Published Date

March 1, 1945

Resource Type

GI Roundtable Series, Primary Source

From GI Roundtable 14: Is the Good Neighbor Policy a Success? (1945) 

The critic is right on this last point, at least. Once Latin America is open to the world again, the United States will have to compete with Europe for South American markets. Britain particularly may be expected to work vigorously to maintain and expand her sales of manufactured goods, and Latin America will play this rivalry for all it is worth.

Corporations wishing to invest money and develop enterprises in Latin America will also be faced with some new obstacles. In the last five years a strong nationalistic reaction has arisen against foreign business. Rightly or wrongly these nations have come to feel that outside capital has taken too much out of their countries. The result has been a rush of laws restricting the building up of foreign oil companies, mining corporations, or other business concerns. These laws aim to prevent the amassing of huge profits and the exploitation of native labor by foreigners.

All the Latin-American countries likewise limit the employment of aliens, for they desire to train and employ their own citizens. Some countries specify that as many as 90 per cent of all employees in every business concern must be citizens of the country. Such regulations are designated to prevent foreign companies from dominating any business by keeping all the technical skills and knowledge in their own hands and minds.

Of course, it will be a long time before Latin America can develop her natural resources fully without having to call upon the outside world for financial help and technical know-how. This wave of nationalistic laws will, however, set up obstacles to the rapid developments of North American and other foreign business in Latin America after the war. If we want to do business with Latin America, our capital will probably have to be joined increasingly with local capital to form joint enterprises. And the profits are not likely to be huge. It is significant, however, that this new system of collaboration to share profits and risks with Latin-American capital has strong support in this country, including some in Wall Street.


Is Latin America a Land of Plenty?

Latin America is not flowing with milk and honey. It was over four hundred and fifty years ago that Columbus brought back to Spain glowing accounts of the new lands he had just discovered. Ever since, the world has tended to think of Latin America as a fabulous land where gold could be scooped up in the streets. Even today few people know that only a small part of the land in South America can be cultivated—that the rest is inaccessible, useful only for timber or grazing, or bleached barren by a tropical sun.

The population of Latin America approximately equals that of the United States while its resources are greatly inferior. Half, and much the better half, of all the cultivated land is in Argentina and Uruguay, where only one-tenth of the population lives. The other nine-tenths, occupying all the rest of South America south of the Rio Grande, have only one-fifth as much cultivated land per person—largely land of inferior quality—as is available in the United States. Population pressure in general is high.

Latin America is definitely not a part of the world in which fortunes can be built up overnight. Americans have made great contributions to the development of Latin America—her mines, railroads, steamship lines, air lines, oil wells, and so forth—but they have usually done it by careful management and plenty of patience. Individuals who make good down there have generally possessed some specific skill or technical knowledge that was needed. This all boils down to “Don’t go south, young man, unless you have something special to offer!”

Latin Americans have sometimes felt resentment when North Americans poured in upon them as if on their way to California or the Klondike in the gold-rush days. As one Latin American put it, “American adventurers, promotion men, and college graduates who feel that all they need is a plane ticket south to find a gold mine or a terrific sales territory wide open and marked ‘Come and get it,’ are due for a hard jolt.”

Will the building of factories in Latin America cut down our trade with these nations? If Brazil weaves her own cloth, and makes her own steel at the big Volta Redonda mill partly set up with our money and technical help, won’t our trade with Brazil be just so much less? By building up these industries as a wartime measure haven’t we sawed off the limb we were sitting on?

The answer to all this depends upon a continuance of our present policy of collaborating with Latin-American governments to raise the standard of living of their people. It is obviously in our own best interest to have them able to buy more and more-of our goods. At present the standard is relatively low, but if it rises we can sell plenty of our refrigerators, automobiles, and other machines and gadgets made more cheaply in the United States than anywhere else in the world. These markets will not fall into our laps, however, and the economic nationalism now rising all over Latin America and efforts of other export nations will make the going harder.

Next section: Is the Policy Here to Stay?