The documents that gave formal birth to the Alliance for Progress were signed at Punta del Este, Uruguay, on August 17, 1961. That date does not mark, however, the sudden commencement of a new stage in inter-American relations, but the culmination of a laborious process in which all the countries forming the Organization of American States (O.A.S.) took an active part.

Notwithstanding this, even today the multilateral character of the Alliance is not clearly perceived. Ask any American from, say, the Middle West what the Alliance is, and he will tell you, if he happens to be exceptionally well informed, that it is a policy of the United States toward Latin America which imposes new burdens on him as a taxpayer but which, properly handled, may serve to stop the Latin Americans from falling under the power of Communism, as Cuba fell. To what extent is this extraordinary distortion the work of those who have had an interest in making the movement attractive? To a great extent, certainly. The truth is that such misinterpretations and oversimplifications were powerful enough to make the very authors of the policy lose sight of its original meaning, its importance, its direction.

For, as should be known, the Alliance for Progress was the crowning confirmation of a Latin American policy seeking to effect a change in the traditional postures of the United States of America with regard to the southern portion of the hemisphere, and, in particular, with regard to the possibilities for the latter's development. It was, at the same time, the imposition of a new way of looking at the Latin American governments' obligations to their peoples. When it began to be disfigured, so that it appeared as merely another phase of the policy of the United States toward Latin America, the governments and peoples south of the Rio Grande felt that they were absolved from doing their share and that from then on they were to wait for the United States to carry out its part of the undertaking alone. So remarkable a change-which took place between the birth of the Alliance and a year and a half later-was facilitated and, I dare say, even characterized by North America's instruments of mass communication-press, radio and television-and by the international news agencies that are fed from United States sources. A great deal of the responsibility for this distortion of the aims of the Alliance also lies at the door of government officials-not excluding those of the United States-charged with the duty of issuing information about it. Nor were matters mended by the attitude of the Latin American governments which found fault with the United States for being too slow in getting the Alliance under way, as if they themselves had no part in launching what might and did seem to be just another one-way apportionment of foreign aid.

But, happily, a few months ago an excellent reaction set in-a movement back toward the historical and, if you like, the philosophical origins of this multilateral policy. There are records of those origins. The documents which were signed two years ago have very few precedents in the history of international relations. The aims and purposes of the Alliance for Progress are so wide-reaching and complex, and penetrate so deeply into what the Charter of the United Nations terms the "domestic jurisdiction" of the states-beyond trespass by that organization or any other-that, as commitments between nations, they are exceptional if not unique.

Neither the Charter of Punta del Este nor the Declaration to the Peoples of America, which preceded it, nor any of the annexed resolutions, has the formal character of ordinary international agreements, covenants and treaties. Following the best tradition of inter-American diplomatic procedure, the whole of this process-which might well prove decisive for the history of the hemisphere-rests merely on a booklet of declarations and commitments which require no ratification and whose duration depends entirely on the good will of each state. The governments bind themselves, not so much to the other signatory nations as to their own peoples, to carry out a policy which will, in effect, be the product of the closest international collaboration. Any of the 20 states may, without previous notice, withdraw from the Alliance simply by communicating the fact. Any state, moreover, may renounce the economic, political and social principles agreed upon in the various documents. The Punta del Este agreements, then, are no mere diplomatic instruments, but the final adoption of a great conjoint policy which is itself the result of a deep collective conviction.

In the political field the first move in this new direction is rightly attributed to the President of Brazil, Juscelino Kubitschek. In August 1958, in an aide-mémoire addressed to the other American presidents, he proposed that the governments should all pledge themselves to a joint effort to fight against Latin American underdevelopment. Kubitschek received from his colleagues the most stimulating response in favor of Operation Pan America. In September of the same year a new aide-mémoire defined in vigorous terms the probable objectives of the Operation. In this second memorandum one can already observe the influence of the Economic Commission for Latin America (ECLA) which, under the direction of the Argentinian economist, Raul Prebisch, had been trying to break the closed circle of underdevelopment with new ideas-ideas that were regarded with hostility or reserve by people in financial circles in the United States and in the World Bank. The second memorandum outlines the conception of development and underdevelopment and the possibilities of progressing from one to the other. It makes clear not only the advantage but also the method of estimating the growth of Latin American countries and of setting a specific goal for development in terms of a specified rate of growth. It asks for an indication of the probable fountainheads of international resources and the extent to which they would have to be drawn upon in order to complement national efforts. It considers it essential to examine the factors chiefly responsible for strangulations of the Latin American economy with a view to eliminating them by collective or individual action. Most important, the memorandum, besides accepting and expressing the spirit of the studies carried out by ECLA and the Inter-American Economic and Social Council, uses even the ECLA technical terminology which is henceforward to predominate in all the inter-American resolutions on economic coöperation.

In that same month of September 1958, an informal meeting of ministers of foreign affairs, gathered in Washington on the invitation of the Secretary of State, gave rise to the creation of the fruitful Committee of Twenty- one, which was to have its first meeting in December of that year at the Pan American Union. The chairman was one of the greatest figures on the American scene, Colombia's former President Alfonso López, who, though sick, lent vigor and direction to undertakings which undoubtedly were decisive factors in the success of the Committee. Various task groups were formed, embodying what were to be the central themes decided on at the Punta del Este Conference almost three years later. One of them worked on and finally drew up the initial statutes of the International Development Bank, previously rejected by the United States as an instrumentality of no value in promoting the economies of Latin America. Another group tackled the problem of basic products arising from the constant and disheartening imbalance in the terms of exchange between the United States and the Latin American nations-an imbalance aggravated just at that time by the striking fall in the prices of principal exports. Still another group examined the possibilities of regional markets, and pioneered in the creation both of the Central American Common Market and of the Latin American Association for Free Trade. And, finally, another team worked on the problems of technical coöperation.

The Committee of Twenty-one met again in April and May 1959. In January that year the Cuban Revolution had triumphed. Up to then the leader of the movement, Fidel Castro, seemed disposed to coöperate with the other Latin American countries and with the United States in the drive for development, which was already assuming a categorical definiteness with something of the same character and almost the identical terms that were finally to be adopted at Punta del Este. Castro was present at the 1959 meeting and delivered a speech which, though long and confused, was not more recriminatory than that of any of the more impatient delegates. It is said that, while speaking and on being asked to assess the amount the United States would have to contribute as foreign aid to the development program, Castro read aloud a figure which one of his economists had passed on to him- $30,000,000,000. That was taken to be a boutade of the bearded chieftain. It turned out to be not very different from the figures that were finally arrived at and agreed on at Punta del Este.

But there is no truth in the rumor about the influence Castro is supposed to have exercised on the United States-through the excesses of his revolution-to change its policy toward Latin America. The fact is that the Government of the United States, as Dr. Milton Eisenhower has recently shown in his book, "The Wine Is Bitter," had for some time been evolving a modification of the orthodox principles hitherto considered appropriate for the economic development of Latin America. It had come to the conclusion that only through unorthodox means and only through joint action-which would necessarily imply structural changes in the social and economic life of the southern republics-would it be possible, if not indeed to achieve development, at least to prevent the disorganization and the economic and political collapse of that quarter of the world. The effect of events in Cuba, such as expropriation and the trend toward Communism, has been to give greater urgency to the intentions of the United States that led to the Charter of Bogotá and Punta del Este; it did not, however, engender a new policy, but was merely a factor in urging-chiefly on the Latin American governments-the adoption of such a policy.

The Committee of Twenty-one, known technically as the Commission for Studying the Formulation of New Measures for Economic Coöperation, had its last meeting in Bogotá, where the whole anterior process of study and discussion culminated in a series of resolutions which ought to be regarded as the basis of the policy that was to be subsequently incorporated into the Alliance for Progress. There now appeared, without any resistance from the United States, but rather with its unequivocal support, certain theses that had been impugned both there and in Latin America as excessively radical. Thus it was acknowledged that economic development could not by itself bring about the desired social welfare in time, and that it was necessary to engage simultaneously in a movement for the improvement of living conditions of the Latin American peoples in order to avert tremendous social upheavals among vast masses of the population sunk in misery.

The Act of Bogotá was, among documents of its kind, the first to proclaim the need for structural reforms-above all in the systems governing taxes, tenure and use of land, and education-in order to set on foot a great effort directed toward endowing the population of Latin America with shelter, schooling, employment and health, by means of the most wholehearted mobilization of domestic resources and a considerable contingent of foreign aid. In consequence of these declarations, the Act of Bogotá recommended the creation of a Special Fund for Social Development which should contribute, on flexible terms, to the exertions of such Latin American countries as might propose to undertake or amplify action in the fields mentioned. Later on, the United States gave the Fund $500,000,000 of which $394,000,000 was to be administered by the Bank for International Development, $100,000,000 by the United States Government, and $6,000,000 placed at the disposal of the Pan American Union for such research as the new policy might require.


In the discussions on these matters the United States assumed an attitude of readiness to yield to Latin American pressure; it revealed its broad- mindedness and its increasing abandonment of its traditional policy; it sometimes even went so far as to urge the acceptance of certain bold schemes presented by others, and to insist, for example, on the advisability of carrying out agrarian and tax reforms. It was obvious that none of the Latin American countries-not even Mexico after 50 years in the climate of social revolution-could compare in social gains and just distribution of land and taxes with their powerful northern neighbor. But it was equally obvious that in order to promote similar conditions in the nations of the south the United States had to jettison a number of ideas which had traditionally weighed on its relationship with Latin America, and which had failed. Such was the idea that most important and decisive collaboration for the development of Latin America could and should proceed from North American private capital-an idea that was to be superseded by the conviction that such collaboration ought to come mainly from public funds. Such, too, was the notion that economic development would, unaided, produce social change quickly enough to satisfy the anxious masses of Latin America; this in turn gave way to a sense of the urgent need to undertake, again with public funds, campaigns for social welfare and even for human rehabilitation.

In place of another outworn conception it came to be recognized that any loans made to Latin American governments for the purposes of economic development and social welfare should be on easy and flexible terms, both as to time and as to interest, so as not to impose an intolerable burden on their already weakened position with respect to balance of payments. It was equally recognized that the law of demand and supply, in its application to Latin America's basic commodities, was causing an imbalance in the terms of exchange, which in turn was steadily impoverishing the nations of the south. But more than this, the United States recognized that it was necessary to come to the rescue, with such artificial measures as agreements on specific commodities, in order to avoid even more alarming consequences. The same spirit of comprehension led to the approval of existing regional common markets-or the creation of them-in an effort to accelerate the economic advancement of the Latin American states. And, crowning all these heterodox initiatives was the fact-without which the new stage would have been impossible-that the American States endorsed the theory of planning.

All these new ideas and undertakings are the principal points that mark the radical change in the Latin American policy of the United States-a change effected by two Administrations, representing each of the two great parties. They were arrived at and carried out in a period extending from the last months of the Eisenhower Administration to the first two years of Mr. Kennedy's Presidency. A curious parallel is to be found in recent American history. It was President Hoover who initiated the policy of non- intervention and good neighborliness toward Latin America; yet it remained for Roosevelt to christen, launch and steer it with admirable decision and energy, to such a degree, indeed, that even in the memory of Latin Americans and, quite naturally, in the memory of his fellow citizens, the fact of continuity is lost sight of. It is forgotten that in this respect there was no distinction of substance, but merely of style, between the Roosevelt Administration and that of his predecessor.

Most of the initiative in the present policy has been due to certain persons in Latin America, nearly all of them belonging to a new school of economists. The governments, however, that set their seal on the policy at Punta del Este were not fully aware or convinced of its ultimate implications. In Latin America, perhaps more than anywhere else in the world, political leaders have a habit of carrying revolutionary statements beyond the point to which they are really prepared to go. That practice does not generally have any serious effects on internal politics. But international politics is quite another thing, since every word is reckoned, or ought to be reckoned, at its face value. We can, then, be reasonably sure-as indeed the event has proved-that when the governments pledged themselves to change fundamentally certain traditional structures in the political, social and economic life of Latin America-as in the case of agrarian reform-they were not yet absolutely determined to carry all this out. The unwarrantable delays which later on took place, and which did not give the Alliance for Progress a chance to make the impact on the Latin American peoples that was hoped for, clearly indicate that when Punta del Este witnessed the signing of the most broadly sponsored and socially advanced document in the common history of our hemisphere, not all the signers understood its scope or divined its depth and gravity.

The declarations and pledges of Punta del Este were profoundly logical and consistent. The structural reforms announced were strictly indispensable if the Latin American states seriously intended to pledge themselves simultaneously to economic development and immediate social rehabilitation; the latter implied in great measure not only an increase in consumption, but also a natural decline in the capacity to save money for the promotion of the former. The Soviet Union had lived through 40 long years of austerity, privation and even misery in order to push its economic development. However, we in the Western Hemisphere proposed to achieve a similar aim, while at the same time procuring better living conditions, though we knew this meant artificially enlarging our capacity to acquire good dwellings, get sufficient schooling, enjoy better health and increase earnings. All this could be accomplished because it would be possible to finance part of the enterprise with foreign aid.

The basic and almost elemental problem of Latin America is the vertiginous increase in population which threatens to drown any rhythm of economic growth and overflow any capacity to improve living conditions. This problem was examined with a certain tactful and calculating discretion at Punta del Este, and it figures implicitly or prominently in every study in which the future of these countries is considered. Here is the reason why agrarian reform is one of the vital needs in our development. For there is no sort of economic expansion, however swift or successful, that can assimilate both the rural masses who cease to live by agriculture and the new surplus hands, whether in the town or in the country, who come year by year to glut the labor market. Nor must we forget that agrarian reform is needed from the point of view of equity, as another means of distributing patrimony and income more justly among the Latin Americans. It is all the more necessary because up to now such distribution has been sought mainly through systems of taxation which bite hardly at all into capital and income associated with land.

We must likewise expect this reform to result in a greater productivity of property neglected by inactive landowners, who prefer to derive profit from appreciation of land values rather than wrest it from the raising of crops and cattle with considerable toil and risk. But agrarian reform also has to be a hope and incentive for millions of peasants who are being displaced by the appearance of rural mechanization, and whose numbers in relation to the land are far in excess of what modern economics considers advisable. Those peasants, quite unprepared for industrial life, will become, if they go to the great towns, denizens of those hovels and slums which constitute a dismal but characteristic blot on the contemporary Latin American city- transformed, as it has been during the last 20 years, from a distinctive, progressive and inviting place into a sinister, proliferating farrago, hideous with sudden and uncontrolled contrast between old and new forms of wealth and with the blight and fester of rampant misery.

But among the conditions laid down by the Alliance for Progress, agrarian reform is not the only one that upsets people in Latin America. There is also tax reform. To indicate how outlandish this situation is, it is enough to say that not a single Latin American, whether of high standing or of the underworld, has ever been imprisoned for not paying his taxes or for sending in a fraudulent income tax report. In all that vast area it is unthinkable that deceiving or defrauding the state in this matter of taxes should be considered a crime, and what is more, the law does not consider it as such. As a result, tax evasion is widespread. But apart from this, symptomatic as it is, the systems of taxation are in themselves quite benevolent. In some countries taxes are very low or exemptions are large. Where tax collection is well organized, the brunt falls on the great industrial incomes-whether foreign-owned or national-and the earnings of employees, for these are precisely the sources which can most easily be checked. But there are many extremely well-to-do and even very rich people who pay no taxes; they have recourse to all sorts of anachronistic though still legal loopholes. For example, agriculturists and cattlemen are protected under the pretext that, if they were taxed, they would have to raise the prices of their produce and would thus cause an increase in the cost of living. A number of countries allow discounts on individual and mercantile incomes when these are accompanied by losses in farming activities; since this arrangement can hardly be controlled by the state, it easily lends itself to falsification of facts.

Now, if the countries that signed the Punta del Este agreement are to carry out what they said they were going to carry out-that is, an authentic revolution in their way of life and a sudden speeding up of economic expansion-they will need tax reforms, which in some instances will have to be drastic. But the classes necessarily affected by such measures have offered and will continue to offer strong resistance, first to the reforms themselves, and afterwards-for obvious reasons-to the Alliance for Progress. Hence the echo of dissatisfaction which is now heard everywhere in Latin America, in congresses and assemblies where the cattleman, the landlord and the great evader of taxes abound and have been silently and effectively representing their interests all through the successive and superficial political changes that have occurred.

In general those voices are the very ones that have been clamoring, in a heart-rending nationalistic strain, against outside interference in the political life of each country, in order to defend the status quo in taxation and landownership. In the past no Latin American nation has effected or even attempted either of these reforms without having to face tremendous opposition and embroilment. To try to carry out the two at the same time, throughout the hemisphere, looks like madness. But whose madness? Let us remember that the governments themselves, seemingly of their own accord, yielded to the gentle suasion of the economists who had been advocating these measures as a prerequisite to improvement in Latin America's precarious situation. Where, then, the madness?-especially since the situation certainly cannot be remedied by less radical means.

But there is still another obstacle, and it is quite a big one, for it contributes to the mañana attitude commonly imputed to Latin America. This is the grievous lack of technical training for the preparation and accomplishment of the early stages of any project, whether of legislation, engineering or social betterment on any important scale. Several countries have no trustworthy statistics. When, as happens in planning, work is undertaken on schemes that attempt to assess the present with a view to a distant future, the results are uncertain and highly questionable. But even for such concrete projects as a dam, an industrial plant or a power station, the financial basis cannot be accurately calculated-for lack of special technical knowledge. Sometimes a project after having been accepted is held up because the detailed blueprints of the concrete work are not forthcoming. All of which does not prevent certain voices in Latin America from attributing the delay in Alliance projects wholly to the bureaucratic machinery of the United States.

For here indeed is the source of the Alliance's great error in procedure. Inter-American organs were set up to study and prepare plans for national development, but it was left entirely to the United States' initiative not only to find the way in which its contribution should be made available, but also to arrive at some standard of judgment as to how and when and to whom support should be apportioned for carrying out Alliance plans. The result was to create a pattern of bilateral operation which, on the one hand, set the tone of the discussions between the United States and each separate Latin American nation for each particular case; on the other hand it caused an unending series of misunderstandings, resentments, conflicts and-though quite exceptionally-opportunities for scoring in the political game. How distant and different from the spirit and intention of the Alliance for Progress! President Kubitschek and I, on being called in to furnish an opinion on the functioning of the Alliance, both agreed-which was hardly remarkable-that the Alliance must be given back its original character and that this should be accomplished by establishing an inter- American body to administer the Alliance. Such a body could really be entrusted with the responsibility of scrutinizing the extent to which each country, including the United States, fulfills the commitments it assumed at Punta del Este. But if a single nation, however rich or powerful, should try to take that responsibility on itself, its action would be interpreted as an attempt at unwarranted invasion of each state's internal jurisdiction- in short, as an instance of imperialism.


It would not, then, be right nor in keeping with the spirit of Punta del Este for the United States to engage alone in the enterprise of Latin American development. The newly formed Inter-American Development Committee may be the means of solving the existing misunderstandings which harass and hinder the march of this policy and counteract its beneficial effects on the hemisphere. But it is not right, either, to place the whole burden of carrying out this great undertaking upon President Kennedy, who has had to assume responsibility for the Alliance whenever it has been abandoned by its Latin American partners, and has also had to join issue with his own compatriots who, though well aware that there is as yet no other way, strive to block the path of his policy.

The Congress of the United States approves of the Alliance and extols it- mark you-as a policy of that nation. Individually, Senators and Representatives follow the same line, converted as they are into jealous guardians of the social and economic transformation of Latin America. On the other hand, their fault-finding, usually based on unsound information, can scarcely be said to help to make the program acceptable. But what is seriously harmful is their manifest itch to slash the figures of the budget when it is laid before them; and although they may later on repent of having yielded to the temptation, the wrong has been done, and the whole of Latin America has interpreted their action as a lack of good will on the part of the United States toward the Alliance. It is already being pointed out that when the moment came to give the Alliance the necessary financial support the United States failed in precisely that part of the joint undertaking which it pledged itself to perform. For of what use would the Alliance for Progress be if its only result were that United States Senators should tell Latin America when and how to enact its agrarian and tax reforms? It was understood from the very beginning that to carry out this gigantic enterprise would require sufficient foreign financing for Latin America to solve, above all, its balance-of-payments problem created by the incipient stages of industrialization. It would deform the great undertaking if that contribution were to be scrimped and instead we were offered counsel and warnings about the revolution that will break out in Latin America unless we hasten to effect the reforms called for by the Charter of Punta del Este.

President Kennedy has grasped the meaning of this policy far better than most of his fellow citizens. He knows it is necessary, and he knows why. He realizes all the dangers that exist for this part of the world if its governments do not enter upon a thorough and far-reaching social transformation. He understands also the difficulties they will come up against; politician that he is, inured to conflicts with the legislative branch, he knows quite well that there will be wrangles, delays and setbacks in many legislative bodies before all the countries embark, as is now inevitable, on a great reform.

On their side the Latin Americans, and especially their rulers, ought to comprehend and sympathize with the impediments President Kennedy often finds in dealing with a Congress that cannot or will not always follow a pure line of international politics, without deviating toward the tastes and misconceptions of the electorate. Whenever the occasion arises to show the citizenry how advisable a policy like the Marshall Plan or the Alliance for Progress is, it seems necessary to explain it in extravagant terms and present it as if it could have been conceived only for the good and profit of the United States. The arguments thus employed are soon taken up and repeated by the Communists and the foreign beneficiaries-friendly governments and peoples to start with-who are then able to reason that there has been at bottom neither generosity nor disinterestedness, no real altruistic sentiment, no defense of common principles, but only an indirect pursuit of direct mercantile advantages for the United States.

Some day it will be necessary for a president of that country-it might well be Mr. Kennedy himself-to tell his people that foreign policy does not always have to produce direct material benefits, and that it is not man?uvred in the sole interest of merchants, industrialists and taxpayers; but that it may be conducted as a sort of long-term investment, extending perhaps through several generations, at great risk, without any guarantee of success, but serving in the long run, and in the widest and highest sense, the interest of the nation. It was in this spirit that the last three wars were fought. Did anybody explain then that the profits would be quick and solid on the money poured out to maintain American soldiers in France, afterwards throughout the world and later still in Korea? Seriously, nobody was demanding such an investment. And nobody in the United States, not even the greatest reactionary, would protest because now, at last, it is Latin America's turn to receive foreign aid, when it needs it most for its defense and development. What may be an error is to try to convince the people of the United States-quite unnecessarily-that the Alliance for Progress is a policy that really seeks to open markets for them and to get back the $1 billion that were lost in Cuba.

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