CRITIQUE OF NIE PAPER 80/90-67: ECONOMIC TRENDS AND PROSPECTS IN LATIN AMERICA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R00904A001300040007-9
• Release Decision: RIFPUB
• Original Classification: C
• Document Page Count: 7
• Document Creation Date: December 19, 2016
• Document Release Date: October 17, 2005
• Sequence Number: 7
• Content Type: REPORT

Approved For Release 2005/11/29: CIA-RDP79R00904A001300040007-9.,
of RIB Paper 80194-67: Economic Trends
and Prospects in Latin rica
8Q194-67 proteata a SlowV picture of current
prospects in tin ri that is
By co ent.rating on per capita Me growth
;t the sole Criteria of press, the pap
a ner of essential dist;tiox
hich are necessary to put the economic
of the area in proper perspective.
the major defects in the analysis :
f the psper base their conclusion that
ahoy poor economic progr is in recent
the statement that " r cap'" &r
f l product (cm') for lot rica is less
e for all underdeveloped areas, and very
for those economies of southern Europe
ro rougsimilar In S ta ofdevelopment to the
Al countries."
advanced Latin American
is are that Latin America's gr th record
,re has not b poor coopariaon with the LDC
ith perhaps the exception of southern Europe.
with south mope is s t dis-
.vac,, in view of the very high population
th rate in Latin , rica and the very ow rate of
pwth in the southern European countries
rtherre: the external trade relations of
opean countries are not comparable to those
of depapdanclit on a few export
t=4* fry large its. On the other
ica's rate of growth c cares favorably
rest of the ieaa-dloped world, as customarily
ORM 3
l agraded at 12-pear intervals
not auto t ically declassified.
SIB t. .
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Pita of nth
of C per capita,
Current
Pate of (;rowtb
W11:91
of Poouiatt ip.
000
-.acluding Japan)
2.3
2.7
,a
1.6
2.9
M
1.4
2.5
1.1
2.4
2, The focus of the paper on the CM growth rate for the
rim 1960-66 obscures the substantially higher rate
the past three yearn co aced to 1961-63. GNP
at an average of 2.3% in 19?, compa
To a significant giant these results
ibuted to inprmed economic policies by the
rests of the area. responding to the stimulus of the
Alliance for Progress.
for unsound policies which we" followed during
of the growth problems of the early 1960's were the
O's, as for example large deficit spewing in
razil and Chile, the effects of which were
by heavy short-term borrowing abroad. The high
in Brazil in the fifties does much to raise
Latin America as a *bole. Yet this rate of
d only by running up over a billion
debt (mach of it an exceedingly
Fah came hie to roost in this
d in this light, the growth record of the
t a proper yardstick by which to judge perform-
is illustrative of the major defect of
to failure to give adequate weight in judging
foe to major iravts in economic policies and
institutional reform during the past several years. in
paper gives the inprassicn that the countries of
continue to follow the ansound policies which
o difficulties in the early part of the decade.
r of important countries, e.g. Brazil, Chile,
more recently, Argentina, have instituted
in economic policy designed to lay
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FIDE IAL 3
the basis for a more permanent and more equitable growth in
the future. The average rate of growth of per capita product
since 1963 has been as high as in the period 1950-1960, yet
the growth has been much more soundly based than in the
previous decade. The description in the paper of the
problems of import-replacement industries, inflation, and
agriculture is more accurate for the decade of the fifties
than of the present.
5. Argentina and Brazil together contribute 40 percent of
the of the region. The slow rate of growth of CAP in
these two countries during most of the sixties has pulled
down the results for Latin America as a whole and obscures
the fact that 12 of the 17 countries considered by the study
had higher rates of growth of GNP in 1961-66 than in 1956--60.
It is an oversimplification of the problems of economic
development to argue that because these two countries weigh
so heavily in total population and product, the economic
rformance of the area mast be measured accordingly. As
Long as the nation-state dominates international political
life, the problem of economic development exists largely in
the context of the nation and success or failure cannot be
judged solely in terms of relative size of the economic unit.
Much is made of the fact that Latin America's portion
total world trade declined. This is beside the point,
as the paper mentions (without understanding the
cc
,
___
implications), this is a problem shared by all the LDC's.
If are interested in measuring economic Rerformance, the
proper yardstick is economies at a similar stage of
. By this measure, Latin America is performing well.
Latin America's market position improved relative to the
other L1 is once allowance is made for the slow growth of
Venezuelan oil exports (Table 11).
The report places much weight on the estimate that
prospects for Latin American traditional exports are
poor and that it is unlikely that Latin American govern-
ments will take the necessary policy actions to stimu-
late exports of other products. While history tends to
support this viewpoint, the fact is that both Brazil and
Argentina have shown signs of a determination to follow
GO IDEI,AL
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CWUX527AL 4
Mod policies. Br it has maintained a real-
rate policy, c ti5tsntlyp for the past three
icas are that it will ate to do sc .
t
time, it has twice in the past year taken steps
el of import protection. Procedural. and
its to export have been adopted. As a
sr"114 s exports of s ufactU=d mss, while
of total experts , have i reased
is that the potential for vxm_
Brasil, Argentina and., for that
tray. American Conam Market area, may be
had ? ared hope for and that the policy
a such exports may not pro's sc
? ereff its become kn .
the statement P"M 0" to t
rice has obam peer ecasmic progress
rnmnt and international financial
since 1960, a p -li d some 46-5 billion in
eomamic mid." This statements which seem calculated to
a eo s tional. i ct on the reader, turns out ups
t to be rather mesai less . The. isplscati Is
that $6.5 billim was a sufficient am*uftt u to have induced
might be concluded that the ascent of external
in ArseriCt has not been evow tc do the I .
ors of the Mare ,l lam, for exa -le,
with roughly the same pOPUlati received a
billion in U.S. lofts sind its (mostly the
6? s situation with rolprd to Institutions,
_- _= vopeam%sbir r+ sources, a infrastructure as far
d
ay
able than that of Latin Amrica to
at
I. Tabl* I - warrant motes Of
M
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 Approved For Release 2005/11/29 : CIA-RDP79R00904A001.Z00040007-9
~ w,c RTES OF PO M ATION GRWflI
Latin Arica
4.5
0.7
0.8
2.9
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Table 1.I
(Millions of
tal
19 Lat in A
Revubiics
Incl. Excl. Incl. Excl. Encl. Excl,
uels Fuels Fuels Fuels Fuels .Fuels
1960 26,900 19,250
1961 27,100 19,000
1962 28,600 19,740
1963 31,140 21,630
1964 34,000 23,380
1965 36,000 24,700
1966 38,200 --
Percentage Increase 42.0% 28.3%
Compound Rate
of Increase
6%
5.1%
5.7%
6.3%
6.1%
13,650
13,290
13,660
15,060
16,220
17,110
1/ Including 19 Latin American Republics, other Western hemisphere (except U.S. and.
Africa (except South Africa), Middle East, and Asia (except Japan).
Sources: International Financial Statistics, May 1967 and
United Nations Monthly Bulletin of Statistics, March 1967.
Approved For Release 2005/11/29 : CIA-RDP79R00904AO01300040007-9
3, 1960-1'966
)ilars )
7,950
8,090
8,640
9,190
9,860
10,370
11,100
39.6%
5,600
5,710
6,080
6,570
7,160
7,590
18,950
19 , 010
19,960
21,910
24,140
25,630
27,100
35.5% 43%
25.49.
4.6%
nada)
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