The yankee dollar; Capital investment, part one
Radio television the University of Texas presents the Yankee dollar. The Yankee dollar What is it Bud. What will it buy. Radio television. The University of Texas in cooperation with the National Association of educational broadcasters invites you to tour Mexico with Richard Ariano as he talks to political leaders and to voters to management and to labor to rich to poor to the people of Mexico. One thing will guide these conversations. What is the American dollar bought south of our border. What can it buy. And above all what image of us is our
money creating. American money finds its way into Latin American countries in different ways. Cheap of these are through foreign aid. The federal dollars through monies spent by vacationers the tourist dollar and through money invested by businessmen. The company dollar. Is the channels through which our money flows or fails to flow affect the image it creates. In order to more fully understand investment capital through the federal dollar Mr Ariano talked with Mr Gerry dresser capital development officer of the Agency for International Development in the Mexico City Mission. Here is a recording of that interview. Today we have with us Mr. Jeremy dresser whose capital development officer of the Agency for International Development in the Mexico City Mission. Mr. dresser is concerned as the title implies with the development of
capital enterprises in Mexico. The first question Mr. President I'd like to ask you is this. Does the Alliance for Progress include any arrangements for assistance to the private sector. Thank you very much Dick. Now answer to your first question. I would say not only that it does but it is one of the keystones of the Alliance for Progress. As you know or as I think that you know look the Alliance for Progress for SI is over the next 10 year period. The total investment requirement of around 100 billion dollars throughout Latin America. This is envisaged about 20 billion dollars will be required in foreign exchange. That is in dollars now.
Only a part of this is going to be used for public projects. And furthermore I should add that most of the 80 billion that will be required in terms of the domestic currencies of the participating countries will have to come from the private sector and be invested in the private sector. Now I'd like to make this point clear. The Alliance for Progress doesn't have one master plan and that can be applied across the board to every country. There's as much difference between let's say Bolivia and Mexico as there is between Mexico and the United States in terms of the size and composition of the country in terms of its relative development. Therefore in some countries which are let's say underdeveloped countries in the true sense of the word why
public works projects are probably more important proportionately than they would be in other developing countries. For example in a country where you don't have much in the way of highways electric power ports educational facilities schools and hospitals it's pretty obvious that you can't have a modern private enterprise system or modern industry in these cases. I think that the alliance would tend to stress the projects which are presented to it which will provide the basic infrastructure as the economists call it of the country. Now in Mexico where we happen to be working. I think that you have quite a different picture. Mexico is certainly not an underdeveloped country. It's a developing country in some ways it's competitive with any country in the world
certain of its achievements for example in New York a textural field just to name one I think are almost unequalled. There are people in Mexico the problem is more complicated as to what projects are the most violent. We have asked within the alliance for poor progress that the Mexican government. Tell us what it feels it's basic priorities are and they have given us along with several public works projects to basic priorities at this time. The first is the development of the rural sector or so we call it the medium and small farmer. And the second is development of industry in both of these cases. Not only will you but the Mexican government recognizes fully the importance of the private farmer and of the private businessman. Specifically I'd like to mention that as you know at the end
of June President Kennedy came down to Mexico and during his visit alone was for agricultural credit. Now this loan even though it was made from our government to the Mexican government will benefit the private farmer not only will it benefit the private farmer but it will be carried out through private banking institutions. The loan is being made through Nasional finance year which is Mexico's official farming agent to the Bank of Mexico the Bank of Mexico then acts as a trustee for a fund for guaranteeing loans to agriculture called upon though they got out of the dollar. Now the way this works is that a private will make a loan to a small farmer and you make it at a very low rate of interest
particularly in Mexico. This rate of interest will not exceed 6 percent. The bank will then take this loan and rediscount it with a pound or so as you can see. This is a loan which will benefit the little guy the farmer and will be carried out by private bankers and businessmen. One of the important aspects of this loan is that it's not just going to be American funds helping Mexican farmers. On the contrary it will serve. As a nucleus or as a catalyst for a much bigger program. Basically there are two ways in which Mexican firms are going to be drawn into this program in the first place is the Mexican government has agreed to merge through the fund
of at least as large a quantity of funds as our 20 million dollars. It will not be used for exactly the same purposes because our funds will be used for medium term loans which will be used to buy American equipment and machinery or which can also be used for any type of improvement which will make the farmers operation more productive. May I stop you at this moment. This means if I understand it right that a large portion of these funds will return to the United States in the person in the form of purchase or farm machinery Thats right. In actual fact our agreement with Fund this is flexible. All of the money which we are lending the Mexica will return to the United States. The greater part of it probably will return in the form of agricultural equipment but not necessarily. We did this so that Mexico could go
ahead with its program as rapidly as possible knowing that the funds would return to the United States but not necessarily tying them down to being able to spend the funds only from Quitman American equipment is requested. In other words in the long run actually the American taxpayer will receive a benefit from this law. That's absolutely correct yes. The second point that I wanted to bring forth here is that in terms of getting participation of Mexican capital the fund will provide at least an equal amount to our 20 million but it will be for short term loans that is for crowd loans. Now in addition to these funds which are letters taxpayers funds from United States taxpayers funds from Mexico. There will also be a
certain amount of direct participation of private capital in this loan. In other words no bank can rediscount 100 percent of along with the funder. The maximum amount that it can rediscount is 90 percent. In this case then 10 percent of the banks own money coming of course from private stockholders will have to enter into the program. Now we expect or I should say that the Bank of Mexico expects to set this program up in such a way as to stimulate the greatest possible participation of private Mexican firms in this loan. There will be a premium for those who only discount 60 or 70 or 80 percent as opposed to 90 percent of their loans to private farmers with a fund as I understand it then you have a sliding scale
of interest payments that vary according to the amount that is free discounted. This is certainly when method is possible and is under consideration. I've read in the local press. Actually in some American publications. And in other sources from other sources that a group of North Americans rather said American taxpayers are unhappy because of the fact that a portion of these funds will be used possibly they think to to subsidize the export of commodities that will be in direct competition with those that are already produced in the United States and further another charge that has been leveled is that a large portion of these funds will find there these commodities rez said will find their way to Cuba. Would you care to comment on this. Well my comment on it would be that these are not facts. We have specific agreements with within the loan.
That the funds will be used to finance the types of commodities which Mexico needs for its internal consumption or those which are for export but not in competition with American commodities which are in world surplus. That phrase in world surplus I think is very important. There obviously will be times when like a corn crop or or whatever type of crop it may be which is primarily for domestic consumption may be extraordinarily good in those cases there may be a slight excess but I think that the intent is very clear and is understood by both governments and that is that they are not trying to use this loan to get into competition with us and products which we have in excess. Now as far as the second
is concerned personally I am not very closely informed on the Agricultural Statistics of Mexico but I am quite convinced that the products that would come forth from this loan would not be used for shipment to Cuba. Yes as I understand it Mexico actually has an official policy that prohibits the exportation of foods that are in short supply within this nation. That's right. Now the next question that I'd like to direct to you is this. What specifically can the alliance do and is it doing in terms of stimulating free enterprise that is private enterprise and private North American enterprise coming into Mexico. In other words how can they operate with the help of the Alliance if they desire to come into Mexico. I think the first thing to clear up is what specifically is
meant by the alliance. This is I know this is a very vague term to many people. The alliance in fact includes all international institutions working in the development and the development or development financing area. This includes the Export Import Bank the World Bank in which we have a substantial proportion of the total funds. You know American banking which we do also. Some of the World Bank subsidiaries such as the International Development Association and the International Finance Corporation. And of course the Agency for International Development. Now I think it's interesting to note that the greatest proportion of funds for many years to Mexico has been through the export of the ICs excuse me yes through the export import bank.
Now this of course directly benefits not only the American taxpayer but also the American manufacturers. It benefits the American taxpayer because rates of interest are charged approximately of 6 percent which in effect reduces our balance of payments deficit. The second area that is favorable to us is of course that we export American products through the export import bank assistance which we might not be able to do otherwise now. As far as the Agency for International Development is concerned we are looking forward to programs which will try to stimulate to a maximum degree private enterprise. Well then Latin America. The next question is this. What is the Agency for International Development
doing in order to induce her to help private enterprise into the development of these nations through the framework of the Alliance for Progress. That's a very interesting question. We have just started a program which is going to be carried out by three different groups the Mexican government through as you know which is vitally interested in this subject Mexican industry through the center for industrial product and our own agency. We are financing a survey which will we hope will be quite extensive and which a great number of. Private businessman from large small medium
industries will be interviewed in which government people in the Ministry of Industry and Commerce will be interviewing bankers both government and private will be consulted. And from this we expect to be able to get the answers to two basic questions. First of all what is the business climate in Mexico and how can it be improved. Should I say or modified in such a way as to attract the greatest amount of reinvestment of Mexican fans into industry. And secondly to be able to attract and hold foreign investment in Mexico within the terms which Mexico considers acceptable. The second thing is
that we hope to be able to discover what the technical and financial needs of medium and small industry are in Mexico so that ultimately the necessary steps could be taken to be able to assist this sector. We particularly are stressing medium and small industry because credits and technical assistance are largely available to the larger companies either because they are tied in with foreign investments or because they have access to Mexican and foreign sources of capital. Now the corollary to that question of course would be how can foreign and domestic private enterprise and capital participate in the alliance and help further the aims of the Alliance for Progress. Well this is of course one of the things we hope to study. There are certain
aspects existing today whereby both industry can help in the alliance and the alliance can help in industry. I like to go back to the survey. The answers that we get from industry will be vitally important in helping us to shape a program to assist this sector. And I think will also be of great interest to the Mexican government in terms of their forming possibly in the future of their policies concerning industry and commerce. Now of course quite aside from the planning function which industry can perform in the alliance there is the economic function which is there for me. I think it's safe to say that the basic economic
development of any country depends on industrialization and on the modernization of its agriculture. The Latin American countries as well as some of the Asian and African countries of course face a very serious problem in that they are one commodity producers generally. In some cases they are producers of several commodities. The role and industry can play for these countries is to produce new exports for them. In addition to these commodities as well as to reduce ultimately the number of expensive imports that they have. The reason that this is so important is that as you know commodity prices over the past 10 years in most cases have been dropping. Whereas on the other hand
the prices of products which these nations have to import primarily industrial products capital goods and to some degree consumer goods have been generally rising. This means that its quite a difficult task for a commodity producing nation to be able to maintain or improve its standard of living. Therefore I think that this is really the keystone of success in the Alliance for Progress program is to get industry to be able to produce new goods new services for these nations which have had to import them previously as well as I mentioned before to modernize their agriculture. Now the second aspect of the economic role which industry must play in the Alliance for Progress. I believe I mentioned before
we estimate that the total program over the next 10 years will cost around 100 billion dollars of which the United States is willing to invest up to 20 billion dollars in foreign exchange. Hopefully it will not be the United States alone but the other industrialized nations will also participate either directly or indirectly through the World Bank for example. Nevertheless this leaves the great burden 80 percent of the development or of the investment required for their own development within the. Resources of the Latin American nations themselves. Obviously this is going to have to be generated by the productive sectors of the economy. The principal one of which must be industry which direction.
Could you tell us please what the Alliance for Progress. Yes. I'm sure that most Americans have a good idea of what the alliance is and what it's trying to do. Nevertheless I would like to make a few comments concerning its origins and objectives. As you'll recall the alliance is a hemispheric program for economic and social development which got started when 20 Latin American Republics Bogota Colombia on the 12th of September. The act of Bogota which resulted from this meeting dealt with four basic points. First with the measures to be taken for creating social progress secondly to create a
special fund for social progress. Thirdly the measures that should be taken to generate economic progress. And lastly to obtain multilateral cooperation for social and economic progress. In other words this was the birth of the Latin American Free Trade Association or laughter as is commonly abbreviated. Now following any act of poverty and inspired by President Kennedy established the Alliance for Progress on the 13th of March 1961. At this time. President Kennedy said and I would like to quote I have
called on all the people of the hemisphere to join in a new alliance for progress and support and progress so the best cooperative effort unparalleled in magnitude and ability of purpose to satisfy the basic needs of the American people for homes work and land health and schools. We did so little here squarely. First I propose that the American Republics begin on a new 10 year plan for the Americas a plan to transform the 1960s into a historic decade of democratic progress. These 10 years will be the years of maximum progress maximum effort. The years when the greatest obstacles must be overcome. The years when the need for assistance will be greatest. And if we're successful.
If our effort is bold enough and determined enough then the cause of this decade will mark the beginning of a new era in the American experience. The living standards of every American family will be on the rise. Basic Education will be available to world hunger will be a forgotten experience. The need for massive outside help will have passed most nations will have entered a period of self-sustaining growth. And although there will still be much to do every American republic will be the master of its own revolution and its own hope and progress. Let me stress that the only the most determined efforts of the American nations themselves can bring success to the service they and they alone can mobilize their resources. Enlist the energies of their people and modify their social patterns of it all and not just a privileged few. Share in the fruits of growth. If this effort is made then
outside assistance will give a vital impetus to progress. Without it no amount of help will advance the welfare of the people. But. If the countries of Latin America are ready to do their part and I'm sure they are then I believe the United States for its part should help provide the resources of the scope and magnitude sufficient to make this development plan a success. This has been a very interesting and informative. You know you Mr dresser Radio-TV Texas thank you very much. This has been another in the series of interviews conducted by Richard Ariano in Mexico. Mr. Ariano has been talking with Mr. Jerry dresser capital development officer of
- The yankee dollar
- Capital investment, part one
- Producing Organization
- University of Texas
- KUT (Radio station : Austin, Tex.)
- Contributing Organization
- University of Maryland (College Park, Maryland)
- AAPB ID
- This program focuses on capital investment in Mexico. The program's guest is Jerry Dresser, Capital Development Officer, Mexico City Mission, AID.
- A documentary series on impact of U.S. dollar on Latin America, especially Mexico. Ther series is hosted by Richard Arellano.
- Media type
Director: Crocker, B.W.
Host: Arellano, Richard G.
Interviewee: Dresser, Jerry
Producer: Norris, R.C.
Producing Organization: University of Texas
Producing Organization: KUT (Radio station : Austin, Tex.)
- AAPB Contributor Holdings
University of Maryland
Identifier: 64-6-2 (National Association of Educational Broadcasters)
Format: 1/4 inch audio tape
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- Chicago: “The yankee dollar; Capital investment, part one,” 1963-12-18, University of Maryland, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC, accessed June 15, 2021, http://americanarchive.org/catalog/cpb-aacip-500-xs5jg14t.
- MLA: “The yankee dollar; Capital investment, part one.” 1963-12-18. University of Maryland, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC. Web. June 15, 2021. <http://americanarchive.org/catalog/cpb-aacip-500-xs5jg14t>.
- APA: The yankee dollar; Capital investment, part one. Boston, MA: University of Maryland, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC. Retrieved from http://americanarchive.org/catalog/cpb-aacip-500-xs5jg14t