Mr. McGEE, from the Committee on Appropriations, submitted the following

REPORT

[To accompany H.R. 15149]

The Committee on Appropriations, to which was referred the bill (H.R. 15149) making appropriations for foreign assistance and related agencies for the fiscal year ending June 30, 1970, and for other purposes, reports the same to the Senate with various amendments and presents herewith information relative to the changes made.

Amounts in new budget (obligational) authority

SUMMARY OF THE BILL

The revised budget estimate for foreign assistance and related programs for fiscal year 1970 totaled $3,679,564,000. The committee recommendation provides for new obligational authority amounting to $2,821,313,000, which is $215,140,000 over the sum allowed by the House, but $858,251,000 under the estimate.

Title I of the bill, which contains funds for economic assistance, military grant assistance, and the Overseas Private Investment Corporation (OPIC), includes a total of $2,131,280,000 for these purposes for fiscal year 1970.

The committee recommends $1,681,280,000 for economic assistance; $75 million to be added to the reserves of the Overseas Private Investment Corporation; and $375 million for military grant aid, which is the same as the sum recently voted by the Senate for this purpose.

In addition, funds are provided in the bill for the Peace Corps, administration of the Ryukyu Islands, the Cuban refugee program, the migrants and refugee program, and for three international banks; namely, the Asian Development Bank, the Inter-American Development Bank, and the International Development Association.

The committee has also approved the increases requested by the executive branch in Senate document 91-43 for the Export-Import Bank of the United States. In this connection, the limitation of program activity approved by the committee for fiscal year 1970 is $3,427,413,000 and the limitation on administrative expenses of the Bank is $5,548,000.

GENERAL STATEMENT

The most pressing need of both developed and developing countries is the need for peace. The chances for peace are enhanced as all countries develop a place in the world order-when they make real progress in providing an acceptable standard of living for their peoples. Most countries for which the United States provides development assistance are committed to developing and increasing that progress. This process involves fundamental changes in economic, social, and political structures, and may be associated with violent social or political upheaval. These structural changes will not effect a stoppage of such upheaval if the economics of a developing country should stagnate, which circumstance would intensify the upheaval. The world hope of moderating violence is advanced as the developing countries are enabled to move ahead successfully toward their development goals.

Are foreign aid programs helpful in the attainment of these goals? The evidence is that, although a marginal supplement to the resources of developing countries, the U.S. aid program has indeed promoted development.

In assessing the economic progress thus achieved, we must consider not only how well the countries receiving U.S. aid have performed, but also how hard they have tried. Underlying recent improvements in performance is an increased determination on the part of developing countries to pursue the economic and political policies required to marshal domestic resources for development. These policies of "selfhelp" are demanding and difficult to maintain. They may be frustrated

on occasion by drought, foreign wars, or political upheaval beyond the control of the government concerned; but they are essential to successful development, and eventually they pay off.

RECIPIENT COUNTRY SELF-HELP

U.S. assistance works to encourage the self-help which brought much of today's progress in development. U.S. development and alliance loans (especially program loans) are furnished to countries which adhere to appropriate economic and social policies. Thus a recipient country with inflation should modify tax legislation, improve tax collection, or curtail government expenditures; a country with balance-ofpayments difficulties should cut redtape encumbering trading procedures, expand export promotion schemes, or adjust exchange rates; a country unable to produce enough food should allocate more domestic investment to agriculture.

Typically, development loans to strengthen the position of those in the recipient governments who are themselves urging more vigorous self-help. We expect these self-help efforts to continue unabated.

U.S. INFLUENCE ON RECIPIENT COUNTRIES

U.S. assistance may also encourage developing countries to adhere to principles for which the United States stands. Only 4 years ago Indonesia teetered on the brink of Communist revolution; today AID assists a new Indonesian Government friendly to the United States, a government which has already worked effectively to wipe out the hyperinflation inherited from Sukarno and reorient the economy toward sound development. U.S. influence exerted through AID's small programs can have only limited effect on the political policies of foreign countries, which are likely to be shaped largely by domestic forces of those countries; it cannot always thwart the pressures for leftist or rightist revolution which often arise in the relatively unstable atmosphere of developing countries, AID can, however, work to tip the balance.

U.S. ECONOMIC ASSISTANCE PROGRAMS

Thus, although the bulk of the energy and the physical resources required for development must come from the developing countries themselves, U.S. economic assistance programs play a vital role. Economic assistance has helped provide the roads and harbors that support development; it has financed the construction of schools and the training of teachers; it has underwritten the Green revolution, a program through which agricultural production has been greatly increased; it has supported the family planning programs without which the rest will be futile. Moreover, U.S. assistance has supported the countries' own efforts to help themselves. Our assistance is beginning to show signs which predict ultimate success in order to capitalize on recent success and promise of future self-help, the United States and the other donors must continue their efforts to provide aid.