(The information referred to is as follows:) REGIONAL TABLE I.-Economic assistance and technical cooperation, American Republics and DOTS1-Comparative summary of obligations by activities In Latin America the United States technical cooperation has just completed its 11th year. Here many of the cooperative techniques have been worked out which are now being applied on a wider scale throughout the underdeveloped areas of the world. Here also technical assistance has had time to demonstrate its effectiveness and its value to other countries. Hundrdes of individual projects-financed largely at their inception by the United States, as war measures have been more and more taken over by the local ministries until eventually these projects have been taken over entirely as parts of the permanent program of these countries-while United States technical assistance has gone on to assist in other pressing development problems. When the inter-American technical cooperation program began, our assistance was largely directed to the basic fields of agriculture, education, and public health. As the program proved iself in these limited areas, however, United States representatives were increasingly asked to make American know-how available for a wider range of developmental activities including industry, trade, public administration, and finance. During recent years American private investment has found its greatest overseas opportunities in our Latin American neighbors. Over $7 billion of United States private and public capital has been put to productive use in Latiin American enterprise. So effective have our good neighbors become in attracting United States enterprise and financing that special economic aid or financial grants have never been seriously requested of the Western Hemisphere. On the other hand, it has been clear for several years that increased technical assistance in selected industrial and administrative fields was necessary if sound economic development was to continue to attract American investors and businessmen. Twelve months ago a system of country directors was established throughout Latin America. With the assistance of economic advisers or program officers, their function was to study the overall developmental needs of each country and recommend selected technical assistance projects which would best contribute to the overall balanced development of these economies. Over the past 12 months a number of proposed joint projects have been critically examined and agreed project proposals resulting are included in the fiscal year 1954 program request. It is to provide this rounding out of United States technical assistance programs as a means of assuring a better balance between agriculture, industry, and other sectors of the Latin American economies that approximately a 10-percent increase in the appropriation for part IV is requested for the coming year. THE AREA AND THE PROBLEM This part of the inner citadel of free-world defense includes well over twice the area of the United States and close to 176 million people. More than 150 million of these live in the region in which the United States technical coopera 1 Dependent overseas territories. iton program is operating under the Institute of Inter-American Affairs as regional office of the Technical Cooperation Administration (Puerto Rico and other United States dependencies and Argentina are excluded). Around 30 million of these still retain their identity as pure Indian, living outside of the general stream of national economic life. To a large extent the physical environment of the region is difficult and hostile. In the highlands of the Andes, which are a formidable barrier to transportation, millions of people work poor soil in forbidding climates at altitudes up to 14,000 feet. Altitudes best suited for human productive effort generally have either an excessively rugged topography or an exceedingly dry climate. The great river basins, while facilitating transportation, become inland seas during the rainy seasons, infested by insects and micro-organisms which afflict plants, animals, and man alike. Even where nature is somewhat kinder, many problems arise from irregular topography and tropical diseases. Although in some countries of the region the pressure of the population on the land is excessive and basic natural resources are limited, on the whole there are sufficient resources for a high degree of economic expansion. There is a considerable imbalance of the national economies resulting from concentration on single industries (Bolivia, tin; Chile, copper; Brazil and Colombia, coffee; Cuba, sugar; Honduras, bananas; and Venezuela, petroleum). Local capital formation is difficult and slow. Without sizable foreign investments in productive enterprise the economic growth of the region would be too slow to effectively further the objectives these countries have set for themselves. In general these objectives include higher levels of living, achievement of economic and political stability, and creation of an improved position of strength for the whole Western Hemisphere-all this to be brought about through diversi fication of their separate national economies and a more balanced overall economic development. It is clearly in our national interest to assist the governments of the region in improving the conditions which stand in the way of increased production. Latin America is a potentially weak link in the chain of the free world's defense against Communist aggression. At the present time, the majority of the people have such a low standard of living and such a small stake in democracy that they are readily susceptible to the blandishments of totalitarian propaganda. Raising productivity in the region means not only to make it less dependent upon the United States in collective defense against military aggression and against the undercover form of political penetration, but also to make it a more effective ally from the viewpoint of supplying the strategic and critical raw materials required in the defense effort of the free world and particularly by the industries of the United States. But even if it were not for these specific purposes, the general economic de velopment of this region would be essential to the United States. It is axiomatic that economic activity and well-being are greater on both sides when trade and exchange are carried on between two highly developed countries than when a highly-developed country seeks to trade with an underdeveloped one. The dif ficulties which so far have retarded the economic development of Latin America can be attacked and overcome. There are sufficient natural resources and manpower to make possible a high degree of economic expansion. Even in 1951. when we witnessed but the beginning of a new economic era for the region, trade with the Latin American Republics accounted for $3.4 billion or 31 percent of the United States total imports and $37 billion or approximately one-third of the United States total exports (this being equivalent to about 50 percent of the toal Latin American imports). The Latin American Republics are second only to Western Europe as a market for United States experts and continue to supply a larger part of United States imports than any other trade area. The region has always been a capital-deficit area, since capital formation is difficult and slow in underdeveloped countries. Just as the United States was itself built up with the help of European capital, Latin America, particularly since the turn of the century, is being helped by foreign investments. By 1951 net United States private direct investments and reinvestments in the Latin American Republics approached the $7 billion mark. $435 million having been invested in that year alone. Conditions can be created which will make the region even more attractive to foreign private investors, who can expand its productive capacity to proportions more in keeping with the overall objectives of the United States. Without such investments the economic growth of the region would continue to be unduly slow. Technical cooperation, therefore, includes special assistance programs aimed at improvement of institutional defi ciences in such fields as public administration, financial organization, statistics, and general economic planning. WHY TECHNICAL ASSISTANCE PROGRAMS IN THE WESTERN HEMISPHERE? 1. Technical assistance needs are great: Undernourishment, disease, and ignorance combine to keep the productivity per worker in agriculture at about one-fifth that in the United States. For the same reasons productivity is low in mining and industry also. Added handicaps to production are the shortage of skilled labor, inefficient utilization of manpower, and the critical lack of transportation and power facilities. All this results in high-cost production and poverty of the masses, which in its turn tends to perpetuate undernourishment, disease, and ignorance. The countries of the region are attempting to break this vicious circle, but they need external help in helping themselves. There are not as yet enough local technicians available to cope with the huge tasks confronting them. 2. Governments and people ask for technical assistance: They ask for such assistance from the United Nations and from its specialized agencies, from the Organization of American States and from the United States Government. Eighteen governments have concluded general agreements on technical cooperation with the United States. There is only a very limited program in Guatemala, and Argentina has not sought technical assistance except for training grants in a few fields. Latin-American governments, national, State, and municipal, as well as private sources, are generally contributing an ever-increasing share of the cost of the programs. In the fiscal year ended June 30, 1952, the United States obligations of $18 million were augmented by contributions of $32 million from the LatinAmerican countries. In fiscal year 1953 the contribution is estimated at United States $22 million and Latin America $38 million; in fiscal year 1954, United States $24 million, Latin America $44 million. These estimates of host government contributions are conservative, as many other contributions are made, particularly "in kind," the dollar equivalent of which is difficult to determine or measure. 3. The case for assistance from the United States Government.—The question is frequently asked why countries enjoying such favorable trade and being so rich in potential resources should receive external technical assistance at the expense of the United States taxpayer to remedy their internal shortcomings? The technical assistance program is not a giveaway program. It is a cooperative program in which the United States and the countries in need of technical assistance become partners in striving for economic progress of mutual benefit; each partner, rich or poor, assuming his fair share of the technical assistance costs involved. Present conditions make it imperative to accelerate this progress. Greater economic activity and well-being in the region make for national political stability and for an international position of strength in the Western Hemisphere. The countries in the region realize that it is to their benefit to implement programs toward these ends. Having the same objectives and being their partner, the United States Government aids where no one else is in a position to aid. TECHNICAL ASSISTANCE PROGRAMS IN LATIN AMERICA Accelerated and balanced development is the common denominator for the various economic objectives spelled out in the act for international development in terms of "raising standards of living, creating new sources of wealth, increasing productivity, and expanding purchasing power." As far as the technical assistance program in the Western Hemisphere is concerned, attainment of these objectives rests upon pursuance of the following specific objectives: Increasing productivity per worker by doing away with undernourishment, disease, and ignorance through programs in food supply, health, sanitation, housing, and education, particularly teacher training and vocational education, which also serve to increase the number of skilled workers. Increasing overall production by appropriate programs in agriculture and industry, as well as in the development of natural resources, power, and transportation. This also involves changing the subsistence economy of many millions of people (including 30 million Indians) to fuller participation in, and greater contribution to, the national economies. Correcting imbalances in the national economies which result from concentration on single industries or products by assisting in diversification of national economies. Encouraging development of sound economic policies on the part of the gov ernments and supplying technical assistance and advice required to attain this objective. Creating incentives to private investment, both local and foreign, by proving through demonstration projects that private enterprise is needed in a particular field, and by providing assistance in finding and presenting opportunities for private investment. METHODS The cooperative service, or servicio, is an agency set up by the Latin American government as a bureau within an appropriate ministry to carry out a given program of technical assistance in which the United States Government participates by supplying technicians and part of the program funds. Operations are cooperatively planned, directed, and administered by United States and Latin American technicians. Projects completed by a servicio are turned over to the appropriate agency of the Latin American government for operation. In some instances, the Latin American government requests that a servicio assist in the administration of programs carried on by other national agencies. The servicio also frequently assists local governmental entities and private third parties in the completion of projects to be operated by them. Servicios have been singularly free from political pressures and other adverse influences more or less typically present in governments of underdeveloped countries. The servicio device is the method generally used in carrying out programs in the broad fields of agriculture, health, education, and industrial productivity. In addition to these major program fields, technical cooperation is carried out in many fields of activity which require only the furnishing of the services of technicians by the United States with little or no contribution of funds, materials, or equipment by the country. The services of individual technicians are thus supplied in such fields as public administration, census, etc.; the technicians serving as consultants to appropriate ministries and other agencies of host gov ernments. The role of the joint commissions for economic development in Brazil and Paraguay is explained in the country presentations which follow. There are training programs systematically integrated into individual country programs. They are designed to increase the number of national technicians capable of taking over the work of United States technicians, and of training additional national technicians. Such training functions are performed chiefly through the on-the-job-training of the servicios. Trainees are also sent to the United States or to third countries affording specific training facilities. Since the Latin American area produces requests for training in a great variety of fields, approximately 50 bureaus within the United States Government agencies carry out the actual training. As a result of experience in operating technical assistance programs in a number of different fields it has been found that the effectiveness of programs is multiplied by following more and more an integrated area-developed approach. This means that besides continuing to operate their own separate functional programs on a countrywide basis, the chief technical assistance field parties also join in planning and implementing an integrated area-development program for certain selected localities, mobilizing available technicans and other resources to solve the overall economic and social development problems of the locality. In such areas as the Rio Doce Valley in Brazil and the Peruvian seaport of Chimbote and its hinterland, the emphasis is on the self-help efforts of the local population, fortified by a combination of various technical services. By improving not merely one aspect of local life at a time but, for example, agricultural production, industrial development, sanitary conditions, and local education and training all together, areas and communities are better able to maintain adavnces made. Intensified development of localities not only benefits the national economy as a whole but stimulates similar self-development in other localities. Integrated area-development projects are also one of the best means of providing "inservice" training facilities-training on the spot a great number of skilled individuals whose experience then makes possible greatly expanded develop mental operations by the government, without requiring additional technical assistance from the United States. As indicated in the tables of the country presentations which follow, funds for stimulating integrated area-development (the main funds for development must come from local capital and loans) will be made available in the form of grants to the separate servicios, but must be at least matched by the individua! Latin American government concerned. The servicio uses these funds to aid the areas on self-help efforts in such a way that no increase in the number of United States technicians in the servicio will ordinarily be involved. In summary it may be said that these programs have (1) been firmly accepted by the Latin American governments as evidenced by their ever-increasing financial contributions; (2) been accepted by the people of Latin America as evidenced by their active voluntary cooperation in following the leads given or by donating labor and funds; (3) taught self-help, self-respect through the grassroots approach; (4) developed a spirit of teamwork between United States and national technicians which sets an example for the technical assistance program in other parts of the world; (5) effectively demonstrated the ability and willingness of the United States to share its know-how; (6) played a role of primary importance in fufilling the historic good neighbor policy of the United States. DOTS1 Those Western Hemisphere dependent overseas territories of European countries for which technical-assistance programs are envisaged in the fiscal year 1954 are located wholly within or immediately adjacent to the Caribbean area. They consist of 12 European dependencies (7 British, 3 French, and 2 Dutch), with a combined population of almost 4 million. The comments made above regarding the need for technical assistance in Latin American apply equally if not even more strongly to the European Western Hemisphere DOTS. The vast majority of the population of the DOTS are living in poverty, disease, and ignorance chiefly because economic and social resources have not increased as rapidly as has the population. The territories all have their own development plans, worked out in greater or less detail. In addition, the Caribbean Commission (a United Kingdom-French-Dutch-United States advisory agency) and its auxiliary bodies, the West Indian Conference and the Caribbean Research Council, as well as international technical conferences sponsored by the Commission, have made numerous recommendations for technical-assistance projects. Although the European metropolitan governments, under the obligations of trusteeship, have undertaken to foster programs of social amelioration in their DOTS, their means have been so gravely depleted by two exhausting wars that, even given the will, they are at the present time unable to supply all the basic needs of the territories. Congress provided in the legislation for fiscal year 1953 for the transfer back to TCA of responsibilities for technical-assistance programs for Western Hemisphere dependent overseas territories, after such responsibility had fallen to MSA under the 1952 program. Of the three European metropolitan governments having territorial responsibilities in the Western Hemisphere, only the United Kingdom has signed with the United States a general agreement for technical cooperation in the dependent overseas territories (July 1951). This agreement provides, however, that it shall apply only to such of those territories as the United Kingdom shall from time to time notify to the Government of the United States, and as yet none of the British Caribbean DOTS have been so identified by the United Kingdom Government. Negotiations for a general agreement for technical assistance with the Netherlands applicable to her Caribbean DOTS are proceeding. France has not expressed an interest in negotiating such a general agreement to cover her Caribbean territories. Technical assistance hitherto approved for British, French, and Dutch Caribbean dependent overseas territories has been a result of individual project requests submitted to the United States (TCA and MSA) by the metropolitan governments. In some cases the impetus for such projects has come from suggestions or recommendations of the Caribbean Commission and the West Indian Conference. In developing program plans for the DOTS, which is a relatively new area for United States technical assistance in the Western Hemisphere, careful consideration has been given to the formulation of projects which are economically and technically sound and which will be carried out on a cooperative basis with both the metropolitan and the local government. Activities in the fiscal 1 Dependent overseas territories. |