A b s t r a c t i n g from political factors, a c o n t i n u e d coh e s i v e n e s s of the Equatorial m a r k e t s e e m s p r o b a b l e . This is p a r t l y b e c a u s e t h r e e of its m e m b e r s - - C o n g o , G a b o n and C a m e r o o n - - c a n hold t h e i r o w n in comp e t i t i o n for n e w i n d u s t r y b y v i r t u e of t h e i r diversified r e s o u r c e b a s e s and strategic positions w i t h respect to c o m m u n i c a t i o n s . O n t h e o t h e r hand, in the f o r e s e e a b l e future t h e two i n l a n d c o u n t r i e s are unl i k e l y to b e b e t t e r off outside t h e c o m m o n m a r k e t if the a l t e r n a t i v e s are v i e w e d in p u r e l y e c o n o m i c terms. C e r t a i n l y ~a g r e a t deal of t r a d e d i v e r s i o n w o u l d h a v e to occur before t h e i n l a n d c o u n t r i e s w o u l d b e b e t t e r off outside a n d e v e n then, t h e b e a r i n g of t h e i r landlocked position on t h e i r effective field of choice would b e a s t r o n g limiting factor. M o r e o v e r , n e w t r a n s p o r t links on which CAR a n d Chad d e p e n d to r e d u c e t r a n s p o r t costs a n d to o p e n up n e w a r e a s also presuppose t h e c o n t i n u e d c o h e s i o n of UDEAC.

The Experience of Common Markets The e x p e r i e n c e of b o t h c o m m o n m a r k e t s in A f r i c a demonstrates that there has been a strong disposition on t h e p a r t of the less f a v o u r e d m e m b e r s to emp h a s i s e i n f l u e n c i n g the l o c a t i o n a l p a t t e r n of i n d u s t r i a l d e v e l o p m e n t a s a m e a n s of s h a r i n g the b e n e f i t s a n d

COORDINATED

a c o r r e s p o n d i n g r e l u c t a n c e to r e l y on fiscal compensation. E v e n if this is g e n e r o u s , a n d o f t e n it h a s not been, it is n o t r e g a r d e d as a d e q u a t e c o m p e n s a tion for the loss of d y n a m i c i n f l u e n c e s to g r o w t h which a c c o m p a n y i n d u s t r i a l d e v e l o p m e n t . To t h e ext e n t t h a t this is a g e n e r a l l y h e l d attitude, t h e progress of i n t e g r a t i o n will d e p e n d in p a r t on a deal which assures each p a r t i c i p a n t of some i n d u s t r i a l g r o w t h t h a t it w o u l d n o t o t h e r w i s e h a v e a t t r a c t e d . The impossibility of d o i n g this in t h e case of t h e W e s t A f r i c a n Iron a n d Steel C o m m u n i t y was perh a p s the most i m p o r t a n t r e a s o n for t h e failure of this v e n t u r e - - i n p r i n c i p l e c a p a b l e of p r o d u c i n g cons i d e r a b l e benefit. T h e r e are c l e a r l y d a n g e r s in att e m p t i n g to i n t e r f e r e w i t h industrial location, since t h e i n d u s t r i e s h a v e first to b e a t t r a c t e d - - a n d e v e n if such policies are successful t h e y will t e n d to h i n d e r t h e d e v e l o p m e n t of a n o p t i m a l l o c a t i o n a l p a t t e r n a n d so result in a loss of some of t h e e c o n o m i c b e n e f i t s which a c o m m o n m a r k e t m a k e s possible. N e v e r t h e less, this is a l m o s t c e r t a i n l y a p r i c e which will h a v e to b e paid n o t o n l y to m a i n t a i n e x i s t i n g i n t e g r a t e d m a r k e t s , b u t also to m a k e p o s s i b l e t h e f o r m a t i o n of others. The o b j e c t i v e m u s t t h e n b e to e n s u r e t h a t such policies are c a r r i e d out in such a w a y as to m i n i m i s e the a d d i t i o n a l costs involved.

ASSISTANCE

The Role of the Colombo Plan by John White, London n t h e late 1950s, t h e world b e g a n to live in t h e h o p e of a g r e a t i n t e r n a t i o n a l effort which w o u l d help t h e less d e v e l o p e d c o u n t r i e s r a p i d l y to o v e r come t h e i r a n c i e n t p r o b l e m s of p o v e r t y a n d stagnation. Later, t h e d i s i l l u s i o n m e n t set in. In t h e l a t e 1960s, t h e w o r l d h a s l e a r n e d to live w i t h the exp e c t a t i o n t h a t it will b e a v e r y l o n g time i n d e e d b e f o r e t h e less d e v e l o p e d c o u n t r i e s b e g i n to see light at the e n d of t h e tunnel, a n d t h a t t h e p a r t played b y t h e richer c o u n t r i e s in this efforts will be, to s a y t h e l e a s t of it, s e v e r e l y limited. The disillusionm e n t m a y well t u r n out to h a v e b e e n as e x a g g e r a t e d as t h e e a r l i e r optimism. Certainly, t h e r e is a crisis in t h e efforts of t h e rich c o u n t r i e s to help t h e poorer. The f e a t u r e s of this crisis are all too familiar to a n y one p r o f e s s i o n a l l y c o n c e r n e d w i t h d e v e l o p m e n t . Bilateral aid, in reals terms, declines, and is i n c r e a s i n g ly confined to a few f a v o u r e d c o u n t r i e s which s t a n d in some special r e l a t i o n s h i p w i t h t h e i r patrons.

I

Starved of Funds I n s t i t u t i o n s such as t h e I n t e r n a t i o n a l D e v e l o p m e n t A s s o c i a t i o n (the soft-loan a r m of t h e w o r l d b a n k ) h a v e b e e n s t a r v e d of funds, so t h a t t h e y could not p l a y t h e k e y role which t h e y s e e m e d to b e e v o l v i n g a few y e a r s ago. In t h e w i d e r c o n t e x t of aid, trade INTERECONOMICS, No. 4, 1968

and i n v e s t m e n t , t h e U n i t e d N a t i o n s C o n f e r e n c e on T r a d e a n d D e v e l o p m e n t is for t h e p r e s e n t a s c e n e of c o n f r o n t a t i o n b e t w e e n rich a n d poor, in which t h e d a n g e r is o n e of d e e p e n i n g m u t u a l m i s u n d e r s t a n d i n g . A c r o s s the w h o l e field t h e p i c t u r e is a g l o o m y one. The d e v e l o p i n g c o u n t r i e s are finding the p r o b l e m s h a r d e r t h a n t h e y h.ad supposed. T h e rich c o u n t r i e s are finding t h a t real a n d effective help c a n cost t h e m m o r e t h a n t h e y o r i g i n a l l y t h o u g h t t h e y would h a v e to pay. But a case can b e m a d e o u t - - a n d I, for one, t a k e this more optimistic v i e w - - f o r s u g g e s t i n g t h a t t h e crisis in d e v e l o p m e n t is o n l y a passing phase. The achievem e n t s of t h e d e v e l o p i n g c o u n t r i e s o v e r the past deca d e are m o r e solid t h a n is c o m m o n l y recognised, a n d are a possible basis for future growth. C o m p a r e the p e r f o r m a n c e of India o v e r the p a s t t e n y e a r s - often cited as a g l o o m y h i s t o r y - - w i t h its p e r f o r m a n c e in t h e 1920s a n d 1930s u n d e r British rule; a n d t h e future looks less bleak. O n the aid side of t h e picture, a n a p p a r a t u s h a s g r o w n up. A i d to d e v e l o p i n g c o u n t r i e s is n o w a n accepted, indeed, e n t r e n c h e d feature of i n t e r n a t i o n a l relations. It m a y suffer temp o r a r y setbacks. But t h e tide of h i s t o r y is a g a i n s t its elimination. T h e d a n g e r in t h e p r e s e n t crisis, as I see it, is this. T h e r e is b i t t e r n e s s in t h e air. The 105

p o o r c o u n t r i e s b l a m e t h e rich for t u r n i n g away. The rich b l a m e t h e p o o r for n o t h a v i n g t r i e d h a r d enough. N e i t h e r a c c u s a t i o n is w h o l l y justified, b u t t o g e t h e r t h e y could c r e a t e a n e w m y t h o l o g y - - a n e w sort of class w a r b e t w e e n n a t i o n s .

Prosperity a Certainty S o o n e r or later, t h e d e v e l o p i n g c o u n t r i e s will a c h i e v e prosperity. The will for d e v e l o p m e n t is too entrenched in t h e l a n g u a g e of m o d e r n politics for a n y o t h e r r e s u l t to b e possible. T h e s e c o u n t r i e s w o u l d achieve p r o s p e r i t y faster, m o r e efficiently, w i t h less cruel d i s r u p t i o n of t h e i r social systems, if t h e rich countries w o u l d help b y p r o v i d i n g a l a r g e chunk of t h e n e c e s s a r y resources. E v e n w i t h o u t t h a t help, t h e y will do it; but, w h e n t h e y h a v e d o n e it, it will b e t h e i r t u r n to t u r n away, d e s p i s i n g a n d i g n o r i n g t h e c o u n t r i e s t h a t refused t h e m help w h e n it w o u l d do most good. But a n i n c r e a s i n g n u m b e r of p e o p l e in t h e rich count r i e s - w h a t e v e r t h e public opinion polls m a y s a y - h a v e a g r o w i n g u n d e r s t a n d i n g of t h e d e v e l o p i n g c o u n t r i e s ' needs. A n d t h e r e are m o r e a n d m o r e p e o p l e in t h e d e v e l o p i n g c o u n t r i e s - - h o w e v e r acrim o n i o u s t h e d e b a t e s in t h e U N m a y b e c o m e - - w h o h a v e a g r o w i n g u n d e r s t a n d i n g of t h e d o m e s t i c political a n d e c o n o m i c p r o b l e m s which face t h e adv o c a t e s of aid w i t h i n t h e rich countries. In this situation, t h e m o s t v i t a l n e e d is to k e e p t h e c h a n n e l s of c o m m u n i c a t i o n open, to p r e v e n t b i t t e r n e s s from so choking t h e m t h a t fulfilment of t h e p r o m i s e of t h e e a r l y 1960s r e m a i n s impossible, e v e n w h e n t h e clim a t e h a s shifted in a w a y t h a t m a k e s it p o l i t i c a l l y p o s s i b l e for t h e rich a n d p o o r c o u n t r i e s o n c e a g a i n to w o r k e f f e c t i v e l y together. T h e r e l a t i o n s h i p of which aid is a p a r t is such a n e w f e a t u r e in i n t e r n a t i o n a l r e l a t i o n s t h a t o r d i n a r y diplomatic c h a n n e l s of c o m m u n i c a t i o n will n o t serve. W h a t is n e e d e d is a n i n t e r n a t i o n a l f r a m e w o r k within which t h e a c e r b i t y of t h e r e l a t i o n s h i p b e t w e e n rich a n d p o o r c o u n t r i e s c a n b e softened, t h e lines of d e m a r c a t i o n s blurred, a n d t h e guidelines laid d o w n for a c o m m o n enterprise. O n e such f r a m e w o r k - - i n its o w n curious w a y o n e of t h e m o s t s u c c e s s f u l - - i s t h e C o l o m b o Plan.

Commonwealth Origins It m a y s e e m odd, in a n a r t i c l e a b o u t t h e Colombo Plan, to d e v o t e so much s p a c e at t h e b e g i n n i n g to a d e l i n e a t i o n of t h e g e n e r a l i n t e r n a t i o n a l c o n t e x t within which the p l a n h a s to operate. But it is n e c e s s a r y . When the Colombo Plan was inaugurated eighteen y e a r s ago n o one w a s t h i n k i n g in t e r m s of a crisis in t h e r e l a t i o n s b e t w e e n the rich a n d t h e p o o r nations. T h e r e were, after all, v e r y few p o o r nations. T h e p o o r w e r e m o s t l y i n colonies or o t h e r d e p e n d e n c i e s . In its time, t h e p l a n h a s s e r v e d m a n y useful functions a n d d o n e good work. In 1968, it h a s a n e w job to do, p e r h a p s t h e m o s t i m p o r t a n t of its w h o l e career. 106

In 1950, t h e r e p r e s e n t a t i v e s of s e v e n C o m m o n w e a l t h c o u n t r i e s m e t in Colombo. T h r e e w e r e w h a t w o u l d n o w b e called d e v e l o p i n g c o u n t r i e s : India, P a k i s t a n a n d C e y l o n - - a n d four w e r e rich c o u n t r i e s : Britain, Canada, A u s t r a l i a and N e w Zealand. T h e p u r p o s e of t h e m e e t i n g was to e x c h a n g e v i e w s o n t h e n e e d s of South a n d South-East Asia; for it h a d a l r e a d y b e e n recognised, in t h e d a w n of t h e p o s t - i m p e r i a l era, t h a t political i n d e p e n d e n c e was n o t t h e e n d of t h e affair. From t h e b e g i n n i n g , t h e h e a r t of t h e idea w a s t h a t the nations within the region covered by the plan s h o u l d m e e t p e r i o d i c a l l y w i t h richer c o u n t r i e s from outside, to e s t a b l i s h a c o m m o n v i e w of w h e r e t h e y w e r e g o i n g a n d w h a t t h e i r n e e d s were. E a r l y on, it lost its e x c l u s i v e C o m m o n w e a l t h character. Today, the m e m b e r s are A f g h a n i s t a n , A u s t r a l i a , Bhutan, Britain, Burma, Cambodia, Canada, Ceylon, India, Indonesia, Iran, J a p a n , Korea, Laos, M a l a y s i a , t h e M a l d i v e Islands, Nepal, N e w Z e a l a n d , Pakistan, t h e Philippines, Singapore, S o u t h V i e t n a m , Thailand, a n d t h e U n i t e d States. In o t h e r words, it c o v e r s m o s t of the i m p o r t a n t less d e v e l o p e d c o u n t r i e s w i t h i n t h e region, w i t h the o b v i o u s e x c e p t i o n of China, a n d most of t h e i m p o r t a n t W e s t e r n aid-giving c o u n t r i e s t h a t h a v e a s t r o n g i n t e r e s t in t h e region, w i t h t h e s t r i k i n g e x c e p t i o n s of t h e N e t h e r l a n d s a n d t h e Federal Republic of G e r m a n y . It m a y b e a s k e d w h e t h e r such a c o m p r e h e n s i v e g r o u p i n g is r e a l l y n e c e s s a r y , w h e n m o r e or less t h e s a m e a r e a is c o v e r e d b y t h e U N E c o n o m i c Commission for A s i a a n d t h e F a r East (ECAFE), which, as a U N o r g a n i s a t i o n , does n o t h a v e t h e m i l d l y e m b a r r a s s ing political a s s o c i a t i o n s which o c c a s i o n a l l y are h e l d a g a i n s t t h e Colombo Plan as e v i d e n c e t h a t it is little m o r e t h a n a m i n o r a g e n c y of W e s t e r n p o l i c y in t h e region. A f t e r all, t h e r e are other, much g r a n d e r framew o r k s w i t h i n which a n a n n u a l e x c h a n g e of v i e w s is possible: a n d t h e r e are other, much m o r e e x t e n s i v e m u l t i l a t e r a l p r o g r a m m e s of t e c h n i c a l a s s i s t a n c e t h a n t h e p l a n ' s p a l t r y $140,000,000 a year. The a n s w e r is p a r t l y h i s t o r i c a l accident. G r o w i n g o u t of its C o m m o n w e a l t h origins, l o n g b e f o r e t h e n o t i o n of a w o r l d w i d e d e v e l o p m e n t effort h a d t a k e n h o l d a n d y e a r s b e f o r e t h e U N h a d g i v e n r e c o g n i t i o n to this n o t i o n b y i n s t i g a t i n g a d e v e l o p m e n t decade, t h e Colombo Plan h a s s u r v i v e d , in spite of t h e fact t h a t m a n y of t h e jobs it w a s set up to d o a r e n o w d o n e e q u a l l y efficiently, a n d o n a l a r g e r scale, e l s e w h e r e . But t h e r e is a s u b t l e r a n s w e r t h a n that. The Colombo Plan h a s s u r v i v e d b e c a u s e t h e m e m b e r s w a n t it to survive. Not all of them, p e r h a p s : India, w i t h p r o b lems o n a scale u n k n o w n in a n y o t h e r d e v e l o p i n g c o u n t r y e x c e p t China, h a s little i n t e r e s t in a n y t h i n g a p p a r e n t l y so p e r i p h e r a l as t h e Colombo Plan: a n d Ceylon, o d d l y enough, h a s n e v e r g i v e n it much credence. But t h e r e are in S o u t h a n d South-East A s i a s e v e r a l c o u n t r i e s which h a v e real difficulty in participating in t h e w o r l d a b o u t t h e m - - C a m b o d i a , o v e r s h a d o w e d b y China, a n d Bhutan, o v e r s h a d o w e d in a different w a y b y India: c o u n t r i e s such as t h e s e a r e a m o n g t h e ones t h a t e x t r a c t most v a l u e from t h e INTERECONOMICS, No. 4, 1968

plan. T h e U N does not s e r v e t h e purpose, if o n l y b e c a u s e , since it a d m i t s v i r t u a l l y e v e r y b o d y , admission h a s no m e a n i n g . In t h e Colombo Plan, t h e y find a r e l a t i o n s h i p w i t h t h e o u t s i d e w o r l d which h a s m e a n i n g , a n d y e t is rela t i v e l y free of the pitfalls of a c o n t i n e n t b e d e v i l l e d b y such c o n u n d r u m s as t h e i n v o l v e m e n t of t h e U n i t e d States of A m e r i c a in V i e t n a m . Historically, this feat u r e of t h e Colombo Plan, as a f r a m e w o r k w i t h i n which channels of c o m m u n i c a t i o n are k e p t open, perh a p s b e c a u s e t h e f r a m e w o r k itself is so loosely defined, m a y p r o v e to b e its g r e a t e s t contribution. But the looseness of the f r a m e w o r k also c a r r i e s a disa d v a n t a g e . The c o m m u n i t y of n a t i o n s which m e e t s u n d e r t h e n a m e of t h e Colombo P l a n does not actually do v e r y much. T h e a n n u a l r e p o r t s c a r r y grandilo q u e n t tables, which give t h e impression, to cite t h e 1966 report, t h a t some $ 3,000 million a y e a r of aid goes into t h e r e g i o n as Colombo Plan aid. But this is o n l y a gloss, a n d a most c u r s o r y r e a d i n g of t h e d o c u m e n t s - - e v e n if one did n o t k n o w it alr e a d y - s o o n r e v e a l s t h a t most of this is straightforw a r d b i l a t e r a l aid which is n o t p r o v i d e d explicitly u n d e r t h e p l a n ' s auspices, a n d w h i c h is p r o b a b l y little affected b y t h e d e l i b e r a t i o n s which t a k e p l a c e w i t h i n the p l a n ' s framework. A m o r e careful reading, h o w e v e r , m a y dispel t h e scepticism to which such an e a s y d i s c o v e r y m i g h t g i v e rise.

Colombo Plan's Record First, it is w o r t h e x a m i n i n g t h e p l a n ' s h i s t o r i c a l record. A u s t r a l i a , Canada, a n d m a r g i n a l l y N e w Zeal a n d are n o w all i m p o r t a n t aid-givers w i t h i n t h e region. T h e y b e c a m e so b y v i r t u e of t h e i r Commonw e a l t h connections, a n d t h e C o l o m b o P l a n p r o v i d e d t h e n e c e s s a r y framework. A l t h o u g h Canada, for instance, p r o b a b l y n o w r e g a r d s it as p e r i p h e r a l , t h e plan was a m a j o r factor in b r i n g i n g C a n a d a into the aid business. O u t s i d e t h e C o m m o n w e a l t h , a n o t h e r case is J a p a n . W h a t e v e r t h e o b j e c t i v e s of J a p a n ' s aid p r o g r a m m e today, it s t a r t e d w i t h a desire to b e a c c e p t e d once again, a f t e r t h e h u m i l i a t i o n of m a r t i a l defeat, a m o n g t h e c o m i t y of n a t i o n s . P a r t i c i p a t i o n in t h e p l a n w a s one of J a p a n ' s first v e n t u r e s in t h e aid field. Secondly, t h e r e is the technical a s s i s t a n c e p r o g r a m m e , which is s u p e r v i s e d b y t h e Council for Technical Coo p e r a t i o n in S o u t h a n d South-East Asia, w i t h its h e a d q u a r t e r s in Colombo. T h e p r o g r a m m e is not large, w i t h m e m b e r c o u n t r i e s c o n t r i b u t i n g technical

a s s i s t a n c e b i l a t e r a l l y a m o n g t h e m s e l v e s to t h e v a l u e of a b o u t $ 1 4 0 million a y e a r . But it is w o r t h n o t i n g h e r e t h a t t h e r e is n o t t h e u s u a l vicious d i s t i n c t i o n b e t w e e n d o n o r a n d recipient. India h e l p s C a m b o d i a ; P a k i s t a n helps I n d o n e s i a ; a n d so on. It is minor, b u t useful m o r a l r e i n f o r c e m e n t to t h e case for aid. Thirdly, t h e r e is the e x c h a n g e of v i e w s t h a t t a k e s p l a c e at t h e a n n u a l m e e t i n g of t h e c o n s u l t a t i v e committee. T h e m e e t i n g goes in t h r e e stages. It starts w i t h an a s s e m b l y of e x p e r t s w h o d r a f t t h e d o c u m e n t s t h a t will b e c o n s i d e r e d b y t h e p o l i c y - m a k i n g p e r s o n alities. T h e n t h e d e l e g a t i o n s of officials consider, adm i t t e d l y o n l y in v e r y g e n e r a l terms, t h e s t r a t e g y of t h e y e a r a h e a d . Fourthly, t h e ministers, t h e political chiefs, set t h e i r seal on t h e e n t i r e exercise. Most i n t e r n a t i o n a l c o n f e r e n c e s b e g i n w i t h t h e political speeches, and t h e n t h e e x p e r t s are left to w o r k out a few, much smaller, p r a c t i c a l propositions. Here, the b e g i n n i n g is a c o m m u n i o n of specialists, w h o talk the same l a n g u a g e and w h o are n o t p r i m a r i l y i n t e r e s t e d in e n a b l i n g t h e i r o w n c o u n t r i e s to m a k e a specially l a r g e splash.

Yearly "Special Topic" Finally, t h e r e is w h a t is k n o w n as t h e "special topic", which is m a d e t h e m a i n f e a t u r e of each a n n u a l meeting. A t Rangoon, Burma, at t h e end of last year, the topic w a s agriculture. It m a y b e d o u b t e d w h e t h er, in such a s h o r t m e e t i n g , w i t h such a m a s s of delegates, a n y g r e a t n e w t r u t h s w e r e d i s c o v e r e d . But in strategic t e r m s this k i n d of focus is useful. To p r o v e the point, p o p u l a t i o n g r o w t h w a s t h e special topic in 1966, a n d it was in t h a t y e a r t h a t A s i a n c o u n t r i e s as a w h o l e r e a l l y b e g a n n to p u t s t e a m into t h e i r p o p u l a t i o n policies. In the d e v e l o p m e n t business, w i l l p o w e r m a y b e t h e engine, b u t t h e fuel is money. A n d t h e a m o u n t of m o n e y t h a t is c h a n n e l l e d t h r o u g h t h e plan, or d i r e c t l y u n d e r its auspices, is so small as to b e v i r t u a l l y irrelevanr to t h e n e e d of t h e region. So t h e C o l o m b o Plan is not, as some of t h o s e w h o h a v e b e e n most d e e p l y i n v o l v e d in it m a i n t a i n , a scheme to d e v e l o p Asia. N o r does it dispose of t h e m e a n s for d o i n g so. But it is a t l e a s t a useful h o l d i n g o p e r a tion. A n d w h a t it c a n hold on do most of all is t h e a b i l i t y of b o t h t h e rich a n d p o o r c o u n t r i e s to t a l k to each o t h e r in a c o m m o n l a n g u a g e a n d w i t h a rec o g n i t i o n t h a t in t h e l o n g t e r m i n d e e d t h e y face t h e same p r o b l e m s together.

H. M. GEHRCKENS HAMBURG

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TELEPHONE 3611 41 9 TELEX 02-11117 Shipowners

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INTERECONOMICS, No. 4, 1068

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