A Positive Approach to Economic Aid

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IT IS now nearly 12 years since the provision of economic assistance to other countries on a regular and organized basis became an established feature of American foreign policy. Such assistance had previously been offered to Latin American countries and during and after the war to the devastated and distressed countries of Europe and Asia. With the promulgation of the Point IV offer in President Truman's Inaugural Message of 1949, the provision of assistance to other countries for their economic development lost its character of emergency relief. It became, instead, a settled arrangement for helping the less fortunate countries of the world to escape from poverty and to place themselves on a path to self-sustaining growth. The amounts being spent, if not huge, have at least become considerable: in the current fiscal year some $1.7 billion is available for loans, grants, technical assistance and administrative costs, and another $1.2 billion in surplus food and fiber. In addition, $250 million is provided for investment guarantees and $130 million for multilateral aid through the United Nations.

From the beginning, foreign aid has been sharply controversial. It has an aspect of goodwill and compassion that naturally arouses grave suspicion. Liberals, reacting to this, come automatically to its defense. Any criticism has been deemed to conceal some design for discrediting the policy. If results are not satisfactory, it is because we are not spending enough. The normal liberal formula for improving foreign aid is to spend about 25 percent more.

A much more careful view of foreign aid is now in order and, indeed, essential. Such a view does not lead to the conclusion that less should be spent. More money will be needed. But it does lead to the conclusion that much recent and present aid has been very ineffectually employed and for that reason has had gravely disappointing or even negative results. Without a substantial change in the whole view of economic development, the results in most cases will continue to be disappointing. The required changes will not perhaps be easily accepted here or abroad. Yet so great is the need for development and also the desire for it that we should not discount too severely the willingness to take the necessary steps...