-NATIOTNAL SFEGURITY--POlICY                259


economic conditions- are- among the fundamentalt determinantsa of the
will -and the-strength to resist subversion.and aggression.
  United- States- foreign economic.policy has been designed to-assist
in the building of such-a-system and such conditions in the free--world.
The principal features of this policy can be summarized-as-follows:
   (1) assistance to Western Europe in recovery and the creation -of
a viable economy (the European Recovery Program);
   (2) ;assistance to other countries because of their special needs aris-
,ing out. of the war or the ,cold war and our special interests in or
responsibility-for meeting them (grant assistance to Japan, the Philip-
pines, and Korea, loans and credits by the Export-Import Bank, the
International 'Monetary Fund, and the International 'Bank to; Indo-
nesia, Yugoslavia, Iran, etc.);
   (3) assistance in the development of under-developed areas. (the
Point IV program ;and loans and credits to various countries, over-
lapping-to some extent with those mentioned under 2);
   (4) military assistance. to the North Atlantic Treaty countries,
Greece, Turkey, etc.;
   (5) restriction of East-West trade in items of military importance
to the East;
   (6)! purchase and stockpiling of strategic materials; and
   (7)4 efforts to re-establish an international economy based on multi--
lateral trade, declining trade barriers, and convertible currencies (the
GATT-ITO program, the Reciprocal-Trade Agreements program, the
IMF-IBRD program, and the program now being developed to solve
the problem of 'the United States balance of payments).
   In both their short and long term aspects, these policies and pro-
grams are directed to the strengthening of the free world and there-
fore to the frustration of the Kremlin design. Despite certain inade-
quacies and inconsistencies, which are now being studied in connection
with the problem of the United States balance of payments, the "United
States has generally pursued a foreign economic policy which has
powerfully supported its overall objectives. The question must never-
theless be asked whether current and currently projected programs
will adequately support this policy in the future, in terms both of need
and urgency.
  The last year has been indecisive in the economic field. The Soviet
Union has made considerable progress in integrating the satellite
economies of Eastern Europe into the Soviet economy, but still faces
very large problems, especially with China. The free nations have
important accomplishments to record, but also have tremendous prob-,
lems still ahead. On balance, neither side can claim any great ad-
vantage in this field over its relative position a year ago. The
important question therefore becomes: what are the trends?
  Several conclusions seem to emerge. First, the Soviet Union is
widening the gap between its preparedness for war and the un-


259,ý