Economic and Social Conditions:

...To judge from certain statements of American politicians and commercial and industrial figures, these groups con?ceive of our economic development only in terms of larger production of raw materials...

...Santa Cruz has served as President of the United Nations Economic and Social Council, and was for several years Chile's permanent representative at the UN...

...it must, therefore, through the intervention of its governments, carry out the basic works to create a climate for the expansion of private enterprise...

...Sta?tistics indicate that today Latin America produces only 70 per cent of the food products she raised ten years ago...

...But the truth is that there still exist preponderant needs which make hemispheric unity imperative...

...The same methods of communication also bring them news of the experiences of the most remote regions, as well as political, economic and social doc?trines...

...The seriousness of this situation and the measures that can be taken to remedy it are the subject of this article by Hernan Santa Cruz...

...Latin America, with the same quantity of raw materials, can purchase only 70 per cent of the manufactured articles it got 70 years ago...

...The great industrial countries aver?age above $1,000...

...elsewhere in the Americas, is scarcely exceeds 30 years...

...The International Bank is so complicated an institution, so imbued with the spirit of a private bank, and so re?moved from the spirit of international cooperation which inspired its creation, that last year it could only lend $70 million to all 20 countries of Latin America combined...

...It is suggested that such aid come from private foreign investments...

...It is my own profound conviction that un?less the economic and social conditions of Latin America are profoundly changed, as well as the policies of the great democratic powers (notably the United States), there is not the slightest hope of democratic progress on the continent...

...but the Latin American countries, as well as others, will profit enormously, since millions of new consumers will be created among people who today consume only the products of their own soil...

...Industrial Canada today buys more than ten times the amount of manufac?tured goods in the United States that she bought 40 years ago when she was only a mining and agricultural country...

...Added to this permanent phenomenon is another: the fluctua?tion of prices at short range...

...The laborer in Sao Paulo and Santiago, the worker in the sugar mills of Cuba and Peru, in the banana plantations of Guatemala and Ecuador, the mines of Bolivia, the coffee plantations of Costa Rica and Haiti ??all know of the agrarian reforms in China and Czecho?slovakia...

...For one thing, the great prole?tarian masses and indigenous peoples do not exist in the United States...

...but when the demand was low, in 1953 and 1954, price controls were eliminated, with the U.S...

...excessive lux?ury in small groups and shameful poverty among the great masses, especially the indigenous populations...

...While each Latin American country has to cope with dif?ficulties peculiar to its own region, most of them share common economic problems that deeply affect their rela?tionship with the United States...

...When their financial condition is healthy, however, they do not need loans or they can obtain them through private banks...

...And it is true that, since the death of Roosevelt, we have been facing a dangerous weakening in continental solidarity, to the point that today it has practically no popular roots and is maintained only by the efforts of governments and certain groups...

...United Nations studies indi?cate that the price variation in raw materials averages between 10 and 20 per cent annually, as against 4 per cent on manufactured articles...

...In North America, the mortality rate is 10 per thousand annually...

...This can?not be done by native or foreign private interests, since it yields no direct or immediate financial return...

...They know that four out of every five families in the United States own a television set, and that one out of four persons has an automobile, that a skilled industrial worker earns at least $1.10 per hour, or four times as much as his fellow worker in Latin America...

...great back?wardness in economic and technical fields in many countries, against unsuspected social and political prog?ress in the conscience of millions of human beings...

...The experience of Canada is instructive...

...Thus, when there was a great demand??1950-52??the United States fixed its top price for copper at 40 per cent below the world market...

...In the face of these circumstances, the countries must act quickly to set the foundations of industrial advance, constructing roads, public works and electric plants, rehabilitating unhealthy regions, and so on...

...2. It is indispensable to understand what the Latin American countries mean by economic development...

...They have notably reinforced the propaganda of the enemies of the United States and the enemies of democracy...

...For them, it is fundamental to increase the wages and thus the living standards of their populations...

...Labor in underdeveloped countries which produce raw materials and export them unprocessed receives many times less in monetary return than labor in industrial countries...

...These countries have voluntarily limited their trade with the non-Soviet world, for reasons of continental solidarity or in order to honor the recom?mendations of the UN General Assembly...

...Despite their political and geographic differences, the destinies of the American nations are indissoluble, militarily and eco?nomically...

...To conspire against inter-American friendship is, there?fore, to conspire against the security and prosperity of each of our countries...

...So, too, has passed the period of democratic regimes imposed by an elite minority of European descent, culture and taste...

...Most of the raw materials which Latin America produces are so-called "strategic materials...

...Life expectancy today in the United States is more than 65 years...

...If a material is strategic and if, for reasons of friendship and political and economic solidarity, it is not sold freely on the world market, it should be given special treatment, since the political reasons should apply to both buyer and seller...

...For more than 50 years now, the United States has formed part of a juridical and political system with its neighbors to the south that has constituted an example of inter?national existence founded on historic, geographic and economic needs and on a common conception of human dignity and the free determination of peoples...

...For example, it is presumed that our countries have the same economic philosophies as the United States, a land of immense material, technical and human wealth, with an international commerce that permits it to enjoy all the advantages of a system of free enterprise and where the economic function of the state is limited to regulation and control of abuses and only occasionally, as in the case of the TVA, sets the founda?tions for economic expansion...

...But the human touch of Roosevelt is gone, and there is lacking the political capacity to trans?late intentions into a dynamic policy in keeping with postwar needs and realities...

...Moreover, all the studies thus far made show that private capital in the United States has no interest in financing any foreign enterprises but oil and mining...

...3. One cannot expect our development to follow the methods which made the United States great...

...Every?thing in Latin America is different: population, geogra?phy, historic structure...

...These enormous in?equalities are a powerful factor of economic and social instability...

...Among peoples whose posi?tion is so precarious, such factors weigh powerfully...

...Moreover, the difference in living standards and economic progress between the United States and the rest of the continent increases con?stantly instead of diminishing...

...I am the first to recognize that Presidents Truman and Eisenhower have had the greatest sympathy for Latin America...

...There are only two sources for this help: the Inter?national Bank for Reconstruction and Development, and the Export-Import Bank of the United States Government...

...paying the market price but not removing these materials from the "strategic" list...

...Today, Latin America exports practically the same amount of prod?ucts as before the war...

...Therefore, the underdeveloped countries wish to process part of their raw materials, to industrialize, and to modernize their agriculture...

...enor?mous spaces and relatively scarce population...

...Under such circumstances, no one can predict what road the political and social evolution of some of the Latin American countries may take, driven by the united pressures of millions of human beings living in continu?ous poverty...

...Naturally, Latin Americans want to increase their production of raw mate?rials and thereby contribute to the industrial expansion of the world...

...Copper and tin, for example, constitute the base of the economic life of Chile and Bolivia respectively...

...Of the 20 Latin American republics, more than 15 show an annual per capita income of less than $200, and none of them more than $400...

...Moreover, at times when the price descends the demand for the product also goes down, so that the fluctuation in Latin America's financial return for its products is 40 per cent...

...He has also been Chairman of the General Assembly's Economic and Financial Committee and a delegate to the UN's Technical Assistance Conference...

...At the same time, the proximity of the two Americas has created among the Latin American masses a clear conception of their rights as human beings and a natural impatience to enjoy the benefits of modern techniques and civilization, which they know through moving pictures, newspapers, maga?zines and books, and from the personal testimony of the increasing numbers of travelers to Europe and North America...

...Study of disease, illiteracy, schools, doctors and so on reveals the same divergencies...

...These facts have made a profound impact on Latin American public opinion...

...it will only produce more underpriced materials...

...International responsibility for effecting a rise in liv?ing standards in Latin America is great...

...This does not mean socialization of our economy, as some circles insist, but only the creation of a climate and the basic conditions under which private industry can function...

...5. At this moment, the thing that most preoccupies Latin America is the prices and markets of its raw mate?rials, which are subject to terrific instability...

...Combined with this is another disturbing element...

...cannot always avoid unemployment...

...Because of this and because the rate of investments from foreign countries has diminished instead of increas?ing, it is evident that Latin America must have help from abroad...

...By contrast, in these same ten years food production has increased 30 per cent in the United States...

...The numerous requests of the various countries were either denied or postponed, principally because the Bank regarded their financial condition as unhealthy...

...its agriculture must be subsidized by other sources of production...

...Hence, the added investment of large capital in the present structure of production will not alone solve the problem...

...It would be stupid to deny that this system has been weakened by the new position of the United States as the world's first power and by the increasing inequalities of the economy and military strength of the two parts of America, as well as by a policy which I consider blind and suicidal...

...The Charter of the United Nations proclaims the determination of the peoples to promote social progress and raise the standards of living, within larger concepts of liberty...

...the relation in prices between the raw materials which it exports and the machinery which it buys abroad also remains more or less the same...

...But they also want to diversify and mod?ernize the structure of their economy...

...4. Our countries must obtain public capital from abroad to finance these works, for our national income scarcely suffices...

...The International Bank, whose capital is in great part obtained by advances of governments, must develop a different standard...

...worker receives...

...The majority of these works demand the use of equipment, machines and materials which must be paid for in foreign currency...

...Despite all this, the U.S...

...Its fields can help sustain millions of beings in other overpopulated regions, its sources of power can produce articles to ease the lives of thousands of men and women...

...If they achieve this, certain private interests in the industrial countries will naturally be affected...

...This means a progressive impover?ishment of its already impoverished population...

...And, in my opinion, those people conspire against this friendship who, having the capacity to do so, fail to evolve an active, dynamic, courageous policy promoting all the spiritual, economic and other factors that create an authentic continental solidarity...

...America, like Asia, is a continent in erup?tion, and the time has passed when revolutions meant merely a change from one group to another, inspired by personal ambitions...

...Latin America, like all other so-called underdeveloped areas, lacks capital, techniques and specialized workers, and has few roads and means of transportation, unexploited re?sources and deficient sanitary conditions, problems of irrigation and land clearance...

...I am convinced that the situation could be corrected, and be enormously reinforced, if the United States adopted toward Latin America a policy of economic solidarity which embraced the following elements: 1. A great effort to understand Latin American reali?ties and the mentality of its population, which differs from that of the United States as a result of special and very diverse factors...

...I have mentioned a blind and suicidal policy...

...From this one can gather that the surest and most effective means of serving continental solidarity would be for the United States to initiate a broad plan of public financing instead of ending the limited program of the Export-Import Bank...

...and the entire economy depends on raw materials produced in other countries where human labor is paid only a quarter, a sixth or a tenth of what a U.S...

...This seems to me a monstrous inconsistency...

...Food consumption in these countries averages 2,100 calories per person daily, as against more than 3,000 in the industrial countries...

...We are told that this is because of the lack of a "favorable climate," but if one studies the ele?ments which constitute this "unfavorable climate" (unfa?vorable balance of payments, restrictions of exchange, and inflation), one sees that, when these disappear, it is because there is no longer any need for foreign capital...

...The United States, for its part, has an even greater responsibility in this respect, arising not only from its role as the greatest economic power and leader of the free world but from another special consideration...

...Today, it is the nearly 200 million human beings (the majority of Indian or mestizo origin), living in misery and determined to live better, who are deciding the future of the continent...

...I have already explained that there are indispensable and basic public works which cannot be financed in this manner...

...it is 17 per thousand in the rest of the continent...

...Its lands, its mines, its broad seas can produce the foods and raw materials demanded by a rapidly increasing population and an economy in continuous expansion...

...Latin America, with its characteristic ethnic and economic structure combined with a predominantly Occidental intellectual orientation, with its traditions of peace and its attachment to juridical procedures in solving international questions, with its deep human sentiments and its mentality attuned to the generous and the new, is a key piece on the inter?national chess board, a factor of enormous potential in the consolidation of world peace...

...The other source of public financing, the Export-Import Bank, is on the point of disappearing...

...The Latin American countries have seen with resentment that, while Europe and Asia receive close to $40 billion in gifts, Latin America has received only one billion and the greater part in loans...

...Moreover, the times have changed rapidly and the people's pressures to attain better stand?ards of life and greater social justice are irresistible...