Commonwealth Consultative Committee for South and Southeast Asia

The first report of the Commonwealth Consultative Committee for South and Southeast Asia (the Colombo Plan) was released in May 1952. The Korean conflict, it was noted, had had the short-term effect of improving the balance of trade of countries in the area through increasing volume and prices of exports. As a result, the trade deficits expected when the original plans were drawn up, turned out to be surpluses; increased volume of public revenue had enabled governments to spend more on development projects, in some cases financed wholly from their own resources. Expenditures of the first year of the plan had been appreciably greater than in 1950–1951. Since the end of 1951, however, economic conditions had again changed. Terms of trade were less favorable with a decline in export prices for raw materials. Government contributions for 1952–1953, therefore, were expected to be smaller than in 1951–1952. At the same time, planned expenditures for 1952–1953 were greater than before, due partly to increased costs and partly to additional projects. Unless conditions became “very adverse†, there was a “reasonable expectation†that next year's program would be successfully completed; finances were expected to come from accumulated budget surpluses, internal loans, increased private savings, private foreign investments and loans from other governments and from the International Bank for Reconstruction and Development. As for future years, the report noted that success would depend in part on the determination of the countries involved, careful planning of projects, continuance of the cooperative spirit in which the plan was begun, and technical and capital assistance.