A U.S. AID program modernizes Peru's fish processing plants, whild Brazil's modern [WORD ILLEGIBLE] are being banned from American markets . The Peace Corps organizes Ecuadorian handicraft workers onto export cooperative, while handcut Colombian flowers wilt as the U.S. Congress tries to halt their entry.
Promoting with one hand what it prohibits with the other, a seemingly WORD ILLEGIBLE#) U.S. economic policy toward Latin America has contributed greatly to the continent wide mistrust of American motives.
Burned repeatedly, as Latin leaders see it, in their efforts to supply the wants of North America and Western European markets, decision-makers here are pushing everywhere for top-speed development of non-traditional resources neglected for centuries. The goals are export flexibility and minimal dependence on any other country.
"Actually you [Americans] are very consistent," said a Marxist student in Bolivia sarcastically. "You lift up the savages enough to make them grateful, but not enough to create competition."
When the Organization of Petroleum Exporting Countries shook the world with its 1973 embargo andprice increase, Latin America was one of the regions hardest hit.
Oil and natural suppy fully 80 per cent of all the continent's energy needs, the largest proporition of any such area on earth. The price hikes ripped through import-dependent Latin economies with devastating effect, spurring a continent-wide recession that economists do not expect to ease fully until the end of 1977.
Adding insult to injury, when the U.S. Congress retaliated against OPEC by excluding its members from 1974 Trade Act preferences, it neglected to exempt member countries Venezuela and Ecuador, which had kept supplying fuel oil to U.S. homes throughout the embargo. The clause still has not been changed, apparently because of congressional election-year inaction.
In conversations around South America, economists, businessmen, bankers and financial officials agree that the entire OPEC experience had been very thought-provoking:
It proved, in this view, that commodity suppliers would have to demand higher prices with a single voice if they were to get them, because industrialized nations were certainly not going to make any generous offers.
It showed that U.S. Congress knew little and cared less, despite occasional State Department rhetoric about Latin America's true importance in the American economy.
It guaranteed the continued fragility of any national economy that depends on manufactured imports and relies on a few raw exports for its income.
Not that these were new lessons. Producer associations for sugar, bananas, tin, copper and coffee had existed for years, but had barely managed to cooperate in exchanging technological knowhow. U.S. ignorance of Latin America is a perennial complaint here, and rising trade imbalances with developed countries have been worrisome since the Alliance for Progress in the 1960s.
"What is needed is a balance between our basic exports and the goods we buy," said Venezuelan President Carlos Andres Perez in a recent article for The New York Times. "In other words, just how many barrels of oil is a . . . tractor worth?"
In the years before OPEC, Latin America had quietly progressed into what Antonio Ortiz Mena, president of the Inter-American Development Bank, last year called "a middle-class continent."
"Although there is still a wide gap between us and the industrialized nations, our countries have achieved . . . a far more advanced position than that of the other developing regions," he asid."Real interdependence has developed between the two parts of the Western hemisphere, in which prosperity or depression in one produces correlative effects in the other."
Latin America is an important market for U.S. capital. U.S. exports of capital goods and industrial products to the region doubled, between 1965 and 1973, to $7 billion, more that year than the combined total of such exports to Japan, India and all of Africa.
By the end of 1974, 70 per cent of all U.S. private capital invested in the developing world was in Latin America, according to the Inter-American Development Bank.
U.S. exports to the area totaled $15.7 billion in 1975, while the current Latin American market for capital goods, durable consumer items and chemical products is three times the Japanese markets and equal to that of the European Economic Community.
In return, Latin America exported $11.9 billion worth of goods to the United States last year, and the overall $3.8 billion deficit is a major worry. It reflects the unreliable roller-coaster of raw-commodity prices as compared to the steadily rising cost of manufactured imports, and the problems the more industrialized Latin nations are having in trying to penetrate the U.S. market.
To say that Latin America's exports rose 14 per cent in value in 1976 is like saying a man with his head in the oven and hid [WORD ILLEGIBLE] in the freezer is [WORD ILLEGIBLE] on the average. Coffee prices skyrocketed in Brazil and Columbis, while prices for Central American sugar [WORD ILLEGIBLE] to their lowest and copper fall in[WORD ILLEGIBLE] to their lowest levels in years. Tin rose in Bolivia and copper fall in Peru and Chile, then rose again. Oil stayed high in Venezuela, but wheat stayed low in Argentina.
Pressure from French farmers forced the EEC to cut off all meat imports from Argentina and Uruguay. Sugar production in the United States are pressing now for a massive cut in the sugar import quota to protect their high-priced production, and Brazilian shoes may soon be barred to protect the obsolescent shoe factories in politically powerful New England.
All of this is probably unavoidable, given the existing world economic system, and voices here are being raised to demand an overhaul of that system. Meanwhile, however, the Trade Act exclusion drove the old lesson home: The United States, despite its statements, cannot be relie on to keep Latin interests in mind.
The result has been a continent-wide effort to diversify products, reduce imports, expand basic development efforts and finance exploitation of resources neglected since independence - in a word, to get out from under.
In the beginning, much nationalistic rhetoric accompanied the drive, especially in Peru after 1968, in populist Argentina under the Perons and in socialist Chile in the early 1970s.
Foreign companies were nationalized without compensation, labor was given long-overdue benefits but not asked to produce in return. There were price controls and black markets and throughout Latin America business found itself [WORD ILLEGIBLE] in by tangled regulations.
But Brazil had [WORD ILLEGIBLE] that route a decade earlier and emerged under a repressive military regime with the most phenomenal growth story in generations.
The period of diverse approaches to common problems seems to be ending. A modified form of state capitalism, based in varying degrees [WORD ILLEGIBLE] the Brazilian model, is taking over on most of the continent, even as most countries have adopted a variant of the Brazilian national security model of government.
Pressures to speed the development are strong. Every year Latin America grows by 8 million people, enough for two cities the size of Boston. Two-thirds of the continent's 210 million people are already in the cities, and one in four is underemployed. That means minimal savings and a tax base totally inadequate in most places for the investment required to finance the development.
It is the big banks who fill the gap. External financing has grwon from $1.5 billion in 1974, according to the inter-American Development bank. The bankers seek, and get, reasonable promises of a return and some feeling that the rules of the game will stay put long enough for the return to materialize.
This requirement for stability has been part of the justification for strong-arm tactics against disruptive leftists continent-wide. It has helped ease private bankers' worries, too: Their loans make up more than three-quarters of the outside money now compared to a similar ratio for the World Bank and other international agencies only a decade ago.
The combined effect of the recent worldwide recession and this new determination for stable, sustained growth toward economic independence has meant belt-tightening from Mexico to Patagonia, with even Fidel Castro calling on Cubans to adjust to a period of sacrifice.
Loans must be repaid, and enormous foreign debts require enormous annual interest payments - $7.1 billion last year according to the United Nations Economic Commission on Latin America.
Meanwhile, tax laws ignored since independence are being reformed everywhere under guidance from U.S. experts. Roads are being hacked out of the Brazilian jungle and hewn into Colombian mountains. Chile planted pine trees onbarren overgrazed hills and now reaps newsprint that is edging into the markets in all its neighboring countries. Cattleman are getting rich in Bolivia's empty eastern plain, while panama has 70 international banks and has become the hemisphere's major money market. Massive dams and atomic-energy plants are in the works, to reduce dependence on oil.
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