roads, engineering and construction surveys, and additional facilities for the agricultural schools. In Liberia, special assistance is planned primarily for teacher training facilities. In Ethiopia, a portion of the special assistance will be used for U.S. surplus agricultural commodities, the sales proceeds of which will be used to cover local currency costs of economic development projects in the fields of agriculture, transportation, and education.

In Somalia, the proposed fiscal year 1960 special assistance will help maintain the level of economic activity and improve standards of living. This is particularly important in view of Somalia's independence in 1960 when the country's leaders must show evidence of progress if they are to launch successfully their newly independent country. Special assistance funds planned for fiscal year 1960 in Somalia will be concentrated on projects in agriculture, transportation, and education.

TECHNICAL COOPERATION

The $20.7 million proposed for technical cooperation for fiscal year 1960 represents a 40-percent increase over the estimated program for fiscal year 1959 and a 66-percent increase over the actual program in fiscal year 1958. This increase in the technical cooperation program is largely a reflection of expanded needs in new country programs, particularly in Morocco, Nigeria, Ghana, Somalia, the East African territories, and the Federation of Rhodesia and Nyasaland. There is also an increase in funds earmarked for multicountry projects which will result from the study of development problems in Africa south of the Sahara which the National Academy of Sciences is expected to complete in June. Important technical assistance programs will be continued in Ethiopia, Libya, and Liberia. All of these programs are directed at the paucity of modern technological skills and administrative techniques which seriously impede an acceleration of economic growth.

Approximately one-third of the total technical cooperation program for fiscal year 1960 is earmarked for projects in agriculture. About 20 percent is planned for education. Industry and health programs also are major areas for the fiscal year 1960 program. Technical cooperation funds in lesser amounts are proposed for labor, public administration and transportation.

By major cost component, the provision of U.S. technicians and contract services account for approximately $14 million out of the proposed $20.7 million. The cost of African participants is pro jected at $2.7 million. $2.3 million is planned for demonstrational supplies and equipment and contributions to cooperative services.

With the primary emphasis of the technical cooperation program on training and demonstration, it is clear that the impact of this program is dependent upon our ability to find and keep well-qualified technicians who can work effectively in the African environment. Projections for fiscal year 1960 indicates a need for about 100 new technicians and over 120 contract technicians for the African program. It is estimated that there will be a total of about 650 contract and ICA-employed technicians in Africa at the end of this year compared with a total of 450 at the end of 1958.

In general, the technicial cooperation program proposed will continue to contribute toward helping the Africans raise their living standards and giving hope to individuals for whom the outlook would otherwise be bleak.

CONCLUSION

Africa is the last of the great continents where the drive for selfgovernment is a dominant force. This force is growing in momentum but it brings with it grave problems of political and economic disruption. Support and assistance from the United States, through the mutual security program, can bring to this movement a stabilizing influence which will stave off extremist solutions and help ease the tensions which endanger the United States and the free world. In this way the mutual security program as proposed for fiscal year 1960 directly meets the interests of the United States and strengthens the free world community of nations.

If you will look at your black book you can see the economic assistance aid levels by country, by year, and by type. The book is dark blue, I am told, and not black.

The table on page 119 indicates the trend of the request for economic assistance, showing an increase in total from roughly $73 million in 1958 to $98 million in 1959 to $109 million proposed for 1960, and the breakdown by countries and type are shown in the two lefthand columns.

[Security deletion.]

Chairman MORGAN. Thank you, Mr. Van Dyke.

Now, if any member of the committee wants to direct a question to any of the three witnesses, they will work as a team and try to

answer.

Mr. Satterthwaite, the total program in Africa for all forms of assistance in Africa is $116,400,000?

Mr. SATTERTHWAITE. Yes.

[Security deletion.]

Chairman MORGAN. How much of an increase is this from last year's program on an overall basis?

Mr. SATTERTHWAITE. Mr. Chairman, last year the total requested was $108.6 million.

Chairman MORGAN. It is an increase of about $8 million in overall expenditures in the program?

Mr. SATTERTHWAITE. Yes.

Chairman MORGAN. What is the difference in technical assistance in the fiscal years 1959 and 1960?

Mr. SATTERTHWAITE. The technical cooperation is $14.4 million in fiscal year 1959 and $20.7 million in fiscal year 1960. A difference of $6.3 million.

Chairman MORGAN. The two big countries sharing the special assistance really are Morocco and Tunisia?

Mr. SATTERTHWAITE. That is right.

Chairman MORGAN. What is most of this [security deletion] special assistance for Morocco to be used for?

Mr. SATTERTHWAITE. I will refer that to Mr. Van Dyke.

Mr. VAN DYKE. That will permit us to import commodities into Morocco. The detail of the types of commodities we would anticipate financing can be found in the Moroccan section of the presentation book. It would also permit us to carry out specific projects in the fields of agriculture, industry, mining, education, and so forth. [Security deletion.]

Chairman MORGAN. Mr. Van Dyke, for the record, will you define the Common Market Development Fund? What is this?

Mr. VAN DYKE. You will remember that six of the countries of Europe recently formed a common market for trading among themselves in Europe. As a part of the institution which they have established, they have organized a development fund which will be used to develop the overseas territories of the member countries of the common market. This fund totals $581 million and is to be used over a 5-year period in the French overseas territories, the Belgian Congo, and in Somalia. We consider this to be a very significant step taken by the European Governments. It is a substantial amount of money. It is not, however, the total amount which is flowing into Africa from the European area, which is even greater.

France at the present time is putting some $600 million a year into the French territories of Africa, excluding its expenditures on the Algerian war.

The U.K. is providing somewhere in the neighborhood of $25 million to $50 million a year for its territories or former commonwealth associates in Africa, and Belgium and Italy are both supplying small amounts for the areas in which they are interested.

Our programs in this part of Africa are designed primarily to supplement the much larger efforts that are being made by the European powers in these areas.

Chairman MORGAN. Thank you, Mr. Van Dyke.

Mrs. Bolton.

Mrs. BOLTON. Let me begin by saying we haven't had a presentation like this before. If it is due to the fact that we finally have an African Secretary and a division that can really do things, I just congratulate every one of us for doing it.

To have you come up here with a public statement that we can use and have in addition to that in writing things to which we can here refer is the most helpful thing of which I know. I want to thank every one of you.

What is happening at Conakry with that international company? Mr. SATTERTHWAITE. The big international company is called FRIA, and 482 percent of it belonged to Olin Mathieson, an American com

pany. About 261/2 percent is French, 5 percent German, and the rest British and Swiss, 10 percent each, I believe.

Mrs. BOLTON. That is doing very well, isn't it?

Mr. SATTERTHWAITE. It is going ahead very well indeed. They have not stopped their activities at all.

Mrs. BOLTON. With a number of these things-we never hear of the European people in Africa. Do we do anything for matters that have to do with the European populations mostly in East Africa? Mr. SATTERTHWAITE. Under the mutual security program? Mrs. BOLTON. Under the mutual security program.

Mr. SATTERTHWAITE. Possibly in Southern Rhodesia.

Mrs. BOLTON. I am particularly anxious to know about Southern Rhodesia.

Mr. VAN DYKE. Our programs are directed primarily at the indigenous Africans. That is where the great need exists, but there have been a handful, I would say less than a half dozen Europeans come to this country as participants under the mutual security program for training primarily in the field of agricultural planning. These have

been from Southern Rhodesia.

Mrs. BOLTON. We don't really deal with that problem of the needs of the European settlers?

Mr. VAN DYKE. We are not conscious of any great need that the European settlers have.

Mrs. BOLTON. That is what I wanted to bring out, that we are not conscious of their needs, but we are very conscious of the African needs.

Mr. VAN DYKE. Yes.

Mrs. BOLTON. What about the Development Loan Fund? Have we had any requests for help in Liberia, Somalia, Tunisia, Sudan, and Ethiopia from the Development Loan Fund?

Mr. SATTERTHWAITE. We have, yes. I will refer it to Mr. Van Dyke again.

Mr. VAN DYKE. We have requests from each of those countries.
Mrs. BOLTON. Are they being considered?

Mr. VAN DYKE. Loans have already been offered to Liberia, to Tunisia, and to Somalia, of this group of countries which you gave, and to the Sudan. Applications have been received from several other countries and they are under consideration. We can provide a statement for the record of specific loans.

Mrs. BOLTON. I would like that very much.

Mr. SATTERTHWAITE. Mrs. Bolton, perhaps I should point out while Sudan is very much a part of Africa, it is not under our Bureau, nor is Egypt.

(The information requested is as follows:)

Development Loan Fund loans approved in countries indicated, Mar. 31, 1959