13. Snider, Delbert A. Introduction to International Economics.

4th ed. Homewood, Ill.: Irwin, 1967.

14. Stanley, Charles E. International Economics: Analysis and Issues. Englewood Cliffs, N. J.: Prentice Hall, 1970.

15. The Future of the International Monetary System. Edited by Hans W. J. Bosman and Frans A. M. Alting Van Geusau. Lexington, Mass.: Heath, 1970.

16. U.S. Congress. Subcommittee on Foreign Economic Policy. A Foreign Economic Policy for the 1970's. Hearings, 91st Congress, Washington, D. C.: U.S. Government Printing Office, 1970.

LATIN AMERICA

One of the truly striking phenomena of the past twenty years has been the rate and extent of change in Latin America. Change, of course, is one thing--development is another. Change may not be constructive, but development, by definition, is. The changes that have been coming about in Latin America properly can be termed developmental changes.

Industrialization is growing rapidly in some of the 24 countries of this area; in no country, except Haiti, is industry stagnant. More and more people are moving into the middle class, with middle class incomes and wants. In all countries except Peru and Mexico, agriculture, unfortunately, is lagging behind industrial and population growth, and this is detrimental to orderly development. The gross national product is rising throughout the area, at about two percent per year overall, and in Mexico, El Salvador, Peru, and Venezuela at much higher rates.

In the social sphere, expansion of the urban population is greater than anywhere else in the world--and this creates almost insurmountable problems for the cities. Literacy rates are improving, and much good use is being made of imaginative educational techniques, but it will be a long time before illiteracy ceases to be a problem. Life expectancy is increasing, and this is not an unmixed blessing in view of the population explosion.

Politically, new groups are gaining political consciousness, and some outstanding political leaders are emerging with responsible and foresighted dedication to good government. In a number of these countries--Mexico, the best example--a tradition of civilian supremacy is developing, peaceful change of government is now becoming traditional, and the people are beginning to know and agree on what kind of government is desired. This cannot be said of the whole area, but it is appearing. In earlier years, politics was the plaything of a small, privileged minority. Quite suddenly all sectors of Latin American societies are demanding

modernization and improvement in government. They want change-rapid change--and change for the better.

The principal development problems in Latin America are education, the population explosion, limited economies, land reform, modernization of agriculture, and the lack of skills of all kinds.

For your further background information on Latin America, there follow some pertinent extracts from a report (dated April 19, 1973) of the Secretary of State entitled: United States Foreign Policy 1972.

"U.S.-Latin American Relations: The New Perspective

"Recent years have witnessed a transition from the uneasy predominance of earlier relations with Latin America toward the more mature partnership called for by President Nixon in October 1969. We are leaving behind the paternalistic attitudes of the past; we have relinquished a directive role while maintaining commitments and responsibilities that are ours as the most advantaged member of the inter-American community; and we have turned more to the support of Latin American initiatives reflecting their perception of needs and priorities. Our goal is a relationship of interdependence based on shared responsibilities and mutual re

spect.

"Throughout the hemisphere there is a broad and growing network of transnational links through which officials, businessmen, people from every walk of life, together with the communications media, bring our societies into contact. With such a pervasive relationship, however, some conflict is inevitable. This is particularly true in an era when the Latin American states are increasingly intent upon asserting their own sense of national identity and independence. As a people whose own history has been shaped by a drive for national fulfillment, we should be particularly sympathetic to this trend.

"In Latin America the assertion of nationhood is manifested most often in economic terms. The Latin American nations are determined to accelerate the pace of their economic and social development. Such an effort requires capital, new managerial

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techniques, and technology, much of which must come from the developed world. It also requires increased access to world markets for Latin American exports. This means that the countries of Latin America will be increasingly obliged to engage in the give-and-take of commercial bargaining with the developed world. Reconciling the conflicts among national interests--the trade-offs among the imperatives of development, the drive for national control, and the need for foreign economic cooperation-presents Latin American governments with a series of difficult choices, which only they and their peoples can make for themselves.

"As Latin American nations make these choices, there will be points at which our interests in the area are affected, sometimes adversely. When legitimate U.S. interests are involved, this government will insist on fair and equitable treatment. At the same time we cannot lose sight of our broader interests in the hemisphere. Our continuing goal--one that reflects our most basic national interest--is a thriving hemispheric community of free, independent, but cooperating nations. The United States must approach each conflict in a spirit of compromise, not confrontation, and with a keen sense of the totality of American interests in play. It is reasonable to ask and expect that Latin American governments, looking closely at their own interests, adopt a reciprocal attitude.

"Achieving a Mature Partnership

"The President's basic policy statement of October 1969 was intended to minimize the possibility of conflict within the interAmerican community and to establish a more realistic cooperative relationship. The President promised that our new relationship would be characterized by:

Redirection toward multilateral assistance.

"The past three years have seen the first steps toward the realization of these objectives. We have not been able to move as fast as we had hoped, and the development of a mature partnership has not yet been fully achieved. We continue to believe, however, that the policies enunciated in 1969 offer the best promise of bringing to our relationship with Latin America a sense of shared interests and purpose.

"Economic matters stood out in U. S.-Mexican relations in 1972. Two-way trade approximated $2.8 billion in 1971 and will very likely exceed that figure in 1972.

"An export-oriented Mexico, aided by the realignment of international exchange rates at the end of 1971, enjoyed an improved trade position with the United States in the first half of 1972. With the ever-increasing number of U. S. tourists to Mexico, in excess of two million in 1971, Mexico is expected to record a surplus in bilateral trade and tourism of 1972.

"In late November the U.S.-Mexico Joint Trade Committee held its seventh annual meeting. The substantial U.S. direct investment in Mexico--approximately $2 billion--is expected to continue to grow in view of the relatively favorable Mexican economic climate. There may be some shift in the pace or kinds of investment as U.S. investors analyze current Mexican proposals in the private foreign investment field. The Mexican Government has assured us that foreign investment is welcome. It can be expected that its 'Mexicanization' policy, which encourages Mexican ownership or participation, will continue.

"In mid-June, President Echeverria paid a state visit to Washington. One problem occupying the two Presidents was the salinity of the Colorado River water entering Mexico. Following earlier exchanges of views between the two governments on this problem, President Nixon assured President Echeverria of his sincere desire to find a definitive, equitable, and just solution. To this end, he appointed former Attorney General Herbert