The need is recognized, in accordance with the principles of interAmerican cooperation and mutual assistance, to extend the duration of the Alliance for Progress for as long as may be needed to ensure sustained and adequate growth, social progress consonant with the goals of the Act of Bogotá and the Charter of Punta del Este, and hence the basic ideas that inspired these documents should be incorporated into the permanent structure of the system;

For the extended duration of the Alliance it should be accompanied by renewed efforts to mobilize national resources to the maximum and to ensure an adequate flow of mutual and external financial and technical assistance, from both public and private sources of capital;

Modernization of rural life and the more equitable distribution and better use of land are essential to national progress, to fulfilling the aspirations of the rural population and the ever-increasing need for food in the hemisphere, and to promoting national development through market expansion;

Economic and social development planning and domestic price stability compatible with such development are national objectives requiring the understanding, the support, and the participation of the various sectors of the national community;

International trade is a determining factor of economic and social development of the countries of the hemisphere and should evolve in the direction of providing developing countries, especially, with a system

54 The Spanish abbreviation for the Inter-American Committee on the Alliance for Progress.

Western Hemisphere Developments

the Charter of Punta del Este, approved by the Inter-American Economic and Social Council on August 17, 1961, as the fundamental policy of the Organization of American States and of the governments of the member states with regard to the economic and social development of the hemisphere and;

2. To instruct the Special Committee charged with drawing up the preliminary draft amendments to the Charter of the Organization of American States to prepare, with the advice of the Inter-American Committee on the Alliance for Progress and other regional bodies, the additional standards in the economic and social field required to be incorporated into the said Charter, in accordance with the guidelines set forth below.

Chapter I

Political Security and Economic and Social Development

1. The principles of solidarity that inspire the activities of inter-American cooperation in the political field and in that of mutual security must, of necessity, be applicable also to the economic and social field, inasmuch as the American republics have resolved to unite in a common effort to enable their peoples to attain the greater social justice and more rapid and balanced economic progress essential to the security of the hemisphere.

2. Freedom, security, and democratic institutions are the best means of satisfying individual aspirations for progress through employment, social justice, improvement in education and health, better land distribution, adequate housing, and protection of the family and children. No system can guarantee true progress unless it affirms the dignity of the individual.

3. To achieve the objectives of the Alliance for Progress, the obligation to cooperate in the solution of economic and social problems is essential, inasmuch as these problems can disturb relations among peoples, limit the opportunities to affirm the dignity of the individual, limit the full exercise of democracy, and endanger the peace and security of the nations.

Chapter II

The National Social and Economic Effort

4. The economic and social progress of the countries depends fundamentally on mobilizing their national, human, and material

resources.

5. The improvement of health, education, housing, and the system of land tenure, as well as the protection of the family and children, and the right to work, should be the fundamental objectives of social development, and to achieve these objectives it is essential, among other things, to generate national resources and establish an adequate domestic institutional structure.

6. The growing urban concentration in the hemisphere makes it increasingly important to focus attention and effort on providing the services and the means essential to an urban life of dignity, healthful and productive; at the same time, national policies may be pursued in order to achieve an appropriate geographic distribution of the population.

7. An effort should be made to achieve a more equitable distribution of national income through measures such as, among others, an appropriate fiscal policy.

8. Increased agricultural productivity and yields, as well as agricultural diversification through the application of modern techniques, credit expansion, systems for the marketing and processing of agricultural products, and reform of inefficient and unjust land-tenure systems, are basic elements sustained development hemisphere.

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9. The requirements for accelerated economic development and the need to create new employment opportunities for the growing population of Latin America make industrialization, under conditions of increasing efficiency and competition, imperative, particularly with respect to capital and intermediate goods, as well as the use of idle capacity and the absorption of unemployed and underemployed manpower through housing and public works programs.

10. The dynamic and constructive action of free trade unions and other organizations dedicated to furthering the welfare of their members contributes importantly to the economic and social development of the countries and to the achievement of the objectives of the Alliance for Progress.

11. Economic development can be furthered in important ways, through the stimulation of increased private initiative and investment, along with parallel action in the public sector, and through the additional economic activity which accompanies such investments. The member states recognize the increasing benefits to the process of development that can be achieved in this manner.

12. Stability in the domestic price level is a fundamental element in the achievement of social justice and sustained development, and, since inflation has an especially detrimental effect on the low-income sectors and on the capacity to earn the foreign exchange necessary for the importation of essential goods, one of the objectives of development policy should be that of reconciling price stability with economic growth and social justice.

Chapter III

Mutual and External Economic and Social Assistance

13. The member states accept the obligation, within the framework of their constitutional processes and to the extent their resources permit, to help one another and to provide assistance, in the order of need to the less-developed countries of the system, with a view to achieving, on a national and regional level, the social and economic objectives set forth in this Act, for the purpose of putting the countries of the hemisphere in a situation of development as soon as possible.

14. The member states undertake to avoid adopting policies, actions, or measures that might jeopardize the economic and social development of another member state.

15. The member states recognize the necessity of cooperating individually and collectively in multinational projects to accelerate the process of Latin American economic integration, particularly those proj

ects originating in the organizations which have that purpose.

16. The member states agree to seek the solution of urgent problems that arise when the economic development or stability of any member state is seriously affected by economic or trade measures adopted by other countries, by severe and continuing deficits in their balance of payments resulting from sharp drops in income from foreign sources, or by emergency situations whatever their origin, that cause a shortage of essential goods and services.

17. Within the framework of mutual assistance, the benefits of scientific and technological progress should be spread among the member states, in accordance with prevailing treaties and national laws, the dissemination and utilization of scientific and technical knowledge and facilitating access to patents that reflect modern technology and promote the expansion of industrial exports.

18. The member states agree that mutual assistance should be extended in sufficient volume and under flexible repayment terms and conditions and manner of utilization, including financing of local costs when necessary, and also to make every effort, individually and collectively, to increase financial and technical cooperation on similar terms from countries or regions outside the inter-American system, as well as that from international financing agencies.

19. Program loans for general development purposes are an important means of facilitating the execution of development plans and monetary stabilization programs, as well as of creating or strengthening national financial institutions, and should therefore be extended without prejudice to the financing of specific projects, provided that the granting of such credits does not create or aggravate balance-of-payments difficulties of another member state.

20. Development plans and monetary stabilization programs require the adoption of suitable formulas to solve the problems arising from excessive accumulation of short-term obligations, detrimental to the economic stability of a member state of the system.

23. The member states should exert properly directed and joint efforts toward:

a. Lessening, by means of suitable systems of international compensatory financing, the fluctuations in earnings from abroad suffered by countries that still depend to a great extent on the export of primary products, with a view to maintaining the continuity of their economic and social development programs;

b. Doing away with preferential agreements and other measures that limit world consumption of Latin American basic products, manufactures, and semimanufactures and their access to international markets;

c. Diversifying and expanding the export of manufactures and semimanufactures originating in the developing countries, as a means of accelerating the economic development of these countries and of raising their standards of living. In this respect, individual or joint measures shall be adopted to:

(i) create favorable conditions for access to international markets; (ii) improve the quality and marketing of the products of the developing countries, in order to assure them an increasing participation in the trade in manufacturers and to meet the needs of their development;

d. Promoting improvement and coordination of transportation and communications in the developing countries as an essential means of achieving their progress, in the national sphere as well as in the integration process.

24. Orderly and appropriate marketing procedures for surplus products should be maintained, in order to avoid disturbing the traditional markets of member countries and to encourage the increased sale of their products on other markets.

25. The developed member countries that sign international trade agreements do not insist on reciprocity for concessions granted by them to less-developed countries in the matter of lowering or abolishing tariffs and other barriers to foreign trade.

26. The drafting of plans for the production and export of basic products, with due attention to their effect on world markets, makes it necessary to support and improve the effectiveness of international price stabilization programs and machinery. Further, efforts shall be made to avoid the uneconomical production of products that can be obtained under better terms in the less-developed countries of the hemisphere.

Chapter V

Economic Integration

27. The American states recognize that the economic integration of the developing countries of the hemisphere should be one of the basic objectives of the inter-American system and, for that reason, will orient their efforts and take the measures that are necessary to accelerate the process of integration.

28. With the object of strengthening and accelerating integration in all its aspects, special priority must be given to the preparation and execution of multinational projects, and to the financing thereof, and the already existing economic integration agencies should coordinate

their activities with a view to the earliest possible establishment of the Latin American common market. Likewise, the economic and financial institutions of the region should continue to give their fullest support to the organizations for regional integration.

29. Within the framework of mutual assistance, the participation of the comparatively less-developed countries in Latin American programs of multinational economic cooperation should be encouraged, and the smooth balanced development of Latin American integration promoted, with special importance attached to the needs of those countries and particularly to their infrastructure programs and programs for the promotion of new lines of production.

30. National development plans should take into account the market expansions resulting from regional integration, in accordance with their own goals and objectives, in order to achieve adequate levels of employment, stimulate investment, increase technological capacity, and improve the conditions of cost, competition, and productivity.