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Approved For Release 2005/11/29: CIA-RDP79R00904A001300040007-9., of RIB Paper 80194-67: Economic Trends and Prospects in Latin rica 8Q194-67 proteata a SlowV picture of current prospects in tin ri that is By co ent.rating on per capita Me growth ;t the sole Criteria of press, the pap a ner of essential dist;tiox hich are necessary to put the economic of the area in proper perspective. the major defects in the analysis : f the psper base their conclusion that ahoy poor economic progr is in recent the statement that " r cap'" &r f l product (cm') for lot rica is less e for all underdeveloped areas, and very for those economies of southern Europe ro rougsimilar In S ta ofdevelopment to the Al countries." advanced Latin American is are that Latin America's gr th record ,re has not b poor coopariaon with the LDC ith perhaps the exception of southern Europe. with south mope is s t dis- .vac,, in view of the very high population th rate in Latin , rica and the very ow rate of pwth in the southern European countries rtherre: the external trade relations of opean countries are not comparable to those of depapdanclit on a few export t=4* fry large its. On the other ica's rate of growth c cares favorably rest of the ieaa-dloped world, as customarily ORM 3 l agraded at 12-pear intervals not auto t ically declassified. SIB t. . Approved For Release 2005/11/29 : CIA-RDP79R00904AO01300040007-9 Approved For Release 2005/11/29: CIA-RDP79R00904A00M0040007-9 Pita of nth of C per capita, Current Pate of (;rowtb W11:91 of Poouiatt ip. 000 -.acluding Japan) 2.3 2.7 ,a 1.6 2.9 M 1.4 2.5 1.1 2.4 2, The focus of the paper on the CM growth rate for the rim 1960-66 obscures the substantially higher rate the past three yearn co aced to 1961-63. GNP at an average of 2.3% in 19?, compa To a significant giant these results ibuted to inprmed economic policies by the rests of the area. responding to the stimulus of the Alliance for Progress. for unsound policies which we" followed during of the growth problems of the early 1960's were the O's, as for example large deficit spewing in razil and Chile, the effects of which were by heavy short-term borrowing abroad. The high in Brazil in the fifties does much to raise Latin America as a *bole. Yet this rate of d only by running up over a billion debt (mach of it an exceedingly Fah came hie to roost in this d in this light, the growth record of the t a proper yardstick by which to judge perform- is illustrative of the major defect of to failure to give adequate weight in judging foe to major iravts in economic policies and institutional reform during the past several years. in paper gives the inprassicn that the countries of continue to follow the ansound policies which o difficulties in the early part of the decade. r of important countries, e.g. Brazil, Chile, more recently, Argentina, have instituted in economic policy designed to lay Approved For Release 2005/11/29 : CIA-RDP79R00904AO01300040007-9 Approved For Release 2005/11/29: CIA-RDP79R00904A001960040007-9 FIDE IAL 3 the basis for a more permanent and more equitable growth in the future. The average rate of growth of per capita product since 1963 has been as high as in the period 1950-1960, yet the growth has been much more soundly based than in the previous decade. The description in the paper of the problems of import-replacement industries, inflation, and agriculture is more accurate for the decade of the fifties than of the present. 5. Argentina and Brazil together contribute 40 percent of the of the region. The slow rate of growth of CAP in these two countries during most of the sixties has pulled down the results for Latin America as a whole and obscures the fact that 12 of the 17 countries considered by the study had higher rates of growth of GNP in 1961-66 than in 1956--60. It is an oversimplification of the problems of economic development to argue that because these two countries weigh so heavily in total population and product, the economic rformance of the area mast be measured accordingly. As Long as the nation-state dominates international political life, the problem of economic development exists largely in the context of the nation and success or failure cannot be judged solely in terms of relative size of the economic unit. Much is made of the fact that Latin America's portion total world trade declined. This is beside the point, as the paper mentions (without understanding the cc , ___ implications), this is a problem shared by all the LDC's. If are interested in measuring economic Rerformance, the proper yardstick is economies at a similar stage of . By this measure, Latin America is performing well. Latin America's market position improved relative to the other L1 is once allowance is made for the slow growth of Venezuelan oil exports (Table 11). The report places much weight on the estimate that prospects for Latin American traditional exports are poor and that it is unlikely that Latin American govern- ments will take the necessary policy actions to stimu- late exports of other products. While history tends to support this viewpoint, the fact is that both Brazil and Argentina have shown signs of a determination to follow GO IDEI,AL Approved For Release 2005/11/29 : CIA-RDP79R00904AO01300040007-9 Approved For Release 2005/11/29 : CIA-RDP79R00904A00M0040007-9 CWUX527AL 4 Mod policies. Br it has maintained a real- rate policy, c ti5tsntlyp for the past three icas are that it will ate to do sc . t time, it has twice in the past year taken steps el of import protection. Procedural. and its to export have been adopted. As a sr"114 s exports of s ufactU=d mss, while of total experts , have i reased is that the potential for vxm_ Brasil, Argentina and., for that tray. American Conam Market area, may be had ? ared hope for and that the policy a such exports may not pro's sc ? ereff its become kn . the statement P"M 0" to t rice has obam peer ecasmic progress rnmnt and international financial since 1960, a p -li d some 46-5 billion in eomamic mid." This statements which seem calculated to a eo s tional. i ct on the reader, turns out ups t to be rather mesai less . The. isplscati Is that $6.5 billim was a sufficient am*uftt u to have induced might be concluded that the ascent of external in ArseriCt has not been evow tc do the I . ors of the Mare ,l lam, for exa -le, with roughly the same pOPUlati received a billion in U.S. lofts sind its (mostly the 6? s situation with rolprd to Institutions, _- _= vopeam%sbir r+ sources, a infrastructure as far d ay able than that of Latin Amrica to at I. Tabl* I - warrant motes Of M Approved For Release 2005/11/29 : CIA-RDP79R00904AO01300040007-9 Approved For Release 2005/11/29 : CIA-RDP79R00904A001.Z00040007-9 ~ w,c RTES OF PO M ATION GRWflI Latin Arica 4.5 0.7 0.8 2.9 Approved For Release 2005/11/29 : CIA-RDP79R00904AO01300040007-9 Approved For Release 2005/11/29 : CIA-RDP79R00904AO01300040007-9 Table 1.I (Millions of tal 19 Lat in A Revubiics Incl. Excl. Incl. Excl. Encl. Excl, uels Fuels Fuels Fuels Fuels .Fuels 1960 26,900 19,250 1961 27,100 19,000 1962 28,600 19,740 1963 31,140 21,630 1964 34,000 23,380 1965 36,000 24,700 1966 38,200 -- Percentage Increase 42.0% 28.3% Compound Rate of Increase 6% 5.1% 5.7% 6.3% 6.1% 13,650 13,290 13,660 15,060 16,220 17,110 1/ Including 19 Latin American Republics, other Western hemisphere (except U.S. and. Africa (except South Africa), Middle East, and Asia (except Japan). Sources: International Financial Statistics, May 1967 and United Nations Monthly Bulletin of Statistics, March 1967. Approved For Release 2005/11/29 : CIA-RDP79R00904AO01300040007-9 3, 1960-1'966 )ilars ) 7,950 8,090 8,640 9,190 9,860 10,370 11,100 39.6% 5,600 5,710 6,080 6,570 7,160 7,590 18,950 19 , 010 19,960 21,910 24,140 25,630 27,100 35.5% 43% 25.49. 4.6% nada) SENDER WILL CHECK AS IFI__ 0 T LyfNFrljvwfmff CENTRAL INTELLIGENCE AGENCY OFFICIAL ROUTING SLIP TO NAME AND ADDRESS DATE INITIALS 1 it I'i 2 3 4 5 6 ACTION DIRECT REPLY PREPARE REPLY APPROVAL DISPATCH RECOMMENDATION COMMENT FILE _ RETURN CONCURRENCE INFORMATION SIGNATURE Remarks : r r"a2 (!i!/--/ r'"i C'v.-s.6r~ivtAiGt a L~Ze ~f /1~ 4LL'~ !/li'Lre,~_J 1 bk ~ Gt + zacC G t-/~ i~IGi J 4 , t -'ell !v! ? ? .~ /9h i~'t /~~A~s 1 t .LuS lA7 FOLD HERE TO RETURN TO SENDER FROM: NAME, ADDRESS AND PHONE NO. DATE A N 1 ! FORM ; 237 Use previous editions (40)