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Wednesday, 10 October 1956

Mr BIRD (Batman) . - I desire to deal, under the Estimates for Miscellaneous Services, with the item, " Colombo plan - Technical assistance and economic development, £4,700,000". In recent months there has been some criticism of this plan. According to press reports, there was a division in the ranks of the Government about whether the amount should be reduced. Whether any credence should be given to those reports I do not know, but I am pleased that, if any pressure was exerted by a section of the Ministry to have the amount reduced, that pressure was resisted and that it is proposed that the same amount shall be spent on the Colombo plan in this financial year as was spent in the last financial year.

I think, in view of the controversy that has arisen, not only in the ranks of the Cabinet but also among certain newspapers, that it is necessary to re-state the aim of the Colombo plan. The Colombo plan is a co-operative enterprise under which several of the more developed countries of the world, including Australia, are assisting less developed countries in South and South-East Asia to raise their living standards. The attitude of the Australian Labour party to this project is quite unequivocal. I wish to read a resolution which was passed last year by the famous Hobart conference - the federal conference of the Labour party-

Mr Haworth - Which Labour party?

Mr BIRD - There is only one federal Labour party. Section 6 of the resolution of the conference reads as follows: -

The Labour party advocates generous assistance by Australia to Asian peoples suffering from poverty, disease and lack of educational facilities.

That statement of Labour party policy is unambiguous. Despite any statement that may be made to the contrary, that is our policy and, as our federal policy, this party is bound to support it.

The Colombo plan is a long-range plan. It is not necessarily of only twelve months' duration, and it is impossible to assess the result of the plan in the light of expenditure in one year. It is easy to say, " This sum of nearly £5,000,000 should be devoted to something else ". I heard one member of the Australian Country party say that, whilst he believed in assisting people overseas, he considered that charity began at home. But I point out that charity does not end at home. I suggest that this is charity that could well be given by the Australian Government outside the confines of the Commonwealth of Australia itself.

At this stage, when the Colombo plan is being discussed and examined by certain interested parties, I consider that the underlying motive for Australia's support of the plan should once again be enunciated. Some people say that its purpose is to make Australia popular in the East. Others say that it is intended to buy Asian gratitude.

Then again, some people say that it is intended to stop the spread of communism in Asia. A fourth section of the community asserts that it is an assurance for ourselves and an attempt to guarantee us allies in the event of some future conflict. If these are reasons that actuate the Government in according support to the plan, we should not let it get out to the Asian people that they are the only reasons. A lot of the good work of the Colombo plan will be undone if the Asian people think that we are supporting the plan merely in order to achieve base, materialistic gains for this country. We shall delude ourselves dangerously if we think that the giving of aid for these reasons will gain for us permanent Asian friendship. We have to recognize, if we want to understand the Asian mind, that the Asian countries have developed an abnormal, if quite understandable, sensitivity to any signs of patronage on the part of Western Powers.

Under the provisions of the Colombo plan, Australia is providing material and technical assistance. I regret to say that that assistance has often been received by the recipients with distrust and suspicion. That is to be deplored, but the fact that some of the Asian people apparently mistrust our motives in giving them equipment and in providing technical assistance is no reason why we should reduce our aid. Nobody really believes that genuine friendship between countries will follow automatically the mere act of one country giving another some capital equipment or technical assistance. We must impress on the Asian people that Australia is genuinely sympathetic, to their struggle and their resolve to create new standards of living. If we cannot impress that salient factor on the Asian people, the whole basis of the Colombo plan will fail as far as they are concerned. Unless we can secure their genuine friendship and unless they can be sure that we are actuated by humanitarian motives in relation to their problems, all the money that we can pour into the Colombo plan will be so much money wasted.

I think that the Government and the people of Australia are of the opinion - and the Labour party is certainly of the opinion - that we must help the people of

Asia, and recognize their problems which they are unable to combat. We can do our share, as a nation, to assist them in their long and upward struggle. While it is quite easy to support the plan from an emotional or sentimental angle, a sober appraisement of the achievement to date shows that although progress has been made in some directions there is still a tremendous amount to be achieved before any large-scale success can be reported. For example, the latest report of the consultative committee - the reports are issued annually and I always read them avidly when they are distributed to members - shows that in a number of countries there have been improvements in the fields of agriculture, irrigation, power, and community development programmes. Expenditure on health, education, housing, and other social services has continued to rise, despite financial stringency in a number of countries. The technical assistance scheme has prospered. Last year, for example, a record number of Asian trainees was sent abroad. It would not be a bad idea if we reciprocated the visits of Asian students to Australia by sending a number of Australian students to the Colombo plan countries. The universities of India and Indonesia would be only too pleased to receive a token number of Australian students who could take courses at those universities. I am certain that a visit by perhaps only 20 or 30 students would create a profound effect on the Eastern mind.

Public investment in the Colombo plan countries continues to increase. Last year, it reached £723.000,000 sterling, as compared with £540,000,000 sterling in the previous year. Unfortunately, private investment, which was intended to be a large factor in the Colombo plan has not risen to the extent to which we hoped it would rise. The United Nations research committee, which made a study of the needs of the Asian people in the investment field, stated that about £5,000,000,000 of new investment annually was required to jolt the Asian people out of their chronic poverty. Of course, that objective is far outside our capacity to attain, so it would therefore appear that for the time being, in the main, the Colombo plan must rely on public investment and that governmental assistance by the donor nations, including Australia, must be the main prop of the plan.

On the debit side, of which we must take particular notice, because it is of no use to delude ourselves that everything is rosy with the plan, the population in recipient countries is increasing at the rate of 10,000,000 persons a year, and this increase has complicated the position. When health and social services decrease the infant mortality rate in those countries, as they will in a very short space of time, the rate of population increase can be expected to accelerate. The expected reduction in this mortality rate will cause the rate of population increase to rise from 10,000,000 to probably 12,000,000 or 15,000,000 a year. This will more than balance the increase in food production in the area as a result of the plan. In other words, the tangible benefits of the plan are being wiped out by the unforeseen circumstance, if I may use the term, of a rapid increase in population. To-day, despite the operation of the plan, the tragic fact remains that Asians are eating less per head of population than they were eating before the war. That is tragic because we had hoped that as a result of the plan they would eat more; actually, because of the increase in population, they are eating less. Not only has the increase in population more or less cut across the basic purposes of the plan, but also Asia's booming population has added to the severity of the unemployment problem. Unfortunately, the main impact of the Colombo plan has been in the rural sector, and therefore there has been little effect upon the level of employment in recipient countries. Over the last four years India's industrial production has increased by 40 per cent. This is a considerable increase in a period of four years. Unfortunately, however, there has been no increase in employment in factories. Because of the introduction of technical processes, production has increased without any increase in the work force.

One of the great drawbacks of the plan - and it may well founder on this, unless a solution is found - is that the recipient countries suffer from fluctuating prices for their staple raw materials which are exported. For example, in the last year or so, the overseas price of rice fell, which had an adverse effect upon the economies of riceexporting countries. The prices of hemp, copra, raw cotton and tin also fell. On the credit side, however, the export prices of rubber, tea and jute were higher than formerly. So there is a fluctuating group of economies whose prosperity, to use the term in a very relative, negative sense, rises or falls in accordance with the world prices received for their exports.

Existing statistical data does not permit any exact and reliable measure of the real economic development under the plan, but the general picture revealed by the last report of the consultative committee shows that there has been but limited progress. This is rather disappointing, but nevertheless some progress must be reported. One fact: stands out like a beacon on a headland. Despite the impact of the plan, Asian economies remain precariously poised between low productivity and high and rapidly increasing population. These economies will never be able to withstand the effects of a run of bad seasons or a mild world recession. In these circumstances, it is not unreasonable to expect that the Colombo plan in its next phase will have to provide for a high rale of economic aid. There must be a next phase, and further phases, because I should say that the plan will on present indications have to operate for al least 20 or 30 years if we wish to reach ultimately the basis which we originally sought to attain. There will have to be heavier investment in most countries, if productivity and national income are to be further increased. There is urgent need for new capital projects to accommodate the growing labour force. The rate of technical assistance will have to be stepped up if additional foreign aid is to be absorbed. It is not a bit of good giving aid in the form of either private or government investment to provide modern machines if the technical knowledge necessary for the operation of those machines is not available locally. I would say that the plan, despite the carping criticism that has been directed at it, is based upon humanitarian aims and it should be supported by all of the Australian people.

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