On March 13, 1961, President John F. Kennedy announced the Alliance for Progress, an economic assistance program to promote political democracy, economic growth, and social justice in Latin America. The United States and Latin American nations formally agreed to the alliance at a conference held in August 1961, at Punta del Este, Uruguay. U.S. delegates promised that Latin America would receive over twenty billion dollars in public and private capital from the United States and international lending authorities during the 1960s. The money would arrive in the form of grants, loans, and direct private investments. When combined with an expected eighty billion dollars in internal investment, this new money was projected to stimulate an economic growth rate of not less than 2.5 percent a year. This economic growth would facilitate significant improvements in employment, and in rates of infant mortality, life expectancy, and literacy rates. In agreeing to the alliance, Latin American leaders pledged to work for equality and social justice by promoting agrarian reform and progressive income taxes.
The Kennedy administration developed this so-called Marshall Plan for Latin America because it judged the region susceptible to social revolution and communism. Fidel Castro had transformed the Cuban Revolution into a strident anti-American movement and had allied his nation with the Soviet Union. U.S. officials feared that the lower classes of Latin America, mired in poverty and injustice, might follow similarly radical leaders.
Alliance programs delivered outside capital to the region, but the Alliance for Progress failed to transform Latin America. During the 1960s, Latin American economies performed poorly, usually falling below the 2.5 percent target. The region witnessed few improvements in health, education, or welfare. Latin American societies remained unfair and authoritarian. Sixteen extra-constitutional changes of government repeatedly unsettled the region.
The Alliance for Progress fell short of its goals for several reasons. Latin America had formidable obstacles to change: elites resisted land reform, equitable tax systems, and social programs; new credits often brought greater indebtedness rather than growth; and the Marshall Plan experience served as a poor guide to solving the problems of a region that was far different from Western Europe. The United States also acted ambiguously, calling for democratic progress and social justice, but worried that Communists would take advantage of the instability caused by progressive change. Further, Washington provided wholehearted support only to those Latin American governments and organizations that pursued fervent anticommunist policies.