Volume #27 - 450.|
COLOMBO PLAN POLICY
Memorandum by Director, International Programmes
and Contributions, Department of Finance|
February 19, 1960|
ANALYSIS OF COLOMBO PLAN OBJECTIVES AND PROCEDURES FOLLOWING A TOUR OF SOUTH EAST ASIA|
My main and abiding impression during the tour of Colombo Plan countries was one of large, growing and destitute populations living in complex and unrewarding environments with inadequate resources either of finance or trained personnel to provide the initiatives and continuing momentum for a move forward to a better life.
In this situation the need for outside assistance is clear, but even more evident for a country (offering assistance) of Canada's limited size and resources is the need for clear and well-defined objectives and effective, dynamic procedures if we are to avoid the danger of dispersal of our limited resources without significant impact.
My following observations are intended to offer a critical evaluation of our present objectives and procedures and to suggest the direction of future efforts to achieve more effective and lasting progress toward our goals.
It is not possible to offer a single and comprehensive definition of the objectives of the Colombo Plan. Each year the Consultative Committee devotes a large part of its time and effort to the description of the task ahead. This description is a reconciliation of many and often conflicting views, but it offers an illustration of the difficulties of explicit definition. The very breadth, complexity and general obscurity of aims in themselves are a measure of the elusiveness of agreed objectives. For this reason it is my impression that the framework in which Canada must proceed requires careful definition. The tendency which is all too prevalent of seeing the Colombo Plan as a comprehensive solution of all the problems of the Far East is an invitation to failure. Our primary aim should be to make a direct and tangible contribution in economic terms which will contribute to the development of conditions of stability and orderly growth in the backward countries and thereby create an environment in which the benefits permeate to the general population to the extent necessary to create a conviction that support for their own institutions will lead to their own betterment. Without identification of the interests of the individual with the national interest there will be no resistance to those influences which have led to xenophobia or support for Communism.
I choose this definition because only too often the Colombo Plan is not seem primarily as an instrument of economic progress but rather as a fundamental part of the cold war. I do not underestimate the high correlation between the two, but I consider it an obfuscation of our true objectives to attempt to evaluate individual programmes on the grounds that they provide an offset to other forms of aid provided by the Communists. As indicated above, it is the development of specific projects which contribute to growth and stability which is fundamental. There will always be questions of appropriate public relations, but these would be most successful if they record tangible contributions to prosperity and stability in the region.
If this is a valid starting point, I would offer the following specific comments on present Canadian procedures.
It seems clear that, despite early difficulties, many of our programmes are progressing favourably. It is the example of the successful programmes which should offer a suitable basis for future plans. The experience acquired in carrying out these programmes offers valuable criteria for future improvements.
Selection of Projects — Role of Recipient Governments and Field Missions
One of the main advantages of the procedures of the Colombo Plan (bilateral) programme is the latitude allowed for reaching agreement with recipient governments on programmes which meet their particular needs and are at the same time suited to the particular capabilities and interests of the donor. Unfortunately, however, the opportunity for flexibility in selection of programmes, unless subjected to effective disciplines, leaves considerable scope for judgments which may not lead to selection of sound and well-conceived projects. The choice of suitable projects is particularly difficult in the case of under-developed countries because the enormity [sic] of needs, the inadequacy of resources and the shortage of trained personnel necessarily require judgments which may be beyond the capacity of the local authorities. In discussing the question of development needs in India, Mr. Krishnamachi, the venerable head of the Indian Planning Commission, emphasized his belief that capital should be directed into projects which will have a lasting impact on the economic life of the country. At the same time he stressed the heavy pressures to which he was continually subjected for expenditures to meet current needs, particularly those to meet social objectives dear to the heart of the public (and therefore the politicians). In a frank discussion of the difficulty of conserving resources and directing them into long-term capital projects, he agreed that it would be helpful if our choice of aid gave maximum weight to economic criteria. With admirable candor he observed that "you are further from the political pressures than I am."
In Pakistan similar problems are present and are aggravated by the geographic separation of East and West Pakistan which gives rise to particularly sensitive problems in the allocation of resources between the two regions.
Under present procedures we rely on the countries concerned to evaluate their needs and submit requests. Although basic to this approach is the assumption that they are competent to make sound judgments, it must be accepted that the requests are not always well-conceived and that in many cases duplicating requests are sent to many aid-giving countries or agencies. Too often instead of comprehensive, balanced and integrated programmes we receive a series of small, unrelated requests. As a result we go through long and arduous procedures of considerable complexity and dubious effectiveness.
A prerequisite for the proper selection of projects is information which would allow:
(1) a separate and penetrating evaluation of their economic usefulness and priority;
(2) weight to be given to other factors which must be taken into consideration in determining the allocation of aid;
3) better co-ordination.
Our Missions should be able to be more helpful than they have in the past to elicit this information from the local governments to which they are accredited. It would also be helpful if they were in a position to offer at least preliminary views on projects which are clearly unacceptable and might therefore be discouraged.
Unfortunately, however, our Missions do not always contain specialists capable of making these judgments ab initio nor have they been given adequate guidance on our basic policies and the detailed information which is necessary for our purposes. They should be provided as soon as possible with a clear and comprehensive statement of the economic criteria as well as other information required before decisions can be reached on appropriate programmes.
When a programme is received in Ottawa it requires further scrutiny and preparation before it can be submitted for approval of Ministers.
Programme Evaluation in Ottawa
The first requirement in Ottawa is a clear and timely evaluation of the proposals received through our Missions from each government. Under present procedures programmes received are circulated immediately to the Departments of Trade and Commerce, Finance and External Affairs. An immediate economic evaluation of the programme in the terms outlined above should be prepared by the Economic and Technical Assistance Branch of the Department of Trade and Commerce as a basis for discussion with Finance and External Affairs. If the information received from the field is inadequate, supplementary information should be obtained immediately through our Mission. The objective should be the early presentation of agreed recommendations to the Interdepartmental Committee and then to Cabinet.
Execution of Projects
One of the generally accepted principles of the Colombo Plan is that Canadian aid should supplement local resources. In large projects this entails complex relationships which are covered by agreements between Canada and the requesting government. Such agreements should contain provisions regarding the respective responsibilities of both governments, including any local costs for which the requesting government will be responsible and the facilities and services it will provide.
In the Far East the absence of clear and definitive advance agreement on these matters invites serious dissension, particularly because the administrative processes of the recipient government are slow and indecisive and long distance consultation with Ottawa is time-consuming. The result is often unnecessary delay and difficulties on the project.
It is advisable, therefore, that as far as practicable comprehensive agreements on these matters should be negotiated and agreed with the recipient government before projects proceed. At Warsak, Shadiwal and Goalpara, Canadian supervisory personnel emphasized this point.
The far-flung activities of the Colombo Plan raise difficult problems of administration and follow-up on Canadian programmes, particularly in regions where Canada does not have diplomatic representation.
Need for Improvement in Current Procedures
It must be recognized that the urgency, gravity and complexity of the problems of development are increasing, necessitating revitalization and possible improvement of the machinery to deal with them. Some of the more obvious deficiencies of interdepartmental machinery in Ottawa might be partially met by strengthening present staff and improved procedures as outlined in this memorandum. However, it seems apparent that more fundamental benefits might be available through broader utilization of existing international machinery. In the near future, we will be called upon to consider such machinery in connection with the proposed reorganization of the OEEC.
Possible New Procedure
Consideration might be given to the utilization of the Offices of the World Bank to perform services essential to the proper evaluation of programmes and possibly also to assist in the follow-through on these programmes.
The Bank might be asked to establish a panel of its own officers with specialized experience in development. This panel would be made available to help the underdeveloped countries on request for help in evaluation of their own requirements and to prepare appropriate programmes. The panel might also be authorized to offer advice on possible sources of assistance (either bilateral or multilateral) on the clear understanding that provision of advice involves no commitment on the part of the organization or government to provide such assistance.
The panel might equally be available to donor countries for assistance in evaluating the programmes submitted by under-developed countries.