A REAPPRAISAL OF THE ALLIANCE FOR PROGRESS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP65B00383R000200220005-3
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: December 15, 2016
• Document Release Date: June 7, 2004
• Sequence Number: 5
• Content Type: OPEN

Appro Cved 4/06C/31,CIA-HOf~00383R000200220005y.-3' 2341
United S ates will be making a contribu- the greatest incliihation to adopt measures
to improve the investment climate and with-
direct, tIon o this project whether direct or in- hold aid from others until satisfactory per-
.. Tand grant this i any is amount of intolerable. aid to the formance has been demonstrated.
To
Communist nation that has confiscated This is an important study and I hope
more than $1 billion worth of American that it receives the widest possible at-
property and has not paid a cent in tention.
compensation is utterly unthinkable. The text of the statement follows:
Mr. Speaker, while the subject of Cuba A REAPPRAISAL OF THE ALLIANCE FOR PROGRESS
is under discussion, I wish to go on rec- Last spring, the Commerce Committee for
ord as being in complete disagreement the Alliance for Progress (COMAP) was
with the theory now apparently in vogue launched with a view to seeking ways in
in administration circles that no one but which American business could further the
the administration should discuss Cuba. Alliance. A few days ago, the Chairman of
In these days of managed news, I sin- -the Committee-J. Peter Grace-submitted
cerely believe that it is the responsibility a report to the Commerce Department and
to other agencies, recommending certain
and duty of each citizen, and, particu- legislative proposals relating to the Alliance.
larly, each Member of Congress, to con- The following memorandum sets out the ob-
structively discuss and, if necessary, as servations and conclusions of three members
in this case, dare to criticize the decisions of COMAP who, while agreeing with many
being made and carried out in our'State of the points made in the Grace report feel
Department by the administration. that there are certain aspects of the problem
These men are not omniscient; their which need a somewhat different emphasis.
decisions are not sacrosanct. For this reason we feel justified in submit-
ting a separate commentary.
This Nation is one of representative "We have become increasingly concerned
government, and as one Representative, lest the Alliance for Progress fail to achieve
I object to our financing anti-American its objectives for lack of a proper focus for
policies. If this means that the Congress its activities.
must cut off support for the Special "As one illustration, the initial concept of
Fund, then this must be done. COMAP's role appears to have been directed
I have voiced my support of the at finding ways to meet the Punta del Este
United Nations in the past, as have the program of $300 million a year of net new
U.S. private investment in Latin America by
vast majority of Americans. However, e devising short-range measures on the part of
this U.N. action demands a serious re- - the United States to encourage such invest-
appraisal of our role in the U.N. My ment. If such measures would really get
deep concern has been voiced to the the Alliance off the ground, they might be
administration, and I sincerely hope that justified. But we are disturbed by the feel-
other Members of Congress will join in ing that even if such measures were taken,
expressing their disapproval. Cuba to- and were successful in inducing an expanded
day is a center for Communist subversive flow of U.S. investments into Latin America,
activities throughout the Western Hemi- the basic problem of making the area attrac-
tive to local savers and investors would re-
sphere. Our every action must be to main. Indeed, such a program could do
weaken communism in Cuba, not positive harm by making local governments
strengthen it. feel even less urgency than they do now for
achieving a proper investment climate.
Alliance a for Progress, is a comprehensive reap-
A REAPPRAISAL OF THE ALLIANCE praisal, not o of the broad objectives of the
FOR PROGRESS ress, but of the policies and
(Mr. LINDSAY (at the request of Mr. actions which will best achieve these fbj e
tives. The first t year's operation of the
BRUCE) was given permission to extend Alliance saw heavy emphasis placed on gov-
his remarks at this point in the RECORD ernment planning, government-to-govern-
and to include extraneous matter.) ment loans and grants, income redistribution
Mr. LINDSAY. Mr. Speaker, I am through tax and land reform, public housing,
deeply concerned over the future of the and other social welfare measures. Many of
Alliance for Progress. So far there has these steps were commendable. Yet they
were not in most cases accompanied by ef-
been very little progress, and too little forts to push through economic reforms
leadership from the United States.. The which would encourage private initiative and
program cannot be allowed to continue enterprise. The continued outflow of pri-
-to flounder. The future of the Western vate funds from Latin America is sufficient
Hemisphere is at stake. proof of the critical character of the current
I am pleased to bring to the attention situation.
d
fiationary increases in the supply of money
and credit. Efforts along these lines could
lead to the removal of the many exchange
controls which still remain and which in-
hibit economic growth in many nations. At
the same time, governments should act to
remove the network of other controls which
restrict enterprise and sustain local, high-
cost monopolies. Economic growth, and the
real benefits to all participants in the com-
munity which can accrue from growth, are
maximized in an atmosphere of political and
economic stability under which competitive
private enterprise can thrive.
"In a very real sense, the Alliance for
Progress is concerned with the age-old prob-
lem of trying to bake a bigger pie and divide
the slices more evenly at the same time. The
emphasis to date has been mostly on the side
of slicing the pie. While such efforts may be
desirable in the long run, the immediate ef-
fect has been to shrink the potential size of
the pie. Experience around the world shows
clearly that the national welfare is better
served by far through policies which enlarge
the entire pie.
"To accelerate economic advance in Latin
America, efforts on many fronts will be re-
quired. Governments have important roles
to play-in such areas as schools, health,
farm extension services and roads. However,
the overriding needs is for an increased flow
of private capital from both local and for-
eign sources and for a significant and con-
tinuing improvement in the efficiency with
which all resources, including most im-
portantly human resources, are used.
"For these reasons, we urge that U.S.
policies be reoriented to, place far greater
emphasis on the encouragement of private
enterprise and investment. What has been
done to date along these lines is simply not
enough. The encouragement of private en-
terprise, local and foreign, must become the
main thrust of the Alliance. This would in-
volve two major changes in U.S. policy.
"The first requirement is that the govern-
ments-and, as far as possible, the people-
of Latin America know that the United
States has changed its policy so as to put
primary stress on improvement in the gen-
eral business climate as a prerequisite for
social development and reform. It must be
made clear that U.S. policy in this hemi-
sphere 'is based on the need for rapid eco-
nomic growth and on the belief, confirmed
by all available evidence, that this can be
achieved within a reasonably free political
framework only if private capital is given the
opportunity to work in a favorable environ-
ment. This means that our policies should
be consistent throughout the area and should
discourage tendencies toward nationaliza-
tion of industries and encourage setting up
explicit rules which provide for truly reason-
able indemnification where nationalization
has taken place.
"In addition we should discourage policies
which tend to distort normal economic rela-
so-
"Many countries in Latin America nee
of my colleagues a memorandum pre- vial reforms as well as measures to provide tionships-policies leading to overvalued,
pared by three members of the Com- greater equality of opportunity. However, and multivalued exchange systems, complex
merge Committee for the Alliance for these broad objectives cannot be achieved import controls with high and highly vari-
Progress-COMAP: Emilio G. Collado, without a more rapid rate of economic ad- able traiffs, quotas and other forms of trade
vice president and director, Standard vanes than now is in prospect. And rapid restriction, price controls and highly unpre-
Oil Co. of New Jersey; David Rocke- economic growth cannot be achieved without dictable budgetary practice. In short,
feller, president, the Chase Manhattan greater emphasis on the private sector. The emphasis should be placed on creating an
fact is that some 80 percent of Latin Amer- atmosphere in which private business plan.
Bank; and Walter B. Wriston, executive ica's national income is today generated by ning can go on without undue concern about
vice president, First National City Bank. private activities. Consequently, the Al- possible changes in the rules of the game.
The authors call for a comprehensive liance for Progress can succeed if-and only Countries following these policies should be
reappraisal of the' policie's and actions if-it builds upon this base and places far given tangible and active support.
that will help the Alliance for Progress greaten emphasis on the encouragement of "To make this position clear and unam-
to achieve its, basic objectives. They private initiative and investment, both local biguous, it would be necessary for the Presi-
urge that increased emphasis be placed and foreign. dent to proclaim it in a major address in
on the "encouragement of private initia- "To reorient the Alliance for Progress in a which he not only spells out the rationale
direction which offers promise of achieving behind the new policy, but also indicates
tive and investment, both local and for- its objections involves difficult and sweeping the tools available to the United States to
eign." It is their further belief that: economic reforms. Currencies need to be help make it effective. The most important
The United' States should concentrate its stabilized through measures to bring govern- of these tools would be the U.S. foreign
economic aid program in countries that show ment budgets under control and to avoid in- aid program.
Approved For Release 2004/06/23 : CIA-RDP65B00383R000200220005-3
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