PROSPECTS FOR MULTINATIONAL ENTERPRISE IN LATIN AMERICA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001900030042-9
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 20
• Document Creation Date: December 19, 2016
• Document Release Date: August 17, 2005
• Sequence Number: 42
• Publication Date: July 29, 1974
• Content Type: REPORT

STAT
Approved For Release 2005/12/14 :CIA-RDP85T00875R001900030042-9
 I .7
MEMORANDUM FOR:
S-6363, Prospects for Multinational
Enterprise in Latin America; requested
by NTO LA for DCT.
Distribution:
1 - D/OER
STAT
31 July 74
(GATE)
FORM NO REPLA,CES FORM 10-101
I
On file Department of Commerce release instructions apply.
Approved For Release 2005/12/14: CIA-RDP85T00875R001900030042-9
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PROSPECTS FOR MULTINATIONAL ENTERPRISE IN
LATIN AMERICA
29 July 1974
WWI,
 Approved For Release 2005/12/14: CIA-RDP85T00875R001900030042-9
PROSPECTS FOR MULTINATIONAL ENTERPRISE IN LT\TIN NIERICA
Co:tclusions
Difficult years lie ahead for multinational enterprises
in Latin America and the Caribbean because of conflicting
national and corporate go.ls. Many governments are now
actively involved in planning for economic development.
They want to expand local cmpl.oyr.ent, increase exports, and
gain access to modern technology. Investment by multi-
national enterprises can play an important role in achieving
these aims, but governments want it on their own terms.
Many of them feel that local control over the actions of
multinational enterprises has been reduced by the size, power,
and geographic dispersion of their operations.
In order to reassert local authority, many governments
have been defining areas or participation by foreign
business, limiting foreign equity shares, and restricting
what are usually considered to be management prerogatives.
Formal and informal restrictio^s are most widespread in
extractive industries; where governments are concerned that
nonrenewable re.ourcerr, be exploited to the best advantage of
the local economy. In the next few years, the most successful
firms will inclua,r :
Existing firms, particularly those in manu-
facturing, which accommoda t-:-~ the desires of
the local governments.
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Approved For Release 2005/12/14: CIA
2005/12/14. CIA-RDP85T00875R00~~'~~U'~'~'7-`J`
New entrants willing to adopt flexible
arrangements such as joint ventures, or
providing I consulting and technical services.
Even adjusting to government desires will not guarantee
protection from nationalization, especially if the firms's
operations are in key economic sectors. The potential for
conflict between multinationals and governments is the
greatest in natural resource exploitation. It is here that
national sensitivities are greatest because of the key position
of mineral industry in many countries.
The ability of Latin American governments to create and
sustain rapid rates of economic growth and a reasonable degree
of political responsibility will,determine the future nature
re.
and extent of the multinational presence. Stability and
prosperity better enable local governments to deal confidently
and responsibly with the multinationals and to blunt the sharp
edges of local nationalism; conversely, multinational corpora-
tions are then more able and willing to contribute to economic
growth and to benefit from it. Mexi-.o and more recently.
Brazil have created these conditions, and the results in the
growth of US investment are quite apparent.
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