General Assembly

Special United Nations Fund for Economic Development: Pursuant to a resolution approved at the ninth session of the General Assembly, Mr. Raymond Scheyven submitted for consideration at the tenth session of the Assembly a further report on the proposed Special United Nations Fund for Economic Development (SUNFED). The report, prepared by Mr. Scheyven in cooperation with a panel of experts appointed by the Secretary-General, dealt with the form or forms, functions and responsibilities which SUNFED might have, and especially with the methods by which its operations might be integrated with the development plans of the countries receiving assistance from it. Mr. Scheyven felt that SUNFED should not confine itself to financing or assisting in the financing of nonself-liquidating projects exclusively; he felt that SUNFED should be able to contribute to any project which was related to economic development but which for some reason, such as balance of payments difficulties, was unable to attract investment capital. He likened the proposed fund to the European Recovery Program, although he pointed out that the analogy was not complete. On the question of the financing of the fund and the size of its initial resources, Mr. Scheyven emphasized the necessity of long-term commitments and felt that the $250 million initial capitalization which had been put forward as the minimum amount on which SUNFED could begin operation should not be considered an absolute; he felt that the limited capacity of underdeveloped countries to absorb capital and the inevitable slowness with which the operation of SUNFED would begin would make it practicable to begin with a smaller amount. He therefore suggested that the General Assembly bear these considerations in mind in reaching decisions and suggested that the fund might be established provisionally for a five year period during which its operations could be assessed. Mr. Scheyven and the experts with whom he consulted felt that SUNFED should be empowered to provide under-developed countries with grants or with loans repayable in local currency but should not be empowered to grant low-interest loans on indeterminate and extremely liberal terms; a combination of grants from SUNFED and loans from such an agency as the International Bank for Reconstruction and Development was suggested as a possible procedure.