The 60th anniversary of the Alliance for Progress: lessons for a new partnership
At March 13, 1961President Kennedy announced the Alliance for Progress, initiating a major shift in the United States’ engagement with Latin America in response to the Cold War struggle with the Soviet Union. While far from perfect, the Alliance for Progress was a positive and engaging partnership that reflected the hopes and aspirations of our neighbors. Out of his 60e Anniversary, the Alliance offers relevant lessons for tackling unfinished business in the region during a new era of great power competition.
The Alliance for Progress involves all members of the Organization of American States, except Cuba. The partner charter encompassed several major reform orders, including increasing economic growth rates to 2.5%, accelerating industrialization, pushing for land reform, eradicating adult illiteracy and improving life expectancy. Often compared to a Latin American Marshall Plan, the Alliance for Progress has been the the largest American development package to date for the developing world in 1961, with a commitment of US $ 20 billion in grants and loans and a commitment of US $ 80 billion from Latin American countries in investment funds.
American soft power initiatives have always included a perspective of enlightened self-interest. In 1959, the Cold War had reached “America’s backyard” when Communist Fidel Castro seized power in Cuba. American relations with the countries of Latin America and the Caribbean had also generally refused after World War II, many felt that the United States had ignored its development needs and contributions to the war. Illustrating the tensions, the crowds in both Peru and Venezuela then assaulted Vice President Nixon during his “goodwill tour” in the region.
Nixon’s visit was such a fiasco that it sparked new thinking within the Eisenhower administration on the region. The Inter-American Bank (IDB), which had been considered intermittently since the end of 19e Century, was launched in 1959 as part of the Eisenhower response. Kennedy would build on these efforts through the Alliance. Early events, such as the failed Bay of Pigs invasion in April 1961, were embarrassing and raised the stakes.
Latin American leaders were encouraged to join the Alliance. While Latin America had higher GDP growth rates than Asian or European countries before 1950, the region lost his advantage. Many countries have simultaneously inflation, with rates of over 30 percent in Argentina, Brazil and Chile.
The Alliance quickly made major improvements development conditions, such as infrastructure construction, educational initiatives and industrial expansion. In addition, the Alliance has given the confidence to “attract” domestic resources and private capital with 87% of total gross investment in Latin America from domestic savings in 1967. Less tangibly, the Alliance for Progress also greater political consensus on the value of institutional modernization.
However, the Alliance did not meet all of its reform goals. Dissonance between American messages on the Alliance and certain American actions, particularly towards Cuba and the Dominican Republic, have blurred the message and contributed to faltering political engagement. The Alliance for Progress has also allowed unintended negative outcomes, such as grand corruption in a few cases, which have marred its record.
The political change in the United States has also had substantial negative implications. After President Kennedy’s assassination, the initiative lost momentum with President Johnson’s decision to deploy troops to the Dominican Republic in 1965, which sparked outrage across Latin America. As the conflict in Vietnam escalated, LBJ’s attention was drawn to other parts of the world. The Alliance for Progress was officially dissolved in 1973.
Fast forward to 2021, Latin American countries have made great strides. GDP per capita for the Latin America and the Caribbean region increased from $ 380 in 1961 to $ 8,900 in 2019. Extreme poverty increased from 13.7% in 1981 to 3.8% in 2018. Adult literacy rates rose from 81% in 1981 to 94% in 2019. Insurgencies and state-to-state conflict are largely absent from the region.
However, many problems remain, as well as new challenges.
Organized crime and the illicit drug trade constitute major threats to peace and development. The countries of the region are among the the most violent.
The crisis in Venezuela, due to Maduro’s repressive and criminally incompetent regime, has also caused an acute regional crisis: 5.4 million people have officially fled to neighboring states.
There is also an additional migration crisis in Central America, with more than 800,000 people displaced in 2020 only. The underlying motivations are rampant violence, economic insecurity, natural disasters and poor governance.
Beyond the acute crises, the region as a whole faces structural economic challenges. The regional GDP growth rate has been only 0.9 percent in 2019, labor productivity is low and stagnant, perceptions of corruption are high, and overall inequality increases.
Latin America has also been hit hard by COVID-19. The virus is now the leading cause of death in Peru, Brazil, Chile, Ecuador and Panama; economic contractions are considered among the most serious in the world.
China is the region first business partner when Mexico is not taken into account; 19 Latin American countries are participants in the Belt and Road Initiative, and Chinese companies have successively invested in Panamanian ports. State-influenced tech giant Huawei has signed agreements with Mexico, Argentina and Brazil to build 5G networks.
While any new Alliance for Progress should focus on improving economic development, tackling COVID-19 will first be necessary. Cooperation could include supporting the roll-out of vaccines in tandem with Covax / GAVI, providing medical supplies and supporting small and medium-sized businesses that have suffered.
A new Alliance should prioritize strengthening democracy, education and institutional reform. Improving business connectivity is an opportunity. The United States should use a new Alliance to push the Americas to become more economically integrated. For example, the United States could build on the recent USMCA and, over time, seek concerted pressure for a renewed Free Trade Agreement of the Americas. As digital transformation is accelerated by COVID-19, the United States should enable the development of Latin America’s digital backbone, independent of Chinese influence.
President Kennedy had the right strategy in proposing a comprehensive, positive and – most importantly – jointly designed agenda, inspired by a common vision and supported by adequate resources. Plus, he understood the connection between Latin America’s well-being and ours, and the implications of American inattention – other countries would fill the void.
As a cornerstone of its strategy in Latin America, President BidenJoe Biden Atlanta mayor to fail for re-election as governor of South Carolina to end pandemic unemployment benefits in June Airplane pollution expected to skyrocket with post-pandemic travel boom KNOW MORE should consider launching an updated version of the Alliance for the Advancement of the Kennedy Era. America will welcome the Summit of the Americas for the first time in 27 years this year, and the Biden administration is expected to use this forum to build a new partnership.
Daniel F. Runde is Senior Vice President and William A. Schreyer Chair in Global Analysis at the Center for Strategic and International Studies. He previously worked for the United States Agency for International Development, the World Bank Group and in investment banking, with experience in Africa, Asia, Europe, Latin America and the Middle East.