Against all odds: U.S. policy and the 1963 Central America Summit Conference

Journal of Third World Studies, Spring 2003 by Leonard, Thomas M

U.S. policymakers also recognized the need to train skilled personnel in order for Central America to attain any substantial degree of economic development. Toward that end the United States intended to provide up to $10 million in grant assistance to accelerate the training of executive and technical leaders. Monies would go to Central American universities to strengthen teaching, research and consultation in the areas of economic development and public service administration. Additional funds were earmarked for each country to establish training centers to improve the quality of performance and leadership of public service employees in planning, customs, statistics, tax, budget, mapping and so forth. Central American students would be eligible for scholarships, internships and training programs, and members of the private sector would be schooled both in Central America and the United States in the issues addressed by the Alliance for Progress. Another $2 million scholarship fund would be used to train mechanics, machinists, draftsmen and skilled agricultural workers that were deemed essential for economic development. And to fully utilize skilled workers across the isthmus, the United States encouraged the free movement of such peoples across Central America's national borders. Free movement of labor not only facilitated the better use of human resources and promoted equalization of economic levels across the region, but once free mobility existed, "a long step will have been taken toward political integration."28

In addition to plans for advancing Central America's economic development, the United States sought to correct problems that militated against U.S. private business initiatiatives. For example, Central America's 1958 Convention on Integration Industries infuriated U.S. policymakers because it granted privileged market positions to selected firms. According to the agreement, a designated "integration industry" gained exclusive free access to the entire Central American market in selling its products. Subsequent firms, producing the same product would not have the same privilege for some years into the future. By March 1963 only Guatemala's GINSA tire manufacturing company and a Nicaraguan caustic soda firm had integrated status. Washington viewed the arrangement as a misdirection in "the allocation of resources in a manner prejudicial to the consumer and to sound economic development" and a deterrent to effective economic integration. The United States adamantly demanded the abandonment of this industrial policy, and in its place advocated "complete freedom of entry for both domestic and external private investment." Clearly, U.S. investment in Central America stood to suffer if the "Integration Industries" policy continued.

The "Integration Industries" also militated against current bi-lateral discussions already underway in each nation for the United States to provide capitalization of new industrial development banks that would provide reasonable credit terms for private sector industrial development projects, and for financing economic feasibility studies by Central American regional organizations.29