RUSSIA: Challenge in Giving

Since the fateful June day in 1947, when General George Marshall, U.S. Secretary of State, rekindled Europe's war-deadened spirits with his promise of massive infusions of U.S. financial help, economic aid has been one of the most effective instruments of U.S. foreign policy. But at Cairo's Afro-Asian Conference last week (see below), Soviet representatives were gleefully hammering away at a new theme: "The capitalists no longer have a monopoly of credit and machinery. The Socialist countries are really giving!"

By hindsight, experts date Russia's economic aid program from 1953. At that time, the argument goes, the Kremlin's bosses took due note of the U.S.'s vigorous response to the Korean invasion, concluded that further military adventures would be unprofitable. Last week, in the hope of averting further congressional cuts in U.S. aid, the State Department put out a statement showing that Russia and its satellites have now handed out to underdeveloped nations $1.9 billion in loans and credits.

The Russians' economic drive was slow getting started, was stronger at first on promises than performance. Compared to the more than $50 billion which the U.S. has dispensed in foreign aid since World War II, the Russian effort seems unimpressive. But today the Soviet bloc has aid agreements with eleven uncommitted nations, and its scientists and technicians are spread through eight more.

Unlike the U.S., the Iron Curtain countries almost never make outright grants of money; instead, they specialize in barter deals and in loans payable at a modest 2½% to 3% over periods ranging up to 30 years. They have avoided demanding any overt political pledge, are ostensibly content to establish economic beachheads in country and government while demonstrating their respectability. The results, as observed by TIME correspondents around the world: