Mortgaged Colombia

September 25, 2007

Between 1962 and 1967, when Colombia was considered a "showcase" of the Alliance for Progress, the national government obtained loans from the United States totaling $732 million for terms of between 20 and 40 years. The national debt, however, increased to $1.6 billion between 1946 and 1967 (of which total, 59% resulted from U.S. loans), or the equivalent of 27.2 billion Colombian pesos at the present exchange rate, approxi- mately four times the annual national budget. With this money it was hoped that Colombia would take the lead in development among all the Latin American countries, and that important changes in the national society and economy would be produced. The North Americans naively thought this would be possible under the then prevailing circumstances. Now, after seven years of experience, a very careful study (Colombia -- A Case History of U.S. Aid, Washington, D.C., 1969) has just been published by the U.S. Senate, which admits the failure of this attempt. To the shame of all, Colombia did not advance enough, nor come close to what was hoped for to survive the crisis. This has naturally provoked bewilderment. It is reasonable to ask how the debacle occurred, and the North Americans, in this study, have begun to analyze the "why" of the failures. In doing so, they have exposed in passing the reasons that impelled them to lend the money as well as those our own Colombian leaders had for accept- ing it. One thing is evident, and the report even says it: the country was mortgaged to save the ruling class, which was on the brink of disaster: it was about to collapse! It was thus allowed a respite, was given a new lease on political life, the artificial life a dying man has under the oxygen tent, and which is proving too costly for the country. The sad thing is that the ruling class will not pay so colossal a mortgage by itself as it should. It will be paid, perhaps with blood, but in any case with the sweat of our children and The NACLA NEWSLETTER is published ten times a year by the North American Congress on Latin America. Minimum contribution for 1-yr. subscription: $5 In This Issue: Mortgaged Colombia ............................................... 1 Supplying the Latin American Military .................. ........ 4 Vietnam Profiteers Antipersonnel Weapons ........................................ 7 Demolition Bombs .......................................... 12 Rockefeller's Entourage .......................................... 14 I NACLA NEWSLETTER NORTH AMERICAN CONGRESS ON LATIN AMERICA (NACLA) \'ol. III, No. 3 P.O. Box 57, Cathedral Station, N.Y., N.Y. 10025 May-June, 1969-2- the laboring classes, innocent people who in the end always pay for the broken dishes. Let us see why disillusion reigns in the Senate of the United States, according to this report. Let us analyze the matter with reference to the goals of the Alliance (pp. 95- 167), using the same words, concepts and figures which appear in the report. Items Goal s AchiPvements General Economy Savings (% of gross national product) 23% Inflation 10% Per capita income (yearly increase) 2. Employment (new jobs) 250,00 Unemployment (% of active population) 20% Manufactures (yearly increase) 7. Yearly flight of Colombian-owned capital less the per year or less 5% 0 per year or less 6% an 25 million More 15.9% 15.1% 1.3% 50,000 than 20% 5.8% More than 80 million Agrarian Reform Per capita agricultural production index Minifundios Latifundios Above 101 Less than 66% of total farms Less than 3.5% of total farms Health Caloric intake per person Running water (# of users) 2,525 or more 6 million 2,428 7.7 million Education Primary schools Increase in number of students Illiteracy Brain drain (college graduates to U.S.A.) 22,000 300% 30% or less 0 800 in 1965 Services Electric power (megawatts) New houses Housing deficit 1,800 360,000 277,000 or less sufficient 224,057 375,000 The figures, as can be seen, are horrifying. It can be adduced that the goals were artificially high, impossible to reach. Even if this were so (something only partially admitted in the study, and that primarily for reasons of diplomacy), it is still more certain that the "achievements" in almost all categories were still less than those demonstrated in the country before the National Front and the beginning of the Alliance. In some important items there have been regressions (illiteracy, unemployment, flight of capital and professional talent, industries). NACLA NEWSLETTER Vol. III, No. 3, May-June 1969 Published monthly, except May-June and July-August, when it is published bi-monthly at 160 Claremont Avenue, New York, N.Y. 10027. Subscription price: $5 per year. Copy- right 1969 by the North American Congress on Latin America, Inc. Second-class postage paid at New York, N.Y. 97 71% 2.7% 5,150 42% 44%-3- There is, then, no satisfactory excuse, and the failure of the development program is crystal clear. But what is incredible is that the failure has cost $732 million. What happened to that money, anyway? The study says it frankly: of that total, nearly $102 million was spent in the purchase of food we needed because, unbelievably, we could not produce it (wheat, cacao, etc.); $30 million went to pay the salaries and bonuses of teachers and other government em- ployees in 1962, when they were threatening to strike and the March elections were com- ing up (p. 14); another $15 million went for the same thing in the pre-election period of 1964 (p. 23) and a similar amount to cover payments on overdue dollar debts (pp.22, 31, 36). $93 million was devoted to the Private Investment Fund which, as is known, belongs to the richest businessmen in the country (pp. 76-78). And so on and so forth. The remainder was spent almost completely on isolated programs, on maintaining in equi- librium the balance of payments in foreign trade and in refinancing previous loans. Only four percent of the counterpart funds (in pesos) were allocated to concrete socio- economic development projects (pp. 68-69). Meanwhile, this foreign support permitted the government to almost double the budget of the Ministry of War between 1958 and 1966, in order to repress the strikers, unversity students, and guerrillas, and to destroy the 'independent republics" (pp. ~2, 163). In sum, it is easy to see that we consumed a good part of the dollars received in food, a part in salaries and bonuses for demagogic ends, another part to strengthen private investments and to equip the army and the police to repress popular discontent, and for "counter-insurgency." They were, woefully, not productive investments, because the big debt must begin to be repaved soon -- in dollars and not in devalued pesos -- during the seventies. How are we going to pay when the production and national wealth do not in- crease as they should (but rather escape abroad), and the exports do not increase fast enough, nor does our import capability improve? These are the key questions that the senators of the United States are asking, worried because this country in the end cannot return the money it has borrowed (p. 94). They predict that the increase in unemployment after 1970 will be catastrophic (p. 94). If the government of the United States permitted Valencia "to postpone...basic reforms," as the study says (pp. 4-5); if the American government managed only to maintain the polit- ical stability of the National Front (pp. 3,10, 20); if in passing it managed also "to control the Colombian economy" (pp. 62, 66); finally, if it "bought time" so that those who rule today in Colombian society might survive, then these things continue as before, with artificial respiration (pp. 92-93); and if even with all this, the country did not progress or respond to the "generosity" of the Colossus of the North, then it will no longer be possible to resort to the Alliance's measures of "peaceful revolution" which have proven so ineffective. And in fact the senators have reacted, just like President Nixon, by closing the purse and "cutting off the flow." Who knows what else can happen, there and here? One of two things: either the country and its people defend themselves internally and externally by their own means, or they continue to be dominated and exploited indefinite- ly, losing their culture, their personality, and their wealth. Such is the dilemma which arises from the inauspicious experience of the last few years. It is apparent that if it were not for the foreign funds, the National Front would have ceased to exist, which demonstrates in part its lack of authenticity. Its leaders allowed this policy in order to survive. But there cannot be a genuine local development when we work within such narrow limits, when more faith is put in Washington than in the Colombian people, when personal or group interests have priority over the collective task of con- structing a nation worthy of respect.-4- How long must the new generations bear such heavy burdens? Is it not urgent that the entire country gain awareness of this process which gives away the nation's patrimony, so that it can act effectively against those who have insisted on mortgaging it so irresponsibly? Orlando Fals Borda is a noted Colombian professor of sociology. His most recent book is La Subversion en Colombia, which is presently being translated into English.

Tags: Colombia, foreign aid, development struggles, US Congress

Like this article? Support our work. Donate now.