Bacon, Ruth E.

English

Research Papers in Economics

OUR SOUTHEAST ASIA POLICY
Ruth  E. Bacon,  Director
Office of Regional Affairs
Bureau of East Asian and Pacific Affairs
Department of State
Southeast Asia  is comprised  of nine states:  Vietnam,  Laos,  Cam-
bodia,  Burma,  Thailand,  the  Philippines,  Malaysia,  Singapore,  and
Indonesia.  These  nine  states  have  a  population  in  excess  of  250
million  people.  All  except  Thailand  are  young  in  independence,
but  many  are  the  heirs  of  ancient  cultures.  They  differ  in  many
respects-history,  religion,  language,  political  orientation.  All  are
essentially  agricultural,  but  most  must  import  food.  Most  are  po-
tentially  rich in natural resources,  but need outside  assistance to help
develop  them.  They  also  require  help  to  provide  protection  against
any  serious military  threat from without.
Southeast  Asia  is  an  integral part  of the  larger Pacific  area and
is  affected  by  states  and  events  elsewhere  in  that  region.  Japan,
for  instance,  is  increasingly  assuming  a  significant  role  in  many
developments  in Southeast Asia and has  decided  to contribute in  aid
to  developing  countries annually  1 percent of its GNP.  South Korea's
contribution  of  military  personnel  to  the  assistance  of  South  Viet-
nam,  on  a per  capita  basis,  is comparable  with  ours.  Australia  and
New  Zealand  in  the  South  Pacific  are  growing  forces  in  Southeast
Asia,  assisting  through  the  Colombo  Plan  and other  channels  with
the needs of area states and contributing  militarily  in Vietnam.
The  United  States  has  an  important,  even  key,  concern  in  the
welfare  of  Southeast  Asia.  We  actively  participate  in  some  area
activities,  contribute  to  others,  and  are  affected  in  one  way  or  an-
other by still others.
U.S.  POLICY OBJECTIVES
Our  long-range  objective  is  a  peaceful  area  with  rising  living
standards  and  growing  prosperity,  with  states  working  out  their
own  destinies  without  outside  interference.  This  is  consistent  with
the  four  goals  for  the  Pacific  area  set  at  the  Manila  Summit  Con-
ference  in October  1966:
1.  To be free from  aggression.
2.  To conquer hunger,  illiteracy,  and  disease.
3.  To build a region of security, order, and progress.
134.  To seek  reconciliation  and  peace throughout  the Pacific  area.
These goals  are  at once altruistic and practical.  With rising living
standards,  peaceful  conditions,  and  increased  prosperity,  the peoples
of the  area  will  benefit;  the  need  for  U.S.  help,  financial  and  mili-
tary,  will be  eased;  and trade  and  cultural  contacts  will  expand.
We  are  working  toward  these  goals  along  three  main  channels:
First,  security. After the French  collapse  in Indochina,  the states
of  Southeast  Asia  were  in  need  of  assurance  against  the  threat  of
Communist  expansionism.  The  Southeast  Asia  Treaty  Organization
(SEATO)  was  formed  in  1954.  That  organization,  which  we
support,  has  made  it  possible  for  area  countries  to  devote  their
attention  to domestic  problems  without  constant  fear of attack.  We
are  also  helping  through  bilateral  alliances  with  some  countries  and
through  cooperative  action  in resisting  Communist  aggression  as  in
Vietnam.
Second,  material assistance. We  are  giving  needed  aid-mate-
rial,  personnel,  training,  financial-to  the  countries  of the  area  to
develop  their  resources  as  they  desire  our  help  and  as  we  can  give
it.  This  aid  is  being  extended  directly  through  bilateral  arrange-
ments  and  indirectly  through  multilateral  arrangements  such  as
United  Nations  agencies.
Third, cooperative arrangements. The  states  of the  area increas-
ingly  are  working  together  on  common  problems  through  regional
arrangements.  We  welcome  and,  where  appropriate  and  desired
by the area  countries, we  are assisting regional'efforts  at cooperation.
These  arrangements  in  many  cases  involve  economic  matters,  such
as  the Asian  Development  Bank  to  which  we  contribute.  There  are
also  significant  political  arrangements  which  the  states  themselves
have  established  among  area  countries,  such  as  the  Association  of
Southeast Asian  Nations  (ASEAN),  announced  on  September  8.
AREA TRENDS
Taking  the  area  as  a  whole,  three  main  trends  can  be  distin-
guished:
1.  ECONOMIC  AND  MATERIAL  IMPROVEMENT.  Everywhere  in the
area  are  evidences  of sturdier  economies.  The  countries  have  acted
individually  or  through  international  organizations  to  produce  the
economic  means  to support  improvements.  In  many  cases  we  have
also  helped.  Improved  economic  conditions  have been  accompanied
by greater  political  stability.
142.  SOCIAL  WELFARE.  There  are  new hospitals,  schools,  low-cost
housing,  urban  renewal  programs,  and  the  like.  Again,  where  pos-
sible and  appropriate,  we  are helping.
3.  REGIONAL  COOPERATION.  The states of the area are now work-
ing  together  on  their  own  initiative  on  common  problems.  Only  a
few of the more  outstanding  recent examples  can  be mentioned here:
a.  The  Asian Development  Bank opened  in  Manila  in  January
1967.  It  was  an  Asian idea and  60  percent of the Bank's  authorized
capital of over  $1 billion has been subscribed by Asians. Eight South-
east Asian countries-comprising  all area states except Burma-have
subscribed  to  the Bank  a  total  exceeding  $120  million.  The United
States has subscribed $200 million, as has Japan. The bank administers
special  funds,  with  particular  reference  to agricultural  development.
b.  An  ambitious  program  is  under  way  for  development  and
control of the  vast  Mekong  River.  This  undertaking  involves  con-
struction  of expensive  dams,  irrigation  of now  unusable  lands,  and
elimination  of  costly  flooding.  The  states  involved  are  receiving
help  from  many  countries,  including  the  United  States,  and  from
private  organizations.
c.  On August  8,  Indonesia,  Malaysia,  the Philippines,  Singapore,
and  Thailand  announced  the  establishment  of  the  Association of
Southeast  Asian  Nations  (ASEAN)  for  regional  cooperation.  The
association  is  open  to  all  states  in  the  Southeast  Asian  region  sub-
scribing  to its  basic  aims: peace,  progress,  and prosperity.
d.  A  Conference on  Transportation  was  sponsored  by  the  Min-
isters  of Education  of Southeast  Asia who  have  banded  together  to
work  on  common  problems  relating  to  education,  communication,
and  transportation.
e.  A  Conference  on  Southeast  Asian  Economic  Development
was  held  in  Manila  in  1967  after  an  initial  conference  in  1966  in
Tokyo, sponsored by Japan.
f.  A  Center for Regional Labor Problems has  been  established
in  Manila.
g.  The  Asian and Pacific Council (ASPAC),  organized  in  1966,
held its second  meeting in July  1967  at Bangkok,  and  will meet next
year in Canberra.  Four Southeast Asian states-Malaysia, the Philip-
pines,  Thailand,  and Vietnam-are  among  the  members,  and  Laos
is  an observer.
h.  The  Southeast Asia Treaty Organization  (SEATO) was created
15in  1954 following  the French collapse  in Indochina. The organization
has provided  assurances  within  the  treaty  area  for  states  threatened
by  Communist  expansionism  and  has  also carried  on activities  in the
economic  and  cultural  field.  In  1968  SEATO's  Graduate  School
of  Engineering  will  become  the  Asian  Institute  of Technology,  an
independent  regional  institution.
These  regional  undertakings  are indicative  of a  contagious  new
spirit  in  the  area.  In some  of these  arrangements,  our help  has been
wanted,  and  we  have  given  it  to  the  extent  that  we  can.  In  April
1965,  President  Johnson  suggested the need  for a  greatly  expanded,
cooperative  effort  among  Southeast  Asian  countries,  and  he  said
that  he  would  seek  a  $1  billion  authorization  from  the  Congress
for  such  an  effort.  He  also  expressed  the  hope  that North  Vietnam
would  join  as  soon  as  peaceful  cooperation  is  possible.  The  states
concerned  have  shown  great  initiative  in  seeking  ways  and  means
of advancing  the welfare  of their people through  cooperative  under-
takings.
These  regional  trends-in  material  progress,  social  welfare,  and
regional  cooperation-are  only  part  of a long  list  of current  devel-
opments  in  the  area.  The  countries  of  Southeast  Asia  are  now  on
their feet and beginning to move.
CONCLUSIONS  ON POLICY
It has been suggested  that we should  withdraw from Vietnam  and
should  look to  the  Chinese  Communists  as  the  coming  "dominant"
power  in  the area  to provide  security  for  Southeast  Asia in  general.
Considering  the  current  disarray  in  mainland  China,  such  a  course
is  clearly  unrealistic.  There  are  also  strong  political  and  human
considerations  against  it.
Contrariwise,  it  has  been  suggested  that  the  conflict  should  be
brought  to  a  speedy  conclusion  through  various  drastic  military
operations.  At  the  same  time  there  is  a  general  desire  to  keep  the
conflict  localized  and  to avoid  a general  conflagration.
Accepting  neither  of  these  alternatives,  U.S.  policy  is  pursuing
these  lines:
In Vietnam
1. We are aiding  the Government of Vietnam in resisting Hanoi's
attempt to take  it over by force.  In this task Australia,  New Zealand,
the  Philippines,  Thailand,  and  Korea  are  contributing  military
personnel.
162.  We  are  seeking to move to a peaceful  settlement  without con-
ditions.  We  remain  watchful for  any indication  that  Hanoi might  be
prepared to enter  into negotiations.
3.  In  the  meantime,  our  military  effort  must  continue.  Our
bombing  of selected  military  targets  in  the North  is  impeding  infil-
tration  and  resupply  to  Hanoi.  While  the  end  of the  conflict  is  not
in sight,  Hanoi's  drive  has been blunted and  it is clear  it cannot  win.
4.  We are assisting the Government  of Vietnam to speed forward
constructive  economic,  social,  and  humanitarian  programs.  Some
thirty Free World  countries  are assisting.
In Southeast Asia  as a Whole
1. Our objective is  to see the  emergence  of a peaceful  and  stable
Southeast  Asia,  with  rising living  standards  and  with  states  choosing
their own  way  of life without  outside interference.
2.  Toward  this end,  we  are  helping  to provide  the  states  of the
area with security  from Communist  expansionism  and a needed sense
of confidence  so  that  they  can  concentrate  on  economic  and  social
progress  at home.
3.  We  are  contributing  to the economic  and social  development
of the states of the area,  when our  help is  desired  and can  be  given,
through  financial  and  other  material  aid,  training  programs,  and
personnel.  Other countries,  notably Japan,  are also  actively  assisting.
4.  Recently,  the  Southeast  Asian  states  have  taken  new  steps
toward  cooperative  action  in  finding  common  solutions  for  com-
mon  political,  economic,  and  social  problems,  and  have  also joined
in  larger  associations  with Japan, Australia,  and  other Pacific states.
PROGRESS
In Vietnam
Constitutional  elections  for the  head of state  were  held  on  Sep-
temper  3,  1967,  in  which  4,800,000  persons  participated-83  per-
cent  of the registered  voters.
Since  July  1965  the  proportion  of the  population  under  Com-
munist  control has  been pushed  back to well  under  20 percent,  and
the  secure  proportion  of the  population  has  expanded  from  about
45  percent  to  65  percent.  The  Viet  Cong  are  experiencing  severe
manpower  problems,  and their  food  supplies  have  become  critical.
So  far  this  year,  20,000  persons  formerly  supporting  Hanoi  have
17come  over  to the Government  of Vietnam  under  the Chieu Hoi pro-
gram.  This  is  double  the  number  reported  for  the  same period  last
year.
In  education,  since  1963,  8,500  classrooms  have  been  built,
thousands  of  teachers  trained,  and  more  than  8  million  textbooks
distributed.
In  agriculture,  an  Agricultural  Development  Bank  was  estab-
lished  last  spring  to  bring low-interest  credit  to  the farmer  and help
with  essential  supplies  such  as  fertilizers.  The  United  States  is
making  available  $35  million  of  fertilizer  in  connection  with  this
program.  Progress  is  also  evident  in  land  reform,  improved  seed
programs,  animal  health programs,  etc.
In  medicine,  with  Free  World  assistance,  hospitals  are  being
established  with out-patient  clinics, bringing  medical help to villagers
who  have  never  before had such  help.
Under  Prime  Minister  Diem,  a  staunch  nationalist,  South  Viet-
nam  demonstrated  a  surprising  strength  of non-Communist  feeling
and  the  ability  to stand  on  its  own  feet.  We  did not-we could  not
"create"  the  Government  of  Vietnam.  The  Vietnamese  them-
selves  created  it.  National  feeling  such  as  the  Vietnamese  possess
cannot be  developed  by  outsiders.
The  struggle  in  Vietnam  is  looked  upon-by  the  Communists
and  by  the  free  states  of Asia-as  a  test  of the  Communist  theory
of  "wars  of  national  liberation."  Failure  on  the  part  of  the  Free
World  to  counter  Hanoi's  attack  would  not bring  peace,  but  more
"peoples'  wars."  It  would  also  surrender  people  who  have  fought
for  their  freedom  to  a  regime  which  has  shown  disdain  for  human
freedom.
In Southeast Asia  as a  Whole
Progress  in  Southeast  Asia  has  been  greater  than  could  have
been  imagined  ten years  ago.  Throughout  the  area,  there  is  a  new
spirit  of  hope  and  confidence.  Many  factors  have  contributed,
including  growing  experience,  financial  assistance,  and  able leaders.
Of  fundamental  importance  has  been  the  greater  sense  of security
-the  confidence  that  small  states  would  not  be  deserted,  that they
could rely  on commitments-that  the Free  World  stand  in  Vietnam
has brought to states  throughout  the area.
We have had our  part in contributing  toward  the progress  in the
area and we intend to continue  to help  as the  states of the area make
their  way  toward  a  better,  more  secure,  and  more  peaceful  future.PART II
Response to World Food
Outlook

OUR SOUTHEAST ASIA POLICY

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