In recent years private enterprise in Latin America has shown that it knows the uses of adversity. In response to the challenges of Castroism, Communism, and jingoism, it has become more sophisticated, more socially responsible, and substantially stronger than before. The results are promising not only for private initiative and for the development of individual countries but for the economic growth of Latin America as a whole.
Things did not look bright for private enterprise in Latin America in 1961. Fidel Castro and his followers throughout the continent were riding the crest of an ideological wave that condemned businessmen as "exploiters" and "lackeys of imperialism." Even non-Communist economists and government officials were widely convinced that the most efficient way to stimulate the development of a country was by increasing state control of its economy.
Both Latin American and U.S. businessmen looked at the deteriorating situation and realized they would have to do more than tend to business. If their enterprises-and Latin America-were to have a future, they would have to support the constructive, democratic elements in labor movements and on university campuses; they would have to devote more effort to helping the private sector solve pressing social problems.
A primary concern was the Latin American labor movement. The Communists were making headway toward gaining control of it, but in the early six- ties supporters of democratic principles found in the American Institute for Free Labor Development (AIFLD) an imaginative way to help turn the tide. Essentially an organization for training labor leaders in enlightened labor practices, it has been given financial support by corporations, and businessmen have sat on its board of directors beside George Meany and other leaders- of the AFL-CIO. Latin American entrepreneurs have likewise assisted and welcomed the work of the AIFLD. It has trained tens of thousands of democratic labor leaders in its schools and seminars in practically every Latin American country and at its advanced study center in Washington. It has taught them the workers' stake in productivity, techniques of union organization, collective bargaining, and the generally vigorous defense of the legitimate rights of labor.
Businessmen are meeting ideological challenges in Latin America by supporting constructive democratic elements in labor movements and on university campuses and by lending their resources and skills to help solve pressing social problems. The author is staff director of the Council for Latin America, one of the groups organized to carry you this work.
Businessmen in Latin America have become convinced that free labor unions are essential to free enterprise and that part of management's job today is encouraging the development of such unions. They do not generate the waste of wildcat strikes; they are opposed to expropriation; and they are solid bulwarks against extremism in the ranks of labor.
Also, in the last several years, businessmen in Latin America have invested much more heavily than before in education. In Peru, for example, a retired executive put $100,000 of his own money into a vocational school that trains some 700 electricians, plumbers, and mechanics a year. Again in Peru, a mining company set up an educational foundation which soon acquired so good a reputation that it became the channel for U.S. foundation, government, and local grants for undergraduate scholarships and graduate fellowships in the country and abroad. In Mexico an automobile company offered any community where it had a dealership half the cost of a new school, if the community would provide the other half. In Venezuela the Creole Foundation and the Shell Foundation, offspring of the two major oil companies in the country, have been making invaluable contributions to educational research, teacher training, and textbook development. Meanwhile, local and foreign business together have established a network of excellent private elementary and secondary schools and an ample revolving loan fund for university students. In Brazil business is playing a big part in supporting the Inter-American University Foundation, which selects those students who look like the country's leaders of tomorrow and gives them a sophisticated orientation course, in Brazil and in the United States, on the world in which they live.
In their efforts to help build stable societies in Latin America, businessmen have also been greatly concerned with "community development" -which is, essentially, a means of helping the lowest income groups of a society to help them- selves not only to better their material lot but also to gain an awareness of their worth as individuals and their rights and responsibilities as citizens.
The forms of community development are many and varied. A foundation in Guatemala makes loans-not grants-to Indian villages for electrification; the lagers can readily repay the loans from what they save on candles or kerosene for their lamps. The loan funds are put up by local businessmen and are managed by a retired lawyer from New Jersey for whom the foundation is a full-time hobby. In Venezuela, U.S. business has helped an enthusiastic group of young North Americans to teach and encourage activities in self-help in the explosive slums of Caracas, in depressed areas of other urban centers, and in the countryside. ACCION, as the program is called, has caught on so well that now many of its volunteers are Venezuelans, a good part of its backing comes from Venezuelan business, and its example is spawning similar efforts in three other countries.
Perhaps the most comprehensive business-supported community development effort has taken place in Colombia. There, Colombian, European, and U.S. companies contribute operating funds as well as the services of engineers, topographers, agronomists, and leader-trainers to the National Federation of the Private Sector for Community Development (FEPRANAL). Starting in 1962, FEPRANAL's staff followed the Colombian Army into areas which had just been cleared of Communist guerrillas and whose peasants were painfully demoralized from oppression. Working with local priests, FEPRANAL selected natural leaders from among the villagers and trained them in the organization of self-help councils and in the rudiments of democratic self-reliance. Where particularly capable leaders developed, they went on the FEPRANAL staff as regional advisers to a group of village councils. In a single year of operations in the once violence-wracked region of Sumapaz, FEPRANAL generated more than $50,000 wotth of self-help construction of schools, roads, bridges, community centers, and sports fields. More important, thousands of peasants learned the fundamentals of democracy so well that, according to a Colombian government estimate, "extremist political influence in the region was reduced by two-thirds."
Over the years FEPRANAL has expanded its operations to seven of Colombia's twenty states. Late in 1966 the organization received a high accolade when the new Colombian administration of President Carlos Lleras Restrepo chose it as the pilot agency for the government's own nationwide program of community development.
Examples of the civic responsibility of private enterprise have gone a long way toward creating better understanding between business and government. Once-skeptical government officials are seeing that business is concerned with the wellbeing of the citizenry. What is more, businessmen in Latin America are dropping their old epithets of "socialists" and "bureaucrats" and are increasingly developing a partnership role with government in the process of development. A group of young businessmen in Peru who call themselves Acci6n para el Desarrollo (ApD) prepare sober, well-documented economic studies as an advisory service to the government. The private sector in Venezuela has hired economists to work in close cooperation with the government's planners. After the Brazilian revolution of 1964, businessmen willingly left their offices for government assignments.
As it has seen the rewards of constructive civic action, the business community in Latin America has organized itself more effectively for it. Hundreds of companies in Venezuela have joined the Voluntary Dividend for the Community, whereby they pledge themselves to give 2 to 5 per cent of their net profits to education, public health, community development, and other endeavors. In the United States, three organizations concerned with the health of private enterprise in Latin America joined in 1965 to form the Council for Latin America, under the leadership of David Rockefeller. The council, supported by a large number of companies, Jersev Standard among them, provides professional assistance and seed money to civic projects of local and U.S. business groups in Latin America. It is recognized by the U.S. government and the Inter-American Committee for the Alliance for Progress as the chief spokesman of U.S. business on Latin American issues. The major national business associations of the hemisphere, including the Council for Latin America, are united in the Inter-American Council of Commerce and Production, which is composed chiefly of leading Latin American businessmen and works with business and civic groups throughout Latin America.
To be sure, these organizations and their members still have their work cut out for them. No one knows better than the businessmen themselves how much more they have to do to strengthen the societies in which they live, to create a broader agreement on what makes economic common sense, and to coordinate business and government as twin instruments for the public good. But what business has been able to accomplish in a few years in expanding its own horizons and in moving a continent and its people for- ward is a mighty spur to what it will do in the next decade and in the next generation. Business is in Latin America to stay and to grow with Latin America.
Reprinted with permission from The Lamp, Spring '67
