GENERAL BOOKBINDING CO. I C QUALITY CONTROL MARK INTER-AMERICAN FOUNDATION: FIRST YEAR TUESDAY, APRIL 25, 1972 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON INTER-AMERICAN AFFAIRS, Washington, D.C. The subcommittee met at 10 a.m., in room 2255 Rayburn House Office Building, Hon. Dante B. Fascell (chairman of the subcommittee) presiding. Mr. FASCELL. The subcommittee will come to order. In 1969 this subcommittee initiated action to establish a new agency to promote innovative approaches to social and economic development in the Western Hemisphere. Our efforts arose from a conviction that the agencies then existing, while conducting highly worthwhile programs, were overlooking the great potential which small-scale social development projects had for improving the living conditions of millions of poor throughout Latin America and the Caribbean. Realizing that it would not be either practical, possible, or even desirable to fund a massive program for support of such "human development" projects, the subcommittee concluded that what was needed was a small-scale program designed to develop innovative techniques which would, in turn, lead to further understanding of this complex field and eventually to a speeding up of the process of social development throughout the hemisphere. From our deliberations emerged legislation, approved by the Congress in December 1969, which established the Inter-American Social Development Institute, now known as the Inter-American Foundation. We are pleased to have with us today to discuss the way in which the foundation has translated its legislative mandate into an on-going program, the very able President of the Inter-American Foundation, William M. Dyal, Jr. Accompanying Mr. Dyal are Mr. Irving C. Tragen, Vice President for Planning and Liaison, and Mr. Paul C. Bell, Vice President for Operations. Bill, the floor is all yours. STATEMENT OF WILLIAM M. DYAL, JR., PRESIDENT, Mr. DYAL. Thank you, Mr. Chairman. I have prepared a rather lengthy statement which I will not attempt to read which can be entered into the record. Mr. FASCELL. Right at this point, also, I would like to put in the record your biographies and those of all of the members of the board. (The biographies referred to follow :) AUGUSTIN SNOW HART, JR., CHAIRMAN OF THE BOARD Mr. Hart is Group Vice President for International Operations and Director of the Quaker Oats Company, where he has served as an executive since 1937. With an A.B. from Princeton University, he served as a Lt. Colonel in the U.S. Army during World War II. Mr. Hart is a trustee of the United States Trust Company of New York; a director of Lake Forest College, Lake Forest, Illinois; a trustee of Presybterian-St. Luke's Hospital of Chicago; a director of the Lyric Opera in Chicago; and a director of the Chicago Council on Foreign Relations. GEORGE CABOT LODGE, JR., VICE CHAIRMAN OF THE Board Mr. Lodge is an Associate Professor and Director of the Division of International Activities of the Harvard School of Business. He served with the Naval Reserve during World War II and received his A.B. cum laude from Harvard in 1950. He was a reporter with the Lyon Daily Evening Item of Boston and the Boston Herald before becoming Director of Information for the U.S. Department of Labor and subsequently the Assistant Secretary of Labor for International Affairs. He has served as the United States representative to the governing body of the International Labor Organization (ILO) and was its chairman from 1960 to 1961. Mr. Lodge is a trustee of the Carnegie Endowment for International Peace, a member of the Council of Foreign Relations, and the author of numerous publications and books, including Spearheads of Democracy and Engines of Change. LUIS ALBERTO FERRÉ Mr. Ferré is currently the Governor of Puerto Rico and member of the Republican National Committee. He served as a member of the Puerto Rican House of Representatives for four years. He was an organizer of the Puerto Rican Cement Corporation and served as Co-Chairman of its Board of Directors. He was President and Chairman of several industrial affiliates of Ferré Industries; Chairman of the Board and President of Ponce Hotel Corporation; Treasurer of Igualdad, Inc.; and Director of the Bank of Ponce. Governor Ferré holds a BS from Massachusetts Institute of Technology; a LLD from Springfield College, Massachusetts; DCL, University of Puerto Rico; and Doctor of Humanities from the Inter-American University of Puerto Rico. Governor Ferré has also been active in Puerto Rican civic affairs, having served as General Chairman of the Puerto Rican YMCA; President of the Federated YMCAs of Puerto Rico; and a member of the Citizens Advisory Commission for Government Security. He has received numerous distinctions, including the Award as Puerto Rican of the Year by the Knights of St. John of Chicago; the Order of Vasa from Sweden; and Knight of the Holy Sepulchre from Pope John XXIII. CHARLES APPLETON MEYER Mr. Meyer is Assistant Secretary of State for Inter-American Affairs. After receiving his B.A. from Harvard University in 1939, he became associated with Sears Roebuck and Company for thirty years. He was Sears manager of foreign administration, president of the Bogota, Colombia subsidiary, and later a vice president and director of the company. He served as a Captain in the U.S. Army during World War II. In addition, Mr. Meyer was actively involved in other business affairs, having served as a director of various corporations, including: Philadelphia National Bank, Dow Jones, Inc., Allstate Insurance Company, Gillette Company, and United Fruit Company. He has also been active in civic affairs, having been president and/or director of various institutions, including: Jarvis Christian College, Philadelphia Museum of Art and the United Fund for Philadelphia. JOHN ALFRED HANNAH Dr. Hannah was sworn in as Administrator of the Agency for International Development on April 2, 1969, after having served as President of Michigan State University since 1941. Besides his BS from Michigan State, he has numerous honorary degrees from other universities in the United States and abroad. He has also held appointments as Assistant Secretary of Defense for Manpower and Personnel; Chairman, U.S. Section, Permanent Joint Board on Defense; Canada United States; Chairman, Federal Commission on Civil Rights; member, International Development Advisory Board, Point IV Program, and has held numerous other government appointments. Dr. Hannah, among other distinctions, is a recipient of the Medal of Freedom Award; an honorary president of the Association of State Universities and Land-Grant Colleges; and former Chairman of the American Council of Education. JOHN RICHARDSON, JR. Mr. Richardson has been Assistant Secretary of State for Educational and Cultural Affairs since 1969. Currently, he is Acting Assistant Secretary of State for Public Affairs. With an A.B. and L.L.B. from Harvard University, he served with the United States Army, European Theatre of Operations during World War II, receiving the Bronze Star. After the war, he was admitted to the New York Bar Association, and was associated with the law firm of Sullivan and Cromwell of New York for six years. He subsequently joined Paine, Webber, Jackson and Curtis, investment bankers in New York City, where he was a partner for eleven years. He has been president of Free Europe, Inc. (Radio Free Europe), the International Rescue Commission, founder and member of the Polish Medical Aid Project, chairman of the New York City Metropolitan Mission, member of the Council on Foreign Relations and member of the National Association for the Advancement of Colored People (NAACP). CHARLES W. ROBINSON Mr. Robinson has been President and General Manager of Marcona Corporation since 1961. After receiving his AB (cum laude) in International Economics from the University of California, he served during World War II as a Lieutenant in the U.S. Navy and then obtained his MBA from the Stanford Business School in 1947. In 1948, he joined the Golden State Dairy Product Company as assistant to the Product Service Manager and in 1950 McKinsey and Company as a management consultant. He then rose through various executive positions with the Utah Construction Company before becoming Vice President and General Manager of Marcona Mining Company in 1959. Mr. Robinson is also President of Waverly Mining Company; Director and member of the Executive Committee, Crocker-Citizens International Corp. of San Francisco; Director of Homestake Mining Company; Trustee of Mills College; active in trade and tourism development of the Pacific Basin; and active in civic affairs in the San Francisco Bay Area. Mr. DYAL. If I might, I would like simply to highlight this rather lengthy statement without going into a great deal of historical background which you already have expressed. Mr. FASCELL. Without objection the entire statement will be put in the record. You may go ahead and summarize it. (Mr. Dyal's prepared statement follows:) STATEMENT OF WILLIAM M. DYAL, JR., PRESIDENT OF THE INTER-AMERICAN FOUNDATION Mr. Chairman and members of the committee, I am especially pleased to appear before this Subcommittee by whose initiative the Inter-American Foundation was born. As you know, Mr. Chairman, the Inter-American Foundation was established in December 1969 under Public Law 91-175 as the Inter-American Social Development Institute; and, its present name was authorized by the Congress in Public Law 92-226 of February 7, 1972 to more adequately and appropriately reflect the organization's character and orientation. INITIATION OF ACTIVITIES The Foundation is a non-profit government corporation dedicated to the support of Latin American and Caribbean efforts to solve their own "grass-roots" economic and social development problems. Its focus is people. Its seven-member Board of Directors, composed of three public sector and four private sector members, was nominated by the President on August 17, 1970 and confirmed by the Senate during September and October of that year; a brief curriculum vitae on each of these Board members has been submitted for the record. The Executive Director, whose title now has been changed to Foundation President, was sworn in on March 16, 1971. Thus, March 16, 1971 was the date on which the Foundation entered actively into staff recruiting, design and implementation of appropriate operating procedures and methods and program development. Since that time, the core staff has been recruited; and we continue to refine procedures and operating criteria in the light of our experience. I am pleased to report to you that even within this short period of time we have been able to establish working relationships with a wide variety of Latin American and Caribbean private non-profit organizations; to identify, assess and fund a series of projects; to begin a process of learning from the impact of the projects; and to project a "broker" role in the interchange of information about social change. PROGRAM PHILOSOPHY House Report 91-611 at the time of the initial legislation reflected the unique and experimental nature of the organization by calling for: innovation, sensitivity to and support for indigenous efforts, independence from short-term political factors which affect the day to day course of U.S. Government policy, experimentation to overcome bottlenecks to progress, responsible recognition and assumption of risks to help solve specific development problems, replicability, and operations primarily through and with the private sector. The purposes of the organization were legislatively stated to be: "(1) to strengthen the bonds of friendship and understanding among the peoples of this Hemisphere; (2) to support self-help efforts designed to enlarge the opportunities for individual development; (3) to stimulate and assist effective and ever wider participation of the people in the development process; and (4) to encourage the establishment and growth of democratic institutions, private and governmental, appropriate to the requirements of the individual sovereign nations of this Hemisphere." OPERATIONAL GUIDELINES To transform these concepts into programs, the Board carefully weighed the various alternatives open to it. At its sixth meeting on May 5, 1971, the Board adopted the following five tentative guidelines to govern Foundation operations: First, the Foundation will respond to needs as perceived by the people of Latin America and the Caribbean as evidenced by their own actions and will join with them to increase their capability to achieve their goals. Second, the Foundation will seek to support projects which are innovative in the field of social development and will undertake experimentation through pilot projects. Third, the Foundation will primarily work through and with private and mixed public-private non-profit organizations which are recognized as indigenous institutions in Latin America and the Caribbean. Fourth, the Foundation will not, at least initially, concentrate on subject matter categories but carefully select those projects which on their merits offer greatest promise of contributing to social development. Fifth, the three objectives of greater and more equitable distribution of income, greater opportunity for participation by the people in decisions affecting their lives, and the amelioration of social conflicts are considered to be inseparable in the implementation of the Foundation's programs. LATIN AMERICAN AND CARIBBEAN GUIDANCE Before taking final action on these guidelines, however, the Board sought the counsel of key opinion leaders from Latin America. As a result, the principal officers of the Foundation met informally on June 7 to 9. 1971, with a dozen highly respected Latin Americans, of varying political views, to seek their ideas with respect to the role, fields of concentration and methods of operation of the Foundation. The majority of the participants recommended that the Foundation could best discharge its responsibilities by performing the following functions consistent with the operating policies established by the Board: Providing institutional support to high leverage Latin American organizations engaged in social development work and related activities. Financing research and development projects aimed at producing operational models for a variety of activities related to social development. Serving as a connective element between U.S. and Latin American institutions and between Latin American institutions as well-with a view to developing a network of institutions concerned with social development and related activities in Latin America. While the Conference did not attempt to define what is meant by social development, it recommended that, for the purposes of carrying out the Foundation's intended objectives, projects be regarded as contributing to social development if they directly or indirectly serve to: Increase the number of people who share in the benefits of economic progress; or Strengthen the individual's control over his or her own life. With respect to strategy, the Latin American participants suggested that, in view of the limited resources available to the Foundation as compared to the magnitude of social development problems in Latin America, the Foundation concentrate on undertakings which: 1. Are Innovative, i.e., they should be concerned with attempting new efforts or reshaping old approaches in a more relevant way; 2. Have a clear potential for Impact, i.e., for diffusing their effects far and wide; 3. Offer a realistic prospect for Replication under similar conditions elsewhere; and 4. Are not susceptible of financing under standard procedures of international financial agencies either because they do not offer prospects of self-sufficiency or because of some other unusual circumstance. Finally, among other suggestions made by the Conference with respect to further mechanisms for Latin American participation, the use of ad hoc committees was identified as a useful means for advising the Foundation from time to time on its program and operations. These suggestions, and counsel from a wide range of "devil's advocates," have been fully incorporated into Foundation policy and procedures. A similar consultation with Caribbean thought leaders is plar.ned for mid-summer 1972. Constant dialogue with Latin American and Caribbean development specialists is the trademark of the Foundation. The enabling legislation, in Section 401 (m), calls for such a dialogue through an advisory council of development experts. As a method of implementing this legislation, our Board has elected to develop multiple channels rather than a single advisory group in light of the disparity in social problems and stages of social development throughout the Western Hemisphere. These channels include periodic program consultation meetings in various geographic areas and on specific social problems. Since our philosophy is to operate with a minimum of bureaucracy (at present there is a total of 46 permanent staff members), and without resident overseas staff so as to keep overhead low and to diminish the tendency to manipulate, we have actively pursued a policy of "brain-picking." That is to say, in travels to twenty countries this past year, and in sessions in the United States, we have conferred with international, regional, national and local bodies and individuals of all kinds in identifying social change institutions, in assessing leadership potential and project credibility, in receiving and analyzing specific project proposals, and in building a network of institutions interested in the interchange of information on social change. We are excited by the dynamism in many sectors of most countries of Latin America and the Caribbean. Development is no longer the platform of a relatively few technologically oriented elitists as it was ten years ago. There is now a large and growing number of socially conscious and technically trained personnel which increasingly pervades both the private and the public sectors. THE FOUNDATION PROGRAM We see our mission as a identification of these dynamic foci, and in response to them, to provide proportionate, enabling matching funds and seed-funding for their efforts and then to aid them in communicating the results and lessons from their efforts. Our limited funds and small staff, in the face of the dimensions and variety of the social problems in the Hemisphere, signify that we must capitalize on approaches and projects by Latin American and Caribbean groups themselves which have potential of models and of replication. During our first year of operations, our program has been built largely on targets of opportunity identified through field visits and from proposals submitted to us. Since March 16, 1971, we have reviewed about $80 million worth of proposals. Most of them requested subsidies for on-going activities, overhead expenses or improved physical facilities certainly not appropriate proposals for an organization created to break new ground in furthering the role of man in development. |