Facts on File
U.S. Economic Penetration of Latin America in 1965
[This article is reprinted from Peking Review, Vol. 9, #5, Jan. 28, 1966, pp. 17-18.]
U.S. ECONOMIC penetration of Latin America U.S. reached new heights in 1965. A new round of intensified plunder of the continent’s strategic and other materials was entered, and Yankee monopolies grabbed off greater superprofits.
Direct investments by private U.S. capital shot up during the year. According to figures released by the U.S. Department of Commerce, new direct investments in Latin America rose from $76 million in the first quarter of 1965 to $111 million in the second. In the first half of 1965, they surpassed the total in 1964.
Other data from the same source listed total direct private U.S. investments in Latin America in 1964 as $8,932 million, and Time magazine reported (March 26, 1965) that by the spring of 1965 the overall total of such investments “stands at a record $9 billion.”
Johnson’s Big Stick Serves U.S. Finance Capital. Wielding the big stick even more furiously, the Johnson Administration did all it could in 1965 to clear the path for private U.S. investments on the continent. According to another item in Time last spring, “The [U.S.] State Department has negotiated detailed agreements with 15 Latin American countries guaranteeing investors against losses from expropriation, currency inconvertibility, war, revolution or insurrection.” The Brazilian paper Tribuna da Imprensa reported on April 4, 1965, that under an agreement signed between the Branco regime and Washington, U.S. enterprises in Brazil now enjoyed the same diplomatic privileges as those of U.S. consulates, and disputes between the former and the Brazilian authorities were handled by the U.S. State Department.
Washington has exerted harsh political and economic pressure on those Latin American countries which have resisted private U.S. investments because of their exorbitant terms. The Washington Post on November 14, 1965, divulged that U.S. “aid has been reduced as a means of pressuring the Peruvian Government into agreeing to an investment contract with the International Petroleum Co., owned by Standard Oil of New Jersey, that the Peruvians are reluctant to accept.”
Bludgeoning such as this by Washington has whetted U.S. financial magnates’ appetites for still more investments. Early last February, a “Council of Latin America,” embracing 175 corporations belonging to three major U.S. business groups with financial magnate David Rockefeller as its head, was formed. The organization’s function is to plan and co-ordinate further economic penetration by private U.S. capital in Latin America.
Vietnam War and Stepped-Up U.S. Plunder of Strategic Materials. Washington’s escalation of its aggressive war in Indo-China has been accompanied by stepped-up U.S. plunder of the continent’s strategic materials. The New York Vision Letter pointed out last August 4: “Continued U.S. involvement in Vietnam will have a major effect on Latin American exports of metals and other strategic goods.... Today, about 30 of the 77 items on the strategic materials list were imported in varying quantities from Latin America.”
Many American businessmen visited Latin America last year. From agreements signed with Brazil, Peru, Colombia, Chile and British Guiana, they obtained for U.S. monopolies the right to explore, exploit and refine on a large scale such strategic materials as petroleum, copper and bauxite. The Aluminium Company of America signed an agreement with Brazil on jointly setting up an “aluminium complex” with an investment of $51 million and a projected yearly output of 25,000 tons. This would almost double Brazil’s present annual aluminium output. In 1965, the U.S.-owned Colombian Oil Company, International Petroleum Company and Texaco Corporation explored and exploited oil in Colombia in an area of more than 2,650,000 hectares; a 66 per cent increase in size over 1963. The American-owned Braden and Anaconda copper companies also signed an agreement with Chile last year to double the country’s copper exports within six years.
The Facade of “Economic Integration,” “Development” and “Joint Enterprise.” Up against growing anti-U.S. sentiment in Latin America, Yankee monopolies are trying to hide their pillage behind a facade of “economic integration,” “public-owned enterprises” and “joint enterprises.” In Central America, the development of the “Central American economic integration” plan has brought on a flood of private U.S. capital which has set up subsidiaries or annexed local enterprises by virtue of “joint management.”
Joint management of “development corporations” or “financial corporations” with Latin American private- or government-owned capital is another method by which U.S. finance capital tears off huge chunks of the continent’s economy and exercises political control. For example, the Inter-American Bank for Development and other U.S.-controlled financial organizations have sent personnel to the Amazon River area, which constitutes 42 per cent of Brazil’s territory, and to the Tachira River area in Venezuela and Colombia to map out “developmient” projects. The U.S. press disclosed that a “Tachira Valley Authority” was being planned and this would lead to substantial U.S. control over the oil, steel and manufacturing industries in that area.
Forty Per Cent Profit Pate. Joint enterprise, whether with government- or private-owned companies, is thus a form of covering up and a means of stepping up ruthless U,S. plunder of Latin American wealth and exploitation of the Latin American people. The Braden and Anaconda copper companies, when they are in joint operation with Chilean firms, will have their profit tax slashed from the present 86 per cent to 44 per cent. As Chilean Congressman Aniceto Rodriguez pointed out, in 25 years these two companies will make almost as much profits as they earned in the last 50 years, which was $4,400 million. And from Wall Street itself comes the admission from a leading member of one of the top U.S. capitalist clans, David Rockefeller, that U.S. enterprises in Latin America are now operating there at an extremely high profit rate, sometimes as high as 40 per cent.
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