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If American policy towards Europe in the postwar years had been a conspicuous success, and towards Asia a disappointing balance between success and failure, it could be said that the most conspicuous thing about relations with Latin America was the absence of any policy. Franklin Roosevelt, to be sure, had launched a “Good Neighbour” policy, but being a good neighbour was, it seemed, a negative rather than a positive affair, a matter of keeping hands off, of making the Monroe Doctrine, in form at least, multilateral. All through the postwar years, the states of Latin America – – Mexico and Chile were partial exceptions – – were in the throes of major economic and social crises. Population was growing faster than in any other part of the globe, without a comparable increase in wealth or productivity; the gap between the poor and the rich was widening; and as the rich and powerful turned to the military for the preservation of order and privilege, the poor turned to revolution.

Deeply involved in other quarters of the globe, the United States paid little attention to the fortunes or misfortunes of her neighbours to the south, and when she did intervene, it appeared to be on the side of order and the status quo rather than on the side of reform. So frightened was the United States of “Communism” in Latin America that is preferred military dictatorship to reformers who might drift too far to the  “left” , and sustained a Batista in Cuba, a Trujillo in the Dominican Republic, a Person in Argentina, and a Jimenez in Venezuela.

In his last two years, President Eisenhower had tried to mend his Latin American fences. Though rejecting a Brazilian proposal of a Marshall Plan for Latin America, he did take the initiative in setting up an Inter-American development Bank with a capital of one billion dollars, almost half of it supplied by the United States. Other government investments in Latin America ran to some four million dollars, while private investments exceeded nine billion. Yet though to most Americans, all this seemed a form of economic aid, many Latin Americans regarded it as economic imperialism. In September $1960$, came a co-operative plan that could not be regarded as other than enlightened: the Act of Bogota, which authorized a grant of half a billion dollars to subsidize not only economic but social and educational progress in Latin America. “We are not saints”, said President Eisenhower when he visited Santiago de Chile, “We know we make mistakes, but our heart is in the right place”.

But was it? President Kennedy was confronted by the same dilemma that had perplexed his predecessors. Clearly it was essential to provide a large-scale aid to the countries south of Rio Grande, but should this aid go to bolster up established regimes and thus help maintain status quo, or should it be used to speed up social reforms, even at the risk of revolt? As early as $1958$, the then Senator Kennedy had asserted that “the objective of our aid program in Latin America should not be to purchase allies, but to consolidate a free and democratic Western Hemisphere, alleviating those conditions which might foster opportunities for communistic infiltration and uniting our peoples on the basis of constantly increasing living standards”. 

This conviction that raising the standards of living was the best method of checking Communism now inspired President Kennedy’s bold proposal for the creation of the alliance for progress – – a ten year plan designed to do for Latin America what Marshall Plan had done for Western Europe. it was to be “a peaceful revolution on a hemispheric scale, a vast cooperative effort, unparalleled in magnitude and nobility of purpose, to satisfy the basic needs of American people for homes, work, land, health and schools. “To achieve this, the United States pleaded and initial grant of one billion dollars, with the promise of additional billions for the future.

According to the passage, the fundamental change in U.S. foreign policy directed towards Latin America

  1. resulted in a deterioration of U.S. Latin American relations.
  2. was responsible for Peron remaining as a dictator in Peru.
  3. recognized that economic aid alone would prevent social revolutions.
  4. provided for increased military and economic aid to prevent the spread of communism in Latin America.
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