The Alliance That Lost Its Way The Alliance That Lost Its Way A Critical Report on the Alliance for Progress by Jerome Levinson and Juan de Onis A Twentieth Century Fund Study Chicago Quadrangle Books 1970 THE ALLIANCE THAT LOST ITS WAY. Copyright © 1970 by The Twentieth Century Fund, Inc. All rights reserved, including the right to reproduce this book or portions thereof in any form. For information, address: Quadrangle Books, Inc., 12 East Delaware Place, Chicago 60611. Manufactured in the United States of America. Published simultaneously in Canada by Bums and MacEachem Ltd., Toronto. Library of Congress Catalog Card Number: 76-125481 SBN 8120-0151-7 The Twentieth Century Fund is a research foundation that undertakes timely, critical, and analytical studies of major economic, political, and social institutions and issues. Nonprofit and nonpartisan, the Fund was founded in 1919 and endowed by Edward A. Filene. Board of Trustees: Morris B. Abram Adolf A. Berle, Chairman Jonathan B. Bingham Arthur F. Bums (on leave) Erwin D. Canham Hodding Carter III Evans Clark Benjamin V. Cohen J. Kenneth Galbraith Patricia Roberts Harris August Heckscher David E. Lilienthal Georges-Henri Martin Lawrence K. Miller Luis Muñoz Marín Don K. Price James Rowe, Vice-Chairman Arthur Schlesinger, Jr. H. Chr. Sonne Herman W. Steinkraus, Treasurer Charles P. Taft David B. Truman M. J. Rossant, Director FOREWORD When the trustees of the Twentieth Century Fund first con­ sidered sponsoring a critical study of the Alliance for Progress, the United States public seemed almost oblivious of events in Latin America. This lack of interest was understandable. The public was then, as now, preoccupied with the war in Vietnam, the urban crisis, and other domestic issues; those concerned about foreign affairs were too absorbed by the aftermath of the near revolution in France, the intervention of the Soviet Union in Czechoslovakia, and the bloodletting in Nigeria to follow developments in the republics of the Alliance. But the Fund’s trustees, many of whom have frequently dem­ onstrated prescience in selecting subjects for study and some of whom had actually participated in the creation of the Alliance, felt it would be a mistake to ignore Latin America simply be­ cause it was relatively quiet. Sensing that this quiet was only relative and only superficial, they called for a review of the Alliance’s performance and of the problems involved in speed­ ing economic and social development in Latin America while strengthening and expanding participation in democratic in­ stitutions. The size of Latin America, the variety within it, and the broad scope of the Alliance made such an assignment extremely com­ plex. It proved manageable, however, thanks to the successful collaboration forged between Jerome I. Levinson and Juan de Onis. Mr. Levinson had worked for the Agency for Interna­ tional Development, first as assistant director of the United States AID mission in Brazil and later as deputy director of the Office of Capital Development of AID’S Latin American bu­ reau (which had overall responsibility for AID lending in Latin America). Mr. de Onis, a skilled journalist, had had long service in Latin America, first with the United Press and then with the New York Times. Both men had been involved with the Alliance from its beginnings, one as a dedicated participant and the other as a professional observer. Their different van­ tage points and varied experience proved invaluable resources, vu the essential raw materials for a comprehensive and detailed account of the Alliance's impact. While Messrs, de Onis and Levinson were engaged in this effort, the fragile and uneasy calm in Latin America was shat­ tered by upheavals in a number of countries, culminating in the tumultuous reception accorded Governor Nelson Rockefeller of New York during his mission on behalf of the Nixon ad­ ministration. This unrest did not derail the project, for the Fund’s research directors, like its trustees, had anticipated tur­ bulence in Latin America. With this awareness they managed to produce what may be the fullest review of the Alliance’s ac­ complishments and failures over the decade of its existence. Unquestionably their findings and their recommendations are controversial and sobering. Almost any serious comment on the Alliance is bound to be, whether it comes from North America or Latin America. But the special merit of the De Onis-Levinson effort is that it reflects a profound commit­ ment to democratic development of the Americas. This com­ mitment has motivated an uncompromisingly objective, critical appraisal of the Alliance and its influence on the Latin Ameri­ can economies, political systems, and social structures. It has led the authors to clarify a great many issues previously dis­ torted or obscured by both detractors and supporters of the Alliance. As in all Fund projects, the authors enjoyed complete inde­ pendence. Their views are their own, not the Fund’s. Their account conclusively demonstrates that the Alliance has not lived up to its initial promise. But the record cannot be considered a complete failure. It reveals the successes as well as the setbacks, and tangible as well as intangible changes wrought by the Alliance. The authors feel that the credit for accomplishments as well as the blame for mistakes must be shared equally between the donors and the recipients of aid. And in identifying the weaknesses and errors of the Alliance, the authors express their deep conviction that this experiment in development must not be abandoned, but must be begun afresh. M. J. Rossant, Director The Twentieth Century Fund March 1970 PREFACE The ambitious and complex venture known as the Alliance for Progress has involved the United States for the better part of a decade in an effort to advance the economic, social, and po­ litical development of Latin America. It served two Demo­ cratic administrations as the main channel of inter-American relations. But the problems that gave rise to the Alliance in 1961 have not been resolved, and now they face a Republican administration in Washington. Latin America is on the threshold of a new decade in which pressures for economic growth and social change will sorely test the political strength of the inter-American relationship. At this time a history of the Alliance would be premature, for its tasks are far from finished. But a critical assessment is due. A stocktaking of the Alliance’s successes and failures may con­ tribute to the formulation of a more effective program for the future. This book seeks to provide such a critique and audit. Our opinions and judgments grow out of personal association with the Alliance. We have watched it from two complementary vantage points: that of a United States foreign aid official, in­ volved in the operations of the Alliance in both Latin America and Washington; and that of a correspondent for the New York Times in Latin America, for whom reporting on the Alliance has been a continuous assignment. In these capacities we actually witnessed a number of key in­ cidents and we have included some quotations, paraphrases, and descriptions that cannot be documented because they have never before been recorded. We have also included quotations from our interviews with U.S. and Latin American govern­ ment officials, businessmen, and other participants in or ob­ servers of events concerning the Alliance. Some of these people have asked to remain anonymous. Otherwise, wherever appro­ priate, we have identified them and the documents, published and unpublished, to which we have referred in our research for this book. We have judged the Alliance by its own standards and stated IX objectives, measuring these against its performance in the set­ ting of the relevant events in both Latin America and the United States which influenced its development. We do not pretend to give a full account of inter-American relations in the past decade. Of necessity we have been selective, paying particular attention to the national and regional experiences that we felt were most characteristic of development problems in the area. The individual characteristics of the Latin American countries make it dangerous to generalize, but we felt that we could not record the particular experience of each and every country without losing our critical focus. The Alliance experience in Brazil is a recurrent theme in the book, partly because in our respective capacities we both had extended tours in that country. But more important, Brazil is by far the largest country in Latin America; its ninety million people present within one national framework the full range of problems that brought the Alliance into being. We consider Brazil’s performance a fundamental test of the Alliance. We have also drawn heavily on the experiences of Chile, Co­ lombia, Venezuela, and Peru because they provide what we feel are the best illustrations of particular aspects of the Alli­ ance, and have given only passing attention to certain other important countries because they appeared to stand apart from the mainstream. Argentina and Mexico have had only a marginal relationship to the Alliance in domestic terms, but we do examine the im­ portance of their potential role in the achievement of a major Alliance objective, the creation of a Latin American common market. Central America and the Caribbean countries offer fascinating examples of the problems of small-country devel­ opment, but their special features fall outside a general study of the Alliance. This study deals at some length with the significance of the United States in Latin American development. We feel that the Alliance experience shows that the United States does not possess a foolproof blueprint for modern development in Latin America. Even if it did, the United States could not take over the responsibility for sovereign political decisions that Latin American leaders alone can make in circumstances that they understand better than any outsider. Moreover, U.S. policy in Latin America lacks domestic support and shifts under the X Preface