Like ANZUS and SEATO, the Colombo Plan is designed to achieve security, but its means are exclusively economic assistance to and friendship with underdeveloped countries whose enmity would be dangerous should low living standards foster the growth of communism within them. Viewed thus, the Colombo Plan is as utilitarian as ANZUS, but this conclusion does not deny the independent operation of motives of benevolence and idealism.

The Plan originated at a meeting of Commonwealth Foreign Ministers held at Colombo, Ceylon, in January 1950, at which was set up a Consultative Committee which has since met annually at the capitals of the participating countries. Its purpose was to organise a cooperative effort to develop the economies and raise the living standards in the countries of South and South-East Asia. The original members were all Commonwealth countries – Australia, Canada, Ceylon, India, New Zealand, Pakistan, and the United Kingdom – but since then it has been extended to include Burma, Cambodia, Indonesia, Laos, Malaya, Nepal, the Philippines, Thailand, Vietnam, Japan, the United States, Malaya, and Singapore. The Plan is administered by a Council consisting of representatives of member-governments meeting at Colombo.

There is no master plan for the whole area, but each country draws up its own development plan and itself provides the greater part of the finance involved. To implement these plans the country concerned negotiates with other member countries for capital aid and technical assistance. In the first decade over £3,000 million of aid has been thus given, chiefly by the United States, and over 18,000 people have been trained in various skills. In this period New Zealand has contributed a total of over £10 million, some £6½ million on capital aid, and has received nearly 900 trainees.

To a great extent New Zealand's assistance has taken forms which her own experience and skills have suggested: school dental service, trade and technical training, dairy and sheep farming and agriculture generally, and the processing of primary produce. In Ceylon, for example, assistance was given to establish a dental school and to train dental nurses; New Zealand also made a capital grant towards the Colombo Milk Scheme. Other schemes connected with dairying include milk collection and distribution schemes in Indian cities and contributions to dairy research and technology. Trade-training centres have been assisted in Indonesia, Burma, Cambodia, and Ceylon. Further, over £1 million has been granted to the All India Institute of Medical Sciences, while £250,000 has gone to the Faculty of Agriculture at the University of Malaya at Kuala Lumpur.

In Indonesia the main form of technical assistance has been participation in an English-language teaching project, under which New Zealand experts have worked in Indonesia and Indonesian students have trained in New Zealand.

Technical assistance in the form of training provided in New Zealand brought nearly 900 trainees to New Zealand in the first 10 years, notably to study engineering, agriculture, health, technical, and general education. Others have studied at the universities in arts and science courses. Of New Zealanders serving overseas in this period, a high proportion has gone to Indonesia and Ceylon; and a great number of the total of 153 have been educationists, health and dental experts, and specialists in dairying, agriculture, and land use.