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Tuesday, 10 May 1960

Mr CAIRNS (Yarra) .- The bill before the House this evening has the aim of making Australia a foundation member of the proposed International Development Association, the purpose of which is to extend financial assistance, in the main, to under-developed countries. The Opposition is not opposing this bill but is making clear the defects and deficiencies of this association and of this proposal. Summarizing our argument, the Opposition says that this proposal comes too late and involves far too little. Proposals for an organization of this sort were made first in 1947 or 1948, and that was the time when the association should have been set up. But at that time the parties which form the present Government were not in favour of such action. Later on, when a proposal came before the United Nations to set up a special fund for economic development, the present Government, which was then in office, did not support it. This was because international lending, during and after the Korean war, had become a strategic and military matter.

It was the Western powers that decided to use international lending for strategic and military purposes. This use of international finance for military purposes has not achieved the aims of those who favoured it. So we claim that the putting of this kind of lending on a non-strategic and nonmilitary basis is too late and involves too little. The Treasurer (Mr. Harold Holt) began his discussion without having any regard to these facts. The honorable member for Melbourne Ports (Mr. Crean) began his speech by quoting figures showing the disproportion between military and semimilitary spending and spending for economic development. He indicated the disproportion between the concern for peace of the governments associated in this move, and their concern for war. I think that the honorable member for Melbourne Ports adequately proved the point that he was making.

The Minister commenced by asking: Why should the International Development Association be established? He answered by saying that the three existing international financial bodies - the International Monetary Fund, the International Bank and the International Finance Corporation - do not fulfil the needs that this association is supposed to meet. He went on to say that -

The charter of the International Bank enables it to extend long-term loans for economic development: but it can make such loans only if repayment and fulfilment of other terms and conditions are guaranteed by the Government of the recipient country. Moreover, the Bank's continued operations depend on preserving the confidence of the private investors who, through their subscriptions to the bonds issued by the Bank on the world's capital markets, provide the bulk of the Bank's lendable funds.

He established that the International Monetary Fund is concerned only with balance of payments problems. Then he went on to say that the International Finance Corporation operated on a principle similar to that of the International Bank. Putting it in a nutshell, these three international bodies have been conducted, in the main, by private investors and have not had the higher profit opportunities because these have been left to private investors - to Wallstreet and associated bodies. These international bodies, the bank and the finance corporation, have taken the next steps but have, in fact, applied the ordinary kind of financial standards which international financiers apply. It was expected, when these international bodies were first established, that, being composed of government representatives, they would be outside the criterion of international finance, but we have found - and the Minister has admitted - that the International Bank and the International Finance Corporation have operated generally within the kind of criterion that international financiers in fact have established.

The honorable member for Melbourne Ports (Mr. Crean) pointed out that these international bodies have not reached inside the problems of the have-not countries. On reference to the International Bank figures in the fourteenth annual report just issued to us, honorable members will find out that of the 3,386 billion dollars, as the Americans express it, almost half has been lent to developed countries. That is 1,650 billion more than the 1,733 billion that has been lent to under-developed countries. If we refer to individual countries, the largest loan that went to an undeveloped country was to India - 444,000,000 dollars. Australia came next with 254,000,000 dollars, Japan next with 237,000,000 dollars, then France with 232,000,000 dollars, Brazil with 229,000,000 dollars, Italy with 207,000,000 dollars, Mexico with 164,000,000 dollars, United Kingdom with 161,000,000 dollars, South Africa with 126,000,000 dollars and Belgium with 112,000,000 dollars. Most of those countries are developed countries, with the exception, perhaps, of Brazil and Mexico, and to some extent Italy. Those countries were the largest borrowers from the International Bank, and they are all developed countries.

Therefore, the International Bank has clearly not discharged its implied responsibilities to begin with. When one sees South Africa borrowing from this source, I think, under present circumstances that no international body should lend to South Africa until it changes its policy. Therefore, the Minister is quite right in pointing out that the way in which the members of the international financial bodies have now been turned into this development association indicates that this is necessary because the existing international associations have not been able to lend, except at the criterion of the financiers, and they have not been able to lend sufficient to underdeveloped countries.

There is one point of criticism I would like to offer here. This association is just what one might call a cold-war or unilateral association. It would be far better, to my mind, if a body of this sort were set up under the United Nations, including all members of the United Nations - Communist powers and non-Communist powers - in an attempt to involve them in the job of financing under-developed countries. It would be better to bring them together in that action rather than set up an organization predominantly under United States influence, suggested by the United States and undoubtedly following, predominantly, American ideas. This proposed body will do a lot of good, but the one I suggest would be much better if it were established on a United Nations basis and brought together the two great blocs of world powers in a joint effort to develop the under-developed parts of the world.

The fact that this International Development Association is a one-sided instrument raises the question: Will it be able to depart from the kind of strategic influences that have so far so much influenced international lending? The facts are that international lending is mainly part of the Western powers' strategic policy. The Western uneconomic lending has been mainly done for the purpose of attempting to reinforce the Western world against communism. When we refer to the military aid programme we find countries that have been lent money by the United States.

Here I shall quote from the Congress Quarterly Weekly Report, No. 8 of 1960. It shows that countries have received Congress military aid in order to integrate them into the network of powers around the Communist powers. It has also been given to France, which is carrying on a colonial war in northern Africa. The largest recipient of military aid from the United States is France with 4,500 billion dollars. The next is Taiwan or Formosa which received just over 2,000 billion dollars. The next was Italy with nearly 2,000 billion dollars, then Turkey with 1,800 billion dollars, and Korea with 1,500 billion dollars. The whole of Latin America, where the threat of communism is not great, received 423,000 million dollars and Africa 48,000 million dollars. This shows the dispersion of military aid.

When we turn to mutual or non-military aid we find the situation is just the same. I have here some figures from the Statistics Abstract for the United States for 1959. For France this amounted to 3,192 billion dollars and for the United Kingdom to 3,828 billion dollars. These are not underdeveloped countries requiring that aid for the purpose of economic development. Korea received 1,300 billion dollars and Greece 911,000,000 dollars. Whichever way one examines these figures they indicate that military aid or economic aid has had an underlying or strategic influence all the way through. Certainly this kind of development shows a recognition of the need for economic development but it does not always show a need for decent honest government as democratic as could be obtained in the circumstances.

Of course, Korea is now a classic example of a recipient of both economic and military aid. It is very clear that the world must have economic progress and stability if we are not to have in many places on the surface of the earth unrest and disorder which will lead to conditions that will endanger the peace of the world and cause widespread hatred and death. The association's purpose is not to reinforce existing governments or to produce economic development only in the limited sense. Its purpose is much broader than that - to prevent economic shortage, poverty and distress from leading to unrest and disorder from which events will occur which may disturb the peace of the world. I should think that every one, irrespective of his politics, prefers to see a condition of stability in that sense, which will prevent the occurrence of events such as we have seen in Korea, which may endanger the peace of the world, rather than the alternative.

It must be recognized - I emphasize this in relation to this measure - that the incidence of communism in various countries is not the result of a conspiracy or of something imported from Russia or China. Basically, communism is the result of economic and social conditions in the area where the trouble arises. It has been said that this has not always been the view of the Australian Labour Party and that this view arose at the Hobart conference of 1955. That conference basically stressed the principle that the incidence of communism in various parts of the world is not only, or mainly, the result of some kind of conspiracy or some imported influence from Russia or China, but is something much more complex and difficult than that, and that it cannot be met by military measures alone, or in the main, but has to be met in some other way. That is the principle which underlies the foreign policy of the Australian Labour Party as enunciated at the Hobart conference.

I hope that the International Development Association Bill 1960 will not result in something which overlooks that fundamental fact. Many of our most bitter opponents have said that this policy of the Australian Labour Party is a recent development. They have referred to the days of Mr. Chifley and Mr. Curtin and have said that in those days things were different. I remind the House that this is not so. I should like to refer to a number of statements which were made by the late J. B. Chifley to demonstrate that the principle which I have mentioned has always been the fundamental view of the Australian Labour Party. I emphasize it now because it is of great significance in relation to this bill. In September, 1948, Mr. Chifley made a speech in which he stated that he had no illusions about the way in which Communists assumed power in various parts of the world in which there was unrest. He said -

I have no illusions about that, but the great upsurge of nationalism that is occurring now throughout the East has roots that go deeper than communism. This upsurge may not have any clear objectives. It is a rebellion, sometimes an economic rebellion, against conditions under which the people have been living. Let us consider the position in Europe. Could communism flourish there if the people were contented, and well fed, and enjoying decent living conditions? Given those conditions, communism would not have found a footing anywhere in Europe.

This kind of measure is too little too late, because the conditions to which Mr. Chifley referred in 1948 have been permitted to continue since that time. They have not been met substantially enough by economic measures calculated to remove them. We say that economic measures always have had this military and strategic consideration underlying them. We hope that that will not continue when the International Development Association comes into operation.

To indicate the degree to which these views have been underlying the policy of the Australian Labour Party, let me now refer to a speech which was made in this House by the late J. B. Chifley, on 23rd March, 1950. He said-

I have heard a great deal of talk about communism, and what the Communists have done in Russia and in central Europe. The fact is that communism has developed in Europe because of conservative action - or inaction - in the past. No one can deny that in most European countries the ordinary people did not receive from governments and from the ruling classes the consideration they deserved. In many European countries such as Italy, Hungary and Poland, more than two-thirds of the land was held by wealthy absentee landlords. That reflected no credit on those who had guided the destinies of such countries in the past. Such a situation constituted a fertile seed bed for the growth of communism Indeed, it may be said that the seeds of communism were sown by those persons who are now referred to as rightists, and who fought against every attempt to liberalize the laws for the benefit of the people.

That is the traditional view of the Australian Labour Party. Unless you get away from this negative anti-communism, or the kind of thing that installed the corrupt Syngman Rhee Government for seven or eight years in Korea, you will not stop unrest and disturbance. You will not stop the advance of communism. You will feed it, and the honorable member for Hume (Mr. Anderson), who is now interjecting, is included in the rightists to whom Mr. Chifley referred in 1950.

When we turn to the traditional Australian Labour Party view on China, Mr. Chifley, continuing the speech to which I have already referred, stated -

I often considered that I should have told the House long ago about the real position in China. The facts were known to the late President Roosevelt in 1942, and he sent many envoys, including Mr. Donald Nelson, General Marshall and Mr. La Guardia to that country from time to time. The administration of the Nationalist government was completely corrupt. When I make that statement, I want it to be understood that I am not referring to the Generalissimo himself, but am speaking of the administration of national affairs in China. That administration was so corrupt that the arms which were sent from the United States of America to assist the National government in the war against Japan were sold or given to the Communist armies in China. In fact, communism triumphed in China because of the arms which had been sent to that country by the United States of America for the purpose of defending democracy. If time permitted, I could describe to the House what happened to large quantities of supplies and stores including those consigned to U.N.R.R.A. The Chinese administration was prepared to sell, give away or surrender large quantities of goods which America was providing to assist the Allies against Japan.

If you want to know why there is communism on the mainland of China, there is the reason. It is not something which was imported from Russia; it is not something which came about as a result of a conspiracy of the Communist parties; it was the result of the conditions which the corrupt Nationalist government and administration in China permitted there. It is not much good giving economic aid at this late stage unless you are satisfied that you will not encourage governments of the kind I have mentioned.

That is not the end of the traditional and fundamental views of the Australian Labour

Party - the views which were not acquired by us for the first time in 1955 at Hobart. They were expressed in Hobart as part of the traditions which the late Mr. Chifley played a distinguished role in making. The people who criticize the foreign policy of the Australian Labour Party as expressed at Hobart do not know the history and the traditions of this party. Neither do they know the emphasis which has been given in this House time and time again to the kind of thing that we have said must underlie legislation of this kind, or it will not be worth the paper on which it is written. At this period Mr. Chifley had this to say also -

It is a grave mistake to attribute to the Communists responsibility for all the disturbances that have taken place in the Bast. On this point Pandit Nehru said:

If anybody thinks he can stop the spread of radicalism in Asia by guns, soldiers and ships, he makes the greatest possible mistake.

He also said that the only thing that can save the East from some form of radicalism is an improvement in the economic conditions of the people. He said that until that was achieved nothing could happen except, perhaps, a worse state of affairs than existed in the first place.

Has not that been illustrated to perfection by the events in Korea? Mr. Chifley continued -

I know we cannot give all the help that we should like to give to these people. They need technical men and, perhaps, plant.

The point was emphasized quite correctly by the honorable member for Wentworth (Mr. Bury), who preceded me in this debate. Interestingly enough, there is made in this examination a point with regard to Korea which I think is fundamental to this bill. I want to remind the House particularly of a statement made by Mr. Chifley in 1950 just after the outbreak of the Korean War. In a speech made in this House of 27th September, 1950, he said -

I want to make it clear that our acceptance of the principle of resistance to North Korean aggression must not be taken to mean that the Labour Party of this country stands for the support of corrupt governments. There has been a tendency in some quarters to make a pretence of defending Formosa, which would be, in effect, giving protection to Chiang Kai-shek. I do not propose to relate the history of the Chiang Kai-shek administration, which is well known to everybody. I am not speaking of the generalissimo himself-

Mr. Chifleymade that distinction all the time - but of the Chinese nationalist administration, which was completely -corrupt. Perhaps t may say in .passing that the administration in the Philippines to-day is something of which no democracy has any reason to be proud. I have emphasized those --points in order to make it perfectly clear that the acceptance by the Australian Labour Party of the principle -enunciated previously by the Prime Minister must not be taken to mean that we are prepared to help to restore to power the kind of governments of which I have spoken.

Mr. Chifleywent on to say that the Government of South Korea was corrupt at that time. As we know, it has remained corrupt ever since.

Mr. Speaker,communism is not a cause; it is a result. It is a result of economic conditions and of corrupt, undemocratic government. Economic progress and stability are needed. But what is needed even more is decent self-government in the areas concerned. This International Development Association is a body of nations which has to face the responsibility of providing that kind of government. If the association continues to face this responsibility with a negative anticommunism associated with a positive emphasis on military and strategic conditions, it will fail. Failure has been the record of this kind of effort for more than ten years. The funds of this association should not be used purely for antiCommunist purposes. They should not be used just for economic aid, because you can have economic aid without results and without development. The economic aid given should lead to economic development with all the necessary development of social institutions and technical knowledge which were emphasized by the honorable member for Wentworth. And economic aid should be provided only for decent, honest governments - not for corrupt ones. It should be provided only for governments which are as democratic as is possible in the circumstances.

What is being done now in Korea as a result of necessity could have been done there two, three, four, five or ten years ago. But no. Those responsible would not take the necessary action until the circumstances forced them to do so. Economic aid and assistance should not be given to governments of the kind that practise the corruption that was practised by Syngman

Rhee. Honorable members on the Government side of the House were defending him only a month or six weeks ago - in particular, the honorable member for Lilley (Mr. Wight), who has said not a word about it since. This kind of pretence and this kind of policy are breaking down under their own weakness.

I want to make one point in conclusion, Mr. Speaker: Whatever is done in relation to economic development, international trading is of prime importance. We know, as a result of the United Nations world economic survey made in 1958, that, in terms of trade, the under-developed countries lost, in the two years prior to 1958, more than they had received in economic aid of every kind since the end of World War II., solely because of the adverse turn in their trade. So, any association of this kind, or any effort of the kind now proposed, ought to be concerned primarily with international trade in basic commodities. We found, at the same time as the under-developed countries lost so heavily because of the adverse turn in their terms of trade, that an improvement in the standard of living in the European countries came as a result of the gain from the favorable turn in their terms of trade. So the prosperity in Europe, which no doubt led to the return of the Conservative Government in the United Kingdom last year, was a gain achieved as a result of the losses of the have-not, under-developed countries.

This sort of thing cannot go on without a worsening of international economic conditions and the creation in various parts of the world of those centres of unrest and disturbance which may endanger world peace. The responsibility to prevent the development of this unrest is the kind of responsibility that the International Development Association will have. It is the kind of responsibility that neither this association, so far, nor any other association, has shown any real concern to meet. In discussing this bill, we must emphasize that aspect of the problems involved. The International Development Association will have to do something about this problem. If the association is to be nothing more than a financiers' club, it will fail as failure has been the record of these ventures in the past.

Debate (on motion by Mr. Swartz) adjourned.

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