116. Current Economic Developments1
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ECONOMIC ACTIONS OF THE TWENTIETH GA
The most important actions of the recent General Assembly session in the economic field were the establishment of a UN Organization for Industrial Development (UNOID) and the merging of the Expanded Program of Technical Assistance and the Special Fund to form the UN Development Program. Other important items concerned extension of the World Food Program and steps to promote the effectiveness of the UN Conference on Trade and Development. Elections were held to enlarge the Economic and Social Council, in accordance with the Charter amendment.
Ambassador Goldberg, in his statement at a press conference following the close of the 20th session of the GA, said: “The Assembly’s work in the political area was equaled if not surpassed by its decisions—too often overlooked—in the economic sphere. It is here, perhaps, that the twentieth session had its most notable advance, pointing up a growing recognition by the members that the future peace may well rest on our success in helping to build the resources of the lesser developed [Page 348] nations of the world. The United States, let me say, has long understood the urgency of this aspect of the UN’s work.”2
UN Organization for Industrial Development
Acting on the recommendation of the Second Committee, the General Assembly decided to establish a United Nations Organization for Industrial Development (UNOID) as an “autonomous” body within the UN system. The resolution was sponsored by 51 countries, including the US, and was adopted by Committee Two by acclamation.3 The establishment of UNOID presumably lays to rest for the foreseeable future LDC proposals that a Specialized Agency for Industrial Development be established—a proposal that the US had strongly opposed.
The UNOID will have a permanent full-time secretariat, to be headed by an Executive Director for Industrial Development. The new organization’s principal organ will be an Industrial Development Board composed of 36 members. The administrative and research activities of the new organization will be financed from the UN regular budget, while its operational activities will be financed from voluntary contributions by member states and members of the specialized agencies. The US, in explaining its cosponsorship, stated that any contributions to UNOID’s operational activities should be made through the UN Development Program. The Assembly also decided to appoint a special ad hoc committee of 36 members to prepare the necessary operating procedures and administrative arrangements for the organization. The ad hoc committee will meet on March 28, and the US is now working on the suggestions it will make in this regard.
The resolution does not explicitly deal with the disposition to be made of the existing Center for Industrial Development and the Committee for Industrial Development, although it is expected these will be absorbed in the new organization. In addition to pressing for such absorption, the US intends to urge the following points in the ad hoc committee: a) that the Industrial Development Board be elected by and report to ECOSOC in order to help assure orderly development of the new organization and support its activities by all parts of the UN system; b) that its Secretariat be established at UN headquarters New York to make it possible fully to avail itself of the other appropriate facilities of the UN which are located there; and c) that appropriate arrangements be made to provide for fullest use of the UNDP for the purpose of receiving [Page 349] and assuring the most effective utilization of voluntary contributions for operational programs and activities in the field of industrialization.
Merger of SF and EPTA into UNDP
At this session of the General Assembly the US saw approval of its long-sought objective of having the Special Fund and the Expanded Program of Technical Assistance merged into the UN Development Program (UNDP).4 Of the 37 seats on the Governing Council of the UNDP, 14 go to Western European and North American countries, 19 to developing countries, including Yugoslavia, and 3 to Eastern European countries. The remaining seat will rotate among these groups over a nine-year cycle, going to the Western European and North American group in 1966 and 1978. The question of the size and composition of the Governing Council was the subject of protracted and difficult negotiations. Although the US had reservations with respect to the size of the Council and the distribution of seats that finally emerged, we supported the merger resolution as laying the basis for effective future development of the combined programs.
Following the General Assembly action, our representative said that the United States would increase its 1966 pledge to the UNDP by $5 million with the proviso that $2 million be devoted to specialized industrial services. The US pledge is thus $65 million, subject to the usual stipulation that its contribution would not exceed 40% of the total. The GA requested states to review their contributions so that the UNDP’s annual financial resources would reach the target of $200 million. To date pledges have totaled approximately $150 million for the 1966 program.
The first session of the UNDP Governing Council will open January 10, Paul Hoffman, formerly Director of the Special Fund, is the Director of UNDP.
UN Capital Development Fund
Despite opposition from developed countries, including the US, Committee Two also approved a resolution which urged developed countries to undertake measures designed to ensure early establishment of a UN Capital Development Fund.5 A Soviet Bloc amendment which would have diverted funds from the pre-investment activities of the UN Development Program to capital investment was rejected, however. Ambassador Roosevelt stated four principal reasons for US opposition to the resolution: a) conditions for establishment of the Fund (disarmament) [Page 350] had not yet been met; b) the international community should use existing facilities for capital investment instead of creating new ones; c) resources should not be diverted from pre-investment; and d) the Fund would be operated by recipient countries while any institution to be satisfactory must give equal consideration to the interests of both donor and recipient countries.
World Food Program
The General Assembly endorsed contribution of the World Food Program and established for the three years 1966–68 a target for voluntary contributions of $275 million.6 It also requested examination of the means and policies which would be required for large-scale international action on a multilateral character. This examination is to be made by the SYG, in cooperation with the Director General of the FAO and in consultation with the executive heads of other interested international organizations and programs, including the IBRD, IMF, GATT, and utilizing the total facilities of the UN, including UNCTAD, the UNDP and the World Food Program.7
These two resolutions received affirmative votes from all members of Committee Two except the Soviet Bloc, which abstained. The US representative made a statement indicating: a) our positive reasons for desiring studies; b) our continued feeling that a World Food Fund (such as proposed by Argentina) is impractical; and c) our feeling that we are not committed to “large-scale international action of multilateral character” in this field and that the secretariat, in studying “means and policies” would have to study “problems and possibilities” as a prior matter.
The World Food Pledging Conference will be convened at UN Headquarters in New York on January 18, 1966.
UNCTAD Resolutions
The GA approved the report of the United Nations Conference on Trade and Development (UNCTAD) and Geneva at its headquarters. In a series of resolutions, it endorsed the activities of UNCTAD but at the same time expressed serious concern at the lack of progress in solving the substantive problems with which the Conference is faced.8 Furthermore, the Assembly “reaffirmed the continuing and urgent need for member states to take full account in their trade policies of the needs of the developing [Page 351] countries, and convene the second session of UNCTAD in the first part of 1967. It requested the developed countries to take urgent meas-ures to accelerate and ensure the flow of international assistance and long-term capital to the developing countries. The competent UN bodies and other international institutions were urged to take steps to implement the recommendation of UNCTAD relating to the problem of servicing of external debt of developing countries. The GA also called upon Governments to give due consideration to the promotion of private foreign investment in the developing countries, taking into account the need for respect for the sovereignty and the relevant laws of each country.
Other Actions
The General Assembly requested that the Convention on Transit Trade of Land-locked States be signed by the December 31, 1965 deadline, and that it be ratified or acceded to as soon as possible. (The US has signed the Convention.) The GA reaffirmed the necessity of attaining the over-all objectives set for the UN Development Decade, urging further efforts to reach such objectives.9 It called upon the UN family of organizations to prepare a joint report on their goals and objectives for the Decade and to establish such goals and objectives in fields where they had not yet been precisely defined. On patents, the GA reaffirmed that access to patented and unpatented technological and managerial know-how is “essential to the economic development and industrialization of the LDCs” and recommended expanded international cooperation in this regard. The SYG was requested to continue studies on the possibility of developing improved practices for the transfer of such technology to LDCs.
Postponed to the twenty-first session was consideration of the agenda item dealing with decentralization of the economic and social activities of the UN. As to a review and reappraisal of the role and functions of ECOSOC, the Assembly requested that the SYG submit to the Council at its forty-first session, and to the General Assembly at its twenty-first session, proposals on ways in which the Council might adapt its procedures and working methods to enable it to fulfill its role effectively. Also postponed, until next year, were agenda items dealing with permanent sovereignty over national resources, population growth and economic development.
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- Source: Washington National Records Center, RG 59, E/CBA/REP Files: FRC 72 A 6248, Current Economic Developments. Limited Official Use. The source text comprises pp. 15–17 of the issue.↩
- For a long extract from Goldberg’s December 22 statement, see American Foreign Policy: Current Documents, 1965, pp. 134–137.↩
- Resolution 2089 (XX), adopted unanimously by the U.N. General Assembly on December 20; text ibid., pp. 153–155.↩
- Resolution 2029 (XX), adopted by the U.N. General Assembly on November 22 by a vote of 98 (including the United States) to 0, with 9 abstentions; text ibid., pp. 149–151.↩
- Resolution 2042 (XX), adopted by the U.N. General Assembly on December 8. (Resolutions adopted by the General Assembly during its Twentieth Session (A/6014), pp. 21–22)↩
- Resolution 2095 (XX), adopted by the U.N. General Assembly on December 20 by a vote of 93 (including the United States) to 0, with 10 abstentions; text in American Foreign Policy: Current Documents, 1965, pp. 196–197.↩
- Resolution 2096 (XX), adopted by the U.N. General Assembly on December 20. (Resolutions adopted by the General Assembly during its Twentieth Session (A/6014), pp. 33–34)↩
- These actions were approved in Resolution 2085 (XX), adopted by the U.N. General Assembly on December 20. (Ibid., pp. 25–26)↩
- Resolution 2084 (XX), “United Nations Development Decade,” adopted by the U.N. General Assembly on December 20. (Ibid., pp. 24–25)↩