In each of the years 1951/52 and 1952/53, Parliament appropriated $25 million for expenditure to assist the economic development of the countries of South and South-East Asia through the Colombo Plan. For the current year, Parliament appropriated a further $25.4 million for a Fund for economic and technical assistance to Colombo Plan countries. The Colombo Plan is scheduled to run for six years from mid-1951 to mid-1957.

Of funds carried over from 1952/53 and those appropriated in the current year for economic assistance, Cabinet has already approved a programme of aid for Ceylon and the extension of the existing serial resources survey for Pakistan. In addition, last May Cabinet approved the temporary financing from Colombo Plan funds of a $5 million gift of wheat for Pakistan "on the understanding that the Government would recommend to Parliament at the next session that the amount be made up by funds then to be appropriated for the purpose". A memorandum proposing a programme for India is before Cabinet. A memorandum on additional Canadian participation in the previously approved hydro-electric project at Warsak in Pakistan is also before Cabinet, and it is expected that other projects for assistance to Pakistan will be recommended for approval when various technical reports from Canadian consulting engineers have been received and considered. Most, if not all, of the funds presently available for economic assistance to Colombo Plan countries will probably be committed before the end of the fiscal year.

I am satisfied that the need to assist in the economic development of the countries of South and South-East Asia is as urgent as ever. A good start has been made, but much remains to be done. There is evidence that the countries of the Area are playing their full part, within the limit of the resources they consider can be made available for development. The other contributing countries of the Colombo Plan are continuing their assistance.

The United Kingdom is making its contribution mainly in the form of releases from the accumulated sterling balances of the countries of the Area plus grants to its colonial territories, to an estimated total of £253 million for the six-year period. Australia is contributing the equivalent of about $75 million over the six years, and New Zealand has so far pledged £1 million for each of the first three years of the program. The United States is making a substantial financial contribution, and from mid-1950 to mid-1953 had made available approximately $500 million for the different Colombo Plan countries of South and South-East Asia, by way of grants and loans, including the $190 million loan to India for wheat. United States foreign aid appropriations for the current fiscal year ending June 31st, [sic]1954 include about $160 million for economic and technical assistance to Colombo Plan countries in the Area and the Philippines. Account should also be taken of the recent gift of up to 1,000,000 tons of wheat to Pakistan and of the $62 million Export/Import Bank loan to Indonesia.

The annual meeting of the Consultative Committee of the Colombo Plan is to take place in New Delhi from September 28th. The position of the Canadian delegation to this meeting would be considerably strengthened if it were in a position to announce that the Government of Canada intends to continue its contribution to the development of the countries of the Area in the coming fiscal year. In this connection, it will be recalled that on February 12th, 1951, the Cabinet agreed that the Canadian delegate at the Consultative Committee be authorized to state that the Canadian Government was willing to provide $25 million for the Colombo Plan in the fiscal year 1951/52, and that, following on decisions taken by Cabinet on February 5th, 1952, the press release issued by the Prime Minister's Office on February 20th announcing the composition of the Canadian delegation to the 1952 meeting of the Consultative Committee included the information that the Government had decided to recommend to Parliament a contribution for 1952/53 of $25 million for economic assistance and $400 million for technical co-operation under the Colombo Plan.

Recommendation:

It is recommended that authority be granted for the Canadian delegation to the Consultative Committee Meeting to state that the Government of Canada proposes to ask Parliament for a further appropriation of funds for economic and technical assistance under the Colombo Plan in 1954/55 in an amount comparable with funds appropriated in previous years, on the understanding that projects suitable for Canadian assistance will be forthcoming from the countries of the Area. The Minister of Finance has been consulted and would have no objection if it was felt desirable to make this further commitment.¹³

L.B. PEARSON