TABLE A.-COMPARISON OF INCOME AND COST OF LIVING, RYUKYUS AND JAPANESE PREFECTURES

TABLE B. COMPARATIVE DATA ON HEALTH, EDUCATION, AND WELFARE FOR THE RYUKYU ISLANDS AND JAPAN

(g) GRI employees' mutual aid association.

Fiscal year 1971....

Do.

TABLE 11.-UNITED STATES AND JAPANESE AID APPROPRIATIONS, FISCAL YEARS 1963 THROUGH 1968

1 Budget.

2 Forecasted supplemental appropriation request of $5,310,000 could not be submitted under present $12,000,000 authorization.

3 Excludes disaster rehabilitation of $1,000,000.

• Proposed.

• Excludes disaster rehabilitation of $2,900,000.

General UNGER. If the committee will turn to table I appended to my statement. I will describe first the arrangement of this table and then proceed to discuss the items for which the moneys would be used, the additional moneys. Columns (1) and (2) show the budget projects and the activities. Columns (3), (4) and (5) give a comparison of the fiscal year 1967, United States and Japanese aid programs. Columns (6), (7) and (8) detail the proposed fiscal year 1968 U.S. aid budget, showing in column (6) the basic budget of $12 million and in column (7) the $7.5 million increase proposed, if the bill before you is approved. The total in column (8) is compared with the approved Japanese program which is shown in column (9).

Most of the fiscal year 1968 supplemental in column (7) would be used to provide much needed support to the Ryukyuan education system as shown in item 1 under project 8732. The United States and Japan have agreed that additional assistance should be provided to this vital program in order to close the gap that exists between the Ryukyus and comparable areas of Japan.

Now in item 1-a, under column (7), and I will be dealing with all the items under column (7), Mr. Chairman, item 1-a would provide an additional $5.6 million to assist the Ryukyuan Government in defraying the cost of teacher salaries and related benefits.

The next line, item 1-b, would provide $200,000 for construction of school libraries which could not be accommodated in the basic budget, in column (6). Incidentally, this will provide 20 libraries for the compulsory education schools, that is schools up to the ninth grade.

In item 1-d, $300,000 is proposed for the University of the Ryukyus for construction of a general education building.

Now turn to page 2 of the table, again in column (7), under item 5, public works, the sum of $1,200,000, is needed for the following projects:

In item 5-a, $450,000, is needed for roads and bridges to relieve the congested traffic situation on the Army's main supply road. Needed for municipal that is low-income housing is $100,000. That is shown in item 5-d.

For airfield improvements, $150,000, in item 5-e, and that is really directed exclusively toward our airfield on Ishigaki Island, some 200 miles south of Okinawa. It will provide for the runway extension and parking apron space needed for interisland air transportation. The $400,000 in item 5-f is needed for the integrated sewer system. Specifically, that will permit the construction of a pressure interceptor sewer main from the area south of Naha and to connect with the Naha treatment plant. It will serve about 35,000 local residents, and about 11,000 U.S. military, civilians, and their dependents.

And finally the $100,000 in item 5-g is for rural electrification in northern Okinawa.

The final project for which supplemental funds are needed is in item 6-a, under economic development, and specifically for agricultural land development for which $200,000 is proposed. That is for plat realinement, for ditches, for drainage, and things of that nature in order to develop more usable land which the government is subsidizing for the local farmer.

Mr. Chairman, the projects which I have discussed are those for which additional U.S. funds are needed in order to meet the high priority fiscal year 1968 requirements of the long-range plan for the economic and social development of the Ryukyus. I would be pleased to answer any questions in elaboration of the use to be made of additional funds, in the event the bill before you is approved.

Chairman RuSSELL. What kind of a tax system do you have in the Ryukyus?

General UNGER. Mr. Chairman, we have a tax system quite comparable to what we have here in the United States-income tax, excise taxes, and commodity taxes. The largest single tax as far as the government is concerned is from the income tax structure.

Chairman RUSSELL. General, we have an economy drive on here now at the present time, as you may have heard.

General UNGER. Yes, sir.

Chairman RUSSELL. Yesterday the other body voted for a resolution, I haven't had an opportunity to study it, but the press indicates it would freeze all the expenditures at the amount expended in fiscal 1967. You had $12 million in fiscal 1967 for expenditures.

General UNGER. We received aid, direct aid for the Ryukyus in 1967 of $12 million, sir.

Chairman RuSSELL. Some years ago we built an electric power producing plant down there. Is that still in operation?

General UNGER. Yes, sir. The last electric powerplant was the Kin powerplant which went into operation on the line in 1965, sir. It produces about 88 megawatts. It has four generators of 22 megawatts each, and it is working beautifully, sir. However, we need more power. Chairman RUSSELL. As I recall at the time that the original plant was installed, I am not familiar with the various improvements, but we gave that plant to the Ryukyuan government, and we buy electricity from the plant and pay them for it in dollars?

General UNGER. The plant is a part of the Ryukyu Electric Power Corporation, an instrumentality of the U.S. Civil Administration and not the government of the Ryukyu Islands. There was, at that time, sir, an $18.5 million loan provided by the U.S. Treasury, but it wasn't all used-$7.5 million was not needed. It was excess, and we came back to the committee last year, I believe, and asked that this $7.5 million be used for additional power producing equipment. That was temporarily denied, and we are currently working on a plan to further increase our power production on Okinawa, sir, to meet increasing demands.

Chairman RUSSELL. Do you actually propose to expend in fiscal 1968 $19.5 million?

General UNGER. That is correct, sir, if the bill before the committee is approved.

Chairman RUSSELL. And the appropriation follows.
General UNGER. Yes, sir.

Chairman RUSSELL. That is a rather substantial increase, General, in 1 year. What would be the effect if the Congress were to limit the authorization and appropriation to $17.5 million instead of $19.5 million that is proposed for the next year?

General UNGER. Well, sir, very briefly and very succinctly, there would be $7.5 million worth of projects that would have to be

deferred.

Chairman RUSSELL. No, that couldn't be correct.

General UNGER. Excuse me, sir, I didn't understand the question. Chairman RUSSELL. The question was if we increase the authorization and appropriation to $17.5 million instead of $19.5 million that you request, where would the impact be greatest?

General UNGER. The differential between what I am asking for and what you had indicated, sir, would be a deferment of $2 million worth of projects. I would have to make a review to see which were the lowest priority projects which we had planned to use the $7.5 million additional funds for, and drop off the least urgent. These are generally in the public works category and the economic development category, in education and in public health and medical activities.

Chairman RUSSELL. What official of the Ryukyuan government assists you in preparing this schedule?

General UNGER. We have a planning department as one of the departments of the government of the Ryukyu Islands. The planning department, headed by Mr. Kenji Kudeken. He works with the head of my comptroller agency in the U.S. Civil Administration, Mr. William C. Burns who is here with me this morning. These two gentlemen, in the initial analysis, put together what we. the United States and the government of the Ryukyu Islands consider is needed to further the long-range plan which is a 5-year plan, sir. Then these proposed projects are approved by me and by the chief executive of the government of the Ryukyu Islands.

Chairman RuSSELL. Do the same officials work with the Japanese Government in determining their expenditures?

General UNGER. The same people do develop what we, the United States, would like to ask the Government of Japan to provide in direct aid funds, sir, that is, the development of the projects and the cost which we would ask the Government of Japan to underwrite. Yes, the same individuals do that development, and again it is in conformance with and it is compatible with the long-range plan that we have developed, sir.

Chairman RuSSELL. Is that the only coordination that we have with the Japanese Government in these expenditures?

General UNGER. Yes, sir. We do it through the medium of a Consultive Committee that sits in Tokyo, the Japanese-United States Consultative Committee, the principal members of which are the Foreign Minister of the Government of Japan, the Director General of the Prime Minister's Office, and the U.S. Ambassador to Japan. It is through that "Concom," as we refer to it, that the discussion be