Hoffman's Decade of Aid

The United Nations was a major casualty of last month's Indo-Pakistani war, and not because of its already diminished prestige as an international peace keeper. Halted by the war were a U.N. emergency relief program and a host of development projects in East Pakistan, including a water-resources survey, management training, a fisheries program and the work of an agricultural-training center. No one can guess when they will be resumed in the new nation of Bangladesh. The U.N. Development Program has 86 such little-publicized projects under way round the world, which are often overshadowed by the windy debates of the Security Council. Yet they collectively represent the kind of practical success that the U.N. has seldom achieved in its larger diplomatic dealings.

This week the man who launched the development program and guided it for the past 13 years will retire. At the age of 80, Paul Gray Hoffman still radiates the optimism of the '50s, when many Americans believed that all it took to make a better world was a little more generosity. "All you have to do is focus on improving people's personal incomes," he says, "and you can't go wrong."

Two Rules. From the beginning, Hoffman ran the program by two hard and realistic rules. He demanded that recipient countries share in the cost and insisted that U.N. aid, instead of supplying factories and dams, be used as "seed money" to teach skills and pinpoint resources for others to develop. The Development Program and its predecessor, the U.N. Special Fund, have spent $3.4 billion on 1,430 projects; the program now channels 20% of all technical assistance going to developing nations. The results, though, have fallen short of Hoffman's goal of raising the per capita gross national product of developing countries by 5% per year over the decade (the actual increase has been around 2.5%), partly because population has more than kept pace with progress.

Another reason is that donor countries, asked to provide $300 million a year, have given only $240 million to the U.N. program. (The U.S. contribution of $86 million annually is the largest in total, but only 27th among the nations in relation to G.N.P.)

"It is all unfinished business," says Hoffman. "We have only made a feeble start." Actually, the U.N.D.P. has made a significant contribution to the quality of life in many countries. One of its first achievements was to rid North Africa and Asia of their historic plagues of locusts by means of cross-border aerial patrols and insecticide raids. Since 1966 the program's various studies--such as surveys that pinpoint copper lodes in Argentina, Panama and Turkey, iron ore in Chile and Gabon, and uranium in Somalia --have helped stimulate $5 billion in follow-up private investment. More than a third of all aid has gone to Africa and more than a quarter to Asia for assistance in such basic needs as agriculture, industry and public utilities.

The program's success owes much to Hoffman, who has been described as the kind of man from whom anyone would buy a used car. A college dropout at 18, he began selling Studebakers in Los Angeles in 1911, acquired a dealership after World War I, and by 1925 had made his first million dollars. He became Studebaker's vice president for sales, and in 1935 was made president of the then-bankrupt company to bring it out of receivership. In 1942, he launched the Committee for Economic Development to prepare for postwar reconstruction; nine years later he became the first president of the Ford Foundation.

Drafted by Harry Truman in 1948 to head the Marshall Plan (Hoffman did not want the job, but Truman announced his appointment anyway), he set about his task with the precept that "only Europeans can save Europe"; the result has been called the world's only wholly successful foreign aid program. Hoffman came under fire during the 1950s for advocating so-called "foreign giveaways" and for heading up the Ford Foundation's civil-libertarian offspring, the Fund for the Republic. Even so, he could usually bring Congress round to voting the aid funds he requested. As Columnist Walter Lippmann once wrote, "Men found the worst they could do was disagree with him. He was patently not angry and not frightened, not envious and not scheming, not playing a game and not hiding his meaning. The air was fresh and clean, as if the windows had been opened."

One Illusion. Today Hoffman still conveys the same impression of freshness, along with a calm manner and a persuasively quiet voice. He is the sort of person who would rather eat a AP cheeseburger in the cafeteria than patronize executive dining rooms. After the death of his first wife--who bore him five sons and a daughter--Hoffman married Anna Rosenberg, a wartime Deputy Secretary of Defense; she now owns a Madison Avenue public relations and management-consulting firm.

What has Hoffman learned about foreign aid after 13 years on the job that he has called "my real education"? A brief sampler of his insights:

P:"One illusion is that you can industrialize a country by building factories. You don't. You industrialize it by building markets."

P:"Our whole thinking has always been clouded and obscured by the term foreign aid as such. If you try deliberately to use aid to win friends and influence people, you won't win any friends and you won't influence any people. On the contrary, you will make bad friends."

P: "All countries tend to make better use of their physical resources than of their human resources. It is hard to conceive of a nation neglecting its diamond mines or overlooking its petroleum deposits. Yet human potentials of an immeasurably greater worth are wasted and frequently for the most unreasonable of reasons."

This week Hoffman will hand over his desk to another U.S. businessman, Rudolph Peterson, 67, former chairman of the Bank of America. Characteristically, Hoffman planned to depart without ceremony, though even the Soviets, who contribute less than India to the program, offered him a farewell dinner. Winding up "the most fascinating 13 years of my career," Hoffman last week saw at least one boon in retirement: "Now I will be able to stop dealing with the urgent and start thinking about the important."

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