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Department of State bulletin (Volume v. 46, Jan- Mar 1962) online

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^\niat is the role of American private enterprise
in fostering the economic growth of Africa?



3 Ibid, Jan. 30, 1949, p. 123.
January 8, 1962



Briefly, in the course of normal business activity
it can assist by providing capital, by making avail-
able qualified technicians and business administra-
tors, and bj' helping to improve the quality of
African management.

Among the business areas in wliich African na-
tions require immediate economic assistance are
those of insurance, banking and loan associations,
low-cost housing, and cold storage. There is room
for commercial, fuiancial, extractive, and indus-
trial activities, exporting and importing busi-
nesses, large and small. As an exam[)le, I am in-
trigued by the number of African craft and folk
art items I am beginning to see in American stores.

Climate for U.S. Business in Africa

"What is the climate for United States business
in Africa? I am sure that my colleagues from
other departments will speak more directly on this
question. This afternoon's panel, I understand,
will get down to specifics. However, let me give
you a few thoughts.

Admittedly these are turbulent times in Africa,
when newly emerging nations are attem{)ting to
develop personalities and institutions of their own.
The framework in which foreign private invest-
ment will operate in many of these nations is still
unclear. At the same time the need for such in-
vestment is almost universally recognized, and we
can be certain that, one way or another, it will
play an important role.

There is no point in hiding the fact that risks
for the private investor are high in some parts of
Africa — because the place of foreign in^-estment
has not yet been determined, because adequate
safeguards have not yet been devised, and in some
areas simply because the possibility of political
instability exists. But we should not let the head-
lines which dramatize the areas of unrest and
governmental irresponsibility obscure the fact
that in much of Africa conditions are peaceful
and that, with the enthusiastic support of the
mass of the people, energies are being devoted
to the constructive tasks of economic dev-eloi^ment
and the maintenance of political stability.

For those of us who have been close to tlie
African scene, broad outlines of the future are
becoming increasingly clear, even though the fer-
ment of transition still obscures many of the de-
tails. Africa must be accepted on its own terms.
We cannot expect, with rare exceptions, that the



61



African nations will immediately develop all the
institutions of democracy in our sense of the word.

African nations are now developing their own
forms of government and their own institutions,
based on cultural patterns that are familiar to
them and that they can make work effectively. I
am confident that they will move in the direction
of free choice and self-expression.

At the risk of considerable oversimplification,
we might say that many of the new states of
Africa are attempting to substitute national loyal-
ties for tribal loyalties and that, to obtain accept-
ance as a substitute for the tribe, the nation must
take on certain characteristics familiar to the peo-
ple. In practical terms, for the time being, this
often means a strong leadership with paternal
overtones and a rather different and more difficult
role for political opposition. It often means a
high degree of state responsibility for the well-
being of the individual citizen, which derives less
from modern welfare theory than from the tradi-
tional claims of a member of a family or a tribe
on its chief. Government ownerslup tends to fit
well into this kind of structure, and the lack of
entrepreneurial skills and private capita] in much
of Africa accentuates the tendency. It is thus
no accident that even some of the most pro-West-
ern leaders of Africa in large measure think auto-
matically in terms of state enterprise.

New Pattern of Cooperation

We must, of course, encoui-age the African na-
tions to develop the plurality of institutions that
we have found to be the greatest bulwark of free-
dom. In particular we must help them find a
place for private enterprise. But we would be
remiss if we did not say very candidly that pri-
vate enterprise itself must be prepared to make
major adjustments. It may well be that Africa
will provide the proving ground for new forms of
cooperation between private foreign investment
and underdeveloped societies.

First of all, the new pattern of cooperation, to
be effective, is likely to emphasize the management
functions. If the major emphasis is placed on
management rather than ownership, many new
possibilities are opened which provide opportu-
nities for us and wliich are fully acceptable to
the Africans.

Second, I lie new pattern of cooperation is likely
to show a somewhat different relationship be-



tween investment in capital and investment in
labor than we are accustomed to. Much of Africa
luis great labor resources, although woefully short
of capital. E\en assuming a sharp increase m
capital made available from outside, the needs
will far exceed the amount received if there is
simply an attempt to reproduce the capital-inten-
sive development of the industrialized West. But
with good planning and good management, hu-
man resoui'ces can be used as a substitute for
capital, not within the harsh framework of Com-
munist exploitation but through humane and
progressive enterprise. We in America may have
a reputation abroad of efficiency and wealth
through machines, but a far more accurate state-
ment of America's contribution to the modern
world has been its development of techniques
through which large-scale production can be
achieved in a genuinely free society. If we can
provide the managerial skills for labor-intensive
production as well as we have for production
based on high capital investment, there is an as-
sured place for us in Africa.

Stated another way, there are limitations on
African development but there is also a tremen-
dous potential. Political and social factors must
be given very special recognition. American pri-
vate enterprise can make a major contribution if
it shows a flexibility in meeting African condi-
tions that goes beyond anything we have experi-
enced in the past.

Robert L. Garner, former President of the In-
ternational Finance Corporation, has suggested
certain particular aspects of responsibility for
foreign businessmen operating in developing
countries. They are worth noting. Foreign
businessmen, he believes, "need to make special
efforts to associate themselves with the local com-
munities — first through maximum use of local re-
sources and people, with positive efforts to pro-
vide training and opportunity for advancement
to senior positions." Garner points out the "mu-
tual advantages in joint ventures with local en-
terprises, or in sharing ownership with local in-
vestors." He cites the role of business in setting
the example and stimulating their local counter-
parts in supporting education, technical and busi-
ness training, and otlier constructive community
activities.

I hope that those of you who are already en-
gaged in foreign business will keep those ideas



62



Department of Stale BuUelin



in mind, aware that the posture of American en-
terprise abroad greatly influences the attitudes of
foreign peojjles and governments toward the
United States.

Participation of Negro Americans

I am convinced that there are among you busi-
nessmen who can turn their capital, know-how,
and experience to the promotion of the broad in-
terests of our nation in aiding African develop-
ment. Negro Americans are already among those
of our citizens demonstrating the benefits which
good private business can contribute to economic
growth. Needless to say, stalwart sons of Michi-
gan were among the pioneers. I speak of a Libe-
rian-American timber firm run jointly by a group
of young men from Detroit in collaboration with
Ijiberian citizens. I understand also that Wilson
Hines, a graduate of Howard and M.I.T., has
established a liquid-air manufacturing company
in Liberia. Another successful venture is the in-
surance company established in Ghana by a group
of enterprising New Yorkers.

Some of the larger United States firms in
Africa have hired Negro Americans in profes-
sional positions. These include a major alumi-
num company and leading soft-drink and cigarette
manufacturers. This is a welcome sign of the
extension of the American principle of fair em-
ployment practices that our Government is en-
forcing with increasing vigor. It is a develop-
ment which I hope will spread throughout Amer-
ican business overseas.

I might say here parenthetically that our AID
[Agency for International Development] missions
in Sierra Leone and in Mali are directed by Negro
Americans of high skills and competence.

The United States has great need for the partic-
ipation and assistance of talented people in its
activities to build security by increasing world-
wide economic development, and larger participa-
tion of the Negro American in this task is no more
and no less than an integral part of his full inte-
gration into American life.

To stimulate appropriate participation of pri-
vate enterprise, the United States Government has
worked out a program of providing insurances
against various kinds of political risks and in
some cases business risks as well.* Certain loans



are available to private enterprise on high-prior-
ity projects. Also the United States Government
is in a position to provide financial help in sur-
veys undertaken by potential investors to acquire
the information essential to investment decisions.
As I have said, the magnitude of the task of
African economic development is tremendous.
Therefore it is reassuring to think that our Gov-
ernment can count upon the support of private
enterprise in its efforts to meet the challenges of
Africa and contribute toward the development
of a stable and prosperous world.

U.S. and U.K. Accuse Soviet Union
of Hampering Geneva Test Ban Talits

Press rploase 804 dated December 19

The following report on the situation at the
Geneva Conference on the Discontinuance of Nu-
clear Weapon Tests was submitted on December 19
to the United Nations Dlsarm/iment Commission.

Report of the United Kingdom and the United
States to the Unitfj) Nations Disarmament
Commission on the Geneva Conference on

the DlSCONaiNUANCE OF NuCLEAR WeAPON

Tests, December 19, 1961

Following a searching and exhaustive discus-
sion of nuclear testing, the Sixteenth United Na-
tions General Assembly passed Resolution 1649
(XVI)^ urging resumption of the test ban nego-
tiations at Geneva.

In accordance with the resolution, the United
Kingdom and the United States immediately pro-
posed to the Soviet Government that the Geneva
Conference resume its meetings on November 28,
1961.= Shortly thereafter the Soviet Government
agreed.

Resolution 1649 (XVI) provided the followmg
guidance to the negotiators.

— It recognized that a permanent and continu-
ing cessation of nuclear weapon testmg in all en-
vironments would be guaranteed only by an efTec-
tive and impartial system of verification in which
all states would have confidence.

— It reaffirmed that it was urgently necessary
to reach an agreement prohibiting all nuclear
weapon tests under effective control, which would



' nid., Nov. 20, 1961, p. 837.
January 8, 1962



' For text, see Bulletin of Dec. 4, 1961, p. 938.
' For texts of a U.S. note of Nov. 13 and a Soviet reply of
Nov. 21, see ihU., Dec. 11, 1961, p. 965.



63



be a first step toward reversing the dangerous and
burdensome arms race, -which would inhibit the
spread of nuclear weapons to other countries,
which would contribute to the reduction of inter-
national tension and which would eliminate any
health hazards associated with nuclear testing.

— Finally, it urged the three negotiating states
to renew at once their efforts to conclude at the
earliest possible time a treaty on the cessation of
nuclear and thenno-nuclear weapon tests on the
basis :

(1) that the treaty should have as its objective
the cessation of all nuclear weapon tests in all
environments mider inspection and control ma-
chinery adequate to ensure compliance with its
terms;

(2) that international control machinery should
be organized so as to be representati^'e of all par-
ties to the treaty and should be staffed and oper-
ated to guarantee its objectivity and effectiveness,
avoiding self-inspection, under procedui-es which
would ensure that its facilities would be used ex-
clusively for purposes of effective control ; and

(3) that the day-to-day executive and adminis-
trative responsibility should be concentrated in
the hands of a single administrator acting impar-
tially and functioning under the supervision of a
commission composed of representatives of parties
to the treaty.

The Soviet announcement that it would return
to the negotiating table raised the hopes of many
people around the world that the Soviet Union at
last was ready to negotiate an effective test ban
treaty. Even before the Conference resumed,
however, the Soviet Union dashed these hopes by
presenting a draft test ban agreement which
would in effect be a moratorium without any in-
ternational controls — a proposal which the Soviet
Union knew ran counter to the declared i)ositions
of the Western powers and to General Assembly
Resolution 1649.

This Soviet proposal amounted to an uncontrol-
led agreement on the suspension of all nuclear
tests. It repudiated every previous agreement for
international inspection and control undertaken by
the U.S.S.R. during three years of patient and
laborious negotiations at Geneva. It abandoned
as well commitments made in other international
forums and in correspondence between the Heads
of Government of the United States, the United



Kingdom and the U.S.S.R., in which the Soviet
Union contmually professed its willingness to ac-
cept effective, reliable, workable, and impartial
international conti'ols to guarantee fulfillment of
its disarmament obligations.

For example, on June 14, 1957, the Soviet Gov-
ernment submitted a proposal to the United Isa-
tions Sub-Committee on Disarmament calling for
an international commission to control a cessation
of nuclear tests. The same proposal provided for
the establishment of control posts in the United
Statas, the United Kingdom, the U.S.S.R. and in
the Pacific Ocean.

The Soviet Union also discarded agreement on
the report ^ of the 1958 Geneva Conference of Ex-
perts convened to study the teclmical basis of an
agreement on the suspension of nuclear tests.
Even the draft treaty proposed by the U.S.S.R.
on October 31, 1958 — when the Geneva Confer-
ence on the Discontinuance of Nuclear Weapon
Tests was first convened — called for the establish-
ment of a netwoi-k of control posts in accordance
with the recommendations of the Conference of
Experts.

In addition, the November 27 draft agreement
proposed by the Soviet Union further repudiated
the Soviet-accepted recommendations of the group
of experts from both sides convened during the
Geneva test ban conference to study methods to
detect high-altitude tests. Tliese experts — includ-
ing Soviet scientists — recommended that earth
and solar satellites be placed in orbit and that
additional equipment be installed at ground con-
trol posts to detect space tests. The new Soviet
draft asked states to rely on existing national sys-
tems to detect tests in space.

Also repudiated by the latest Soviet volte face
are the preamble, 17 draft treaty articles, and
two annexes ^ agreed by the three powers during
the course of the test ban negotiations. These
agreements recognized the need for the establish-
ment and contmued operation of an effective in-
ternational inspection and control system. In do-
ing so they provided for:

(1) the establishment of a Control Organiza-
tion to include a Control Commission, a Detection



' For text, see ihUL. Sept. 22, 1958, p. 453.

'For texts, see Dorumcnts on Disarmament, 19G0 (De-
partmeut of Stnto publication 7172), pp. 376-387 ; for sale
by the Superintendent of Documents, U.S. Government
Printinf; Office, Washington 2.5, D.C., price ?1.25.



64



Department of State Bulletin



and Identification System, and a single Adminis-
trator ;

(2) the installation and operation of the Con-
trol System;

(3) the composition of the Control Commission ;
and

(4) arrangements designed to insure the signa-
tory states' cooperation with the Control System
for, inter alia, transportation, aircraft flights, air
sampling and on-site inspection.

Throughout the Geneva Conference on the Dis-
continuance of Nuclear Weapon Tests, the Soviet
Union has constantly attempted to hamper the
establishment of an effective, reliable inspection
and control system. Yet even the U.S.S.R. ad-
mitted on many occasions to the principle of in-
ternational inspection and control — whatever dif-
ferences it may have had as to the details of on-site
inspection, international control posts, and inter-
national inspection teams. Now the Soviet Union
has abandoned the very principle of international
verification and control to which it has been com-
mitted throughout the negotiations.

The Western Delegates to the resumed Confer-
ence at once indicated their wish to avoid all po-
lemics and immediately begm work to negotiate
a meaningful treaty. They called Soviet atten-
tion to the draft of a treaty ^ presented to the Con-
ference in April 1961 by the United States
and the United Kingdom which consisted of
twenty-four articles and three annexes. The draft
treaty was complete and much of it already
agreed. The remainder consists of compromise
proposals put forward by the West to meet the
Soviet point of view. The Western Powers have
never insisted that these articles be accepted by
the Soviet Union as they stand; and while the
West considers them fair and responsible pro-
posals, they remain open to negotiation.

The Soviet draft agreement, on the other hand,
with which the United States and the United
Kingdom were suddenly confronted on their re-
turn to the conference, in effect rejected not only
the nvmierous provisions for international super-
vision already agreed at Geneva but even the small
amount of control contained in the Soviet Union
one-page treaty tabled at the very first meeting in
1958. This constituted an extraordinary step back-
wards and must be considered an affront both to
the otlier members of the conference and to the



majority of members of the United Nations who
voted for Eesolution 1649 (XVI). Nevertheless,
in the course of the resumed negotiations, the
United States and United Kingdom delegations,
in order to leave no doubt about the Soviet posi-
tion, questioned the Soviet delegation closely.

The Soviet Delegate said that the Soviet Union
was no longer prepared to accept impartial inter-
national verification because of the tension exist-
ing in international relations. He was, however,
unable to say :

(A) How the international situation had de-
teriorated since June 4, 1961, when the Soviet
Government had most recently stated in a note ' to
the United States Government that it was pre-
pared to accept international control for a nuclear
test ban treaty;

(B) Why the Soviet Union had continued
during the period immediately before its test series
to adhere to agreed treaty articles embodying the
principle of international control which it was
obviously planning to repudiate as soon as its tests
were concluded ;

(C) Why the United States and United King-
dom were confronted with this sudden change in
the Soviet attitude only a day or two before the
conference began and then only through the inter-
national press.

The Soviet contentions that the international
situation compelled it first to resume testing and
then to change its attitude in the conference is
patently untenable. The Soviet-manufactured
crisis in 1961 corresponds closely to the tense situa-
tion created by the Soviet Union in 1958 when the
conference began. It is precisely the existence of
tension and the absence of confidence engendered
by Soviet actions over Berlin and elsewhere which
makes international verification of a test ban all
the more necessary.

Moreover, the Soviet series of tests has contrib-
uted to tension in the international situation and
it is notable that the Soviet Union is only propos-
ing a test ban agreement without international
supervision at a moment when it has concluded its
massive series of tests and is unashamedly boasting
about them and threatening to renew them.

The Soviet proposal for an agreement simply on
the word of the parties is all the more unacceptable
in that the Soviet Union had previously given its



' For text, see Bulletin of Jvine 5, 1961, p. 870.
January 8, J962



' For text of a Soviet aide memoire, see ibid., July 3,
1961, p. 22.



65



word that it would not be the first among the three
members of the nuclear test ban conference to re-
sume testing and liad soleimily voted in the United
Nations on the 20th of December 1960 for
a moratorium on further nuclear weapon testing.

The Soviet Government argues that its new pro-
posals resemble those made by President Kennedy
and Prime Minister Macmillan on September 3.'
But the Soviet Government rejected them. In
any case, the Western proposals on that date were
made in an emergency in an attempt to save the
woi-ld from the dangers of the Soviet test series
and in the hope that they would lead to a somid
treaty under international control. Experience of
Soviet actions since then has, however, gone far
to destroy that hope.

The United States and the United Kingdom are
continuing their efforts at Geneva to persuade the
Soviet Union to revei-se its present position and
open the way to fruitful negotiations on the basis
recommended by the United Nations General As-
sembly in Resolution 1649 (XVI) .

The United States and the United Kingdom
undertake to continue to keep the Disannament
Commission, and thi-ough it, the General As-
sembly, informed of the progress of the Geneva
negotiations.

U.S.-Japan Committee on Scientific
Cooperation Concludes First Meeting

Following is the text of a joint commtmique is-
sued on December 15 by the United States-Japan
Committee on Scientific Cooperation at the close
of its first meeting.

Press release 895 dated December 19

1. The First Meeting of the United States-Japan
Committee on Scientific Cooperation was held
from December 13 to 15, 1961 at the Ministry of
Foreign Affairs, Tolryo.^ The joint communique -
issued last June by President Kennedy and Prime
Minister [Hayato] Ikeda led to the establisliment
of this Committee.

2. President Kennedy, in his message to the First
Meeting of the Committee,' emphasized that the



' For text, see ibid., Sept. 18, 1961, p. 476.
' For a Department nnnouncement of the meeting, see
Bulletin of Dec. 25, 1001, p. 1059.

' For text, see ihid., July 10, 1961, p. 57.
' Not printed here.



people of the United States are determined that
science and technology shall be dedicated to the
service of humanity and to the arts of peace.
Prime Minister Ikeda, at his limcheon given in
honor of the United States and Japanese members
of the Committee, extended a warm welcome to the
United States members and expressed the hope
that, through the Committee, even closer coopera-
tion would be established in the field of science and
that the two countries would contribute, hand in
hand, to the goal of promoting human welfare.

In his address at the opening session. Minister
[Takeo] Miki expressed his belief and expectation
that the Committee would be a living example of
international scientific cooperation contributing
to peace and not to war, to construction and not
to destruction. United States Ambassador [Ed-
win O.] Reischauer, who was present at the open-
ing session, also expressed his conviction that close
cooperation in the field of science was an obvious
and necessary aspect of the partnership between
Japan and the United States and that from such
close cooperation would come benefits for the peo-
ple of both nations and indeed for all humanity.

3. Dr. [Kankyuro] Kaneshige and Dr. [Harry
C] Kelly were elected chairmen and served on
alternate days. The principal points of the Com-
mittee's discussions, which took place in a frank



Online LibraryUnited States. Dept. of State. Office of Public CoDepartment of State bulletin (Volume v. 46, Jan- Mar 1962) → online text (page 19 of 101)