193. Current Economic Developments0
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ACTIONS ON ECONOMIC ITEMS AT RECENT GENERAL ASSEMBLY
Industrialization as a means to achieve more rapid economic development and the creation of a more favorable climate for the export trade of the underdeveloped countries were the principle themes underlying the economic resolutions adopted during the recent session of the United Nations General Assembly.
It became clear early in the session that the changed voting pattern under the UN might lead to the adoption of resolutions completely unacceptable to the US. The decision was made, therefore, that in order to exercise a moderating influence the US would, without sacrifice of principle, view with sympathy the expressed wish of the majority. To a large extent this tactic was successful. We were not forced into any new major compromise to US interests during the session.
UN Development Decade
A number of resolutions were approved calling on the Secretary General and the subsidiary bodies of the UN to take specific action looking to the early achievement of industrialization in the underdeveloped countries and for the expansion of their export trade. Guiding principles to achieve these two major themes are contained in the resolution initiated by the US for a United Nations Development Decade (UNDD) and adopted unanimously by the General Assembly.1 This resolution is basically a charter for economic development over the next ten years. It combines a call to action together with recommendations for: closer [Page 424] cooperation between the UN and its subsidiary bodies as well as with bilateral and other multilateral programs; a request to member governments to pursue policies designed to enable the less-developed countries to sell primary commodities at more stable and remunerative prices; measures to assist countries in the development of their country programs; support for diversification and industrialization; measures to increase the flow of development capital, both public and private, to the under-developed nations; establishment of aggregate growth targets for the under-developed countries and other similar policies.
The US was unable to avoid the inclusion of two items in the resolution which may cause concern in the future. The most hotly debated issue was the proposal by the representative of Iraq that an increasing share of the profit from the exploitation and marketing of natural resources by foreign capital be made available to the host country. After several days of intense negotiations, agreement was reached on wording calling on member countries “to pursue policies designed to ensure to the developing countries an equitable share of earnings from the extraction and marketing of their natural resources by foreign capital in accordance with the generally accepted reasonable earnings on invested capital.”
The UNDD resolution also contains a provision inviting the Economic and Social Council to accelerate its examination of and decision on principles of international economic cooperation. ECOSOC has the matter on its agenda for the spring session, and the USSR has circulated a draft for consideration. The decision which now must be made by the US and its allies is whether to oppose the adoption of principles on international economic cooperation as being unnecessary in view of individual resolutions already approved by the UN or whether a set of principles containing Western views should be submitted for ECOSOC consideration. At the moment the US inclines toward the latter approach since it is clear that the consensus of the UN membership is favorable to the adoption of a set of principles in one document. It is unlikely, however, that meaningful East-West agreement can be reached.
As a corollary to the UNDD resolution (I) the Assembly also adopted a UNDD resolution (II) calling on member states to increase their contributions to the Special Fund and Expanded Program of Technical Assistance with the objective of reaching $150 million for 1962 and for the Special Fund to consider the advisability of establishing an information service on existing and future sources of development capital and assistance.2
[Page 425]Program for Food Surpluses
The other major initiative of the US was the proposed establishment of a $100 million program for the provision of food surpluses to food-deficient peoples through the United Nations system. The subject was first discussed and approved by the Food and Agriculture Organization in November. The US together with Canada submitted a proposal to the UN which, in addition to supporting the program as approved by the FAO, looked to the future when the program could be expanded in size and increasing emphasis placed on the use of food for economic and social development. Major opposition was encountered from the food exporting countries which wished to keep the program primarily one for meeting emergencies and limited to a three-year period. Many of the underdeveloped food importing countries were also fearful that an attempt was being made to substitute food for dollar aid. The resolution, as finally adopted, was more limited in purpose than the original US-Canadian proposal and reiterates throughout the necessity for maintaining safeguards for the protection of food exporting countries and for the development of agriculture in the developing countries.3
United Nations Capital Development Fund
With negative votes only from France, South Africa, the UK and the US, the General Assembly reaffirmed the mandate of the Committee on a UN Capital Development Fund and instructed the Committee to proceed with the drafting of a statute to establish the Fund.4 The draft is to be submitted to ECOSOC in the first instance and then to the GA at its seventeenth session. In addition to the negative votes, seven countries abstained, but 70 countries voted favorably.
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- Source: Washington National Records Center, E/CBA/REP Files: FRC 72 A 6248, Current Economic Developments. Confidential. The source text comprises pp. 13-15 of the issue.↩
- Reference is to Resolution 1710 (XVI), adopted unanimously by the U.N. General Assembly on December 19; printed in American Foreign Policy: Current Documents, 1961, pp. 153-156.↩
- Reference is to Resolution 1715 (XVI), adopted unanimously by the U.N. General Assembly on December 19; printed ibid., p. 156.↩
- Reference is to Resolution 1714 (XVI), adopted by a vote of 90-0 with 9 abstentions by the U.N. General Assembly on December 19; printed ibid., pp. 187-191.↩
- Reference is to Resolution 1706 (XVI), adopted by the U.N. General Assembly on December 19; printed in U.N. General Assembly, Official Records: Sixteenth Session, Supplement No. 17 (A/5100) (New York, 1962), pp. 13-14.↩