Foreign Relations of the United States, 1961–1963, Volume XII, American Republics

54. Memorandum From the Assistant Secretary of State for Inter-American Affairs (Martin) to Secretary of State Rusk¹

Washington, February 4, 1963.

SUBJECT

• Latin America in 1962—Institutional Changes

As an effort to stimulate more qualitative thinking on the part of all of us, I asked the Desk Officers, in cooperation with the Office Directors and the Embassies, to come up, as part of the 1962 review exercise, with a list of the three most important institutional changes which took place in their countries in 1962, and the three that we should most seek to accomplish in 1963.

The results, which are attached,² are not wholly satisfactory, despite several attempts. It is not easy to define what is an institutional change, nor what is one institutional change as distinct from a bundle of meas-ures with a similar objective, nor am I sure that we have really gone deep enough in picking what are the most important things to seek in 1963. A year from now we should know more and be able to do better.

A rough summary of the attached papers indicates that we have been, and will be, concentrating on agrarian and fiscal measures, those which have received the most publicity as objectives of the Alliance for Progress. In 1962 there were a dozen items each in these fields. In 1963 there is a step-up in the fiscal reform field with 16 listed, but still only a dozen for agriculture. I should emphasize that these cover a wide range of measures in these fields and do not refer only to higher taxes and break-up of landed estates.

There has been also a commendable emphasis on better planning for the use of scarce resources with 8 major achievements listed for 1962 and 9 projected as desirable for 1963.

While it has not been quite clear that non-governmental changes should be listed as “institutional” changes, it is significant that despite this limitation there were 4 achievements in 1962 and 5 projected for 1963, which deal directly with expanding the role of private enterprise, largely in the industrial field. Agricultural credit and technical assistance for farmers, as well as promotion of home ownership are also, of course, efforts in the direction of expanding the private stake in the community.

In view of the fact that the shortage of trained personnel for private and public enterprise is a crucial bottleneck in the program of the Alliance, and that educating leadership is necessarily a relatively long term job, it is disappointing that in this first full calendar year of the Alliance for Progress only one is reported in the educational field. However, six are projected for 1963. I am still not sure we are giving adequate emphasis to this area, though it may be that the need is for many small steps, rather than big ones which could be listed as one of 3 major targets.

1. Source: Department of State, Central Files, POL LA. Confidential. The memorandum and the attached report are companion pieces to a February 1 study entitled “Latin America—Political Progress.” (Ibid.) Both bear marginal notations indicating that the Secretary read them.
2. Not printed. The 23-page report discusses institutional changes in each Latin American nation.