On Growth Two

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29. Hernán Santa Cruz

Hernán Santa Cruz was born February 8, 1906, in Santiago, Chile. In 1928 he was graduated in law and political science from the University of Santiago. From 1947 to 1952 he represented Chile in the United States, and during 1952 he also sat in the Security Council of the United Nations. In 1960 he became connected with the Food and Agricultural Organisation (FAO) of the United Nations. In 1966 he acted as chairman of the first World Agrarian Reform Conference in Rome. In 1969, he became chairman of the fifteenth FAO Conference, also in Rome. In 1972, Ambassador Santa Cruz led the Chilean delegation of the Salvador Allende government to UNCTAD III in Santiago. Immediately after the 1973 coup d'état in Chile, he resigned from the Chilean government service. In November, 1973, he became president of the International Center for Development in Paris.

In 1973 you attended, as representative for the Allende government, the Conference of Nonaligned Nations in Algeria?

Yes. This conference was split up into a Political and an Economic Committee and I presided at the latter.

Was the energy crisis of October, 1973, already foreseen?

I think so, but not in its full magnitude. The most important feature of this Algerian Conference was, in my view, the emphasis on the improvement of relations among the developing nations themselves. In particular, strong efforts were made to arrive at some kind of association of producers in order to reinforce our bargaining power. Secondly, we aimed at the establishment

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of an institution which could act as a nonaligned development authority financed by the developing countries themselves. This institution could then assist in rendering financial and technical aid and assistance to member nations, while at the same time it should be directed at increasing commercial and industrial relationships amongst the developing nations.

In other words the Algerian Conference set up its own World Bank.

Not exactly, because what this conference intended is in some respects less and in some respects more. First of all, so far it has not reached beyond the project stage and its scope will be limited. Secondly, it is more than a World Bank, because if established it will only give financial assistance to developing nations, and in any case not under the same conditions as the World Bank in Washington, D.C., does.

With its well-known political ties to pro-American policies.

In our case the idea was to establish an institution which is to operate without any political strings and which is to favor the establishment of combined industries in developing nations. It is also to assist their associations of producers, facilitate the marketing of its commodities, and on the whole assist technically and financially the nations of the Third World. This is what we actually have called in the past an International Authority for Development within the United Nations framework. However, we never got anywhere, because of great-power opposition.

The 1973 Conference of Nonaligned Nations reiterated the positions taken during the first conference in Algiers in 1967 by the group made up of seventy-seven developing countries, as well as those that approved the Declaration of Principles and the Program of Action at Lima in 1971. We agreed, in 1973, that no progress had been made in the discussions between the developed and developing countries concerning increased economic cooperation, trade, finance, transfer of technology, shipping, and so forth. We agreed that up to now the objectives of the strategy for the Second Development Decade, solemnly proclaimed by the General Assembly of the United Nations in 1970, had likewise not been fulfilled at all. We agreed, therefore, that with the crisis continuing and getting even worse in relation to international cooperation for development, we should begin to rely even more on ourselves.

There have already been in some regions a number of schemes and subregional projects of cooperation among developing nations. In my opinion, the most outstanding in this respect is the treaty of Cartagena, whose principal objectives are economic integration and cooperation as well

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as the establishment of a common market. This treaty is called the Andean Pact, and Venezuela, Colombia, Peru, Ecuador, Bolivia, and Chile are part of it. However, these objectives and aims are not enough. We have now deemed it necessary to go even further and to really unite the strength and resources of the developing nations, which, in effect, are considerable.

First, with the current scarcity of raw materials in the world - after all, the energy crisis is only one of them - we know that our raw materials are needed and wanted much more than during the two past decades. Suddenly the world seems to have become aware of the limitation of its natural resources and of the threat to the environment posed by some of the substitutes for these resources. Secondly, there is no doubt that the developing nations have acquired considerable experience over the past twenty years in all these fields.

In dealing more effectively with the rich half of the world?

Yes, and also in dealing with the economic and technical problems of development. Now, we have defined our targets. We also have defined the obstacles that we are facing and the magnitude of the external obstacles standing in the way of our development. Furthermore, we now have thousands of skilled men and women in developing lands whom we did not have ten years ago. With that large, skilled force we can certainly achieve much better results.

Unfortunately, however, a rather large number of that skilled force are being lured by a ‘rich’ life to the developed nations - the ‘brain drain.’

That is true, unfortunately. The magnitude of this drain is tremendous. But, on the other hand, a new generation with stronger national loyalties and with a new sense of values is developing in the Third World very fast above all in the socially and politically more advanced nations of the developing countries.

The rich nations have been stunned by the cut in oil supplies and the rise in prices. What should the developed world do now as a matter of priority? How should it react?

It seems to me that the first thing the developed world should realize is the magnitude and world importance of the problems of underdevelopment. The present order which determines economic relations with the developing countries should be replaced by a new international order based on sovereign equality, interdependence, and common interests among all states, as stated by the Declaration approved by the special session on resources of the UN

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General Assembly on May 1, 1974. Accelerating the economic and social development of the Third World is the very first thing to do. This fact should be also accepted politically. It should be realized in the rich countries that this is an absolute priority for all the countries of the world; the need to dynamize the economy, increase the standard of living, incorporate millions and millions of people into the economic circuit - as producers and consumers - and incorporate them into the cultural life, take them into the mainstreams of the world. This should be the basis. Without it, I do not see any possibilities of real and true understanding or the initiation of important and significant policies in favor of development.

If this is condition number one, would condition number two then be that Western nations learn to truly share their technological and scientific know-how with the developing world?

Of course, this too would be necessary. But I still feel number two should be the realization in the developed world that the actual rules and practices that presently govern international economic relations are totally obsolete. They need to be completely rephrased and reshaped on the basis of an entirely new international division of labor. And, naturally, if you want to implement these ideas, this new economic target, then you have to extend an important priority to the free transfer of science and technology. I want to add that I am not thinking merely of a free exchange of technology for the future. What should be done is that the developed nations should help to assist the developing nations in the evolution of their own technology. This means technology adapted to the needs and the realities of the developing nations themselves.

The same approach should be taken toward problems of finance or the economy. New formulas should be found to provide more resources and better conditions to finance the social and economic progress of the developing nations. Today, with the international energy crisis on, it is abundantly clear that the developing countries on their part could help the developed nations with their raw materials, human resources, and consumption capacity. This has never been clearer. At last the world realizes how important it is for the advanced nations to develop the area in which two-thirds of mankind lives, and to develop it as a consumer territory. At this moment, when we consider the developing world on a whole, we find that no more than ten or fifteen percent of its inhabitants are real consumers of industrial goods. The day will come when the developed world will find out that it is in their very own interest, perhaps not so much their immediate interest, but certainly in their long-term or medium-term interest, that to assist in increasing the

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number of consumers of industrial products in the developing nations is just as important to them as their own economic stability or economic and social welfare.

The interdependence of economic and social welfare in the rich nations with that of the developing nations should be plain by now.

Well, I hope this is beginning to be understood in the developing world. Once they understand this, clearly and widely, measures will follow. Up to now, we have only listened to endless declarations and statements from leading personalities in the United States or Western Europe recognizing this interdependence. The logical consequence of this concept is the constitution of a new economic world-order, agreed upon by the developed and underdeveloped countries, and which would take into account everyone's interests.

Are you not a bit too optimistic?

No. I am not saying that this understanding, this needed conviction, already fully exists in the developed world. The reservations expressed by the US and other Western countries to the General Assembly resolution of May, 1974, are quite discouraging. But I am convinced that they will realize the imperative need to change their attitude. It appears that a new mentality is building up, and once it does arrive, effective measures would follow and in the process an entire new form of collaboration between the developing and developed nations could ensue. Some governments are still prisoners of old concepts and policies. Up till now, we have lived mainly by confrontation, because there has been no true understanding. During all these years of hard struggle, within the United Nations and elsewhere, we have never yet received sound reasons for not accepting our proposals. All we have been faced with were delaying tactics or arguments that measures would not yet be opportune, that the pound was falling or the dollar was in disarray. The nations that attended the Algerian Conference are now convinced that the measures we proposed at UNCTAD III, measures directed toward the development of the developing nations, are just and sound. This conviction was reiterated with great force at the special session on resources of the UN General Assembly, to which I have already referred.

These proposals were probably not taken seriously by the rich club of nations.

Probably not. At its regular session in 1973 the General Assembly stated very clearly that the objectives and targets set up in the Strategy for

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Development not only have not been reached but that there have been many severe setbacks. No objections were raised to this statement.

As you know, the MIT study Limits to Growth, sponsored by the Club of Rome, gave fresh impetus to the planetary debate whether to grow or not to grow. Leaders in the Third World seem especially unanimous in demanding further rapid growth.

I agree with this point of view. The world needs to continue to grow. At the same time, however, I think that new policies of conservation and consumption have to be implemented. Resources are limited. They should not be wasted as has been done in the past. On the other hand, a much wider and better distribution of income should be applied the world over. We should apply this principle to the world economy the same way in which nations strive toward a just distribution of income within their own society. I am not in favor of the theory that economic growth should enrich a few countries indefinitely and that with the surplus of this wealth the rest of the world should live or should be allowed to grow. The fact is that growth has been very limited and has been extremely slow in the developing nations and extremely rapid in the industrialized world. However, of late, policies have been developed that are liable to change this process. I believe that a large and bold program based on cooperation and understanding between the developed nations and the developing nations should be brought about.

I recently attended a symposium of the OECD¹ in the company of distinguished politicans and scholars from both the developed and developing countries. We discussed the report of the president of DAC. DAC is, as you know, the committee of development assistance of the OECD in Paris. It presented a report on the activities of the year 1973. Naturally, the discussions centered on energy and all types of relationships between rich and poor countries. There was broad agreement about an urgent need to create a new economic order in the international field. The interdependence of problems of resources, environment, financing, development, and monetary systems were very clear to everyone. It is my own point of view that if the leaders of the world had sufficiently stressed the links between the economic and social relations of all peoples, and had sufficiently cautioned against unilateral actions, the world would be in considerably better shape. Belatedly, the rich nations seem to have become aware of global interdependence and the ultimate limitation of resources. Only now, following the crisis of late 1973, are they prepared to accept that they do depend in many ways on the developing nations. We in the developing countries were very much aware of these problems and we have been stressing for years that

1 OECD: Organization for Economic Cooperation and Development. Its headquarters are in Paris.

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problems of development should be dealt with as part of the whole. We have continually stressed that a new order of things was urgently needed and that in the framework of a new order in the world the progress of the developing nations would play a decisive part. All the crises the world has suffered recently - the monetary crisis, the energy crisis, the environmental crisis - have proved us to be right. We never asked special privileges for our lands without giving something in return. But I have the impression that a new mentality is developing. Never before did an economic gathering including developed and developing nations such as that which took place in April, 1974, in New York, have such widespread influence and repercussion. We saw daily reports about it on worldwide television.

In other words, mankind on the whole is becoming more aware of the problems we face together. In this respect the MIT study Limits to Growth played its part in raising human consciousness on these matters of survival.

Well, it is undoubtedly true that the thinking of people around the world is moving into the directions of Limits to Growth. These are hard facts which cannot be ignored any longer.