The Alianza: Troubles & Remedies

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Forces for Confidence. A second U.S. businessman who has large interests in Latin America added some fascinating statistics to bolster Rockefeller's case. He was John T. Connor, president of Merck & Co., Inc., which operates pharmaceutical plants in Argentina, Brazil, Colombia, Mexico, Peru and Venezuela. Talking to a New England trade group in Boston, Connor noted that U.S. companies account for one tenth of Latin America's gross national product—and pay one fifth of all taxes, and produce one third of all exports. Yet, he continued, while the Alliance asks for an additional $300 million investment each year from U.S. business, U.S. companies during the first half of last year took out an estimated $29 million more than they put in. Why? "Would you invest in an atmosphere of rising anti-Americanism, unpredictable new taxes, revolutions that occur at the rate of two or three every few months, falling profits and runaway inflation?"

Connor called for joint government-industry task forces to recommend the legal and administrative measures necessary to restore business confidence in Latin America. Without that, concluded Connor, private enterprise—and the Alliance—is doomed. "Private enterprise requires order and a minimum of certainty. Disorder drives capital out of an area, not because it is timid, but because it is scarce. It is the product of work and savings, and it abhors irresponsibility, wastage and misuse. In the midst of the current chaos in Latin America, the U.S. corporation is about as much at home as a bishop in a poker game."