The Hemisphere: LATIN AMERICA'S NEED TO EXPAND

Why Good Neighbors Must Get Together

THE economic and financial policy-makers of the U.S. and the 20 Latin American states meet next week in Rio de Janeiro for a conference that will have serious implications for the future relations between the U.S. and its neighbors. At issue is how much help, and what kind of help, the needy countries south of the border can expect from the U.S.

The Latin Americans bring with them eager hopes for sweeping changes in U.S. trade and investment policies—changes that would mean U.S. loans to produce more industrialization, more opportunity, a better life for the millions of impoverished who dwell in the high Andes, on the lonely pampas, in the green jungles and the crowded cities. The U.S. agrees wholeheartedly with these hopes: they grew in part from the loans-and-aid recommendations of Milton Eisenhower, who toured Latin America a year ago on behalf of the President. But what the U.S. proposes to offer seems to be far short of what the Latin Americans would like. If the Latinos are let down at Rio, their disappointment may generate the most serious era of bad feeling since the Good Neighbor Policy began.

Good Traders. Latin America depends almost solely on the U.S. for the means to develop its immense resources. Since the turn of the century, the U.S. has poured more direct private investments into Latin America ($6 billion plus) than into either Europe, Canada or the combined remainder of the world. Between the Rio Grande and Cape Horn there are 2,000 U.S. enterprises: oil companies, mines, auto factories, power plants, banana plantations.

Latin America sells the U.S. more ($3.5 billion a year in coffee, sugar and militarily essential metals), and buys more U.S. goods ($2.9 billion a year in vehicles, chemicals and textiles) than any other continent. Its peoples number 167 million, and they are multiplying 2½ times as fast as the rest of the world. But three-fifths of them are lowly tillers of the soil, and their per capita yearly income (about $275) is a meager one-sixth that of the U.S. citizen.

The U.S. and the Latin Americans agree that a raising of this standard of living can no longer be postponed. Says Henry Holland, the State Department's top official for Latin American affairs: "Perhaps the most important single economic development in the hemisphere is the growing determination among men everywhere somehow ... to feed, clothe, house and educate themselves and their families better." But what should be done, and how?

One possibility is outright grants; since the war, as Latin Americans often point out, rich Belgium and tiny Luxembourg have received almost three times more from the U.S. than the $209 million given to all 20 Latin American nations. Most Latinos, however, are beginning to agree with the U.S. that money gifts are not the cure. Another possibility is higher prices for the things Latin America sells, but the U.S. is cool toward price supports anywhere. A third way is more technical guidance from the U.S.; Latin America could use another 7,000 scholarships a year to train engineers and technicians in the U.S. But both the U.S. and the Latin Americans agree that the heart of the matter is Latin America's need for greater capital investment.