ABSTRACT
Introduction of the Private Enterprise Initiative coincided with a severe recession in Latin America. Economic recession and rapidly expanding external debts in Latin American set the stage for introduction of the Private Enterprise Initiative. Private enterprise was clearly central to the Alliance for Progress. United States Agency for International Development was instructed to foster “vigorous private economies” in Latin America and grants were sometimes awarded directly to local businesses. Market-oriented reform was the second major objective of the Private Enterprise Initiative. The United States also supported limited debt relief for Latin American countries during the 1980s. United States aid to Latin America was fundamentally restructured during the 1980s. Public sector projects were deemphasized in favor of private enterprise development and market-oriented reforms. Credit and technical assistance was allocated directly to small- and medium-sized businesses. Aid officials frequently argued that the Private Enterprise Initiative was consistent with their basic developmental mission. Previous strategies had clearly failed in Latin America.
