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be done in the Latin American schools, means the prevention of the spread of Castro Mr. Moscoso. We have evidence of a nummanned largely by Institute alumni. ism in Latin America?

ber of very wealthy Latin Americans beginTo me, this is one of the most exciting Mr. Moscoso. Well, there is no doubt that ning to recognize their social responsibilities, undertakings in the history of the labor a very substantial number of jobs are cre which come with great wealth, and not only movement, for the future of more than half ated by the aid program right here in the are they no longer, in many instances, opa hemisphere depends upon it.

United States; approximately 50,000 jobs are posing reforms but, in some instances, they pretty much dependent on the aid program are espousing reforms or leading them.

because we do not send dollars to Latin Now, hopefully, as the program progresses LATIN AMERICA IN DANGER

America-dollars do not help Latin Amer and as these more privileged classes realize Participants: President John F. Kennedy ica or the rest of the underdeveloped world. that it is in their self-interest to see that (report to the people on foreign aid); Teodoro We send machinery, equipment, commodities the masses of the people get a better break, Moscoso, U.S. Coordinator for the Alliance for of all kinds and, obviously, in the produc we are going to see an increasing response Progress; Moderator: Harry W. Flannery.

tion of these commodities and of this equip of the wealthy classes to the social needs of Mr. FLANNERY. "Washington Reports to the

ment and machinery and so forth, Americans their country and a greater participation and People.” President Kennedy on the House are employed. Now, to say that the program, even the providing of more leadership on cut of half a billion dollars in foreign aid:

insofar as the Latin American part of it is their part for the undertaking of reforms. "President Kennedy: Under the terms of

concerned, addresses itself to destroying Cas Mr. FLANNERY. One of the needed reforms this bill, hopeful social and economic prog- troism, I think we are putting the cart be is tax reform. Has this been accomplished ress in Latin America will be stalled and our

fore the horse. I think what we are try to some extent? shield against Communist aggression in this ing to do is create independent Latin Amer Mr. Moscoso. Over 11 countries already hemisphere will be weakened. It will mean

ican nations and, as a byproduct, we will, have very substantial tax reforms either on that the Soviet Union will be giving almost as

undoubtedly, reduce the appeal of Castro their way or about to be undertaken. We much assistance to the small island of Cuba communism.

should give them credit for having initiated as the United States is to the whole of Latin

Mr. FLANNERY. Might not a very effective so strongly and so well tax reform programs America. This is no way to defeat commuappeal also be, Mr. Ambassador, the fact that

in some of their countries. nism in this hemisphere.”

this is a moral responsibility of the United Mr. FLANNERY. Mr. Ambassador, you are Mr. FLANNERY. What about the effects of States?

suggesting that the Alliance for Progress has the cut on the Alliance for Progress? The

Mr. Moscoso. Well, yes. I think that both made considerable progress. Is this the case? U.S. Coordinator of the Alliance for Progress,

things should be done. I must say that a Mr. Moscoso. Well, I would say that it has Teodoro Moscoso, answers for this radio sta

moral appeal is being made in this country made a lot more progress than the people tion and the American Federation of Labor

in the good traditional democratic manner who criticize the program are willing to conand Congress of Industrial Organizations. by private groups. I think there is hardly cede. The ability is there now-140,000 The interview is in Mr. Moscoso's office in the

a community in the United States where houses have been built, 8,000 schools, 12,000 Department of State here in Washington. aid and has supported it for humanitarian

some civic group hasn't come out for foreign miles of road, we are now conducting schoolYour reporter, Harry W. Flannery. Mr. Am

aid and has supported it for humanitarian lunch programs and other chil -feeding pro

reasons. bassador, if the Senate went along with the

grams among some 15 million people in Latin drastic House cuts in foreign aid, would the

Mr. FLANNERY. Tell us about some of the America. Even more important than that, I Alliance for Progress be seriously affected?

conditions in the urban slums, Mr. Am think that the Alliance is starting to take Mr. Moscoso. Well, it has already been af- bassador, if you can take a few examples.

psychologically—it is starting to penetrate. fected, psychologically speaking, of course,

by the cities of Latin America, a rim of huts

Mr. Moscoso. Well, in the case of some of It is becoming the object of sometimes the cut in the House, in Latin America. We

acrimonious debates but that is all right; are getting reports on editorial comment from

which are given rather picturesque names, that is fine. I think that it is good that a prominent Latin American newspapers to depending on what country you are talking

program of this impact and of this dimension

In the effect that there is a degree of disen- about, surrounds these capital cities.

be debated and those who are against it have chantment setting in with regards to the many instances, no water is available, the

every right to say so, but those who are in Alliance and to the creditability to the prom

death rate is very high, the average lifespan favor are now coming out and defending it. ises that the United States made at Punta is very low, the literacy rate is also very

And that is one way of making a program of del Este back in August 1961. I think that low and, in general, a feeling of desperation

this type well known. we can recoup and our image can be restored permeates the atmosphere of these slum

Mr. FLANNERY. What is the hope for the areas. if the Senate gives us back a substantial

That is why, even from an economic

next several years, Mr. Ambassador? amount of the cut made by the House. point of view, housing may be a low produc

Mr. Moscoso. Well, in the first place, I hope Mr. FLANNERY. Is it true, Mr. Ambassador, ing Latin American countries begin to attack tivity investment. We are interested in help

that a greater degree of political stability will as the Clay Committee indicated, that the

be achieved by the knowledge that the GovAlliance couldn't use all the money originally strong program in Latin America of housing

this problem of slums. We have a very ernment of the United States will not give requested

economic assistance to military governments Mr. Moscoso. One of the reasons why some construction, both the AID agency and the

that unseat a democratically elected governof the Members of Congress believe that we Inter-American Development Bank have put

ment. I think that with a greater degree of cannot use these funds, and I believe the up close to $250 million in the past 2 years

political stability, it will be able to perform same reason applies to General Clay's stateto assist Latin America in beginning to solve

much more rapidly in the economic and sothis problem. ment is that last year we did not use a little

cial field. Many countries will have intro

Mr. FLANNERY. Has the American Instiover $50 million of our appropriation. We

duced reforms within the next few years and didn't use it because we didn't think we tute for Free Labor Development, Mr. Am

many of them will have finished their nacould use it prudently. Now, I think that bassador, been a help in the progress of the

tional economic and social development when a program is being administered in such program in Latin America ?

plans, and it will be much easier then for our

Mr. Moscoso. Yes. The Institute has been a way as to get the utmost effect out of the

Agency and other credit agencies to finance taxpayer's dollar there should be confidence

working very closely with the AID agency
and with the Latin American countries in

these programs as they are embodied in these in the people who are administering the

long-term plans. two major ways: First, of course, the Instiprogram and instead of cutting the funds for tute runs a series of training centers, both

Mr. FLANNERY. Thank you, Teodoro Mosthe next year, the funds that have been rehere in the United States and in the major

coso, Coordinator of the Alliance for Progquested should be approved. countries of Latin America to train demo

ress. This interview was in Mr. Moscoso's Mr. FLANNERY. I suppose the recent mili- cratically oriented labor leaders. About five

office in the Department of State here in tary revolts in Latin America haven't helped groups have already been graduated from the

Washington. This is Harry W. Flannery inthe situation ? U.S. center, and a new building is going

viting you to listen each week at this same Mr. Moscoso. No, they certainly haven't.

time for this to be dedicated within the next few days

public-service program, They have set us back, politically. Hope to house the Institute. We now have

brought to you by this radio station and the fully, we again may be able to come out of

the branches of this training center in five Latin

AFL-CIO—"Washington Reports to this very bad setback in such a way that American countries and, hopefully, we will

People.” we not only can recover but obtain some ad get branches in other countries. Now, the vantage from this experience. For instance, second major thrust of the Institute's effort I can see where the democratic forces in

CHALLENGE IN LATIN AMERICA is in the social service field, primarily in asLatin America will probably rally to the call sisting democratically oriented labor unions

Participant: Joseph A. Beirne, president, of danger to the threat that democracy may in putting together housing developments

Communications Workers of America. disappear from the hemisphere unless those for the members of the democratic labor un Moderator: Harry W. Flannery. who believe in it defend it. I think that since ions in that area.

Mr. FLANNERY. As we see it. the Alliance for Progress precisely encourages Mr. FLANNERY. Has there been a change, Mr. BEIRNE. The American people are getdemocratic forces, this is the time for the Mr. Moscoso, in the attitude of the wealthy ting tired of carrying the burden of foreign Congress to approve the funds which will class in Latin America? Many have opposed aid, so we slash by $500 million off Latin permit the Alliance to move forward at ut- reforms, as we know, and some had even America. The result will be that 15 years most speed.

lacked a national spirit so much that they from now we can carry the burden of the war Mr. FLANNERY. Mr. Ambassador, is it true were sending their money over to Swiss that will go on, of the troops that will be that foreign aid really means jobs and it also banks.

necessary.

Mr. FLANNERY. Joseph A. Beirne, president as the capacity of those men-people down go to Peiping before the big split, trained of the Communications Workers of America, there—to sacrifice in carrying out the phi not for 3 months, trained for a year, trained and secretary treasurer for the American In- losophy, the words and the ideas of free for 2 years. What will be one of our big stitute for Free Labor Development. In his men.

problems in Cuba? Two years ago, 3 years talk to the 36th annual conference of the So, a few years later, with a grant from ago, the whole fourth grade of the public Catholic Association for International Peace the executives council of the AFL-CIO, se schools-practically every child-was shipped on "The Christian Challenge in Latin Amer- curing the services of a professor from the over to Moscow to go to school. Many of ica,” Mr. Beirne called upon the Congress and University of Chicago, we studied the whole them haven't come back yet. Now, when the American people to preserve and con- problem of setting up an institution, a con they come back, and they go to the schools tinue the Alliance for Progress. Mr. Beirne tinuing institution to carry out this kind in Cuba today, you and I should both know warned that without action in the United of work. For the last 18 months to 2 years, that when they grow up and reach the age States and reform in Latin America, Latin we have such an institution. It is called, as of 16, 17 or 18 they will be dyed-in-the-wool America will go Communist. For this radio your program suggests, the American Insti Communists of the type that you can't station of the ABC network and the AFL, tute for Free Labor Development.

touch. They have so many trained already CIO, he declared:

It's an organization in which the Ameri that they are exporting them to other parts Mr. BEIRNE. It was in the days of Franklin can labor movement, through the AFL-CIO of Latin America. Roosevelt that we made famous the good was able to convince certain enlightened Our universities in the United States have neighbor policy. What is the good neighbor business leaders, certain men in the public been doing a lot of things, but not enough. policy? To shake somebody's hand and say, domain, certain professors in North America What we are doing is not enough. “Go ahead starve, fellow. I am with you. I

and in South America, to join together in a Mr. FLANNERY. Joseph A. Beirne, president am your friend. I am here today and gone

board of trustees for the purpose of raising of the Communications Workers and secretomorrow. I will come visit you once in a money to carry out, on a continuing basis,

tary-treasurer of the American Institute for while. I will eat your food and compare it

the education, the work attached to carry Free Labor Department, cosponsored by with mine and tell you how lousy yours is.” ing the message of free institutions under the AFL-CIO and American business leadIs that a good neighbor policy? To me it's law.

ers, in a talk at the 36th annual CAIP connot. To me the significance of Latin Amer I am happy to be able to tell you that the ference at the Sheraton-Park Hotel in ica in the U.S. affairs has not come home to pattern is the same as I outlined in our first Washington. our political leaders.

experimental class 3 months ago here in the This is Harry W. Flannery, speaking for One of the greatest things that has re- United States. Likely candidates have been the AFL-CIO and inviting you to be with ceived a boost was Kennedy's declaration of sent to Israel and to Germany for 3 more us next week at this same time for "As We the Alliance for Progress. What do you think months to pursue studies of certain aspects See It.” This program, a presentation of ABC is the result, when people see that only 2 of movements that can be carried out in public affairs, has been brought to you by years later the politicians of America got Latin America like the cooperatives, the the ABC radio network and the affiliated tired of Latin America and are not going to credit unions. They had their further studies station to which you are listening. provide any more money?

and then spent the balance of their time on This is really no coordination; those in the internship, paid for by the American InstiAID program, like Ambassador Moscoso, are

tute for Free Labor Development, to carry LATIN AMERICAN INTEGRATION trying desperately to do a job, but are frus- out their work in their own country. trated at every turn of the game. And by

We have had four such courses up here

Mr. HUMPHREY. Mr. President, the what? Basically by the apathy of the Amer in Washington. One hundred and fifty-one Alliance for Progress represents, as I ican people. It all starts there. Those fel- people-mostly men, some 11 women-spent have stated earlier in this debate, the lows in Congress just reflect what they have their 3 months up here and are now down most important part of our foreign aid found out, in whatever way it is that they doing the job in Latin America of reaching find out what you and I think, and their others in their own native lands. We have a

program. In the continuing struggle for

political and economic improvement now judgment so far this year has been that the class that starts this Monday morning, right American people want the Congress to do over here on 19th Street, off Connecticut going on in Latin America, there are nothing. The American people are getting Avenue, for those who come from Washing

many problems to be solved in this crutired of carrying the burden of foreign aid, ton, in the old John Hopkins School for

cial area and one of the foremost is the so we slash $500 million off Latin America. International Studies—the American Insti problem of economic integration. We began something here for, it is my belief, tute has taken over one of their buildings The President of the Inter-American that every American has an obligation and

and Monday morning, 31 more will be going Development Bank, Mr. Felipe Herrera responsibility to do his part in the whole through the fifth class for 3 months.

of Chile, a man well acquainted with the world scene, as well as Latin America but At the same time, we established institutes particularly in Latin America because we down in Latin America; we have some 11

problem of economic integration in Latin are connected to the continent. We have already in operation in 11 different countries.

America, recently discussed the problem the obligation to sacrifice, and I mean sacri- through those 11, we have already trained

through those 11, we have already trained in a lecture at the University of Chile. fice the way in which, at times, it hurts us, 1,682 men and women. What are we teach With the notable exception of the not the lipservice that is so often given by ing there? We are trying to teach them Central American common market, the too many who are in a position to give more that which is lacking in the curriculums of

20 separate nations of Latin America than lipservice.

Latin America. Not only how to set up free Mr. FLANNERY. The secretary treasurer of institutions, not only how to fight to main

have thus far had little success in coordithe American Institute for Free Labor De tain them and continue them, but also that

nating economic and political decisions velopment told of the beginning of the insti which has been lacking in Latin American

essential to the process of development. tute.

life, the responsibility that goes with leader The discouraging and frustrating effects Mr. BEIRNE. We have got workers who are ship-responsibility to an organization, re of this unsatisfactory arrangement have leaders—some 16 of them—from 12 countries. sponsibility to people, responsibility to a been felt here in the United States as From our own resources we trained them for nation, responsbility toward the carryng out well. In carrying out development pro3 months in the fundamentals of democratic of an idea.

grams such as the Alliance for Progress, trade unionism, the responsibility that goes We remember reading in our newspapers with leadership and that goes with what they here a few years ago about Richard Nixon,

we have been hampered in our efforts by call power. Having trained them for 3 when he was Vice President. He went to

the lack of cooperation and coordination months, we carried them for 9 months on our Latin America and was stoned and spit on. among the states of Latin America. It is payroll and had them go back to their own Well, it took us, through our own means, a grave error to imagine that such pronative lands to transmit to their own col about a month to determine that there were

grams can achieve maximum results leagues that which they retained from 3 only four people—none of whom came from months of training.

under the existing situation. As Mr. the nation—who organized that whole demOur experiment worked. Of those 16 onstration. Four Communist-trained men.

Herrera says: men–15 of them stuck it out-for they had And they were able, in a short period of This is the error of believing that it is to leave their homes and their families to time, to get hundreds of people, who didn't possible for a country as expansively develcome up here for 3 months and when they know who Richard Nixon was any more than

oped as is the United States (which in effect returned they had to stay away from their they know what constitutes the powers of

is an integrated nation comprised of 50 homes and their families as they traveled a nuclear warhead, but who were ready to

States) to have a relationship without frusthroughout their country, not on fast jets spit at, ready to throw stones at him, as we

trations and mistrust with each of the 20 and planes and 19-foot cars—like we have remember seeing on our television and in our

disunited countries of Latin America. in the United States—but sometimes on the newspapers. Four Moscow-trained agents. backs of mules, sometimes hoofing it, Now, the American Institute for Free Both interested Americans and Latin walking it all the way—20 miles, 30 miles, 40 Labor Development has only been in exist

American development leaders realize miles, living in the fields. They made the ence, as I say, operating for about 18 months

that only through integration can Latin sacrifice of staying away from their homes or 2 years. The Communists have been to teach their own colleagues. And we were there for 10 years. Thousands of men were

America become an equal partner in the greatly impressed with what was revealed taken to Warsaw, to Moscow, some used to Alliance for Progress.

Several organizations in Latin Amer- THE UNIVERSITY'S TASK: GIVE INTEGRATION American people, on their welfare. Otherica have begun to lay the groundwork

PHILOSOPHICAL AND POLITICAL SUPPORT wise the idea of integration will be nothing for the first necessary steps toward inte Aside from these personal reasons which

more to those people than theoretical disgration. These groups are working to are so dear to me, I am also happy to have

courses from the study halls, far removed coordinate monetary and fiscal policies

this opportunity to meet with you here, be- from their interests and their prospects. and to attract more private investment I have made it a habit to visit the univer

The integration of Latin America must not cause in my travels through Latin America

be looked upon as an alternative to the in Latin American development pro

sities. I believe that in these turbulent urgently needed structural transformation grams. An attempt is also being made times, these times of heated debate, of the which, to a greater or lesser extent, should be to encourage freer trade among the na violent clash of ideas, doctrines, and atti- initiated, carried out, or completed in our tions of Latin America. This program tudes, it is in the Latin American university countries. Integration must not be regarded would utilize the experience of the Com

that we still are able to communicate. as the remedy that will make it possible to mon Market nations of Europe to estab

Tolerance must be protected there where the overcome the present crisis without facing

unceasing restlessness of the young people is up to the integrating task itself from withlish a Latin American common market, combined with the positive accomplishments in, from its very roots. We must not forget an arrangement which I have advocated of the more mature generations.

that despite all the progress made by our on the floor of the Senate.

In that always significant and fruitful di hemisphere in the process of acculturation, The Inter-American Development alogue that I have been holding with Latin in its effort to bring great groups of marginal Bank has acted as a central coordinator American university groups, I have noted populations into civilized life, Latin America for all agencies interested in Latin Amer that, along with the pragmatic concepts of

still has an illiteracy rate of 40 percent; that

is, 40 percent of the people still have not ican integration. A concerted effort is integration, there is a desire—a desire not yet expressed in so many words—to nourish

been integrated into the scale of ideas and now being made to obtain maximum use

those technical schemes with a philosophical values that determine the trends of public of the technical resources of each agency

and political line of thought that will endow opinion among the more culturally advanced in order to attain the common objective integration with the sense of cohesion it groups. Let us not forget that there are still of integration. These measures rep now lacks. We want a kind of integration

some 20 million Latin Americans who live resent only a beginning of the solu that will go beyond that based on the con under the most primitive conditions, equivation of the problem of Latin disunity. cepts of the common market, regional plan

lent to those that prevailed among the

indigenous precivilizations that antedated This whole problem of Latin American ning, coordination of monetary policies, cuseconomic integration is being discussed ments. What is urgently needed is an overtoms agreements, and other such arrange

the more developed ones found by Columbus

and those who followed him. To them, clearthis week at the meeting of the OAS In

all design that will bind together Latin ly enough, this recovery of Latin America ter-American Economic and Social America's materials needs with clearly de- through its process of integration has and Council in São Paulo, Brazil. I hope that fined philosophical and political concepts will have no meaning if at the same time they out of this conference will come some such as will give meaning to the unitary are not incorporated into the cultural and guidelines for hastening economic inte solution. I should like to make my words

material way of life that will identify them gration on the South American Conti forceful enough to encourage not only the

with and bring them into the more developed

sectors. Integration must simultaneously nent. It is time for South America to young students but their teachers as well, catch up with its Central American

so that through their thinking, through have both depth and breadth. The mystique their intellectual processes, we, the men of

of hemispheric nationalism will create franeighbors.

Latin America, might be able to find that ternal bonds among the Latin American I ask unanimous consent that Mr. philosophical and political content so sorely masses when they become fully aware that Herrera's address, “The Financing of needed in the present-day life of our hemi integration is not only going to give them a

common market but will also widen their Latin American Integration,” be printed sphere. Such a synthesis is essentially a task in the RECORD.

of the university. It is the inspiring task horizons toward well-being and hope. There being no objection, the address have today within their grasp. which the universities of Latin America

It is certain that without integration there

will be no economic development in Latin was ordered to be printed in the RECORD,

America. But I would venture to say with

TOWARD A HEMISPHERIC NATIONALISM as follows:

equal emphasis that if at the same time we THE FINANCING OF LATIN AMERICAN

It is from such perspective that we can fail to create the social conditions appropri

speak, as indeed we are speaking, of a hemiINTEGRATION

ate to development; if our countries fail to sphere nationalism in Latin America; a na transform their structures; if they do not (Address delivered by Mr. Felipe Herrera, tionalism that comes, not as it did in times

achieve a better distribution of national inPresident of the Inter-American Develop gone by, from dismemberment, from atom

come; if they do not expand the benefits of ment Bank, at the University of Chile, ization, from the proliferation of frontiers,

education; if they do not improve welfare May 22, 1963)

but from a concept and process of reinte and health conditions, we shall likewise have Mr. President, ladies and gentlemen, Presi- gration.

no integration. dent Gómez Millas was perfectly right when I had occasion some months ago to outline It is dangerous to distort the meaning of he said that it is pleasurable and rewarding these ideas at the University of Bahia, when integration—as certain groups, by definition to rise to positions of responsibility so that I said that “Latin America is not 20 na its enemies, are seeking to doby claiming one may be able, even if partially, to realize tions; it is 1 great dismembered nation.” that the process of integration can be turned the dreams of one's youth. Therefore, I am It may be added that there are many cases into an alternative for the responsibility deeply grateful to all of you who have shown in history where the tendency toward na that is incumbent upon modern governa willingness to listen to me this afternoon tional identity has been nourished not by ments to satisfy the demands and needs of here at the University of Chile, my alma the idea of separation or the desire for in the great masses who aspire to something mater, where on so many occasions we, the dividualization but rather by a tendency to better than their present situation. It is men of my generation, discussed our dream ward association, a movement toward a new necessary to insist that if on the one hand of Latin American unity. True, it was not rendezvous with a historic destiny clearly in we shall find the solution for many of our a dream of our own making, for it had also dicated by centuries of time but lost from problems only through integration, on the been cherished earlier by the generation of sight or thrown off course by events. If one other hand it is imperative that the benefits 1920 under the leadership of Santiago seeks a current example, one need only look of integration be distributed and spread out Labarca, with the same impassioned faith at the process of reunification now at work among all levels of Latin American society. with which the youth of today continue to in the old Arab world which in recent cen

INTEGRATION AND THE ALLIANCE FOR PROGRESS cherish it in these same halls. The only turies had been fragmented. difference is that today the events of history However, we must make it very clear that

What I have just said is closely related to have provided positive steppingstones toward this hemispheric nationalism cannot be a

two topics that have come up in practically giving tangible form to those ideals, to such

all the conversations I have had in Chile in mere emotional concept based on the spiritan extent that in this momentous period in

the course of this official visit as President ual ties and mutual interests of our counthe life of Latin America, we are talking tries. It is not the old nationalism-bound

of the Inter-American Development Bank, concretely of the unification of our countries. by the traditional canons that identify the

whether with high Government officials,

with outstanding representatives of private As I look back and think of the ideological people who comprise a state by their similar

enterprise, representatives of labor and coinspiration of those past generations; as I ity of origin and custom and by their comrecall the times, not so long ago, when the

operatives, men from the various regions of mon love for the land lying within the nanecessity of our integration was nothing

the country, with the authorities, or with tional borders—it is not that type of nation

the faculty and students at the universities. more than a theory advanced in the lecture alism that should be translated to the hemi

These two topics are the Alliance for Progroom; as I compare that situation with the spheric level, simply by exchanging narrow

ress and the Latin American Free Trade Asposition today, when we can meet to discuss borders for wider ones. We must be able to

sociation. And obviously there are conin concrete terms “the financing of Latin give the new concept of integrated national cepts and opinions about them that merit American integration,” I cannot help but ism a dimension in depth that will cause the analysis. urge you to ponder on the tremendous proc process of integration to produce a genuine The Charter of Punta del Este, which set ess of acceleration that has occurred.

impact on the great masses of the Latin the legal framework for the Alliance for

Progress, attempts to lay out the common Therefore, I believe that the program of in this respect; the physical, mathematical, paths by which the Latin Americans may the Alliance can have meaning only if Latin and biological sciences were progressing advance to find new horizons. Thus, there America comes to agreement within itself, much more rapidly than the processes of is clearly a connection between the Alliance sets itself up as a regional bloc, and thus social organization. But today I would venand the concept of integration that I have established, agrees on common and reciprocal ture to say that perhaps the processes of defined.

action with the United States in order to at adjustment, readjustment, and revolution In the conversations which I mentioned, tain the objectives of the Charter of Punta of our contemporary society are trying to the attitude of my questioners has been the del Este. Western Europe has already shown make up for the long delay, or even to forge same in essence although cast in different the way and we can also see it today in the ahead at uncontainable speed, as compared molds: “The program of the Alliance is not new states of Africa which, boldly and with with the advance of the sciences and of their working out, or it is working badly, or it is out hesitation, are laying the political foun application that became so marked begina failure, or we have no faith in its results." dations of the Pan African process.

ning in the 19th century. At first glance, and from the way in which The program of the Alliance—under that So I feel, my good friends, that I am not the problem is brought up, it is not difficult

name or any other—is not a program for the addressing myself to tomorrow, to our chilto appreciate the reason for such opinions. United States. It is a program for us, and dren or our grandchildren. I am talking, And still further, if the program of the Alli- nobody is going to make it for us if we do we are talking, on behalf of ourselves, on ance is regarded as a unilateral decision of not make it ourselves. Chile, our country, behalf of those of us who today have the the United States to provide assistance to has an important role to fulfill in that pro responsibility of shaping the destiny of Latin the countries of Latin America through gram and I am sure that you, and all of America. If we Latin Americans ignore the bilateral arrangements with each of them, the other responsible and representative urgency of the situation, we shall remain one can perfectly well explain the feeling sectors of this Nation, so understand it. outside the margin of history. We shall see of frustration to be noted on all sides. INTEGRATION AND THE LATIN AMERICAN FREE

history pass us by, offering opportunities If the program of the Alliance for Progress

TRADE ASSOCIATION

to other men, to other nations, to other rewere of that ilk, it would not be worth the

The activities of the Latin American Free

gions that will not waste them through titrouble it took to formulate it. The Alliance Trade Association are being judged in terms

midity, through cautiousness, through fear of would have no reason for being, had it not

the future, through conformism. been conceived as it was, that is, as an intersimilar to those used in criticizing the Al

Ours is the time of integration. In a American program. It would not be worth liance. It is not functioning, or it is func

document that has made history in our era, the time spent on discussing its effectiveness tioning timidly, it is said. This policy of if the entire plan of Punta del Este were to

the projections of which are bound to reach traders, of simply negotiating the removal of duties on exports and imports, is not

out through the course of all time to comedevelop into a series of isolated bilateral ac

the last encyclical of the late Pope John enough, it is added; it is necessary to do tions of the United States with each Latin

XXIII, Pacem in Terris, Peace on Earthsomething more, something deeper and more American country. But on the contrary, if far reaching.

it is most profoundly pointed out and I we look upon the Alliance as a program of

Obviously, no one can deny that those who

believe that it is not by chance that this Latin America in which the United States think this are right. But they forget that last Ecumenical Council—that mankind is

encyclical is related in large part to the participates, then the Charter of Punta del

what the Latin American Free Trade AssoEste and the whole plan it outlines have

inevitably and irrevocably moving toward a meaning. It is imperative, then, for us to

ciation is doing today is carrying out the
terms of reference which the countries that

process of unification of political doctrines, Latin Americanize the Alliance for Progress. comprise the Association set for it in 1958,

of ways of life, of regional blocs. And to do that, it will be sufficient for us to

I am convined of the reality of that apthat is, less than 5 years ago. In that short recover that regional sense which is the very time we have advanced so much that what proach and therefore I believe that if Latin essence and basis of the Charter of Punta del we approved only yesterday now seems in

America proves incapable in the next 10 to Este.

sufficient to us. We should congratulate 15 years of bringing itself together into a In fact, anyone who reviews the charter will note that it brings together aspirations that a conscious feeling for integration is ourselves on this, because it is clearly a sign political bloc of its own, our countries will

find it necessary, perhaps individually and toward which Latin America has been strug- taking shape at a much faster pace than

disjointedly, to form part of some sort of gling through many long years, to which the even the most optimistic would have dared

world integration. In other words, the usual United States and Europe had so far given to think.

thing would happen to us: a hemisphere no response, and with regard to which not

What happened in 1958 when the Associa- apparently full of prospects would lose the even we, the Latin Americans ourselves, had tion was established was the same that had

opportunity to bring them to fruition bebeen able to come to agreement. The charter happened to us so many times in the past.

cause it was waiting for the right time, like speaks of the need of achieving the ecoAs on other occasions, we Latin Americans

those young girls of marrying age who let nomic and social development of Latin were attracted by the results that Western

marriage, which would complete their lives America and the right of the people to en- Europe was obtaining through its process of

and carry them into the future, pass them joy the benefits of that development; it integration. But, as had also happened so

by because they are waiting for the ideal points out the urgency of having greater pub- many times in the past, we erred in imitat

husband, one who can give them security. lic and private investment and guarantees ing. Instead of drawing from the approach

That ideal prospect is the one who quite the minimum external assistance required

of the “Inner Six," with their Rome Treaty, generally never appears. for development; it emphasizes that there their Common Market, their administrative

I repeat that I believe that the time for can be no solution to Latin America's prob and technical integrating agencies set up in

action in Latin America is today, not tolem if a formula is not found to insure staBrussels, we went only halfway and fol

morrow. And I sense, I divine this same conbility of export earnings and fair prices for lowed the more restrained arrangement of viction in your unanimous uneasiness, in our raw materials; and finally, the charter the "Outer Seven,” as adopted by those your interest in these subjects, in your presstates that economic development will not be countries that were not in a position boldly ence at this conference. It is apparent, too, enough if, at the same time, there are no

to join a common market, which presupposes in our governments. Good proof of this is social development and social reforms, and

not only many reciprocal relinquishments the significant declaration recently signed that consequently governmental investments

and, consequently, immediate sacrifices, but by Presidents Alessandri and Goulart. I beshould not be confined exclusively to the also the maintenance of common policies lieve that the proposal to convene a meetfields of production but must also help to

in the principal aspects of economic activity ing of Ministers of Foreign Affairs to conprovide homes, education, and good health. and even of social advancement.

sider a new approach to the need of instituIt is a Latin American program to which We copied badly and it should not sur- tionalizing the slow process of our economic the United States has pledged to give finan- prise us that the Latin American Free Trade integration may well have very important cial assistance and support to help solve the Association is having to cope with the lim- outgrowths. problems of greatest concern to our countries, itations that we ourselves imposed upon it. The Foreign Ministers of the Latin Amerprovided the program takes on meaning for Because of our cautiousness, we copied ican Free Trade Association countries may us, the Latin Americans.

badly, as so many times in the past. And find a good example right here in Latin AmerWhat is happening, as I have said before we did so because, unfortunately, our deci- ica. The five countries of Central America from other platforms, and I repeat it today sions are still influenced by the timid, by

sions are still influenced by the timid, by were more daring, less cautious than the here, in my own alma mater, is that within those who believe that to move quickly is members of the association. They are creatthe program of the Alliance, the same error dangerous, who think that we can take a ing a genuine common market. Their organs is being committed that has been repeated long view of these processes over a 50-year of consultation, working on a continuous over and over in inter-American relations period: Those who will say to me, "How in basis, are accelerating the process day by day. throughout our history. This is the error of teresting your speech was, but what a pity

teresting your speech was, but what a pity Very appreciable and concrete benefits are albelieving that it is possible for a country as that we shall have to wait 40 to 60 years, at ready being felt. They were not content in expansively developed as is the United States least, to see your ideas materialized.” Central America with talking about eco(which in effect is an integrated Nation com I believe that those persons are unaware

nomic integration. They are integrating. A prised of 50 States) to have a relationship of the fact that the pace of our times is new spirit of integration has taken hold of without frustrations and mistrust with each much faster than the rate of improvement the people of Central America and they are of the 20 disunited countries of Latin in science and technology. For many years confident that after all the present obstacles America.

a very great imbalance could be observed and limitations have been overcome, they

years.

will see the development of an integrated system of free prices; nonetheless, we see payments, as its available foreign exchange nationalism having both

both breadth and that throughout its history, particularly in declines and its internal rate of growth depth-which is exactly what we should like the last 30 years, agriculture in the United decreases from the effects of these crises in to see projected throughout all of Latin States has continuously been receiving a sub- its foreign trade, the more that country will America.

sidy; that is to say, it has required a policy have to move toward international indebtThe process of Latin America's integration of income redistribution in order to enable edness. requires political decisions that will encour those who engage in the production of these This is a situation that we find not only age, work out, execute, and make possible primary products to have a level of purchase in Latin America but in general in all underthe implementation of the plans of the tech ing power similar to that created by industry developed countries. Figures were submitnical experts. The technicians can plan and or services.

ted at a recent meeting of the Development study integration, but it is the governments, Today efforts are being made to find an Assistance Committee,i at which the repreas the leaders of public opinion in each international equivalent to this domestic sentatives of 12 capital-exporting countries country, that will have to put it into effect. search for a measure of balance between expressed concern at the fact that the annual THE RAW MATERIALS PROBLEM

the production of primary commodities and service on the debt of the countries in the

industrial productivity. Fortunately for process of development has more than Before beginning to consider and analyze

Latin America, there are men who are doubled during the last 5 years, having the machinery for financing economic inte

currently studying these problems and work- reached an annual sum of $2.5 billion. gration, we must make this point very clear:

ing to find progressive solutions. Within In the case of Latin America, the external such machinery by itself, no matter how ef

a short time at the beginning of next public debt of the member countries of the ficient we make it, is not going to solve cer

year-a World Conference on Trade and De Inter-American Development Bank increased tain basic problems of our present regional velopment will be held for the declared from $3.7 billion in 1955 to $9.2 billion at the economic situation. These problems existed

purpose of dealing with this very important end of 1962. And services on that debt inbefore we began to make an effort to estab

question. The very name of that confer creased from approximately $550 million in lish intraregional organizations, and their

ence is most expressive, because in fact the 1955, equivalent to 7.4 percent of the value solution cannot be found exclusively within idea of development without a prior study of these countries' exports that year, to an our own community.

of trade relations would result in these times annual average of almost $1.2 billion in Regional financing is very important; in in nothing but artful dodgery. Dr. Prebisch 1961-62, which is equal to 14.5 percent of this respect, although I am an interested

has just officially terminated his duties with the average value of their exports in those 2 party, I believe that the establishment and ECLA—which he has inspired and guided for functioning of the Inter-American Bank are

15 years—to make his experience and his I have tried not to overload this presentaof paramount significance. The stimulation

broad knowledge of Latin America available tion with figures, but I think it is imperative of Latin American exports within our own

in a wider field, the organization of this to cite these in order to give a clear picture area represents a positive advance; in fact, conference.

of the financial consequences of the raw great importance may be attached to all the

Let us hope that to that meeting, which materials problem. Let us look at these various mechanisms of this type that we

may well have a decisive effect on our future, figures and measure their importance: 7 have established, and many others that we

Latin America will come united, forming a years ago, out of each $100 that Latin Amerihave not yet set up, which I shall discuss

bloc capable of bearing the combined weight ca obtained for its exports, $7.50 were used later on. But there are essential aspects of

of our region and of making its intrinsic to pay international debt; today almost $15, our financial situation that must be given importance felt in world trade. The day double the earlier amount, must be allocated priority if we wish to make regional develop- when we Chileans can place our copper on to that same purpose. In my opinion this ment possible.

the balance along with the coffee of Brazil is due basically to the fact that Latin AmerSuch is the case of the problem, foremost

and Colombia, Bolivia's tin, the wool and ica has been unable to find through ordinary in importance, of our raw materials. It is

meat of Argentina and Uruguay, the sugar channels and the natural sources of its utopian to think that Latin America will be

and fishmeal of Peru, and similarly with all foreign trade the external resources it needs able to emerge from its underdevelopment the Latin American countries, we shall to promote its internal development. if the present international trade structure, really have advanced toward a solution of in which the facts seem to say that the

THE PROCESS OF CAPITAL FORMATION our raw materials problem. Otherwise, suscountries producing raw materials are conpicion among us is again going to darken

Without discounting the decisive infludemned to stagnation, is maintained. the outlook for the common interest. If we

ence of foreign trade in the process of capiAt the close of World War II it was hon arrive disunited at this forthcoming world tal formation, there is, of course, another, estly believed that the advances in techconference, the chances are that we shall

autonomous form of capital formation in nological development, in a climate of inreturn from it lamenting once again the

our countries. Such capital is derived from ternational understanding that then seemed lack of understanding of the other blocs and

two sources: Domestic savings and investvery simple to preserve, were going to be then we shall continue to repeat our com

ment, and investments from abroad. spread throughout the world, making it pos- plaints about the increasingly more serious In this respect, it is well to remember sible, thanks to that technological progress, deterioration in our terms of trade.

that the process of capital formation in for the more backward countries rapidly to

The inexorable facts, as shown by hard Latin America has depended fundamentally rise to the levels of the more advanced coun

statistics, urgently call for action on our on its own domestic effort. Proof of this is tries. The real situation, as you know, has part. Latin America's share in world trade found in the fact that in the 10-year period been otherwise.

is decreasing in significant proportions. 1951-60, almost 90 percent of capital inThe backward underdeveloped countries Looking at the last 30 years, we see that vestments came from domestic sources. This have been and continue to be relegated per- Latin America's share in world trade, which explains why, despite critical balance-ofhaps to a greater distance behind the others generally used to fluctuate around 10 per- payments problems, the relatively more detoday than they were yesterday. In the final

cent, has fallen since 1955 to 6 percent, with veloped Latin American countries have been analysis and reduced to its least complex no signs of recovery.

able to accelerate their domestic growth. terms, the explanation is very simple. They are countries which continue to sell cheap

LATIN AMERICA'S GROWING INDEBTEDNESS

Of course, in order to build up domestic

savings and their subsequent investment in and buy at constantly higher prices. This

There is one direct consequence of the the country itself, it becomes necessary to definition may seem elementary, but essen

crisis in the terms of trade, which is not adopt a fiscal and monetary policy that will tially it is correct. Worse still, this equation always borne in mind or immediately noted, stimulate savings and investment instead of shows no immediate possibilities of change. but the incidence of which is evidenced

discouraging them. On this point one canIt seems that there are factors inherent in every day at the Inter-American Bank and

not lay down rigid rules, that will act like a the relationship between industry and the in other international financial organiza- straitjacket, but it must be understood that production of raw materials that determine tions.

a sound fiscal policy, joined with an equally this situation an intrinsic relationship be This evidence is as follows: The loan ap sound monetary policy that will protect the tween manufacturing productivity and the plications submitted by our countries are internal purchasing power of the savings, production of raw materials that will always increasing daily, and year by year the volume can create conditions that will stimulate the work to the advantage of the former and of external indebtedness of our region grows dynamic process of investment. to the detriment of the latter. larger. What is the reason for this? Is it

The fact that we recognize the importance In the face of this situation, one of the only an old incurable readiness to go in debt

of domestic sources of capital does not mean principal concerns in the economic policy as the easiest way to obtain funds that can

that we deny the importance of investments of many countries of the world, beginning immediately be applied to tangible works?

coming from foreign sources. We do not with the most advanced ones, has been pre We at the Inter-American Bank do not be

think, as unfortunately many people in cisely this problem of balancing the returns lieve that is the reason.

Latin America do, that our process of defrom the labor of the raw-material producing The answer lies in the raw materials prob- velopment can be financed only with a sectors against industrial productivity. This lem to which I was just referring. Deteriohas been and continues to be so in the ration in the prices of our exportable basic United States, in Western Europe, in the products generates these now so familiar 1 A specialized agency of the OECD whose Soviet Union, and in Communist China. The balance-of-payments crises. The more dif- function is to coordinate the action of the United States has traditionally upheld the ficulties a country has in its balance of capital-exporting countries.

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