THE ECONOMIC DEVELOPMENT OF UNDER-DEVELOPED …

ECONOMIC DEVELOPMENT OF UNDER-DEVELOPED COUNTRIES

CHAPTER III

THE ECONOMIC DEVELOPMENT OFUNDER-DEVELOPED COUNTRIES

131

UNITED NATIONS SPECIAL FUND AND PROPOSAL FOR UNITED NATIONSCAPITAL DEVELOPMENT FUND

UNITED NATIONS SPECIAL FUNDDuring 1958, both the Economic and SocialCouncil and the General Assembly took actionto launch a Special United Nations Fund, tocome into being on 1 January 1959, for helpingin the development of the less developed coun-tries. One of its main tasks is to provide sys-tematic and sustained aid, on request, in fieldsessential to the integrated technical and socialdevelopment of these countries. It is envisagedas a means to enlarge the scope of the existingtechnical aid and economic development activi-ties of the United Nations and the specializedagencies.

The Fund's operations are intended to be ofimmediate significance in speeding the develop-ment of under-developed countries, and, it ishoped, will facilitate new capital investmentsof all types by creating conditions making suchinvestments either feasible or more effective.

Membership in the Special Fund is opento all Members of the United Nations or mem-bers of the specialized agencies or of the Inter-national Atomic Energy Agency.

The Fund is financed from voluntary contri-butions by Governments. It may also receivedonations from non-governmental sources.

The Special Fund is administered under thegeneral authority of the Economic and SocialCouncil and the General Assembly.

Its organs are: (1) an 18-member GoverningCouncil (elected by the Economic and SocialCouncil), which gives policy guidance; (2) aManaging Director (appointed for a four-yearterm by the Secretary-General subject to Gen-eral Assembly confirmation), who is chargedwith over-all responsibility for the Fund's opera-tions, and is assisted by a small staff workingunder him; and (3) a three-member Consul-tative Board to advise the Managing Director,consisting of the Secretary-General of the UnitedNations, the Executive Chairman of the Tech-nical Assistance Board (TAB), and the Presi-

dent of the International Bank for Reconstruc-tion and Development, or their designated re-presentatives.

(For further details about guiding principles,organization and financing of the Special Fund,See DOCUMENTARY REFERENCES below, text of

General Assembly resolution 1240 (XIII) . )Also discussed by the General Assembly in

1958 was the question of setting up a UnitedNations Capital Development Fund.

REPORT OF PREPARATORY COMMITTEE

It was in 1957 that the General Assemblydecided, unanimously, to establish the SpecialFund, as of 1 January 1959.

The Assembly at the same time created a16-member Preparatory Committee with thefollowing tasks : (1) to define the basic fields ofassistance and types of eligible projects; (2) todefine the administrative and operational ma-chinery to be recommended for the SpecialFund, including such changes as might be re-quired in the present legislation and proceduresof the Expanded Programme of Technical As-sistance; and (3) to ascertain to what extentGovernments would be willing to contribute tothe Special Fund.

The Preparatory Committee met at UnitedNations Headquarters from 11 March to 15April 1958 and adopted a report for considera-tion by the Economic and Social Council andthe General Assembly.

The Preparatory Committee's proposals onthe first two questions indicated above wereembodied in a set of recommendations readilytransformable into a basic legal instrumentfor the Special Fund. The Committee recom-mended, inter alia, that the Special Fund shouldassist projects in the fields of resources (includ-ing the assessment and development of man-power), industry (including handicrafts andcottage industries), agriculture, transport andcommunications, building and housing, health,

132 ECONOMIC AND SOCIAL QUESTIONS

education, statistics and public administration.To operate the Special Fund, the Committee

envisaged: an 18-member Governing Council,to be elected by the Economic and Social Coun-cil; a Managing Director assisted by a staff; anda Consultative Board composed of the Secre-tary-General of the United Nations, the Execu-tive Chairman of the Technical Assistance Board(TAB) and the President of the InternationalBank for Reconstruction and Development.

Other recommendations dealt with the prin-ciples and criteria which should guide the opera-tions of the Special Fund, the role of the Gen-eral Assembly and the Economic and SocialCouncil with respect to the Special Fund, therole of existing agencies, the procedures for theformulation, evaluation and approval of requestsand the execution of projects, and the financesof the Special Fund. The Committee also ap-pended to its report an illustrative list of typesof projects for assistance.

As to the willingness of Governments to con-tribute to the Special Fund, the PreparatoryCommittee felt that it could not report fully tothe Council in view of the information beforeit and the limited time at its disposal. It there-fore asked the Secretary-General to invite Gov-ernments to provide as precise information aspossible on the extent to which they would bewilling to contribute.

CONSIDERATION BY ECONOMIC

AND SOCIAL COUNCIL

The Preparatory Committee's report was con-sidered at the twenty-sixth session of the Eco-nomic and Social Council in mid-1958.

In the course of the debate, the Councildiscussed the merits of this new programme ofassistance to under-developed countries and itsposition in the general framework of financingeconomic development.

While generally welcoming the establishmentof the Special Fund as a step forward, severalmembers, particularly Chile, the Netherlandsand Yugoslavia, regretted that a capital de-velopment fund could not have been estab-lished. Greece, Poland and others felt that theSpecial Fund should be considered as a prelimi-nary step towards agreement on such a fund.Still others, particularly Pakistan, thought thatthe Special Fund was the only compromise

conceivable in the absence of internationallysupervised world-wide disarmament.

Most representatives welcomed the Prepara-tory Committee's recommendations as a soundbasis for the early establishment of the SpecialFund.

The Council was generally agreed that theSpecial Fund should assist under-developedcountries in a sustained and systematic mannerto train their manpower and to assess and makeuse of their natural resources more productive-ly. The Special Fund should undertake surveysand research and training projects of consider-able scope and depth in such fields as agricul-ture, industry, communications and administra-tion, and it should be able to assume financialcommitments over long periods of time and toprovide relatively large amounts of supplies andequipment for its projects.

The general administrative structure recom-mended by the Preparatory Committee foundwide acceptance in the Council.

The recommendation for the establishmentof a Consultative Board, however, was the sub-ject of some controversy. In the view of mostrepresentatives, the Board would be an essentialinstrument of co-ordination. The representativeof France thought that the Board's three mem-bers were particularly qualified in matters ofassistance in under-developed countries.

In Canada's view, the representation of theBank on the Special Fund's Board would ensurethat the programmes selected would, as far aspossible, result in an increased flow of capitalto deserving projects. The USSR argued, onthe other hand, that the Special Fund shouldbe an autonomous institution in which the In-ternational Bank should not be endowed withany special rights. Yugoslavia agreed to theestablishment of the Consultative Board onlybecause its functions were to be purely advisoryand not of a policy-making nature.

As to participation in the Special Fund, theUSSR representative considered that the Pre-paratory Committee was being unduly restric-tive in recommending that participation be opento Members of the United Nations or membersof the specialized agencies or of the Interna-tional Atomic Energy Agency. He recommendedthat any State wishing to join should be allowedto participate.

ECONOMIC DEVELOPMENT OF UNDER-DEVELOPED COUNTRIES 133

On the matter of contributions, India, In-donesia, Poland, Sudan, the USSR and othersheld that participating countries should be al-lowed to contribute in national currencies orthat countries with a difficult foreign exchangesituation should be allowed to make contribu-tions in their own currencies or in the currencybest suited to their situation. Canada and theUnited States, on the other hand, regretted thatthe Committee had not found it suitable toprovide for a minimum of convertibility in con-tributions to be made by Governments.

Concern was expressed at the fact that onlya few Governments had replied in encouragingterms to the Secretary-General's inquiry abouttheir willingness to contribute. The represen-tatives of Canada, Chile, the United Kingdomand the United States announced the decisionsof their Governments to seek parliamentary ap-proval for a contribution.

On 31 July 1958, the Council unanimouslyadopted a resolution (692 (XXVI)) to whichthe recommendations of the Preparatory Com-mittee were annexed in the form of a draftresolution for adoption by the General Assembly.

The Council thereby appealed to all Membersof the United Nations or members of the spe-cialized agencies to give the Special Fund thegreatest possible assistance, expressing the hopethat all Governments would be able to announcetheir contributions for 1959 at a Pledging Con-ference to be held later in 1958.

The resolution to this effect was based ona proposal introduced in the Council's Eco-nomic Committee by Canada, Chile, France,Mexico, the Netherlands, Pakistan, the UnitedKingdom, the United States and Yugoslavia.

CONSIDERATION BY

GENERAL ASSEMBLY

At the General Assembly's thirteenth session,debate on the establishment of the Special Fundtook place in the Second (Economic and Finan-cial) Committee. This Committee was calledupon to decide on the recommendations of thePreparatory Committee which the Economicand Social Council had endorsed.

Two major lines of thought emerged duringthe Second Committee's debate.

One group of representatives favoured adop-tion of the Preparatory Committee's recom-

mendations without any changes, as advocatedby the Economic and Social Council. Theyargued that the Preparatory Committee's recom-mendations were the outcome of lengthy de-liberations and represented a compromise. Itwould thus be unwise to reopen the issue. Thiswas the view of Canada, Denmark, France,New Zealand, Philippines, the United King-dom and the United States. Italy, Mexico andPeru contended that the recommendations,despite certain imperfections, marked a majoradvance towards the establishment of the SpecialFund, which should not be delayed. Thailandpointed out that the recommendations met withthe approval of those Governments which wouldtake on the major responsibility in financing theSpecial Fund.

Twenty-seven powers of this school of thoughtsubmitted a draft resolution whereby the As-sembly was asked to adopt the recommenda-tions of the Preparatory Committee withoutchange. The draft resolution also noted that in1957 the General Assembly had decided thatas and when it considered that the resourcesexpected to be available were sufficient to enterinto the field of capital development, it wouldreview the scope and future activities of theSpecial Fund and take such action as it mightconsider appropriate.

The 27 sponsors of this text were: Argen-tina, Belgium, Chile, China, Colombia, CostaRica, Cuba, Denmark, Dominican Republic,France, Haiti, Italy, Iran, Japan, Laos, Liberia,Luxembourg, the Netherlands, Norway, Paki-stan, Peru, Philippines, Spain, Thailand, Turkey,the United Kingdom and the United States.

A second group of representatives advocatedchanging the recommendations of the Prepara-tory Committee on the election of the Govern-ing Council. The Preparatory Committee calledfor election of the Governing Council of theSpecial Fund by the Economic and Social Coun-cil. These representatives felt that the Govern-ing Council should be elected by the GeneralAssembly. Among their arguments were thefollowing: All the participants in the SpecialFund should be given an opportunity to electthe Fund's executive body. The Special Fundwas a new type of institution, not simply an-other subordinate body of the Economic andSocial Council. The idea of the Special Fund


was born in the General Assembly and derivedits force from the opinion of the vast majorityof the Assembly's Members. Those subscribingto one or other of these views included Ghana,India, Indonesia and the United Arab Republic.

In reply, Japan, Norway, the United Statesand others observed that the Economic andSocial Council was the organ primarily responsi-ble for co-ordinating United Nations economicand social activities.

The Netherlands representative added thatthe Preparatory Committee had worked outcarefully balanced recommendations ensuringthat the General Assembly and the Economicand Social Council exercised the powers as-signed to them by the United Nations Charter.In particular, the Preparatory Committee hadexpressly provided that the Assembly wouldexercise supreme supervisory functions in respectof the Special Fund's progress and operations.

Seventeen powers proposed amending the27-power text so as to have the Assembly electthe Governing Council and to have the As-sembly appeal to Member States to work forthe speedy establishment of a United Nationscapital development fund. The sponsors of thisproposal were: Afghanistan, Brazil, Burma,Ceylon, Ethiopia, Ghana, Greece, India, Indo-nesia, Iraq, Libya, Morocco, Saudi Arabia,Sudan, United Arab Republic, Yemen andYugoslavia.

Several representatives, especially those fromthe under-developed countries, emphasized thatthe Special Fund was only to be considered asa first step towards a capital development fundand that specific reference to this ultimate goalshould be made in the General Assembly reso-lution establishing the Special Fund. This wasconsidered indispensable in order to bring outthat the idea of a Special United Nations Fundfor Economic Development (SUNFED) hadnot been set aside.

In support of the SUNFED idea, the USSRrepresentative recalled that the Soviet Ministerof Foreign Affairs had recently proposed a 10 to15 per cent reduction in the military budgetsof the Soviet Union, the United States, theUnited Kingdom and France. Adopting thismeasure would free large funds which could beused to finance SUNFED.

In this connexion, the United States repre-

sentative observed that, as early as 1953, thePresident of the United States had proposedthat part of the savings achieved through anagreement on internationally controlled dis-armament should be devoted to a multilateraleconomic assistance fund.

In the course of the debate, the Chairmanof the Second Committee submitted a draftresolution in an effort to combine all the pointscommon to the texts of the two groups. Afterrejection of various amendments, the Chair-man's text was approved by the Second Com-mittee on 13 October 1958 by 73 votes to 0,with 1 abstention. The Assembly also adoptedit at a plenary meeting on 14 October 1958,by 77 votes to 0, with 1 abstention, as resolu-tion 1240 (XIII).

DECISION ON SPECIAL FUND

The Assembly thereby established the SpecialFund in accordance with the provisions laid downby the Preparatory Committee. It also reaffirmedits decision of 14 December 1957 (resolution1219(XII) ) to review the scope and future ac-tivities of the Special Fund, and take such ac-tion as it might deem appropriate when itconsidered there were enough funds availableto enter into the field of capital development.

On 5 December 1958, the Assembly unani-mously confirmed the appointment of Paul G.Hoffman for the post of Managing Directorof the Special Fund. His name was submittedby the Secretary-General after consultation withthe Governing Council.

On 23 October 1958, the Economic and So-cial Council, at its resumed twenty-sixth session,elected the 18 members of the Governing Coun-cil of the Special Fund. (For details see AnnexII of this Yearbook.)

At the end of 1958, plans were made to holdthe first session of the Governing Council inJanuary 1959 to deal primarily with mattersrelating to the general organization of thework of the Special Fund. A second sessionof the Governing Council was scheduled to beheld in May 1959, at which session the Councilwas expected to have before it a first programmeof operations recommended by the Fund's Man-aging Director on the basis of requests receivedfrom Governments up to the middle of March1959.


PLEDGES FOR SPECIAL FUND achieve the volume of resources envisaged byOn October 24, 1958, at a United Nations General Assembly resolution 1219(XII), and

Pledging Conference held at United Nations urged them to continue working for the estab-Headquarters to receive contribution pledges lishment of a United Nations capital develop-for the Expanded Programme of Technical ment fund. By the same resolution, the As-Assistance and the Special Fund, 41 Govern- sembly further decided to continue to review,ments made firm pledges to the Special Fund, as a separate subject of its agenda, progress intotalling approximately $21.5 million. At the the field of financing the economic developmentend of 1958, on the basis of available informa- of less developed countries, particularly progresstion, it could be reasonably assumed that con- towards the establishment of a United Nationstributions equivalent to at least $26 million capital development fund.would be pledged by Governments for 1959. This resolution was adopted on the recom-(For details, see table below.) mendation of the Second Committee, which

approved it on 28 November 1958 by a roll-PROPOSAL FOR CAPITAL call vote of 58 to 0, with 18 abstentions, onDEVELOPMENT FUND the basis of a proposal by Afghanistan, Burma,

In a separate resolution 1317(XIII), adopted Ceylon, Chile, Ethiopia, Ghana, Greece, India,on 12 December 1958 by 67 votes to 0, with Indonesia, Iraq, Lebanon, Morocco, the Nether-14 abstentions, the Assembly called upon United lands, Tunisia, United Arab Republic andNations Member States to consider appropriate Yugoslavia,contributions to the Special Fund in order to

PLEDGES TO THE SPECIAL FUND(As of January 1959)

PLEDGE

Country In local currency U.S. dollar equivalentAfghanistan 6,000Argentina a

Belgium Belgian francs 12,500,000 250,000Byelorussian SSR Rubles 200,000 50,000Canada 2,000,000Ceylon 5,000Chile Pesos 55,000,000 55,612China 20,000Colombia Pesos 100,000 16,393Czechoslovakia Crowns 500,000 69,444Denmark b Danish kroner 2,300,000 332,996Ecuador 10,000Ethiopia Ethiopian $72,500 29,187Federation of Malaya 5,000France c French francs 450,000,000 911,475Germany, Fed. Rep. ofd

Ghana Pounds 10,000 28,000Greece 25,000Haiti Gourdes 110,000 22,000Holy See 1,000Hungary Forints 500,000 42,608Iran 50,000Israel 15,000Italy 600,000Japan Yen 172,800,000 480,000Laos 3,000Liberia 10,000Luxembourg Francs 150,000 3,000Monaco French francs 500,000 1,013e

Morocco 20,000

136

CountryNetherlands

New ZealandPakistanPanamaParaguayPeruPhilippinesPolandPortugalRomaniaSwedenf

ThailandTunisiaTurkeyg

Ukrainian SSRUnion of Soviet

Socialist RepublicsUnited Arab RepublicUnited KingdomUnited Statesh

Viet-NamYugoslavia

ECONOMIC AND SOCIAL QUESTIONS

PLEDGE

In local currencyNetherlands guilders

9,272,400£NZ25,000Pakistan rupees 500,000

Philippine pesos 132,000Zlotys 500,000

Lei 100,000

Rubles 500,000

Rubles 4,000,000Egyptian £100,000

Dinars 45,000,000

U.S. dollar equivalent

2,440,10570,000

104,9981,000

10,00010,00066,000

125,00010,00016,667

160,0002,000

125,000

1,000,000287,191

1,000,000

8,000150,000

a Will contribute same proportion to the SpecialFund as to the Expanded Programme of TechnicalAssistance.

b A maximum of Danish kroner 8.8 million($1,274,070) was pledged to the Expanded Pro-gramme of Technical Assistance and the Special Fundon the assumption that a total of $100 million wouldbe reached. The amounts indicated are the minimumcontributions to the two programmes.

c Approximation; final contribution to be announcedlater. The U.S. dollar equivalent is computed at therate of exchange which went into effect on 29December 1958.

d A contribution of Deutschemarks 7 million($1,666,667) has been pledged to the Expanded Pro-gramme of Technical Assistance and the Special Fund.The distribution of this amount between the two pro-grammes is to be announced later.

eU.S. dollar equivalent computed at the exchange

rate of the French franc which went into effect on29 December 1958.

f A total of Swedish kroner 15 million ($2,899,671)was announced for the Expanded Programme ofTechnical Assistance and the Special Fund. Thedivision of this amount between the two programmesis to be announced later.

g Will contribute same proportion to the SpecialFund as to the Expanded Programme of TechnicalAssistance.

h A contribution of $38 million was pledged to theExpanded Programme of Technical Assistance andthe Special Fund. The contribution is subject to thecondition that it will not exceed 40 per cent of thetotal contributions to the two programmes. Thespecific amounts for each programme will be an-nounced when pledges of other Governments are known.

DOCUMENTARY REFERENCES

UNITED NATIONS SPECIAL FUND

ECONOMIC AND SOCIAL COUNCIL——26TH SESSION

Plenary Meetings 1037-1039, 1043.Economic Committee, meetings 253-255.

E/3098 and Corr.1 (A/3908 and Corr.1). Reportand recommendations of Preparatory Committeefor Special Fund, submitted in accordance withGeneral Assembly resolution 1219(XII).

E/3153 and Add.1-3. Replies received to inquiry bySecretary-General regarding extent of willingnessof Governments to contribute to Special Fund.

E/AC.6/L.228 and Corr.1. Canada, Chile, France,Mexico, Netherlands, Pakistan, United Kingdom,

United States, Yugoslavia draft resolution adoptedunanimously by Economic Committee on 30 July1958, meeting 255.

E/AC.6/L.229. USSR amendment to 9-power draftresolution, E/AC.6/L.228.

E/3176. Report of Economic Committee.RESOLUTION 692(XXVI), as submitted by Economic

Committee, E/3176, adopted unanimously byCouncil on 31 July 1958, meeting 1043.

A"The Economic and Social Council,"Noting the decision of the General Assembly

contained in resolution 1219(XII) of 14 December1957 to establish a Special Fund which would providesystematic and sustained assistance in fields essential

ECONOMIC DEVELOPMENT OF UNDER-DEVELOPED COUNTRIES 137to the integrated technical, economic and social

development of the less developed countries,"Noting the conditions envisaged in section III of

General Assembly resolution 1219(XII), under whichthe Assembly shall review the scope and futureactivities of the Special Fund and take such actionas it may deem appropriate,

"1. Concurs with the recommendations contained inthe report of the Preparatory Committee, and trans-mits it herewith to the General Assembly;

"2. Recommends that the General Assembly adoptthe draft resolution annexed hereto, setting forth theprovisions governing the Special Fund;

"3. Draws the attention of the General Assemblyto the comments on the report of the PreparatoryCommittee made during the twenty-sixth session ofthe Council."Annex. Draft Resolution Recommended for Adoption

by General Assembly"The General Assembly,"Recalling its resolution 1219 (XII) of 14

December 1957,"1. Commends the Preparatory Committee on its

work;"2. Establishes a Special Fund in accordance with

the provisions set forth below: [These provisions areidentical with those cited below in Part B of GeneralAssembly resolution 1240(XIII)]."

B"The Economic and Social Council,"Considering that the success of the Special Fund

depends, inter alia, on its financial resources,"Noting from section C of the report of the Pre-

paratory Committee and from the replies received tothe inquiry by the Secretary-General regarding thewillingness of Governments to contribute to theSpecial Fund that so far few Governments have beenable to indicate the size of their contribution to theFund,

"1. Appeals, in conformity with paragraph 12 ofresolution 1219(XII) of the General Assembly of 14December 1957, to all States Members of the UnitedNations or of the specialized agencies to give theSpecial Fund the greatest possible assistance;

"2. Requests the Secretary-General to makearrangements for the announcement of contributionsto the Special Fund as envisaged in paragraph 47 ofthe Preparatory Committee's recommendations;

"3. Expresses the hope that all Governments willbe able to announce their contributions for 1959 atthe forthcoming pledging conference."

C"The Economic and Social Council,"Concurs with paragraph 10 of the recommend-

ations of the Preparatory Committee according towhich the Economic and Social Council wouldestablish a Committee of the Council, to assist in theexamination of the reports submitted to the Councilconcerning the Special Fund and the Expanded Pro-gramme of Technical Assistance, and of such ques-tions relating to their operations as the Council mayrefer to it."

GENERAL ASSEMBLY——13TH SESSION

Plenary Meeting 776.Second Committee, meetings 513-528.

A/3848. Report of Economic and Social Council toGeneral Assembly, Chapter II, Section I.

A/3908 and Corr.1 (E/3908 and Corr.1). Report andrecommendations of Preparatory Committee forSpecial Fund, submitted in accordance withGeneral Assembly resolution 1219(XII).

A/3909. Questions relating to economic development.Memorandum by Secretary-General.

A/3910. Replies received to inquiry by Secretary-General regarding extent of willingness of Govern-ments to contribute to Special Fund.

A/G.2/L.362 and Rev.1. Afghanistan, Brazil, Burma,Ceylon, Ethiopia, Ghana, Greece, India, Indonesia,Iraq, Libya, Morocco, Saudi Arabia, Sudan, UnitedArab Republic, Yemen, Yugoslavia draft resolutionand revision.

A/C.2/L.363, Add.1 and 2. and Rev.l. Argentina,Belgium, Chile, China, Colombia, Costa Rica, Cuba,Denmark, Dominican Republic, France, Haiti, Italy,Iran, Japan, Laos, Liberia, Luxembourg, Nether-lands, Norway, Pakistan, Peru, Philippines, Spain,Thailand, Turkey, United Kingdom, United Statesdraft resolution and revision.

A/C.2/L.364. Note by Chairman of Second Committeecontaining draft resolution, as amended by Nether-lands and Thailand (A/C.2/L.367), adopted bySecond Committee on 13 October 1958, meeting528, by 73 votes to 0, with 1 abstention.

A/C.2/L.365. Afghanistan, Brazil, Burma, Ceylon,Ethiopia, Ghana, Greece, India, Indonesia, Iraq,Libya, Morocco, Saudi Arabia, Sudan, United ArabRepublic, Yemen, Yugoslavia amendments to draftresolution contained in note by Chairman, A/C.2/L.364.

A/C.2/L.366. Afghanistan, Brazil, Burma, Ceylon,Ethiopia, Ghana, Greece, India, Indonesia, Iraq,Libya, Mexico, Morocco, Saudi Arabia, Sudan,United Arab Republic, Yemen, Yugoslavia revisedamendment to draft resolution contained in note byChairman, A/C.2/L.364.

A/C.2/L.367. Netherlands and Thailand amendmentto draft resolution contained in note by Chairman,A/C.2/L.364.

A/C.2/L.368. Canada, Denmark, France, Italy,Netherlands sub-amendment to 18-power amend-ment, A/C.2/L.366.

A/3947 and Corr.1. Report of Second Committee.RESOLUTION 1240(XIII), as recommended by Second

Committee, A/3947, adopted by Assembly on 14October 1958, meeting 776, by 77 votes to 0, with1 abstention.

"The General Assembly,"In conformity with the determination of the

United Nations, as expressed in its Charter, to pro-mote social progress and better standards of life inlarger freedom and, for these ends, to employ inter-national machinery for the promotion of the economic


and social advancement of all peoples,"Conscious of the particular needs of the less

developed countries for international aid in achievingaccelerated development of their economic and socialinfrastructure,

"Recalling its resolution 1219(XII) of 14 December1957,

"Further recalling previous resolutions on theestablishment of an international fund for economicdevelopment within the framework of the UnitedNations,

"Noting the recommendations contained in Eco-nomic and Social Council resolution 692 (XXVI) of31 July 1958,

Part A"1. Commends the Preparatory Committee on its

work;"2. Establishes a Special Fund in accordance with

the provisions set forth in part B below;Part B

I. Guiding Principles and Criteria"1. Pursuant to the provisions of General Assembly

resolution 1219(XII) and pending a review by theAssembly of the scope and future activities of theSpecial Fund, as envisaged in section III of thatresolution, the Special Fund shall:

"(a) Be a separate fund;"(b) Provide systematic and sustained assistance

in fields essential to the integrated technical, economicand social development of the less developed countries ;

"(c) In view of the resources prospectively avail-able at this time, which are not likely to exceed $100million annually, direct its operations towards enlarg-ing the scope of the United Nations programmes oftechnical assistance so as to include special projects incertain basic fields as outlined hereunder.The Special Fund is thus envisaged as a constructiveadvance in United Nations assistance to the lessdeveloped countries which should be of immediatesignificance in accelerating their economic develop-ment by, inter alia, facilitating new capital investmentsof all types by creating conditions which would makesuch investments either feasible or more effective.

"2. In establishing programmes, the ManagingDirector and the Governing Council of the SpecialFund shall be guided by the following principles andcriteria :

"(a) The Special Fund shall concentrate, as far aspracticable, on relatively large projects and avoidallocation of its resources over a great number ofsmall projects;

"(b) Due consideration shall be given to theurgency of the needs of the requesting countries;

"(c) Projects shall be undertaken which will lead toearly results and have the widest possible impact inadvancing the economic, social or technical develop-ment of the country or countries concerned, in par-ticular by facilitating new capital investment;

"(d) Due consideration shall be given to a widegeographical distribution in allocations over a periodof years;

"(e) Due consideration shall be given to technical,organizational and financial problems likely to be

encountered in executing a proposed project;"(f) Due consideration shall be given to the

arrangements made for the integration of projects intonational development programmes and for effectiveco-ordination of the project with other multilateraland bilateral programmes;

"(g) In accordance with the principles of theCharter of the United Nations, the assistance furnishedby the Special Fund shall not be a means of foreigneconomic and political interference in the internalaffairs of the country or countries concerned and shallnot be accompanied by any conditions of a politicalnature ;

"(h) Projects shall be devised in such a way as tofacilitate transfer, as soon as practicable, of the re-sponsibilities of the Special Fund to assisted countriesor to organizations designated by them.

"3. Projects may be for one country or a groupof countries or a region.

"4. Projects may be approved for the period oftime needed for their execution, even if more thanone year.II. Basic Fields of Assistance and Types of Project

"5. The Special Fund shall assist projects in thefields of resources, including the assessment and de-velopment of manpower, industry, including handi-crafts and cottage industries, agriculture, transportand communications, building and housing, health,education, statistics and public administration.

"6. In view of the resources prospectively availableat the time of the initial period of the Special Fund'soperations, projects to be assisted by the Fund mightbe in one or a combination of the following forms:surveys; research and training; demonstration, includ-ing pilot projects. These may be implemented by theprovision of staff, experts, equipment, supplies andservices, as well as the establishment of institutes,demonstration centres, plants or works, and otherappropriate means, including fellowships, in so far asthey are integral parts of a specific project financedby the Fund, in such proportions as are judgednecessary by the Managing Director for each project,taking into account the type of assistance requestedby Governments.

III. Participation in the Special Fund"7. Participation in the Special Fund shall be open

to any States Members of the United Nations ormembers of the specialized agencies or of the Inter-national Atomic Energy Agency.

IV. Organization and Management"8. There are established as organs of the Special

Fund: a Governing Council, a Managing Directorand his staff, and a consultative board. The SpecialFund shall be an organ of the United Nations ad-ministered under the authority of the Economic andSocial Council and of the General Assembly, whichwill exercise in respect of the Fund their powersunder the Charter.

"9. The Economic and Social Council shall beresponsible for the formulation of the general rulesand principles which will govern the administrationand operations of the Special Fund; the review of theoperations of the Fund on the basis of the annual


reports to be submitted by the Governing Council;and the consideration of the Expanded Programmeof Technical Assistance and of the Special Fund inrelation to each other.

"10. The Economic and Social Council shall trans-mit the report of the Governing Council, togetherwith its own comments, to the General Assembly. TheAssembly will review the progress and operations ofthe Special Fund as a separate subject of its agendaand make any appropriate recommendations.Governing Council

"11. The immediate inter-governmental control ofthe policies and operations of the Special Fund shallbe exercised by a Governing Council which will con-sist of representatives of eighteen States.

"12. The Governing Council shall provide generalpolicy guidance on the administration and operationsof the Special Fund. It shall have final authority forthe approval of the projects and programmes re-commended by the Managing Director. It shall reviewthe administration and the execution of the Fund'sapproved projects, and shall submit reports andrecommendations to the Economic and Social Council,including such recommendations as the GoverningCouncil may deem appropriate in the light of therelevant provisions of General Assembly resolution

"13. The States members of the Governing Councilshall be elected by the Economic and Social Councilfrom among Members of the United Nations ormembers of the specialized agencies or of the Inter-national Atomic Energy Agency.

"14. There shall be equal representation on theGoverning Council of economically more developedcountries, on the one hand, having due regard totheir contributions to the Special Fund, and of lessdeveloped countries, on the other hand, taking intoaccount the need for equitable geographical distribu-tion among the latter members.

"15. States members of the Governing Councilshall be elected for a term of three years, provided,however, that of the members elected at the firstelection, the terms of six members shall expire at theend of one year and the terms of six other membersat the end of two years. Retiring members shall beeligible for re-election.

"16. Decisions of the Governing Council on im-portant questions shall be made by a two-thirdsmajority of the members present and voting. Thesequestions shall include questions of policy, theapproval of projects and the allocation of funds.Decisions of the Governing Council on other questionsshall be made by a majority of the members presentand voting.

"17. The Governing Council shall adopt its ownrules of procedure, including the method of selectingits officers.

"18. The Governing Council shall normally meettwice a year and on such occasions as may be neces-sary, in conformity with its rules of procedure.

"19. The Managing Director of the Special Fundshall participate without vote in the deliberations ofthe Governing Council.

"20. The Governing Council shall make appropriatearrangements in its rules of procedure for the re-presentation of the specialized agencies, the Inter-national Atomic Energy Agency and the ExecutiveChairman of the Technical Assistance Board. To thisend, it shall take due account of the practice followedby the Economic and Social Council.Managing Director

"21. The Special Fund shall be administered by aManaging Director under the policy guidance of theGoverning Council. The Managing Director shall havethe over-all responsibility for the operations of theFund, with sole authority to recommend to theGoverning Council projects submitted by Governments.

"22. After having consulted the Governing Council,the Secretary-General will appoint the ManagingDirector, subject to confirmation by the GeneralAssembly.

"23. The Managing Director shall be appointed fora term of four years, or for a shorter period. He shallbe eligible for reappointment.

"24. Appropriate arrangements shall be made forthe participation of the Managing Director in theTechnical Assistance Board.

"25. The Managing Director shall establish andmaintain close and continuing working relationshipswith the specialized agencies concerned with thosefields of activity in which the Special Fund willoperate, and with the International Atomic EnergyAgency. He may also establish appropriate contactswith other organizations which may be concerned withthe activities of the Fund.Consultative Board

"26. A Consultative Board shall be established toadvise the Managing Director. The function of theBoard shall be to assist the Managing Director withadvice in the examination and appraisal of projectrequests and proposed programmes of the SpecialFund. The Board shall be composed of the Secretary-General of the United Nations, the Executive Chair-man of the Technical Assistance Board and thePresident of the International Bank for Reconstruct-tion and Development or their designated represent-atives.

"27. The Managing Director shall make, as appro-priate, arrangements for representatives of the special-ized agencies and of the International Atomic EnergyAgency to be invited to the deliberations of theConsultative Board when projects falling main ywithin their fields of activity are considered.Staff

"28. The Managing Director shall be assisted bya small group of officials to be selected by him or inconsultation with him, on the basis of their specialcompetence.

"29. For other services, the Managing Director shallrely as far as possible on the existing facilities of theUnited Nations, the specialized agencies, the Inter-national Atomic Energy Agency, and the TechnicalAssistance Board. These facilities should be madeavailable to the Special Fund without charge exceptwhen clearly identifiable additional expenses areinvolved. The Managing Director may also, as re-

139


quired, engage expert consultants."30. To facilitate the field co-ordination between

the Special Fund and the Expanded Programme ofTechnical Assistance in the countries seeking assist-ance, the Managing Director shall enter into an agree-ment with the Executive Chairman of the TechnicalAssistance Board concerning the role of the residentrepresentatives in the work of the Fund.

V. ProceduresSources and formulation of requests

"31. Projects shall be undertaken only at the requestof a Government or group of Governments eligible toparticipate in the Special Fund.

"32. Governments shall present their requests forassistance in a form indicated by the ManagingDirector. Requests shall include all possible inform-ation on the intended use and benefits expected to bederived from the Special Fund's assistance, evidenceof a technical nature regarding the projects for whichassistance is requested, data bearing upon the economicappraisal of such projects, and statements concerningthe part of costs which the Government itself wouldbe ready to assume. The Special Fund, the ExpandedProgramme of Technical Assistance, the UnitedNations, the specialized agencies and the InternationalAtomic Energy Agency should be ready to assist andadvise Governments, at their request, in the prepara-tion of their applications for assistance.

"33. The Special Fund shall utilize only the officialchannel designated by each Government for the sub-mission of requests.Evaluation and approval of requests

"34. The Managing Director shall be responsiblefor the evaluation of project requests. In this evalua-tion, he will normally be expected to rely upon theassistance of existing services within the ExpandedProgramme of Technical Assistance, the UnitedNations, the specialized agencies and the InternationalAtomic Energy Agency. He shall also be authorizedto contract the services of other agencies, private firmsor individual experts for this purpose, in case theservices of the United Nations, the specialized agenciesor the International Atomic Energy Agency are whollyor partly unavailable or inadequate.

"35. On the basis of the evaluation of projectrequests, the Managing Director shall periodicallydevelop programmes for submission to the GoverningCouncil. In developing his recommendations to theGoverning Council, he shall consult the ConsultativeBoard.

"36. The Managing Director shall, at the requestof the Government or Governments which have sub-mitted such projects, submit to the Governing Councilfor its consideration a report on project requestswhich he has been unable to include in his programme.

"37. The Governing Council shall examine the pro-grammes and projects submitted by the ManagingDirector. Each project shall be accompanied by:

"(a) An evaluation of the benefits expected to bederived by the requesting country or countries;

"(b) A summary of its technical evaluation;"(c) A proposed budget showing the financial

implications of the project in their entirety, including

a statement on the costs which would be borne by therecipient Governments;

"(d) A draft agreement with the requestingGovernment or Governments;

"(e) When appropriate, a draft agreement withthe agent or agents responsible for the execution ofthe project.

"38. The Governing Council shall take final decisionon the projects and programmes recommended by theManaging Director and authorize him to concludethe appropriate agreements.Execution of projects

"39. Projects shall be executed, whenever possible,by the United Nations, by the specialized agenciesconcerned, or by the International Atomic EnergyAgency, it being understood that the ManagingDirector shall also be authorized to contract for theservices of other agencies, private firms or individualexperts in the cases mentioned in paragraph 34 above.

"40. Arrangements for the execution of projectsshall be subject to the approval of the requestingGovernment or Governments, and shall be specifiedin an agreement with these Governments. Sucharrangements shall contain provisions regarding thecost, including any local costs, which the requestingGovernment will assume and those facilities and ser-vices which it will provide.

"41. Where requests for assistance fall within thesphere of two or more organizations, arrangementsshall be made for joint execution by the organizationconcerned and for proper co-ordination.

"42. The Managing Director shall make appropriatearrangements to follow the execution of projects.

"43. The Managing Director shall report to theGoverning Council on the status of projects and thefinancial position of the projects and programmes.

"44. The Managing Director and the GoverningCouncil shall take appropriate measures to ensure anobjective evaluation of the results of projects andprogrammes.

VI. Finances"45. The financial resources of the Special Fund

shall be derived from voluntary contributions byGovernments of States Members of the United Nationsor members of the specialized agencies or of the Inter-national Atomic Energy Agency. The Fund is alsoauthorized to receive donations from non-governmentalsources. It is recommended that contributions byGovernments should be paid as early in each year aspossible. Furthermore, while contributions will norm-ally be on an annual basis, it is recommended, in viewof the expected longer term of many of the Fund'sprojects, that contributions be pledged or indicated,whenever possible, for a number of years.

"46. The Secretary-General is requested to conveneannually a pledging conference at which Governmentswould announce their contributions to the ExpandedProgramme of Technical Assistance and to the SpecialFund respectively. If a Government pledges an initiallump sum, it should, within a reasonably short period,indicate the division of its contribution between thetwo programmes.

"47. Contributions shall be made by Governments


in currency readily usable by the Special Fund con-sistent with the need for efficiency and economy of theFund's operations, or shall be transferable to thegreatest possible extent into currency readily usableby the Fund. To this end, Governments are urgedto make available as large a percentage as they mayfind possible of their contributions in such currencyor currencies as the Managing Director may indicateare required for the execution of the Fund's pro-gramme. The Managing Director should, consistentwith the criteria set forth respecting the nature andutilization of contributions, endeavour to make thefullest possible use of available currencies.

"48. The Managing Director shall, at the end ofthe first year of the operations of the Special Fundand subsequently as he deems necessary, report to theGoverning Council for its consideration on the extentto which restrictions which may have been maintainedon contributions have affected the flexibility, efficiencyand economy of the Fund's operations. The Govern-ing Council shall also consider what action may benecessary with respect to currency found not readilyusable in order to facilitate the Fund's operations.Any action in this respect shall be subject to reviewby the Economic and Social Council and the GeneralAssembly.

"49. Contributions shall be made without limitationas to use by a specific agency or in a specific recipientcountry or for a specific project.

"50. To the end that the multilateral character ofthe Special Fund shall be strictly respected, no con-tributing country should receive special treatment withrespect to its contribution nor should negotiations forthe use of currencies take place between contributingand receiving countries.

"51. Since programmes shall be developed on aproject basis, there should be no a priori allocationof funds on a country basis or among basic fields ofassistance.

"52. Recipient Governments shall be expected tofinance part of the costs of projects, at least that partpayable in local currency. This general rule may,however, be waived in the case of countries deemedfinancially unable to make even a local currencypayment.

"53. The Special Fund shall be governed byfinancial regulations consistent with the financialregulations and policies of the United Nations. Thefinancial regulations for the Fund shall be draftedby the Secretary-General of the United Nations, inconsultation with the Managing Director, for approvalby the Governing Council, after review by the AdvisoryCommittee for Administrative and Budgetary Ques-tions. In the preparation of these regulations, accountshall be taken of the special requirements of theFund's operations; in particular, appropriate provisionshall be made to permit the approval of projects ofmore than one year's duration and for an exchangeof currencies between the Fund and the SpecialAccount for the Expanded Programme of TechnicalAssistance. Provision should also exist under whichthe Managing Director is authorized in consultationwith the Governing Council to establish appropriate

financial rules and procedures."54. The administrative budget prepared by the

Managing Director with the assistance of theSecretary-General of the United Nations shall be sub-mitted for approval to the Governing Council withthe comments, if any, of the Advisory Committee onAdministrative and Budgetary Questions. It shall besubmitted to the General Assembly at the same timeas the annual report of the Governing Council withthe comments of the Advisory Committee on Ad-ministrative and Budgetary Questions.

"55. The Special Fund shall be authorized to buildup gradually a reserve fund by earmarking a specificpercentage of the total contributions of each yearup to an amount to be determined by the GoverningCouncil on the recommendation of the ManagingDirector.

"56. The Governing Council shall be authorizedto consider allocating part of the resources of theSpecial Fund for assistance on a refundable basis atthe request of Governments for projects within theterms of reference of the Fund.

Part C"Reaffirms the conditions set forth in section III

of General Assembly resolution 1219(XII) underwhich the Assembly shall review the scope and futureactivities of the Special Fund and take such actionas it may deem appropriate."

GOVERNING COUNCIL OF SPECIAL FUNDECONOMIC AND SOCIAL COUNCIL—RESUMED 26TH

SESSION

Plenary Meeting 1045.

APPOINTMENT OF MANAGING DIRECTORGENERAL ASSEMBLY—13TH SESSIONPlenary Meeting 782.

A/4024. Establishment of Special Fund. Confirmationof appointment of Managing Director. Note bySecretary-General.

PLEDGES FOR SPECIAL FUND1958 Pledging Conference on Expanded Programme

of Technical Assistance and Special Fund, meetings1, 2.

A/CONF. 16/1. Statement of contributions pledgedfor 1959 to Expanded Programme of TechnicalAssistance and to Special Fund. Memorandum bySecretary-General.

PROPOSAL FOR CAPITALDEVELOPMENT FUNDGENERAL ASSEMBLY—13TH SESSIONPlenary Meeting 788.Second Committee, meetings 564—567.

A/C.2/L.386 and Add.1, 2. Afghanistan, Burma,Ceylon, Chile, Ethiopia, Ghana, Greece, India,Indonesia, Iraq, Lebanon, Morocco, Netherlands,Tunisia, United Arab Republic, Yugoslavia draftresolution, as amended by Brazil and Mexico,


A/C.2/L.400, adopted by Second Committee on28 November 1958, meeting 567, by roll-call voteof 58 to 0, with 18 abstentions as follows:In favour: Afghanistan, Albania, Argentina, Austria,Bolivia, Brazil, Bulgaria, Burma, Byelorussian SSR,Cambodia, Ceylon, Chile, China, Colombia, CostaRica, Cuba, Czechoslovakia, Dominican Republic,Ethiopia, Federation of Malaya, Ghana, Greece,Guatemala, Honduras, Hungary, India, Indonesia,Iran, Iraq, Ireland, Israel, Japan, Jordan, Laos,Lebanon, Liberia, Libya, Mexico, Morocco, Nepal,Netherlands, Pakistan, Panama, Paraguay, Peru,Philippines, Poland, Romania, Saudi Arabia, Sudan,Tunisia, Ukrainian SSR, USSR, United ArabRepublic, Uruguay, Venezuela, Yemen, Yugoslavia.Against: None.Abstaining: Australia, Belgium, Canada, Denmark,Finland, France, Iceland, Italy, New Zealand, Nor-way, Portugal, Spain, Sweden, Thailand, Turkey,Union of South Africa, United Kingdom, UnitedStates.

A/C.2/L.398. United Kingdom amendment to 16-power draft resolution, A/C.2/L.386 and Add.1, 2.

A/C.2/L.400. Brazil, Mexico amendment to 16-powerdraft resolution, A/C.2/L.386 and Add.l, 2.

A/4054 and Add.l. Report of Second Committee,draft resolution II.

RESOLUTION 1317(XIII), as recommended by SecondCommittee, A/4054, adopted by Assembly on 12December 1958, meeting 788, by roll-call vote of67 to 0, with 14 abstentions, as follows:In favour: Afghanistan, Albania, Argentina, Austria,Bolivia, Brazil, Bulgaria, Burma, Byelorussian SSR,Cambodia, Ceylon, Chile, China, Colombia, CostaRica, Cuba, Czechoslovakia, Denmark, DominicanRepublic, Ecuador, El Salvador, Ethiopia, Federa-tion of Malaya, Ghana, Greece, Guatemala, Haiti,Honduras, Hungary, Iceland, India, Indonesia,Iran, Iraq, Ireland, Israel, Italy, Japan, Jordan,Laos, Lebanon, Liberia, Libya, Mexico, Morocco,Nepal, Netherlands, Nicaragua, Norway, Pakistan,Panama, Paraguay, Peru, Philippines, Poland,Romania, Saudi Arabia, Sudan, Thailand, Tunisia,Ukrainian SSR, USSR, United Arab Republic,Uruguay, Venezuela, Yemen, Yugoslavia.

Against: None.Abstaining: Australia, Belgium, Canada, Finland,France, Luxembourg, New Zealand, Portugal,Spain, Sweden, Turkey, Union of South Africa,United Kingdom, United States.

"The General Assembly,"Bearing in mind the obligations assumed by the

Governments of Member States under Articles 55 and56 of the Charter of the United Nations,

"Recalling previous resolutions of the GeneralAssembly and of the Economic and Social Councilon the establishment of a United Nations Fund forfinancing the economic development of the lessdeveloped countries,

"Noting with satisfaction the establishment of theSpecial Fund,

"Noting however that the Preparatory Committeefor the Special Fund expressed the hope that for theyear 1959 an amount of at least $100 million wouldbe available for the operations envisaged in GeneralAssembly resolution 1219 (XII) of 14 December 1957,

"Taking into account bilateral, regional and multi-lateral efforts to advance international co-operation inthe field of financial assistance for the economicdevelopment of the less developed countries,

"Recognizing that financing the economic develop-ment of the less developed countries is one of themain world economic problems,

"Conscious of the urgent need to furnish financialassistance for the economic development of the lessdeveloped countries,

"1. Calls upon Member States to consider ap-propriate contributions to the Special Fund in order toachieve the volume of resources envisaged by GeneralAssembly resolution 1219(XII) ;

"2. Urges Member States to continue working forthe establishment of a United Nations capital develop-ment fund;

"3. Decides to continue to review, as a separatesubject of its agenda, progress in the field of financingthe economic development of the less developedcountries, particularly progress towards the establish-ment of a United Nations capital development fund."

INTERNATIONAL FLOW OF PRIVATE CAPITAL

The role of foreign private capital in financingthe economic development of under-developedcountries was again taken up by the Economicand Social Council at its twenty-sixth sessionin mid-1958. Before the Council was a reportentitled The International Flow of PrivateCapital, 1957, prepared by the Secretary-Generalas requested by General Assembly resolution1035(XI) of 26 February 1957.

During 1957, the report indicated, the flowof international private long-term capital wasapparently higher than in 1956, already a record

year in the post-war period. The peak appearedto have been reached around the middle of1957. In the second half of the year gross capi-tal exports declined, though still high com-pared with the years before 1956.

The United States continued to be the prin-cipal provider of private long-term investmentcapital, furnishing about two thirds of the total.The United Kingdom ranked second with onesixth. Other important suppliers were Belgium,Luxembourg, the Federal Republic of Germanyand the Netherlands. The gross outflow from

ECONOMIC DEVELOPMENT OF UNDER-DEVELOPED COUNTRIES 143both Canada and Switzerland declined fairlysharply as compared with 1956. The under-developed countries appeared to have increasedtheir share of the world's gross private capitalimports in 1957. Substantial increases tookplace in Latin America, notably in Venezuela,Brazil and Mexico. In the developed countries,outstanding increases in gross inflow took placein the case of the Federal Republic of Germany,France and the Netherlands. Canada continuedto be the world's largest importer of privatelong term capital, despite a decline in 1957.

During 1957, the report added, portfolio in-vestment remained much less important thandirect investment, which continued to providethe bulk of the outflow. The petroleum industrywas, in 1957 as in earlier years, the chief areaof foreign private investment, although invest-ment tapered off in the second half of the year.The bulk of direct investment in manufacturingwent to developed and semi-developed coun-tries, but there were indications that such in-vestment had increased in the under-developedcountries, notably of Latin America.

An important development in 1957 was aconsiderable increase in imports into under-developed countries of capital equipment boughtwithout current foreign exchange. The sup-pliers of such equipment received in paymenteither equities in the enterprise which was toown and operate the new machinery or hadto provide medium-term credits for a periodusually of five years. Several countries in LatinAmerica, among them Brazil, and in Asia,among them India, obtained considerable newinvestments in this way.

Increasing attention was given by bothcapital-exporting and capital-importing coun-tries to the need for practical measures to pro-mote the international flow of private long-termcapital. In the principal capital-exporting coun-tries, outflow was stimulated by governmentmeasures on the provision of investment guaran-tees, export credits and special loans, and onthe relaxation of exchange control and taxationon foreign income.

Many under-developed countries took meas-ures—mainly in exchange control and incentivelegislation—which had the effect of improvingthe investment climate of their countries. Suchmeasures dealt to an increasing degree with the

development of manufacturing industries andto a lesser extent with the petroleum, miningand public utilities industries.

During the debate in the Economic and So-cial Council, the representatives of China, Pa-kistan, the United Kingdom, the United Statesand others expressed satisfaction that the in-ternational flow of private capital had morethan maintained itself in 1957.

Differing opinions were expressed on the roleof private capital in financing a faster rate ofeconomic development compared with that ofinternational aid. Most members, among themGreece, Indonesia, Pakistan and Yugoslavia,noted that a large proportion of foreign capitalwas invested in extractive industries, especiallythe petroleum industry, while investment inmanufacturing, which was of particular im-portance to the less advanced economies, wasmade for the most part in industrialized coun-tries. It was also noted that little private capitalhad gone to South and South-East Asia.

Spokesmen for China, the Federation ofMalaya, Greece, Indonesia and Pakistan hopedthat, in the years to come, the internationalflow of private capital would continue to swell.In that connexion, the United States represen-tative found it encouraging that both capital-ex-porting and capital-importing countries hadbecome increasingly conscious of the need toimprove the investment climate and thus wereenacting domestic legislation or concluding bi-lateral treaties to that effect.

As to the predominance of direct investmentsover portfolio investment, the USSR representa-tive held that direct investments led to an in-creased production of raw materials for thebenefit of the investing countries and mightmake under-developed countries more depend-ent on industrialized ones, and even subjectthem to a net outflow of capital. The Nether-lands and the United Kingdom representatives,however, found direct investment to be of bene-fit to both under-developed and developedcountries; furthermore, it was often accom-panied by much-needed technical knowledge.Generally speaking, foreign investment was con-sidered to be of significant importance in thefinancing of economic development. The UnitedStates representative hoped that in 1959 theSecretary-General would be able to report on


itshow such investment was made up andimpact on the capital-receiving countries.

The international flow of private capital wasfurther discussed at the General Assembly'sthirteenth session in 1958 during the debateon the economic development of under-devel-oped countries. The matter was referred to theAssembly's Second (Economic and Financial)Committee.

The Committee had before it two draft reso-lutions. One was submitted by Argentina, Aus-tralia, Canada, Denmark, the Federation ofMalaya, Japan, Laos, Liberia, Nepal, New Zea-land, Pakistan, Peru, Philippines, Sudan andThailand, who were subsequently joined byBolivia, Colombia, Ireland and Lebanon. Thesecond text was proposed by the ByelorussianSSR.

By the 19-power draft resolution, the Gen-eral Assembly would, among other things, re-affirm the need for a higher level of capital for-mation for the economic and social progress ofthe under-developed countries; it would alsoexpress confidence that growing bilateral andmultilateral capital investment arrangementspromoted an expanding flow of private capitalfor investment beneficial to under-developedcountries.

The Assembly would also ask the Secretary-General to obtain the views of leading con-sultants, drawn from both capital-exporting andcapital-importing countries, on (a) the fields ofactivity in which foreign private investment wasneeded and sought by under-developed countriesand the volume and forms in which such invest-ment would be welcome, and (6) the typesof projects which might be of interest to privateforeign investors. He would be asked to reporton measures, either in operation or contem-plated, for the channelling of an increasingflow of private capital investment into under-developed countries, and to make a report to thetwenty-ninth session of the Economic and So-cial Council in 1960, so that the Council couldpass it on, with its recommendations, to theAssembly's fifteenth (1960) session.

Three amendments were proposed—one bythe Ukrainian SSR, which wanted the draftresolution to state clearly "the premise thatforeign capital can be used in under-developed

countries without the imposition of any po-litical, economic or military conditions". Thesponsors declared that such a premise was im-plicit in the resolution and did not accept theamendment, which was ultimately rejected bythe Committee by 34 votes to 18, with 13abstentions.

The two other amendments, proposed respec-tively by Bolivia and France, were intended tochange the original joint draft resolution, butwere not pressed to the vote, following a revi-sion by the sponsors of the draft resolution inthe light of the suggestions offered.

On 29 November 1958 the Second Com-mittee adopted the 19-power draft resolution,as revised, by a roll-call vote of 53 to 9, with3 abstentions.

By the draft resolution proposed by theByelorussian SSR, the General Assembly would,among other things, ask the Secretary-Gen-eral to organize a study of the agreementsgoverning the activities of private foreign com-panies in the under-developed countries. Thisstudy would ascertain the possibilities of in-creasing royalty and other payments by com-panies to countries whose natural resources werebeing exploited and also the possibilities ofallocating a certain percentage of the exportedprofits of those companies for the financing ofthe economic development of under-developedcountries through the United Nations.

After a discussion, during which severalchanges to his draft resolution were suggested,the Byelorussian SSR representative agreed notto press his proposal to the vote, on the under-standing by the Committee that the Secretary-General, in preparing the report called for inthe 19-power draft resolution, would take intoconsideration the discussion in the Committeeon his draft resolution.

At a plenary meeting on 12 December 1958,the General Assembly approved the resolutionadopted by the Second Committee, by a voteof 69 to 8, with 4 abstentions, as resolution 1318(XIII). The representatives of Czechoslovakiaand the USSR explained that they could notsupport the resolution because its sponsors hadnot seen fit to accept the amendment of theUkrainian SSR.

ECONOMIC DEVELOPMENT OF UNDER-DEVELOPED COUNTRIES 145DOCUMENTARY REFERENCES


Plenary Meetings 1037-1039.Economic Committee, meetings 254-255.

E/3128 and Corr.1. International Flow of PrivateCapital, 1957. Report by Secretary-General.


Plenary Meeting 788.Second Committee, meetings 552-568, 570, 573.

A/3848, Report of Economic and Social Council toGeneral Assembly, Chapters II, III, IV, V.

A/C.2/L.390 and Add.1-3. Argentina, Australia,Bolivia, Canada, Colombia, Denmark, Federationof Malaya, Ireland, Japan, Laos, Lebanon, Liberia,Nepal, New Zealand, Pakistan, Peru, Philippines,Sudan, Thailand draft resolution, as amended bysponsors, adopted by Second Committee on 29November 1958, meeting 568, by roll-call vote of53 to 9, with 3 abstentions as follows:In favour: Argentina, Australia, Austria, Belgium,Bolivia, Brazil, Burma, Cambodia, Canada, Ceylon,Chile, China, Costa Rica, Cuba, Dominican Re-public, Ethiopia, Federation of Malaya, Finland,France, Ghana, Guatemala, Honduras, India, In-donesia, Iran, Ireland, Israel, Italy, Japan, Lebanon,Libya, Morocco, Nepal, Netherlands, New Zealand,Norway, Pakistan, Panama, Paraguay, Peru, Philip-pines, Portugal, Saudi Arabia, Spain, Sweden,Thailand, Tunisia, Turkey, Union of South Africa,United Arab Republic, United Kingdom, UnitedStates, Uruguay.Against: Albania, Bulgaria, Byelorussian SSR,Czechoslovakia, Hungary, Poland, Romania, Ukrain-ian SSR, USSR.Abstaining: Afghanistan, Mexico, Yugoslavia.The representative of Denmark asked that her votebe recorded in favour of the draft resolution.

A/C.2/L.401. Ukrainian SSR amendment.A/C.2/L.403. France amendment.A/4054 and Add.1. Report of Second Committee,

draft resolution III.RESOLUTION 1318(XIII), as recommended by Second

Committee, A/4054, adopted by Assembly on 12December 1958, meeting 788, by roll-call vote of69 to 8, with 4 abstentions as follows:In favour: Argentina, Australia, Austria, Belgium,Bolivia, Brazil, Burma, Cambodia, Canada, Ceylon,Chile, China, Colombia, Costa Rica, Cuba, Den-mark, Dominican Republic, Ecuador, El Salvador,Ethiopia, Federation of Malaya, Finland, France,Ghana, Greece, Guatemala, Haiti, Honduras, Ice-land, India, Indonesia, Iran, Iraq, Ireland, Israel,Italy, Japan, Jordan, Laos, Lebanon, Liberia, Libya,Luxembourg, Morocco, Nepal, Netherlands, NewZealand, Nicaragua, Norway, Pakistan, Panama,Paraguay, Peru, Philippines, Portugal, Saudi Arabia,Spain, Sudan, Sweden, Thailand, Tunisia, Turkey,Union of South Africa, United Arab Republic,United Kingdom, United States, Uruguay, Vene-

zuela, Yemen.Against: Albania, Bulgaria, Czechoslovakia, Hun-gary, Poland, Romania, Ukrainian SSR, USSR.Abstaining: Afghanistan, Byelorussian SSR, Mexico,Yugoslavia.

"The General Assembly,"Reaffirming the need for a higher level of capital

formation for the economic and social progress ofthe under-developed countries,

"Taking note of the expanding bilateral and multi-lateral arrangements in the field of capital investment,particularly the establishment of the InternationalFinance Corporation and the prospective increase inthe resources of the International Bank for Recon-struction and Development,

"Confident that such arrangements contribute toa general improvement in the conditions necessaryfor an expanding flow of private capital for invest-ment beneficial to under-developed countries,

"Taking into account its resolution 824(IX) of 11December 1954 on the international flow of privatecapital for the economic development of under-developed countries, and section B of Economic andSocial Council resolution 368(XIII) of 22 August1951 concerning the objective of achieving an ex-pansion and steadier flow of private foreign capital,

"Welcoming the fact that a growing number ofcountries have become increasingly conscious of theneed to improve the international climate in relationto both existing and prospective private investment,

"Stressing the need for increased knowledge andbetter understanding of the conditions of and oppor-tunities for international investment,

"1. Requests the Secretary-General to consult asappropriate and obtain the views of qualified persons,drawn from both capital-exporting and capital-importing countries, regarding:

"(a) The fields of activity in which foreign privateinvestment is needed and sought by under-developedcountries and the volume and forms in which suchinvestment would be acceptable;

"(b) The types of projects—including, wherepossible, specific examples—which private foreign in-vestors may be interested in financing or undertakingin under-developed countries in suitable circumstances ;

"2. Further requests the Secretary-General, draw-ing on the views of the qualified persons concernedand taking into account other available information,to prepare a report concerning measures in operationor contemplated, both in capital-exporting and capital-importing countries, for the channelling of an increas-ing flow of private capital investment into the de-velopment of under-developed countries under mutu-ally satisfactory arrangements;

"3. Invites the Secretary-General to submit hisreport to the Economic and Social Council at itstwenty-ninth session for transmission, with theCouncil's recommendations, to the General Assemblyfor consideration at its fifteenth session."

A/C.4/L.392. Byelorussian SSR draft resolution.


INTERNATIONAL TAX PROBLEMS

Along with other means to stimulate the inter-national flow of private investment to under-developed countries, both the Economic andSocial Council and the General Assembly in1958 considered the question of the tax treat-ment of private foreign investment.

At the Council's twenty-sixth session, inJuly 1958, the subject was touched upon inconnexion with a Secretariat memorandumentitled Taxation in Capital-Exporting andCapital-Importing Countries of Foreign PrivateInvestments, one of a series prepared at therequest of the General Assembly.

The memorandum, which reviewed recenttax measures to encourage foreign businessactivities on the part of advanced countries andalso tax concessions granted in under-developedcountries to attract investments, stated that con-tinuous efforts were being made in both capital-supplying countries and capital-receiving coun-tries to facilitate the flow of capital throughrevisions of their tax regulations and tech-niques.

Among other developments, the memorandumreferred to measures taken by the United King-dom, a tax agreement signed by the UnitedStates and Pakistan, and further progress inthe avoidance of double taxation by the con-clusion of a number of other bilateral agree-ments and by the enactment of unilateral reliefprovisions in domestic legislation, including theadoption of a system of credits for foreign taxesby the Federal Republic of Germany. An in-creasing number of capital-importing countrieswere offering tax concessions to private foreigninvestors, the study also reported.

Accompanying the memorandum to the Coun-cil was a study on United Kingdom taxationof income from foreign private investments anda list of legislative material on tax incentives

for private investment in capital-importingcountries.

During the Council's debate, the representa-tives of Brazil, Mexico and Pakistan welcomedthe efforts being made with regard to tax reliefand incentive measures. They were joined bythe spokesmen of Canada and France in stress-ing the usefulness of the Secretariat's studiesin this field.

The Council did not take formal action onthe subject, but included a statement in itsreport to the General Assembly noting thatfurther country studies were in preparation bythe Secretariat and that a triennial report onthe international flow of private capital, to besubmitted to the Council at its twenty-eighthsession, in 1959, would include information onrelevant fiscal developments. This work, theCouncil felt, would help to carry out the wishesof the General Assembly on the subject.

The question of international tax problemswas briefly discussed by the General Assembly'sSecond (Economic and Financial) Committeeon 15 October 1958.

The representative of Ceylon praised thecountries which had taken effective action toavoid double taxation, including the UnitedStates, the Federal Republic of Germany andthe United Kingdom. It would take severalyears for the results of such relief measuresto be evaluated in terms of their effect on in-ternational investments, he said.

On the Chairman's suggestion, the Commit-tee decided on 15 October 1958, without a for-mal vote, to postpone detailed considerationof the taxation question to the General As-sembly's fourteenth session, in 1959, by whichtime the Secretariat's triennial report and fur-ther tax studies would be available.



Plenary Meeting, 1043.Economic Committee, meeting 255.

E/3074 and Add.1, Add. 1/Corr.1, 2, and Add.2.Taxation in capital-exporting and capital-importingcountries of foreign private investments. Memo-randum by Secretary-General.


Second Committee, meeting 529.

A/3848. Report of Economic and Social Council toGeneral Assembly, Chapter III, Section II.

A/4054. Report of Second Committee.


REPORTS OF INTERNATIONAL BANK ANDINTERNATIONAL FINANCE CORPORATION

147

At its twenty-fifth session, the Economic andSocial Council considered jointly the twelfthannual report of the International Bank forReconstruction and Development and the firstannual report of the International Finance Cor-poration, which is affiliated with the Bank.These reports were for the fiscal period 1956-1957, and supplementary reports were submittedto bring the data for the two agencies up todate to 31 January 1958 and 28 February 1958,respectively.

Introducing the reports in the Council on17 April 1958, Eugene R. Black, President ofthe Bank, stressed that the Bank's lending ac-tivities reached a new peak during the periodunder review when signs of a slow-down ineconomic activity were causing concern. By theend of June 1958, the Bank expected to havelent well over $650 million. Two-thirds of theBank's loans had been granted for steppingup production and developing new resourcesthrough increasing the supply of electric powerand through improving transport. Most loanswere for electric power. These developmentswere also of great importance to agriculture,although direct loans for agriculture continuedto be small—about $25 million in the currentyear. The Bank's aid to industry was substan-tial, amounting to about $95 million a year.

The International Bank, Mr. Black also noted,was more than a financing institution. Thus,it had co-operated with the Italian Govern-ment in a study looking towards the establish-ment of a nuclear power station; it had con-tinued efforts to bring about agreement be-tween India and Pakistan on sharing the watersof the Indus system of rivers; and it had exer-cised good offices in connexion with compensa-tion for the shareholders of the Suez CanalCompany.

The Bank, he added, hoped to co-operateclosely with the United Nations Special Fund.Mr. Black also thought it would be most un-fortunate if preoccupation with domestic eco-nomic problems prevented the developed coun-tries from providing the assistance and invest-ments needed by a large area of the world andif countries still in process of development

failed to realize that their welfare dependedon their own efforts.

As to the International Finance Corporation(IFC), which had been established on 24 July1956, Mr. Black pointed out that it had madesix commitments during the previous 10 monthsin a variety of enterprises. He emphasized thatthe IFC investment pattern was flexible andthe pace of its operations could be expectedto accelerate materially.

During the Council's subsequent debate, theUnited States representative praised the Bank'sassociation with private financial institutions,aimed at encouraging private investment, andthe technical assistance provided by the Bank'sEconomic Development Institute.

Costa Rica, Mexico, Yugoslavia and othersemphasized that a further increase in the num-ber of loans by the Bank was especially im-portant during periods of recession.

While praising certain activities of the Bank,the representative of Poland said that the Bankand the International Monetary Fund hadfailed to fulfil expectations. Some of their poli-cies, identified with certain "cold war" posi-tions, were unacceptable to some States; thus,Poland had withdrawn its membership eightyears previously. However, Poland was preparedto contribute to the future work of these agen-cies if they moved towards the reintegration ofthe world economy.

Many delegations also considered that theresults achieved by IFC during its first year ofoperations were encouraging.

Chile, France, Indonesia, the Netherlands,Pakistan and Sudan suggested that IFC widenits activities and at the same time makethe conditions for the granting of loans moreflexible.

In reply to points raised in the debate, thePresident of the Bank stated that there was nogreat demand for assistance from the Bank foragricultural and forestry development. He gaveassurances that the Bank was aware of thegreat opportunities for productive investmentin Africa and Latin America and that thevolume of loans to both regions would un-doubtedly continue to grow. The Bank had


recently reduced its interest charges, but thesewere dependent on the rate it had to pay on itsown borrowings. IFC, he agreed, should notconcentrate its activities too much in any one re-gion, and its regulations should remain flexible.

On 17 April 1958, the Council adopted,without a vote, a resolution (669 (XXV))taking note of the reports of the two agencies.(For further details about activities of the Bankand IFC, see PART TWO, CHAPTERS VI and VII.)



Plenary Meetings 1002, 1003.

E/3059 and Add.1. Note by Secretary-General trans-mitting to Council annual report of InternationalBank for Reconstruction and Development forfiscal year ended 30 June 1957, and summary ofdevelopments in Bank from 1 July 1957 to 31January 1958.

E/3061 and Add.l. Note by Secretary-General trans-mitting to Council first annual report of Interna-tional Finance Corporation, 1956-1957, and sum-mary of developments in Corporation from 11September 1957 to 28 February 1958.

RESOLUTION 669(XXV), taking note of report of Bankand IFC, as proposed by President of Council,adopted by Council on 17 April 1958, meeting1003.

COLLECTION OF INFORMATION ON ECONOMIC AIDFOR LESS DEVELOPED COUNTRIES

In July 1957 the Economic and Social Council,by resolution 662 A (XXIV) asked the Sec-retary-General to report periodically on theextent of bilateral and multilateral economicassistance to the less developed countries. Gov-ernments and international organizations wereurged to co-operate with the Secretary Gen-eral in the provision of appropriate informa-tion.

The first annual report under this resolutionwas submitted to the Council in July 1958. Itshowed that annual assistance in the form ofgrants and loans had risen from a rate of justover $2,000 million per annum, during theperiod 1954-1956, to $2,800 million in the period1956-1957. The most important increases hadoccurred in the contributions of France, theUnited States and the USSR. While aid inthe form of grants still predominated, the pro-portion provided in the form of long-term loanswas expanding. Greater emphasis was also

being given to assistance for specific develop-ment projects.

The report showed that there were 20 coun-tries, with a total population of 740 million,where the average annual income per personwas less than $100; these countries had re-ceived international economic assistance aver-aging $1.40 per person.

There were 18 countries, with a total popula-tion of just over 200 million, with average an-nual income per person between $100 and$200, and these had received international eco-nomic assistance averaging $2.30 per person.

Eleven countries with a total population of1,005 million had average annual incomes ofover $200 per person and had received interna-tional economic assistance amounting on theaverage to $1.50 per person.

The Economic and Social Council took nodecision on the report.

ECONOMIC AND SOCIAL COUNCIL—

Plenary Meetings 1037, 1038.Economic Committee, meeting 255.


26TH SESSION E/3131 and Corr.1, 2 and Add.l. Internationaleconomic assistance to under-developed countries1956/1957. Report by Secretary-General.

INTERNATIONAL CO-OPERATION FOR ECONOMIC DEVELOPMENT

International co-operation for the economic de-velopment of under-developed countries wasdiscussed in 1958 at the General Assembly'sthirteenth session.

A draft resolution on the subject was in-troduced in the Assembly's Second (Economicand Financial) Committee by Argentina, theFederation of Malaya, Haiti, Italy, Sudan, the


United States and Uruguay, later joined byCuba, Iran, Japan, Laos, Norway and Pakistan.

By the proposal as revised and amended inthe light of comments by Morocco, the UnitedArab Republic and others, the Assembly would :(1) call upon United Nations Member Statesto undertake a review of accomplishments todate and "to chart anew their future coursesof co-operative action" relating to both thepublic and private sectors of their economiesso as to give further impetus to the economicdevelopment of the less developed countries;and (2) invite Member States to explore fur-ther the possibility of enlisting the aid of theiruniversities and scientific institutions so as tohasten, in co-operation with similar institutionsin other Member States, the solution of scien-tific and technological problems of particularconcern to the less developed countries.

Member States in a position to assist wereinvited to inform the Economic and SocialCouncil and the General Assembly in 1959 ofmeasures which they had taken or might con-template taking in regard to these two courses.Less developed countries were similarly invitedto inform the Economic and Social Counciland the Assembly of any measures which theymight decide to take in order to advance theireconomic and social progress. The Secretary-General was requested to submit an interimreport on the information received to the Eco-nomic and Social Council's mid-1959 sessionand a final report to the General Assemblylater in 1959; he was also to include a reviewof the financing of economic development.

The draft resolution asked, too, that theCouncil give special consideration to the de-velopment needs of the less developed coun-tries in the course of its examination in mid-1959 of a report giving a five-year appraisalof the scope, trend and cost of the economicand social programmes of the United Nations,the International Labour Organisation, theFood and Agriculture Organization, the UnitedNations Educational, Scientific and CulturalOrganization, the World Health Organizationand the World Meteorological Organization.The Council was also to give special considera-tion to ways in which such programmes couldbe more effectively organized to help meetdevelopment needs.

The original 13-power proposal was intro-duced by the United States representative, whosaid it called in effect for a global stocktakingduring 1959 of measures taken or contemplatedby Governments to give further impetus toeconomic development. This inventory, hestated, would differ from the information thatMember States were asked to submit underprevious resolutions of the Assembly in that itwas intended to determine whether new coursesof action were desirable.

While most speakers in the debate agreedwith the intent of the original version of the13-power proposal, several (including the re-presentatives of the Ukrainian SSR and theUSSR) thought it was vague.

Misgivings were also voiced about the requestin the original version that Member States"chart anew" their courses of co-operative ac-tion lest this be taken to imply that existingplans be jettisoned.

The United Arab Republic submitted amend-ments to the original version which were in-tended to place more emphasis on financial aidfor the development of under-developed coun-tries. These were withdrawn when the 13-powerproposal was revised to provide for a reviewof the financing of economic development tobe included in the reports to be submitted tothe Economic and Social Council and GeneralAssembly.

Further, whereas the original 13-power draftproposed that less developed countries be in-vited to supply information on "any additionalmeasures" they might decide on or might "con-template taking" for their economic and socialprogress, Morocco proposed that they be invitedto provide information simply on "any meas-ures" they might decide on for their economicand social progress. Morocco argued that itwas difficult to report on contemplated meas-ures. The Moroccan amendments were even-tually accepted.

On 27 November 1958, the Second Commit-tee approved the amended resolution as a wholeby 55 votes to 0, with 11 abstentions, aftervoting separately on individual paragraphs. On12 December it was approved at a plenarymeeting as resolution 1316 (XIII) by 68 votesto 0, with 8 abstentions. (For full text, seeDOCUMENTARY REFERENCES below.)




Plenary Meeting 788.Second Committee, meetings 559, 561, 563.

A/3848, Report of Economic and Social Council toGeneral Assembly, Chapters II, III, IV, V.

A/C.2/L.378 and Add.1, 2, Rev.1 and Rev.1/Corr.1.Argentina, Cuba, Federation of Malaya, Haiti,Iran, Italy, Japan, Laos, Norway, Pakistan, Sudan,United States, Uruguay draft resolution and revi-sions as amended, adopted by Second Committeeon 27 November 1958, meeting 566, by 55 votesto 0, with 11 abstentions.

A/C.2/L.396. United Arab Republic amendment to13-power draft resolution, A/C.2/L.378.

A/C.2/L.399. Morocco amendment to 13-power re-vised draft resolution A/C.2/L.378/Rev.1.

A/4054 and Add.l. Report of Economic Committee,draft resolution I.

RESOLUTION 1316(XIII) as recommended by SecondCommittee, A/4054, adopted by Assembly on 12December 1958, meeting 788, by 68 votes to 0,with 8 abstentions.

"The General Assembly,"Recalling the pledge of all Member States, con-

tained in Article 56 of the Charter of the UnitedNations, to take joint and separate action in co-operation with the United Nations for the achieve-ment, inter alia, of higher standards of living andconditions of economic and social progress and de-velopment,

"Recognizing that significant efforts have been madeby both the less developed and the more developedcountries to achieve these ends,

"Considering however the continuing need forgreater efforts to accelerate the economic develop-ment of the less developed countries,

"Noting with satisfaction the initiatives which havebeen taken looking towards an increase in the capitalof the International Bank for Reconstruction andDevelopment and the quotas of the InternationalMonetary Fund, and the increasing attention beinggiven by these agencies to the less developed coun-tries,

"1. Calls upon Member States to undertake a re-view of accomplishments to date and, in the lightof this review, to chart their future courses of co-operative action relating to both the public andprivate sectors for the purpose of giving furtherimpetus to the economic development of the lessdeveloped countries;

"2. Invites Member States, having in mind Gen-eral Assembly resolution 1260(XIII) of 14 Novem-ber 1958, to explore further the possibility of en-listing the aid of their universities and scientificinstitutions for the purpose of accelerating, in co-operation with similar institutions in other MemberStates, the solution of scientific and technologicalproblems of particular concern to the less developedcountries ;

"3. Invites Member States in a position to assistthe economic development of under-developed coun-tries to inform the Economic and Social Councilat its twenty-eighth session and the General Assemblyat its fourteenth session, through the Secretary-General, of measures which they have taken or maycontemplate taking in accordance with paragraphs1 and 2 above, such information to be additionalto the information which they are now called uponto submit, in accordance with General Assemblyresolutions 824(IX) of 11 December 1954 and 1034(XI) of 26 February 1957, concerning what they arenow doing in this field;

"4. Invites the less developed countries similarlyto inform the Economic and Social Council and theGeneral Assembly of any measures which they maydecide to take in order to advance their economicand social progress;

"5. Requests the Secretary-General to compile theinformation received pursuant to the above para-graphs in the form of an interim report for submis-sion to the Economic and Social Council at itstwenty-eighth session and a final report to the Gen-eral Assembly at its fourteenth session for considera-tion under the item entitled 'Economic developmentof under-developed countries', including a review ofthe financing of the economic development of theunder-developed countries ;

"6. Requests the Economic and Social Council,during its review of the consolidated report of thefive-year appraisal of the scope, trend and cost ofthe economic and social programmes of the UnitedNations, the International Labour Organisation, theFood and Agriculture Organization of the UnitedNations, the United Nations Educational, Scientificand Cultural Organization, the World Health Or-ganization and the World Meteorological Organiza-tion, called for in Council resolutions 665 C (XXIV)of 1 August 1957 and 694 D (XXVI) of 31 July1958, to give special consideration to the develop-ment needs of the less developed countries and toways in which such programmes can be more effec-tively organized to help meet these needs."

QUESTION OF TRADE PROMOTION AND ACCELERATING GROWTH OF LESSDEVELOPED COUNTRIES THROUGH INTERNATIONAL ACTION

Questions relating to international trade promo-tion and the acceleration of the economic growthof less developed countries through interna-tional action were discussed at the General

Assembly's thirteenth session in the course ofdebate on the annual report of the Economicand Social Council.

Bulgaria circulated a draft resolution in the


Second Committee, the original version of whichproposed that the Secretary-General report tothe Assembly in 1959 on economic questions,including questions concerning the promotionof international trade and assistance in thedevelopment of the less developed countries,the solution of which called for internationalaction such as the convening of a conferenceof experts.

A later version of this proposal omitted thereferences to the promotion of internationaltrade and to the convening of a conference.The Assembly would thereby ask the Secretary-General, on the basis of the records of the workof United Nations economic bodies during thepast two years and other material: (1) to pre-pare an initial memorandum with data on waysby which the acceleration of the rate of eco-nomic growth in the less developed regionsmight be fostered through international action;and (2) to present the memorandum to themid-1959 (twenty-eighth) session of the Eco-nomic and Social Council for such commentsas it deemed necessary to make to the GeneralAssembly's fourteenth session.

Supporting the revised text, the representa-tives of Brazil, Morocco, Poland, the USSRand Yugoslavia stressed the importance ofspeeding the rate of economic growth of under-developed countries. While favouring the pro-posal in principle, the delegates of Afghanistan,France, India, Indonesia and Peru suggestedthat the nature of the proposed memorandumwas not clearly outlined, and that it need notbe limited to material covering the past twoyears.

The United Kingdom and the United Statesfelt it would be inadvisable to ask the Secretary-General to make concrete proposals to Govern-ments on action to be taken by them on de-velopment problems. The study envisaged, theUnited States suggested, might be handi-capped by the fact that some States were un-willing to provide information on their economicpolicies.

The Bulgarian spokesman pointed out thatthe proposed memorandum would serve merelyas a basis for discussion in the Economic andSocial Council and the General Assembly, whichwould later consider the action to be taken.

After further discussion, the revised Bulgarianproposal was again amended, on the basis ofa joint proposal by Brazil, Mexico and theNetherlands, so that the Assembly would askthe Secretary-General to prepare "an analyticalsummary of the various means of acceleratingeconomic growth" rather than the "initialmemorandum" proposed by Bulgaria. The sum-mary, to go to the Economic and Social Coun-cil's mid-1959 session, would be prepared onthe basis of the records of work of UnitedNations economic bodies in recent years (ratherthan in the past two years) and other appro-priate material.

The Assembly would also indicate its aware-ness that uneven trends in the development ofproduction in various parts of the world might,in some cases, have a highly detrimental effecton the economies of less developed countriesand hence on the degree of gainful employ-ment and standards of living in these coun-tries. This paragraph embodied an amendmentby Pakistan.

The amended draft resolution as a wholewas adopted by the Second Committee on 2December 1958 by 55 votes to 0, with 13 absten-tions.

On 12 December it was amended, on aUnited States proposal, at a plenary meetingof the Assembly, so that the material on whichthe Secretary-General's summary would bebased would also include relevant informationfrom the replies to be received from Govern-ment in response to another resolution adoptedon 12 December 1558 (resolution 1316(XIII)).The latter resolution asked United NationsMembers for information on international co-operative efforts to give further impetus tothe economic development of under-developedcountries. (For details, see above, section onINTERNATIONAL CO-OPERATION FOR ECONOMIC

DEVELOPMENT.)

The United States amendment (which hadpreviously been rejected in the Second Com-mittee by a vote of 21 to 21, with 20 absten-tions) was approved by 41 votes to 21, with8 abstentions. The resolution as a whole wasthen approved by 75 votes to 0, with 2 absten-tions, as resolution 1323 (XIII). (For final text,see DOCUMENTARY REFERENCES, below.)





A/G.2/L.393. and Rev.1. Bulgaria draft resolutionand revision as orally amended, adopted by SecondCommittee on 2 December 1958, meeting 572, by55 votes to 0, with 13 abstentions.

A/4054 and Add.1. Report of Second Committee,draft resolution VIII.

A/L.256. United States amendment to draft resolu-tion VIII proposed by Second Committee, A/4054.

RESOLUTION 1323(XIII), as proposed by Second Com-mittee, A/4054, and as amended by United States,A/L.256, adopted by Assembly on 12 December1958, meeting 788, by 75 votes to 0, with 2 absten-tions.

"The General Assembly,"Bearing in mind the main economic objectives of

the United Nations, which consist in promoting higherstandards of living, full employment and conditionsof economic and social progress and development,

"Aware of the lack of balance shown in the trendof economic growth in the different parts of theworld during the last decades,

"Conscious of the highly detrimental effect that

an uneven trend of development may, in somecases, exercise on the economies of the less developedcountries and, thereby, on the degree of gainful em-ployment and on the level of standards of livingexisting in these countries,

"Noting the keen interest shown by the delegationsin international economic problems during the gen-eral debate in the Assembly,

"Convinced that the United Nations should showa still greater interest in the factors of world economyinfluencing the rate of economic development of theless developed countries,

"Requests the Secretary-General, on the basis ofthe records of the work of United Nations economicbodies during recent years and other appropriatematerials, including information to be received fromGovernments in response to General Assembly reso-lution 1316(XIII) of 12 December 1958:

"(a) To prepare an analytical summary of variousmeans of accelerating economic growth in less de-veloped countries through international action;

"(b) To present the above-mentioned analyticalsummary to the Economic and Social Council at itstwenty-eighth session for discussion, and for sub-mission to the General Assembly at its fourteenthsession of such comments on the matter as theCouncil deems necessary."

INDUSTRIALIZATION AND PRODUCTIVITY

PUBLICATIONS

Two publications were issued in 1958 by theUnited Nations Secretariat as part of its workprogramme on industrialization. One was thefirst issue of the bulletin Industrialization andProductivity. The second was a report, Man-agement of Industrial Enterprises in Under-Developed Countries.

The bulletin contained studies on differentaspects of the problem of capital intensity,that is, the relative quantities in which capitaland labour resources should be combined tobest advantage in developing industrial produc-tion. One article, based on reports of UnitedNations technical assistance experts, describedthe problem as it had actually arisen in under-developed countries. A second article discussedthe need for research on the choice of tech-nology for industrial planning and gave prac-tical suggestions. Another gave a case studyof capital intensity in heavy engineering con-struction.

The report on industrial management waslargely based on the discussion of a panel ofexperts held between 24 September and 5 Oc-

tober 1957. It examined various aspects ofmanagement in relation to environmental con-ditions in under-developed countries, organiza-tion of industrial enterprises, labour policies,training and recruitment, production facilities,problems of marketing and control techniques.The report also contained recommendations foraction by individual entrepreneurs, industrialassociations and Governments.

CONSIDERATION BY ECONOMIC

AND SOCIAL COUNCIL

Problems of industrialization and produc-tivity were also discussed by the Economic andSocial Council at its twenty-fifth session inApril 1958.

The Council had before it two reports bythe Secretary-General, one describing progressmade by United Nations industrialization andproductivity projects and the other containingproposals for organizational changes and ad-ministrative machinery to carry out the workprogramme.

During the Council's debate, there was gen-eral agreement among the members that the


work under the programme should aim at takingstock of actual experience in under-developedcountries and at stimulating national and inter-national action by Governments in the field ofindustrialization; that the Secretariat's work onindustrialization should be expanded and ac-celerated as much as possible; and that theSecretariat should strengthen its servicing oftechnical assistance operations in industry.

The representatives of Finland, the Nether-lands, Pakistan, Sudan and others hoped thatmore attention would be given to the problemsof small-scale industries and handicrafts. Someother speakers stressed the need for studies onthe social and demographic, fiscal and financialaspects of industrial development, and on plan-ning.

As to organizational machinery, the USSRurged the immediate establishment of a specialUnited Nations organ on industrialization ques-tions. Others, including Pakistan, Poland andYugoslavia, favoured either a special agencyor a functional commission of the Council forthis purpose, whereas spokesmen for Brazil,Indonesia and the Netherlands, among others,preferred the establishment of an expert commit-tee to advise the Secretariat on its programme.

On 1 May 1958, the Council unanimouslyadopted two resolutions on industrialization,on the recommendation of its Economic Com-mittee.

The first resolution (674 A (XXV)), amongother things, emphasized the need to acceleratethe Secretariat's programme as far as possible;

asked the Secretary-General to publish the re-sults of this work, in the form of manuals, whenappropriate; stressed the desirability of strength-ening the substantive servicing of United Na-tions technical aid operations in the industrialfield; and invited the Secretary-General to es-tablish a committee of experts to review theprogramme of work and make recommenda-tions on its further development and implemen-tation.

The second resolution (674 B (XXV) ) de-veloped, at the suggestion of Brazil and Chile,after the Council had discussed questionsraised by the deterioration in the terms oftrade of exporters of primary goods andimporters of manufactured goods. The Coun-cil's resolution recognized that industrializa-tion could not be undertaken on the desiredscale without continuing imports of the re-quired equipment, and that these imports wereto be paid for mainly by the exports of theunder-developed countries. The Council alsorecognized the important relationship betweenthe prices of raw materials exported by under-developed countries and the prices of the manu-factured goods imported by them for theirgeneral industrial and economic advancement.In the light of the desirability of achieving asound international economic balance, the Coun-cil looked forward to further exploration of theseproblems when, at its next session (in mid-1958), commodity problems came up for dis-cussion. (See also above, CHAPTER II, section onINTERNATIONAL COMMODITY QUESTIONS.)



Preliminary Meetings 1009, 1011-1014, 1020.Economic Committee, meetings 234-236.

Industrialization and Productivity, Bulletin 1 (E/3051).U.N.P. Sales No.: 58.II.B.2.

Development of Manufacturing Industry in Egypt,Israel and Turkey (E/3111). U.N.P. Sales No.:58.II.B.4.

Management of Industrial Enterprises in Under-De-veloped Countries (E/3143). U.N.P. Sales No.:58.II.B.5.

E/3078. Progress report on implementation of pro-gramme of work on industrialization and produc-tivity. Report by Secretary-General under Councilresolution 597 A (XXI).

E/3079. Industrialization: Organizational and ad-

ministrative machinery. Report by Secretary-Gen-eral under Assembly resolution 1033 B (XI).

E/AC.6/L.203. Brazil draft resolution.E/AC.6/L.204 and Rev.l. Chile, Costa Rica, Mexico

draft resolution and revision, as orally amended byPakistan, adopted by Economic Committee on 30April 1958, meeting 236, by 17 votes to 0, with1 abstention, as draft resolution B.

E/3112. Report of Economic Committee, draft reso-lution B.

E/AC.6/L.206. Note by Chairman of Economic Com-mittee, containing draft resolution A, as amended,approved by Economic Committee on 30 April1958, meeting 235.

E/AC.6/L.206/Add.1. Statement of financial implica-tions.

E/3112. Report of Economic Committee, draft reso-


lution A.RESOLUTION 674 A and B (XXV), as recommended

by Economic Committee, E/3112, adopted unani-mously by Council on 1 May 1957, meeting 1020.

A"The Economic and Social Council,"Recalling its resolutions 597 A (XXI) of 4 May

1956, 618(XXII) of 6 August 1956 and 649 A(XXIII) of 2 May 1957 and General Assemblyresolution 1033 B (XI) of 26 February 1957 re-garding the programme of work in the field of in-dustrialization and productivity and the question oforganization and administrative machinery relatingthereto,

"Having considered the reports of the Secretary-General,

"Bearing in mind the importance attached to therapid industrialization of less developed countries asa significant factor in the sound and balanced develop-ment of their economies,

"1. Notes the progress of the programme of workon industrialization and productivity as set forth inthe report of the Secretary-General and emphasizesthe need to accelerate this work as far as possible;

"2. Requests the Secretary-General, in carrying outthe programme, to take into account such views asmay be expressed by the countries directly concernedrelating to the problems which are of significance tocountries in the process of industrial development;

"3. Recalls paragraph 2 of its resolution 649 A(XXIII) and requests the Secretary-General, whenappropriate, to encourage the organization of seminars,consultations and training centres in order to facilitatethe practical application of the programme;

"4. Further requests the Secretary-General to pub-lish the results of work under this programme, inthe form of readily usable manuals when appro-priate;

"5. Welcomes the statement in the report of theSecretary-General that effective co-operation has beendeveloped with the specialized agencies concerned inplanning and carrying out projects of common in-terest and that such co-operation will continue andmay be expected to expand in the future;

"6. Emphasizes the desirability of strengthening thesubstantive servicing of the United Nations technicalassistance operations in the field of industrializationalong the lines suggested in the Secretary-General'sreport ;

"7. Further emphasizes the desirability of mantain-ing close relationships with the Expanded Programmeof Technical Assistance and the Special Fund, whenin operation, in order to facilitate the developmentof the Secretary-General's programme of work andthe application of its results in the less developedcountries ;

"8. Expresses the desire to continue to be keptfully informed about the important work being doneby the specialized agencies concerned;

"9. Recognizes the important work being done bythe regional economic commissions in the field of in-dustrialization and productivity;

"10. Requests the regional economic commissions,when giving consideration to the formulation of re-gional programmes of work on industrialization andproductivity, to take into account, in accordance withparagraph 8 of Council resolution 597 A (XXI), theactivities under the programme of work of the Secre-tary-General undertaken pursuant to that resolution;

"11. Endorses the proposals of the Secretary-Gen-eral to expand the staff concerned with the workprogramme in the field of industrialization and pro-ductivity ;

"12. Invites the Secretary-General to establish acommittee of experts, consisting of no more than tenpersons to be appointed in consultation with Govern-ments, for the purpose of reviewing the programmeof work in the field of industrialization and produc-tivity, and making recommendations to the Secretary-General on the further development of this pro-gramme and its implementation; and to include inhis next progress report to the Council informationregarding the establishment of such a committee;

"13. Recommends the periodic inclusion in theagenda of the session of the General Assembly of anitem entitled 'Industrialization of the under-developedcountries'."

B"The Economic and Social Council,"Recognizing that the economic advancement of

the under-developed countries has been and con-tinues to be one of its main concerns,

"Considering that one generally accepted means ofachieving this end is the diversification of produc-tion, for which industrialization is an important re-quirement,

"Recognizing that industrialization cannot be un-dertaken on the desired scale without continuingimports of the equipment required and that primarilythe latter must be paid for by the exports of theunder-developed countries,

"Recognizing the importance attached to the rela-tionship between the prices of the raw materials ex-ported by the under-developed countries and of themanufactured goods exported by the industrializedcountries for the industrial and general economicadvancement of the under-developed countries,

"Looks forward, in connexion with its discussion ofcommodity problems at its twenty-sixth session, tothe further exploration of such problems in the lightof the desirability of achieving a sound internationaleconomic balance."

WATER RESOURCESWater resource questions were the subject offour reports issued by the United Nations in1958. The reports provided background infor-

USE OF NATURAL RESOURCESmation for discussions at the Economic andSocial Council's twenty-fifth session, held be-tween 15 April and 2 May 1958.

One of the reports, Water for Industrial Use,


issued in printed form, reviewed problems aris-ing from industrial demand for water, andexamined such matters as quantity and qualityrequirements, water costs and water conserva-tion problems. The report also contained sug-gestions for national and international actionto develop the use of water for industry. Inaddition, it gave statistical data on relatedsubjects.

The second study was a report by the Secre-tary-General giving the results of a preliminaryinquiry on existing hydrologic services. Pre-pared with the aid of the World MeteorologicalOrganization (WMO), it also examined cur-rent problems in regard to hydrologic activities,and outlined some steps which might be takento meet them.

The third report, by a panel of experts, wasentitled Integrated River Basin Development.Issued in printed form, it dealt with the scope,purposes and major aspects of river basin de-velopment and described co-operative actionbetween countries in the development of aninternational river basin. It also made recom-mendations, among which were the following:the responsibilities of WMO should be ex-panded to include hydrology; there should bea co-ordination office or centre in the UnitedNations Secretariat to deal with certain inter-related responsibilities and tasks; steps shouldbe taken to encourage scientific and technicalinvestigations; aid to countries in developingtheir river basins should be increased throughthe co-ordination and expansion of technicaland other assistance; and the United Nationsshould support efforts to overcome the specialproblems of developing international rivers.

The fourth report, on international co-opera-tion with respect to water resource develop-ment, prepared by the Secretary-General, in-formed the Council of the latest activities ofthe United Nations Secretariat in the field ofwater resources, and of the action taken atinter-agency meetings on water resources devel-opment to co-ordinate activities of the various in-ternational organizations concerned, the UnitedNations and its regional economic commissions,the International Atomic Energy Agency andthe specialized agencies. It also indicated cer-tain problems which the Secretary-Generalthought should be given high priority by the

Council, such as problems relating to under-ground water, water pollution control, co-ordi-nation of hydrologic activities and integrationof water resources services.

Some Council members attached great im-portance to efforts to formulate legal principlesfor users of waters of international rivers. TheCouncil took no position on any particularlegal principles, but various members notedwith interest the efforts being made by otherbodies to formulate them. It was also pointedout that legal aspects would in any case bestudied in connexion with integrated river basindevelopment.

Stressed, too, was the importance of develop-ing a programme of studies on the interrelatedproblems of water resources, including, in par-ticular, systematic studies on underground water,on integrated river basin development, on re-ducing water pollution in industrial countries,and on preventing water pollution in areas inprocess of industrialization.

On 2 May 1958, the Council unanimouslyadopted a four-part resolution (675 (XXV) ) onthe recommendation of its Economic Commit-tee.

By the first part, the Council called the reporton Integrated River Basin Development andits recommendations to the attention of UnitedNations Member Governments and the appro-priate specialized agencies, and it noted withinterest the efforts being made to formulatelegal principles applicable to users of interna-tional rivers.

The second part dealt with the report ofthe Secretary-General and WMO on hydrologicservices, which contained recommendationsabout WMO's functions in hydrology. TheCouncil invited WMO to consider the reportand to take appropriate action thereon, bearingin mind the need to avoid duplication in thework of the United Nations and the specializedagencies.

By the third part of the resolution, the Coun-cil called the report on Water for IndustrialUse to the attention of Member Governmentsand the appropriate specialized agencies. Itcalled special attention to the importance ofreducing water pollution, particularly in indus-trialized countries, and preventing water pol-lution in countries in the early stages of indus-


trialization; in this connexion, it recommendedthat account be taken of the experience of theEconomic Commission for Europe and co-oper-ating specialized agencies (FAO and WMO).

The fourth part of the resolution dealt withinternational co-operation in the developmentof water resources. The Council asked the Sec-retary-General to take appropriate measures toestablish a centre within the United NationsSecretariat to promote co-ordinated efforts forthe development of water resources. He wasalso asked to give proper consideration to re-quests of Governments for assistance in the de-velopment of river basins, including the jointdevelopment of international rivers. In addi-tion, the Secretary-General and the specializedagencies were asked to stimulate the interna-tional flow of information on water resourcesand to develop a programme of studies onthe interrelated problems of such resources,giving priority to various questions enumeratedin the Secretary-General's report and to in-tegrated river basin development.

INTER-AGENCY MEETING

The fifth inter-agency meeting on water re-sources was held in Geneva between 8 and 10July 1958. It was attended by members of theSecretariats of the United Nations, the Inter-national Atomic Energy Agency, the Food andAgriculture Organization, the United NationsEducational, Scientific and Cultural Organiza-tion, the World Health Organization and theWorld Meteorological Organization. Among thematters discussed were points raised by theEconomic and Social Council resolutions of 2May 1958, such as the establishment of awater resources centre, co-ordination of acti-vities in the field of hydrology, water pollutionand underground water resources. Also dis-cussed were plans to prepare certain studieson techniques for water resources and require-ments surveys.

PETROLEUM RESOURCESLater in 1958, at the thirteenth session of

the General Assembly, Albania, Romania andCzechoslovakia proposed a draft resolution inthe Second (Economic and Financial) Com-mittee on various aspects of the developmentof petroleum resources.

Their text pointed out that many under-developed countries were interested in improv-ing prospecting for petroleum deposits with-in their territories, bettering the exploitation,processing and transport of petroleum and alsoin obtaining and manufacturing the necessaryequipment. The text also pointed out that asymposium on developing the petroleum re-sources of Asia and the Far East was beingheld in New Delhi in December 1958, underthe auspices of the Economic Commission forAsia and the Far East. By the proposal, theAssembly would ask the Secretary-General,when the results of the symposium were onhand, to study the possibilities of internationalco-operation in developing petroleum resources,including the desirability of convening expertmeetings.

Austria, Canada, Saudi Arabia, South Africa,the United Kingdom, the United States andothers found the proposal unacceptable. Onereason they advanced was that some of theSecretariat studies on power resources and thefacilities available under the Expanded Pro-gramme of Technical Assistance and the UnitedNations Special Fund were considered as al-ready meeting some of the purposes of theproposed text. Also, the proposal would in-volve consideration of questions of nationalpolicy in the petroleum industry or would en-tail passing judgment on bilateral assistance inthe industry or on private investments. It wouldtherefore represent unwarranted United Na-tions interference in the domestic affairs ofstates.

On 5 December, the Second Committeeagreed to a revised version of the three-Powerproposal, as orally amended by Iraq, on behalfof Ceylon, Cuba, the Federation of Malaya,India, Iraq, Panama, the United Arab Republicand Yugoslavia. The Committee's vote for itwas 61 to 0, with 8 abstentions. The text waslater approved unanimously at a plenary meet-ing of the Assembly on 12 December 1958 asresolution 1319 (XIII).

The Assembly thereby invited the Secretary-General to transmit the report on the proceed-ings of the New Delhi symposium to the Eco-nomic and Social Council for appropriate con-sideration and for possible transmission to otherappropriate United Nations organs and bodies.


DOCUMENTARY REFERENCESWATER RESOURCES


Plenary Meetings 1014-1016, 1021.Economic Committee, meetings 236, 237.

Water for Industrial Use (E/3058). U.N.P. SalesNo.: 58.II.B.1.

Integrated River Basin Development (E/3066). U.N.P.Sales No.: 58.II.B.3.

E/3070. A preliminary inquiry on existing hydrologicservices. Report by Secretary-General.

E/3071. International co-operation with respect towater resources development. Report by Secretary-General.

E/AC.6/L.205. Mexico, Netherlands, United States,Yugoslavia draft resolution, as amended, adoptedby Economic Committee on 1 May 1958, meeting237, by 16 votes to 0, with 1 abstention.

E/AC.6/L.205/Add.1. Statement of financial implica-tions.

E/3114. Report of Economic Committee.RESOLUTION 675(XXV), as recommended by Economic

Committee, E/3114, adopted unanimously by Coun-cil on 2 May 1958, meeting 1021.

"The Economic and Social Council,"Recalling its resolutions 417(XIV) of 2 June

1952, 533(XVIII) of 2 August 1954 and 599(XXI)of 3 May 1956,

I"1. Commends the Panel of Experts for its report

entitled Integrated River Basin Development, whichbrings together basic information on, and principlesof, integrated river basin planning and develop-ment;

"2. Calls the report and its recommendations tothe attention of Governments of Member States andthe appropriate specialized agencies;

"3. Notes with interest the efforts being made toformulate legal principles applicable to users of inter-national rivers, particularly those referred to in chap-ter 4 of the report;

II"1. Commends the Secretary-General and the World

Meteorological Organization for the report entitled'A Preliminary Inquiry on Existing Hydrologic Ser-vices' ;

"2. Notes the recommendations with respect to thefunctions of the World Meteorological Organizationin the field of hydrology;

"3. Invites the World Meteorological Organiza-tion to consider the report and to take appropriateaction thereon, bearing in mind the discussion atthe twenty-fifth session of the Economic and SocialCouncil and the necessity of avoiding duplicationwith the work of the United Nations and specializedagencies ;

III"1. Commends the Secretary-General for the re-

port entitled Water for Industrial Use, as a helpfulcontribution to a better understanding of this im-portant and growing problem;

"2. Calls the report to the attention of Govern-

ments of Member States and the appropriate spe-cialized agencies;

"3. Calls special attention to the importance ofwater pollution abatement, particularly in indus-trialized countries, and of preventing water pollutionin countries in the early stages of industrialization,and in this connexion recommends that the experi-ence of the Economic Commission for Europe andco-operating specialized agencies should be taken intoaccount ;

IV"1. Notes the report of the Secretary-General en-

titled 'International Co-operation with respect toWater Resources Development', including the usefulactivities of the regional economic commissions setforth in chapter III of that report;

"2. Commends the Secretary-General and the spe-cialized agencies for their co-operation in carryingforward their series of consultations on water re-sources problems ;

"3. Requests the Secretary-General to take appro-priate measures for the establishment, within theSecretariat, of a centre to promote co-ordinate effortsfor the development of water resources and, for thatpurpose, to facilitate co-ordination in the collectionof information on such resources and their uses;

"4. Further requests the Secretary-General to giveproper consideration to applications by Governmentsfor assistance in the development of river basins;including the joint development of international rivers ;

"5. Endorses the recommendation of the Panel ofExperts on Integrated River Basin Development re-lating to water resources that the United Nations andthe specialized agencies should pay special attentionto stimulating and facilitating the international flowof information, including that developed by non-governmental organizations in consultative status withthe Council;

"6. Requests the Secretary-General and the spe-cialized agencies to keep the interrelated problemsof water resources under continuous review and, tothis end, to develop a programme of studies relatingto such problems, giving priority for concerted actionto the questions enumerated in chapter IV of theabove-mentioned report and to integrated river basindevelopment, and to report to the Council at itstwenty-ninth session on the progress achieved at thenational and international levels in regard to theabove items, including appropriate recommendationsconcerning further action which might be taken bythe Council and the specialized agencies;

"7. Invites Members of the United Nations to payappropriate attention to water resources questions intheir country programmes, and in regional or inter-regional projects, both in connexion with the UnitedNations Expanded Technical Assistance Programmeand in programmes developed through other multi-lateral or through bilateral arrangements."

PETROLEUM RESOURCES




A/C.2/L.394 and Add.1 and Rev.1. Albania, Czecho-slovakia, Romania draft resolution and revision, asamended orally by 8 powers, adopted by SecondCommittee on 5 December 1958, meeting 575, by61 votes to 0, with 8 abstentions.

A/4054 and Add.l. Report of Second Committee,draft resolution IV.

RESOLUTION 1319(XIII), as recommended by SecondCommittee, A/4054, adopted unanimously by As-sembly on 12 December 1958, meeting 788.

"The General Assembly,"Considering that more effective use of the natu-

ral resources of the under-developed countries isimportant for their economic development,

"Recalling that in December 1958 a symposiumon the development of petroleum resources of Asiaand the Far East is taking place at New Delhi underthe auspices of the Economic Commission for Asiaand the Far East,

"Invites the Secretary-General to transmit the re-port on the proceedings of the above-mentionedsymposium to the Economic and Social Council for ap-propriate consideration and for possible transmission toother appropriate United Nations organs and bodies."

OTHER DOCUMENTSE/3142. Conservation and utilization of non-agricul-

tural resources. Report by Secretary-General onaction taken under Council resolution 345 (XII).

ROSTERS OF SCIENTIFIC AND TECHNICAL PERSONNEL

In 1958, at the General Assembly's thirteenthsession, Honduras introduced a draft resolu-tion in the Second (Economic and Social) Com-mittee on the possibility of establishing rostersof scientific and technical personnel of under-developed countries. The proposal, calling foraction by the Economic and Social Council,was based on the premise that there was anunder-employment of "human capital resources"in the less developed countries.

These countries, according to the spokesmanfor Honduras, not only lacked the qualifiedpersonnel they needed to carry out their de-velopment plans. They were also often un-aware that there were technicians within theirown borders or in neighbouring countries onwhose services they could call. Many of theexperts in question sought employment abroadwhere their skills could be more fully utilized.It was essential, he continued, that steps betaken to deal with the under-employment andemigration of the skilled manpower of theunder-developed countries. The aim of the draft

resolution, he explained, was to encourageexchanges of technicians between the under-developed countries and to make available apool of technicians with a thorough personalknowledge of the material, social and psycho-logical situation in those countries.

The proposal was adopted by the SecondCommittee in revised form on 2 December 1958by 58 votes to 0, with 8 abstentions. It wasapproved at a meeting of the Assembly on 12December by 70 votes to 0, with 9 abstentionsas resolution 1320(XIII).

The Assembly thereby invited the Economicand Social Council to examine, at its twenty-eighth session in mid-1959, the possibility anddesirability of establishing and maintaining,under United Nations auspices, rosters of scien-tific and technical personnel of the less devel-oped countries, whose services might also beused outside their own countries. It also askedfor the views of the specialized agencies and theInternational Atomic Energy Agency on theresolution.


Plenary Meeting, 788.Second Committee, meeting 572.


abstentions.

A/C.2/L.397 and Rev.l. Honduras draft resolutionand revision, as amended in Committee, adoptedby Second Committee on 2 December 1958, meeting572, by 58 votes to 0, with 8 abstentions.

A/4054 and Add.l. Report of Second Committee,draft resolution V.

RESOLUTION 1320(XIII), as recommended by SecondCommittee, A/4054, adopted by Assembly on 12December, meeting 788, by 70 votes to 0, with 9

"The General Assembly,"Considering that economic development plans can

be carried out more economically in those countrieswhich achieve a real increase in their human capitalresources through a better knowledge and distributionof their qualified technicians,

"Considering that ready and easy access to acommon pool of qualified technicians who are easyto find would enable countries in the process of de-velopment to make more rational and complete useof scientific and technical personnel in and outside

TECHNICAL ASSISTANCE FOR ECONOMIC DEVELOPMENT 159

their country of origin and to benefit from the expe-rience of other countries which are passing throughsimilar stages, thus increasing the effectiveness ofinternational co-operation,

"1. Invites the Economic and Social Council toexamine at its twenty-eighth session the desirabilityand feasibility of establishing and maintaining, underthe auspices of the United Nations, rosters of scientific

and technical personnel of the less developed coun-tries, whose services might also be utilized outsidetheir respective countries;

"2. Requests the Secretary-General to transmit thepresent resolution to the specialized agencies and theInternational Atomic Energy Agency and to ask themto state their views on this subject at the twenty-eighthsession of the Economic and Social Council."

CHAPTER IV

TECHNICAL ASSISTANCE FOR ECONOMIC DEVELOPMENT

THE TECHNICAL ASSISTANCE PROGRAMMES

ACTIVITIES DURING 1958Eighty-six Governments pledged a total of$31,307,200 in over 50 different currencies tocarry out operations under the Expanded Pro-gramme of Technical Assistance during 1958.Activities under this Programme are financedfrom voluntary contributions by Governments.The funds so obtained are shared among: theUnited Nations; the International Labour Or-ganisation (ILO) ; the Food and AgricultureOrganization (FAO) ; the United Nations Edu-cational, Scientific and Cultural Organization(UNESCO) ; the World Health Organization(WHO) ; the International Civil Aviation Or-ganization (ICAO); the International Tele-communication Union (ITU) ; and the WorldMeteorological Organization (WMO). Arrange-ments were also made in 1958 for the Inter-national Atomic Energy Agency (IAEA) toshare in Expanded Programme funds as of1959.

Some 107 countries and territories receivedaid to the value of $33,820,000 by the end of1958. During the year, 2,427 experts from 64countries and territories served in the field, 578of them provided by the United Nations. Theywere assigned to 91 countries and territories. Atotal of 1,759 fellowships and study grants wereawarded to the nationals of 119 countries andterritories, for study in 66 countries and ter-ritories.

The major fields in which the United Nationsand the specialized agencies advised and aidedGovernments during 1958 were: agriculturalproduction, health services, economic planning,

basic surveys of resources and building up ofadministrative services, industrial research andproduction, auxiliary services to industry andagriculture, education, public utilities, power,transport and communications, community de-velopment, narcotics control and other socialservices such as housing and social security.

In addition to participating in the ExpandedProgramme, the United Nations, through itsTechnical Assistance Administration (TAA)also provided additional technical assistance ineconomic development, public administrationand advisory social welfare. This was paid forout of funds from the regular United Nationsbudget.

During 1958, the United Nations, under theExpanded Programme as well as under its regu-lar programme which is financed from theUnited Nations budget, sent out 769 expertsdrawn from 58 nations to 69 different coun-tries and territories. A total of 824 fellowshipsand scholarships were awarded to nationals of88 countries and territories for study abroadin 47 countries. The United Nations also pro-vided limited quantities of supplies and equip-ment.

Expenditures incurred for all these UnitedNations operations in 1958 under both pro-grammes totalled $8,849,590. This sum in-cluded $6,102,555 for economic development,$1,229,976 for public administration activities,and $1,517,059 for advisory social welfare ser-vices.

Of the experts supplied by the United Na-tions under both programmes, 502 gave help

Documents

THE ECONOMIC DEVELOPMENT OF UNDER-DEVELOPED …