You may be interested in reading the attached memorandum which is an analysis of the Colombo Plan Conference held in Ottawa earlier this Fall. ³⁷ If this paper appears unduly long it is because we felt you might be interested not only in the substantive discussions that took place during the Conference but also in the subsidiary aspects of a meeting which marked the first time that Canada had played host on a large scale to a number of important Ministers and officials from countries of South and Southeast Asia.

You will recall that one of the arguments put forward in support of not increasing our Colombo Plan contribution was that the Asian Ministers did not actively seek increased assistance during the meeting. I think paragraphs 3, 4 and 5 of the attached paper indicate how essential external aid is considered to be by Ministers like Mr. Deshmukh of India and Mr. Mohammed Ali of Pakistan. While they could not for obvious reasons sound too demanding they both sought to stress the importance of foreign assistance to their countries particularly during this initial period of economic development.

In paragraph 11 of the analysis reference is made to a misunderstanding which appeared to exist with respect to the Canadian contribution to the Colombo Plan. As a result there may be some impression that Canadian administrative machinery is unable to use effectively an annual contribution of approximately $25 million. This of course is an incorrect interpretation arising out of a tendency to confuse uncommitted and unspent money. As paragraph 11 explains, at the time of the meetings only about $7 million remained uncommitted. (As a result of subsequent decisions of Cabinet to provide additional assistance only a little more than $4 million remains available as of this date, and there are of course a number of sound projects under active consideration which would more than absorb this amount).

I am also attaching a printed copy of the final version of the Third Annual Report of the Consultative Committee. Thanks to the excellent co-operation which we received from the Queen's Printer printed copies of this Report have been made available in record time. This report is not to be released until December 15.

J[ules] L[éger]

[Ottawa], December 9, 1954

This memorandum attempts to analyze the recent Conference of the Colombo Plan Consultative Committee by summarizing and commenting upon significant developments in the substantive discussions; and by also appraising the results of Canada's first essay at playing host to a major Conference, at which most of the delegates were from South and Southeast Asia and were largely unfamiliar with Canada, or its people. Without exaggerating the importance of these Colombo Plan Conferences, it should be recognized that they play a modest role in moulding attitudes of at least a number of fairly significant individuals from both Western and Asian countries.

Substantive Discussions

2. The character and tone of discussions in the formal sessions of this year's Consultative Committee meeting closely followed a pattern which had been established at the earlier meetings in Karachi and New Delhi. Most of the work during the first two weeks at the meeting of officials was devoted to the preparation of a draft Report for the consideration of Ministers. The Drafting Committee, after collating the country chapters which had been reviewed and revised by separate working groups, turned most of its efforts towards the preparation of the final sections of the Report in which an attempt was made to describe the progress achieved and to point up the major obstacles which the Asian countries were seeking or should seek to overcome. In that Committee there was a general disposition towards frankness and the avoidance of over-optimism or complacency, but of necessity some parts of the conclusion reflected the effects of compromise.

3. As at Karachi and New Delhi, the meeting of officials in Ottawa fulfilled a useful function. From the Canadian point of view it was particularly helpful to have on hand for a reasonable period of time, a wide and varied group of officials from the Asian countries, familiar with the details of Canada's Colombo Plan operations in their particular countries. However since the major task of the meeting of officials is the preparation of the draft Report, consideration might perhaps be given to the possibility of limiting the preliminary meeting in the future to one or two officials from each country (especially since the number of countries involved has increased considerably), in reality the Drafting Committee; this would allow this smaller body to concentrate more intensively on the preparation of the draft report - which each year becomes a more complicated and time consuming task.

4. During the meeting of Ministers, which lasted for five days, the discussion of the Report and its conclusions was restrained and at times perfunctory. For the most part, leaders of delegations limited themselves to speaking with reference to those sections or chapters which concerned their countries. As one might have anticipated, the most substantial and dignified statements came from Mr. Deshmukh of India and Mr. Mohammed Ali of Pakistan. When speaking of foreign assistance, Mr. Deshmukh spoke with anything but a demanding tone, and one gained the impression that, for India at least, aid in the form of loans might be acceptable (particularly since political strings would be less likely in that case) as well as aid in the form of grants. The Indian statement laid stress on the value of foreign assistance during the initial period of economic development in the country and there was a note of hopefulness about the future of private savings and investment in India. Inhibited by only the inherent dignity of the East, Mr. Deshmukh went to considerable length to confirm the need of his country and others in the area for external aid; and at the same time one sensed that he was paying particular tribute to the acceptability of the Colombo Plan as the instrument for achieving the effective cooperation required for the distribution of external aid. On the importance of external aid, Mr. Deshmukh observed that while they might be able to get along without it they would then have to take forty years instead of twenty to achieve the modest objective of doubling their present inadequate national income.

5. Mohammed Ali sought with somewhat less effect to correct the impression that unfavourable conditions for private investment existed in his country. His remarks, however, indicated a far greater reliance than India on foreign assistance, in the form of both grants and loans. The Pakistan Minister of Finance spoke at length about the disastrous results of the floods and of the fall in prices of cotton and jute, but his statement was probably not as candid or harsh as one might have anticipated in the light of the serious problems which the Pakistan economy is reported to be facing.

6. The statements of most of the other Asian delegates were interesting and provided a useful supplement to the Report. These statements made it clear that the Asian countries were facing up to the gigantic task of financing from their own resources the bulk of the cost of development (the Report notes that about 80% will be financed by Asians this year). The address, by the leader of the Viet Nam Delegation was the only speech to place economic development in its political framework. It was a simple and moving appeal which apparently was not distasteful to any of the other delegates present. For the first time the representatives from Viet Nam, Cambodia and Laos seemed to be at home in the Colombo Plan. The comments directed to them in French by our Prime Minister and by other Canadian Ministers were warmly appreciated. Although members of the Canadian delegation were careful to avoid even an implied commitment, these countries undoubtedly hope to secure capital assistance from Canada as well as technical assistance through the provision of French-speaking experts.

7. The references in several speeches made by Asian delegates to the shortage of consumer goods and the consequent fear of inflation in their various countries provided background to the statement of the United States delegate which concerned itself largely with the new Agricultural Trade Development and Assistance Act. Assuring the conference that normal markets would not be disturbed or world prices depressed, the United States delegate pointed out that the proceeds arising from the sale of United States agricultural surpluses could be of valuable assistance to Asian Governments in financing economic development projects. There was no evidence of any enthusiastic response from the Asians to this approach.

8. Mr. Stassen spent two days in Ottawa during the Ministerial Meeting, and his comments, which were in addition to the formal U.S. statement, did not come until the last day of the conference. There had been some thought that he might announce a new "Save Asia" plan. As it turned out, his statement was fairly routine in nature, although the conference and the press were greatly interested by his suggestion that the United States intended to devote to projects within the Colombo Plan a portion of the savings which will arise from the ending of the Indo-China war. He also spoke of his Government's interest in the steps that might be taken towards multilateral regional cooperation in Asia commencing to the delegates the successes achieved in Europe through the Regional approach. Whilst Mr. Stassen's comments were otherwise of an unspectacular nature, what he said and what was said by others on his delegation throughout the conference made it clear that the United States Government was anxious that it should be considered as a very active member and supporter of the Colombo Plan. Statements and comments by United States representatives, both in and out of the conference, often betrayed their disappointment at the tendency of both the United States public and the rest of the world to consider that the United States at the best was only a marginal observer of the Colombo Plan. Subsequent reports have reinforced this feeling that the United States Government was leaning towards stronger association with the Colombo Plan. This could of course produce both good and bad effects.

9. There was evidence at this year's meeting that the Colombo Plan was at a transition stage in its development. Delegates frequently referred to the fact that the Plan was at its mid-point or moving into the final stages of at least the first planning period; and the United Kingdom openly acknowledged what all governments appeared to have tacitly accepted, that the Plan would have to be continued beyond 1957. There were other indications that the Colombo Plan was in transition. The membership at this meeting was enlarged to include Japan, which had previously not been associated in any way with the Plan, as well as Thailand and the Philippines, which had been represented at previous meetings by observers. Originally the Plan was initiated primarily in terms of strengthening the Asian countries in the Commonwealth, although it was recognized from the beginning that other countries would be welcome. The entry of Japan involved the conference for the first time in a certain amount of political shuffling. The increased United States interest in the Plan, which was referred to above, was also apparent to most of the Asian countries and there were, of course, passing references to the relationship between the Colombo Plan and SEADO (with no inclination to link the two in a manner objectionable to the other members of the Plan).

10. The broader membership of the Plan may be giving rise to fears in the minds of some of the Asian countries, although there was no particular evidence of this at the Ottawa meeting. The founding members of the Colombo Plan have always recognized that special relationships between countries and between individuals have developed through these meetings. These are relationships which draw in part on the Commonwealth sentiment, in part from the habit of meeting and working closely together over the past few years, and in part on the uncontroversial nature of the aspirations of the Plan. The informality and frankness which develop as a result of these relationships might be extremely difficult to maintain if the Colombo Plan were to become another international agency in the ordinary sense of that term. At the present time there is no evidence in the Colombo Plan of the split between the Asian countries and the West, or in fact between certain countries of Asia themselves, which is often found in other international agencies.

11. By and large, controversial issues were avoided. However Burma, Indonesia and Australia made frequent attempts to record into the Report and the minutes their desire for greater stability in commodity prices. The Report and in fact the published Conference documents avoid a clear cut recognition of what was undoubtedly an issue about which many delegations, including the Canadian, were unenthusiastic. Indonesia also reminded the Conference of the importance of trade with Communist China. Ceylon, on several occasions stressed the importance to their economy of the rice-rubber barter agreement with China.

12. As host to the conference, both Canadian Ministers and officials were called on to undertake a large amount of preparation and work, but Canada played a modest part in the formal discussions of the conference. Since Mr. Harris was serving as Chairman, Mr. Sinclair introduced the Canadian section of the Contributions Chapter. His reference to unspent moneys available for Colombo Plan projects was unfortunately misunderstood by some of the conference and later by the press. Almost all of the unspent money (the figure referred to in Mr. Sinclair's comments was $32 million) has been committed in principle to capital projects in India, Pakistan and Ceylon. Something less than $7 million of funds voted up to the end of this fiscal year were available for disposition at the time of the Conference and numerous requests for assistance from these remaining funds had been submitted by these three countries, as well as by non-Commonwealth countries.

13. Apart from the more general multilateral discussions, the Consultative Committee meetings are usually accompanied by a series of bilateral conversations between the partners who share in the financing of developmental projects in the area. This year the meetings were particularly useful to Canada, since they gave Ministers and a very wide range of officials an opportunity to meet any of those responsible for development planning in the Asian countries. A great deal of useful work was done in discussing projects of interest to Canada which were in operation or were shortly to be undertaken in India, Pakistan and Ceylon.

14. A more reserved attitude was adopted by both Canadian Ministers and officials in discussions concerning new requests for aid. Since no decision had been taken about the size or nature of Canada's contribution for next year, it was not possible, of course, to offer non-Commonwealth countries any encouragement that new capital projects could be undertaken. The representatives of most of these countries and in particular Burma, Indonesia and Cambodia were told that Canada would carefully study any requests for technical assistance which they might submit - and that there appeared to be a wide range of fields in which Canada might assist through the provision of technical assistance. In addition, of course, Burma, Indonesia and Cambodia all have capital projects which they proposed to Canada and they were active in pressing their requests.

15. To a lesser degree, the uncertainty about next year's programme limited discussions of new projects in India and Pakistan. Both of these countries expressed some interest in receiving some commodity assistance. Pakistan admitted that such aid would not only contribute to economic development both through the use of the commodity when manufactured and through the provision of counterpart funds, but would also have at least an anodyne effect on the painful decline in their foreign exchange reserves.

16. The Pakistan Delegation and in particular the Finance Minister, Mohammed Ali, attributed the highest priority to the Punjab tubewell programme which will supply power and irrigation to those parts of Pakistan most reliant on the waters of the Indus basin, the use of which is in dispute between India and Pakistan. (Canada has already agreed to assist in principle in this programme to the extent of $5 million. A decision has been taken to assist in the construction of a hydro-electric plant at Shadiwal on the Upper Jhelum Canal at an approximate cost of $2 million. There are reservations about some of the other projects which form part of the Punjab tubewell programme, but the fullest consideration must be given to them in the light of Mohammed Ali's appeal).

17. In general the meetings, produced a wholesome and co-operative atmosphere. This year's Report is probably more thorough than previous ones. If its conclusions are vague in parts, this may be partially attributed to the difficulty of generalizing for the area as a whole; and it is of course, attributable also to the political implications involved in a frank and realistic analysis of the progress of the economic development programme.

Subsidiary Aspects of the Meeting

18. It was recognized from the outset that the value of the Colombo Plan conference would derive not only from the meetings themselves but also from the atmosphere surrounding them. This had been true of previous Colombo Plan conferences and it was felt it would be especially true of this conference, since it was the first to be held in North America and gave the Canadian Government and people their first opportunity to receive Colombo Plan delegates.

19. In planning the conference the following aims were kept in view: (1) to provide efficient and congenial working arrangements (2) to house the delegates comfortably and to give them opportunities to mix together in an informal and friendly way (3) to provide hospitality which, without interfering with the work of the conference, would afford entertainment and at the same time introduce the delegates to some important aspects of Canadian ways of living and working (4) to give the delegates an opportunity to learn something of Canada and to enable the Canadian people to learn more about the Colombo Plan and the Colombo Plan countries.

20. Many compliments were received from visiting delegations on the efficiency of the conference arrangements and on the facilities designed to make the delegates feel as much at home as possible. After a brief initial period of adjustment, the conference organization, composed of many people from several different departments, worked well together, achieving consistently effective results - sometimes in the face of heavy demands in terms of time and energy.

21. Other facilities provided for the delegates included not only items such as lounges and local transport but also minor gestures such as dishes somewhat to the Asian taste, the display of all national flags (including those of new members as they were admitted), the playing of a medley of national anthems by the carillonneur, and the services of receptionists to assist delegates with miscellaneous enquiries.

22. The functions arranged outside the conference were, on the whole, highly successful. During the period of the officials meeting we were able to arrange these functions entirely with the assistance of local organizations both public and private; during the Ministerial meetings it was necessary to make use of talent and facilities from outside Ottawa since local theatre and musical groups of the right sort were not performing. The officials' meetings got off to a good start with a very pleasant dinner at the Country Club. Thereafter during the two weeks of their meetings, as time allowed, the officials attended an informal tour of the National Gallery, a display at the National Research Council, a tea at the Experimental Farm, a football game, an ice hockey game, an evening on northern Canada, a concert by the Palestrina Choir which included Canadian folk songs, and a conducted tour to Chalk River.

23. The opening day of the Ministerial meetings was enhanced by the kindness of the Prime Minister and the Speaker of the House of Commons in agreeing to receive the delegates on their arrival at the Parliament Buildings and by the courtesy of the Speaker of the Senate in holding a reception for senior delegates and their wives in the late afternoon. The following day the Governor-General held a lunch for the leaders of delegations and a reception for the delegates-at-large; the play presented by a group of Canadian actors which many of the delegates attended in the evening was greatly enjoyed.

24. Views on the CBC's concert of Canadian music, broadcast as part of a Wednesday Night programme were rather mixed. The orchestra and soloists were first-class and the reception afterward was a pleasant affair. Some listeners felt, however, that the music of Canadian composers is less presentable to this kind of group than the work of Canadian painters. We did our best to encourage CBC to put on the right type of programme and we understood there was to be a considerable amount of Canadian folk music in addition to some modern compositions. As it turned out there was less of the former on the programme than we had expected and even this was dropped by CBC at the last minute because they had under estimated the time the whole programme would take.

25. The tea at Kingsmere, regrettably suffered from inadequate organization in certain respects on the part of the officials; while it achieved one objective - that of enabling the delegates to drive through the Gatineau Hills while the autumn colouring was in evidence - it nevertheless fell considerably short of what it should have been as a social event. On the other hand, the tea at the Prime Minister's house for wives of delegates was very pleasant in every way.

26. The farewell dinner, at which the Prime Minister was host, was splendidly successful. Both he and Mr. Deshmukh, who responded to his graceful toast, spoke in a delightfully informal, friendly manner (in both English and French), and the warmest feelings of good fellowship prevailed throughout the evening.

27. Especially during the week of the Ministerial meetings, there were many receptions, dinners and lunches given by delegations or heads of Colombo Plan missions. It would not appear, however, that the delegates felt that they were being "killed with kindness" - at least by their Canadian hosts. On the contrary, the visiting delegates appeared to be impressed with the quiet and natural manner in which they were allowed to sample something of the Canadian way of life and culture.

28. Another objective - to give the delegates an opportunity to learn something of Canada and to enable the Canadian people to learn more about the Colombo Plan and the Colombo Plan countries - was achieved to a considerable extent by indirection. The press and other media, in advance of the meetings, were given very full information about the conference, the Consultative Committee, the Colombo Plan and Canada's part in the Plan. Statements by leaders of visiting delegations were made available; and there was a briefing session for the press just before the meetings commenced. During the meetings arrangements were made to facilitate interviews by the press, radio and TV people, and full co-operation was afforded to the information and press officers of local missions. Mr. Harris and Mr. Taylor as spokesmen for the conference, met the press on a number of occasions. Canadian officials were careful not to engage in activities which might lead to charges of "over selling"; at the same time all concerned with the meetings did everything possible to co-operate with the "media" and to enable them to cover the conference adequately.

29. Before and during the meetings a considerable number of radio and TV programmes about the conference or the Colombo Plan were broadcast. The press coverage in Canada was very considerable - in news and editorial columns and in the form of pictures. All comment on the substantive aspect of the Colombo Plan was favourable to the objectives of the Plan; there was some criticism of it as inadequate in scope, and a majority of editorial writers seemed to favour an increase in Canada's contribution.

30. With the cooperation of this Department, the Exhibitions Commission of the Department of Trade and Commerce produced a very effective Colombo Plan exhibition which was on display in the Parliament Buildings throughout the period of the meetings. It was seen by all the tourists going through the building; and large numbers of school children visited it from time to time. The public was further interested in the Conference by the attendance of a large number of representative groups in Ottawa to the opening session; the response was good, and the galleries were very nearly filled.

31. Every effort was made to obtain adequate publicity abroad. Special arrangements were made to keep local representatives of wire-service agencies informed, and a small number of foreign correspondents attended for a few days. The CBC-IS was especially briefed on the Conference, and it broadcast news items and sent documentaries abroad on discs. During the Ministerial meeting alone there were 62 short-wave broadcasts to South and Southeast Asia. The visit of two radio specialists from India and Pakistan, brought to Canada by the CBC-IS to work for a few weeks with the CBC, was timed so that they could help with broadcasts to their countries, and an Indonesian radio broadcaster, who was here under the Colombo Plan as a trainee, acted as a special commentator for CBC-IS. The BBC relayed some CBC broadcasts and did shortwave broadcasts of its own. The United Kingdom Information Office sent special stories to United Kingdom Missions in Colombo Plan countries. Special arrangements were made to have newsreel coverage of the opening session released in Colombo Plan countries.

32. The post-conference tours were highly successful. About fifty started out on the main tour of Montreal, Kingston, Toronto and Niagara Falls. About twelve took the brief northern tour to Arvida in planes provided by the Department of Transport; it was also to have visited Knob Lake but was forced back by bad weather. About twenty went on the Western tour. Asian delegates made up a high percentage of all the tour parties. The tours gave some Canadians an opportunity to meet a representative group of Asians at first hand and to learn more about their countries.

33. A pleasing feature of the conference and the tours was the extent to which delegates were entertained by non-official groups or simply went off on their own to visit people or places which interested them. This happened quite spontaneously, but always in a way which was of benefit both to the visitors and to the hosts.

34. The impact of Canada upon the Asian delegates was greater than had been anticipated. Subsequent reports have indicated how much the country and the people impressed both Asian Ministers and Officials. The Asians equally left a very dignified and pleasant impression with the Canadian people; it is noteworthy that the tours were carried out without even the slightest evidence of any incidents relating to an unfriendly reception or discrimination.

35. In providing hospitality on the scale indicated in this memorandum for visiting delegates, numbering about ninety at the peak period, the Canadian Government was following the precedent established at previous Colombo Plan conferences in New Delhi and Karachi. Another justification for meeting some expenses not normally met at international conferences was the fact that most of the Colombo Plan countries are short of dollars; Canada's hospitality made it easier for them to send delegations of a suitable size. (In view of the fact that Canada has now taken its turn as host, it would be open to us to suggest that in the future - especially with the increase in the number of member countries, and hence of delegations - it might be desirable for each delegation to cover a larger part of its own expenses).

36. One aspect of the conference arrangements was, as was expected, uneconomical: the use of the Parliamentary Restaurant for lunch. The extent to which this contributed to the easy functioning of the conference will, it is hoped, justify the expense. While the conference accounts have not yet all been settled, it appears that the amount spent will be well within the amount budgeted and in line with the amounts approved for particular purposes.