A Lift out of the Morass

In the soft light and air-conditioned comfort of the Sala Santitham (Peace Hall) in Bangkok's United Nations Building, Indians smiled at Pakistanis, Nationalist Chinese hobnobbed with Russians, and Cambodian delegates rubbed shoulders with their recent Thai enemies. The French, as is their growing custom where international cooperation is involved, stayed away--and so, of course, did the Chinese Communists. But 28 nations sent delegates, including a 14-member U.S. team led by Assistant Treasury Secretary Merlyn N. Trued and--remarkably--a high-ranking, five-man delegation from the Soviet Union. All of them came to Bangkok last week to set up a $1 billion Asian Development Bank to help lift Asia from its morass of poverty. Its purpose: to finance such economic necessities as power, ports, railroads, water supply and industry.

Undecided Russians. The bank, which will be a regional version of the World Bank, will start off with modest aims, considering the problems that Asia faces. It will make only businesslike loans (for 20 to 25 years at 5 1/2%), thus placing beyond its range such grand designs as President Johnson's proposal that the Mekong River be transformed into an Asian TVA project. The bank's capital will be chiefly in hard currencies supplied by governments. Most of the money has already been pledged: $200 million each from the U.S. (subject to congressional approval) and Japan, $100 million jointly from Australia and New Zealand, $300 million from 20 Asian nations and $100 million from Europe. The Soviet Union has not yet decided whether it will join (it suffers from a shortage of hard currencies, which it has been using to buy wheat), so far has contributed nothing to the project.

Unique among postwar efforts to aid the world's poor, the new bank--a brainchild of the U.N.'s Economic Commission for Asia and the Far East-was inspired largely by Asians themselves. In contrast to the U.S.-led World Bank and the U.S.-dominated InterAmerican Bank, it will be run largely by Asians. At Bangkok this week and next, the sponsoring nations are expected to decide how the organization will be set up and where it will be located, thus paving the way for a ministerial meeting to be held Nov. 29 in Manila to sign the charter. If the governments involved ratify the treaty this winter as expected, the bank should begin operating by mid-1966.

Aid Gap. The Asian Bank is taking shape at a time when development aid to the world's needy countries is falling steadily behind their needs. Despite rising prosperity in the U.S. and Europe, the flow of aid from these sources has remained static since 1961 at $9 billion a year, now amounts to a trifling .9% of the developed nations' total output of goods and services. Last week Lyndon Johnson signed a comparatively modest $3.2 billion foreign-aid appropriation, but the U.S. still carries more than its share of aid. Despite nudging from Washington, Europe has been slow to pick up its part of the burden.

The world's poor countries, whose population growth is now more than twice as rapid as the growth of their economies, need an extra $3 billion to $4 billion a year in aid to keep them from growing poorer still. Unless this aid gap is quickly narrowed, warns World Bank President George Woods, the world faces "a heartbreaking slowdown in economic development and even in international trade." The Asian Bank is only a start at alleviating that threat. Nonetheless, it is a significant self-help step.

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