Going the Wrong Way

The Alliance for Progress gathered in Sao Paulo, Brazil, and discovered that there was little progress, and not much alliance. In his so-called welcoming speech, Joao Goulart, demagogic President of the host nation, mentioned the Alianza only once and the U.S. not at all, pointedly denounced what he called "palliatives or false, superficial concessions" by the "industrialized, capital-exporting countries."

Speaking for the U.S. two days later, Chief Delegate W. Averell Harriman had some sharp comments of his own. The U.S. was providing $1 billion a year in Alliance aid. But inside Latin America there have been "delays in establishing effective planning machinery, in establishing priorities and, above all, in the development of well-conceived and technically sound projects."

Backward Giants. The lack of deeds tended to sharpen the words. Some small and medium-sized nations got good reports; Colombia is putting into effect a sophisticated economic development plan, land reform, a revised tax system; it has received $185.2 million in Alliance aid and last year registered a 3.4% increase in gross domestic product per capita--nearly 1% better than the Alliance's hemisphere-wide goal of 2.5%. Venezuela's per capita gross domestic product last year climbed 3.9% .

But Latin America as a whole is standing still. Its average per capita economic product increased only 1% in 1961, scarcely at all last year. Holding down the average are two giants--Argentina and Brazil. Yet of the total $2.5 billion in Alliance aid so far committed, Brazil and Argentina got nearly a third--$841.8 million between them. Neither country has drawn up effective development plans and stuck to them; the money has been sopped up by economic chaos and unplanned spending. Argentina's per capita gross domestic product actually fell 5.1% last year, while Brazil's grew by less than 1.5% .

Advise, Not Consent. In Sao Paulo last week the Brazilians wanted more accessible money and fewer conditions. They called for a "latinized" alliance in which a new inter-American organization would pass out $20 billion in ten years ($8 billion from the U.S.) without U.S. control. But Harriman favored an alternate proposal for a new coordinating board to advise, though not consent, on loans and projects. In the end, this addition to hemispheric bureaucracy won out.

Left unsolved was the Alliance's crucial shortage: private capital. In the original plan, everyone counted on at least $1 billion a year in new development money from private investors. But jingoism and skyrocketing inflation have frightened off investors to the point where some $200 million more in private capital was taken out of Argentina alone last year than was put in. Last week's oil contract cancellation was hardly likely to attract more private investors.

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