The Alianza: Three on the Go

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Four years after the Alianza set out to help 200 million Latin Americans make progress, there were still half a dozen countries teetering on the brink of political and economic chaos. But it is now clear that three tiny, historically tortured countries can be taken off the crisis list.

∙NICARAGUA. In office since 1963, President René Schick, 56, works in the shadow of the Somoza brothers, Tachito and Luis, who control the country's military and much of its wealth. Schick and the Somozas are development-minded, however, and since 1961 their small (pop. 1,600,000) country's G.N.P. has increased by a phenomenal 40%, highest sustained growth in Central America. From the Alliance for Progress has come $30 million for such projects as construction of 350 miles of roads to stimulate dairy and beef production, reduce dependence on cotton. Foreign investors have teamed with local entrepreneurs to produce everything from TV sets to insecticides—and a new class of forward-looking managers, such as Businessman (construction, automobile parts) Enrique Pereira, 42, is emerging to "take the country out of the feudal ages for everybody's benefit."

∙HONDURAS. With 136 coups in 144 years of independence, this neighboring Central American republic (pop. 2,000,000) can at least thank Strongman General Osvaldo López, 44, for two years of political stability—and economic growth. With $25 million a year in Alianza aid, generous foreign investment, and their own nine-foot-deep topsoil, Hondurans have built a G.N.P. that this year is expected to add up to $460 million, 8% over last year. Bananas still provide $38 million (or 40%) of the country's export earnings, but the highly successful Central American Common Market has stimulated a mushrooming cluster of small industries (paint, synthetic rubber, flour mills) on the Caribbean coast, where Mexican investors soon hope to build a $12.5 million steel mill using native ore and charcoal.

∙PARAGUAY. After eleven years under Dictator-President Alfredo Stroessner, the country's 1,900,000 people do not have democracy in the U.S. sense, or much hope of achieving it in the near future. But the regime is growing more benign, and Paraguayans are beginning to know a little prosperity. Attracted by rocklike stability (the guarani at 126 to the dollar has not budged in five years), foreign investment has increased steadily. U.S. firms have spent more than $25 million to build meat-packing plants, a bottled-gas facility, a hydroelectric station and an oil refinery. Last year, exports (mainly beef, lumber and cotton) earned $50 million, 23% more than 1963, and this year may rise another 10%. Some $27 million in Alianza aid has gone into agricultural, educational and communications projects, helped push 1,200 miles of paved roads into the rich but unexploited interior. Though the country's per capita G.N.P. is still one of the lowest in the hemisphere, it is expected to top last year's $146 by 8%, and keep on improving.