17. Memorandum From the Under Secretary of State (Bowles) to Secretary of State Rusk1
SUBJECT
- The Montevideo Conference
I am concerned lest the momentum generated by the Act of Bogota and the Alliance for Progress be dissipated by a conference at Montevideo which is so heavily dedicated to financial and technical measures that the human element gets lost in the shuffle.
Expectations are very high in Latin America. Yet if the primary test of the Alliance’s success is to be the number of dollars that are made available by the U.S.A. we may end up with every country dissatisfied with its share of our necessarily limited funds.
Since our financial capabilities are not inexhaustible, we must seek constantly to identify the United States with other less costly aspects of the process of economic and social change which are of equal or even greater importance to the development of prosperous, stable, democratic societies.
It seems to me, speaking in the most general terms, that we can identify three major elements in the development complex where we can be most effective.
The first of these is providing resources for economic growth. We have many instruments for doing this, most of which are expensive. Moreover, massive investments in infrastructure and industrial facilities, essential though we know them to be, may in fact create additional tensions within a society by failing to meet immediate consumer expectations and by increasing the disparity between the wealthy and the poor.
Greater emphasis, therefore, should be applied to bringing about basic reforms in the distribution of wealth. This means promoting social justice through changes in tax systems, land tenure patterns, credit arrangements, which in addition to their obvious political implications, can help release domestic resources and talents for more productive utilization.
For the United States this is a dramatic, necessary and yet virtually costless exercise. Moreover, such reforms will make sense to the American people because they stem from such well-accepted convictions as to [Page 45] the proper nature of society as that a man should own his land and home and that the burden of taxation should be distributed on the basis of ability to pay. Sometimes there are suggestions that pushing for social reform abroad means espousing some “radical”, un-American doctrine; in fact quite the opposite is true.
A third area where we can assist, also at relatively little financial expense, is in promoting the welfare of the rural areas, where 70% of the people of Latin America live. An integrated approach to rural poverty through extension services, cooperatives, land reform, self-help schools, roads, and so forth, can yield an enormous return not only in better living conditions but in the immeasurable elements of hope and self respect which are the strongest bulwarks against Castro-Communism. Yet for all of Northeast Brazil, probably the most poverty-stricken part of Latin America, the dollar needs are estimated at only $76 million over the next five years.
Integration, it seems to me, must be the essential element of our efforts to stimulate rural development not only in Latin America but throughout the underdeveloped world. I have drafted a memorandum2 (now being circulated for comment within the Department) which discusses this coordinated approach and suggests ways in which it can be furthered. A firm expression of our interest along these lines would not be amiss at the Punta del Este meeting.
I hope that our delegation to Montevideo will bear constantly in mind these three inter-related aspects of United States involvement in Latin American economic and social progress and will lose no opportunity to reemphasize our concern with the last two elements as well as the first. It will help re-inspire many of our Latin American friends as well as reassure our own citizens that “foreign aid” need not consist solely of an ever-increasing stream of dollars.