In the months following the end of World War II, Nelson Rockefeller created two new in-
ternational “development” organizations, The American International Association for Econ-
omic and Social Development (AIA), and the International Basic Economy Corporation (IBEC).
The purpose of the first, a “philanthropic organization,” was to spur various infrastruc-
ture reforms in Latin America, particularly in the fields of agriculture and health — re-
forms essential to building and maintaining a productive labor force. The second organ-
ization, IBEC, a profit-making business venture, was established to take advantage of the
improved investment opportunities created by the infrastructure reforms and to diversify
the family’s investments into areas other than oil. 1
Since its creation in 1946, the AIA has concentrated its effort on launching agrarian re-
form projects in Brazil and Venezuela, improving seeds and fertilizers, introducing farm
machinery, supervising agrarian credit systems, building roads from farms to markets and
maintaining health and farming education extension programs. 2 AIA conducts many of its
projects in conjunction with local government agencies. This Rockefeller “philanthropy”
provides 50 percent of the initial financing and gradually reduces its share of the costs
each succeeding year. Such projects channel local government funds into programs which
are ultimately beneficial to American investors.
To illustrate the way AIA paves the way for IBEC investments, examine how a hybrid seed
corn company in Brazil was set up. AIA, nominally a non-profit organization, conducted
a market and product survey of the hybrid seed corn industry in Brazil in 1946. It dis-
covered that only one domestic company produced hybrid seed corn, Agroceres Limitada.
AIA persuaded the Agroceres management to form a new company in which Agroceres would
provide the technical knowledge; AIA then organized IBEC as a profit-making venture to
provide Agroceres with the necessary capital for expansion. IBEC thus came into control
of the formerly indigenously-owned Agroceres and since then has cornered over 45 percent
of the Brazilian hybrid corn seed market. 3
As of 1967, AIA had total assets of $500,000; directors included Nelson Rockefeller and
his son Rodman. Besides direct Rockefeller family grants, the AIA receives funds from
corporations with close ties to the family: Creole Petroleum, Mene Grande Oil, Shell
Caribbean, Mobil, International Minerals & Chemicals, and IBEC.
IBEC was founded in 1947 with $3 million put up by the Rockefeller brothers (current
assets are $160 million); Nelson served as president at that time. The company’s world-
wide operations (142 subsidiaries and affiliates in 33 countries) are currently presided
over by Rodman Rockefeller. The Rockefeller family holds 70 percent of IBEC’s stock
(New York Post, April 12, 1968).
The company’s operations are divided into five major groups, with the first two, both in
the agribusiness sector, providing about half of IBEC’s sales. 4
1) Food: IBEC is the largest supermarket distributor of food products in South America,
with 52 American-style supermarkets in Venezuela (31), Peru (5), and Argentina
(16). It also raises hybrid corn seed in Brazil (see above), catches and cans
tuna in Puerto Rico, processes and distributes milk in Venezuela, produces
coffee in El Salvador, and grows and refines sugar cane in Peru.
2) Poultry: In 1964, IBEC acquired a controlling interest in Arbor Acres, one of the
principal poultry breeding operations in the world. It supplies breeding stock
to chicken farmers in 23 countries, including Argentina, Colombia, Brazil, Mex-
ico and Peru.
3) Housing: IBEC has constructed over 14,000 one-family houses (most of them starting at
$11,000) in Puerto Rico and smaller numbers in Peru and Chile (where it was-20-
backed by AID mortgage guarantees).
4) Industrial: IBEC manufactures a wide range of metal products (many associated with
agribusiness) in the United States and overseas, including Argentina, Brazil,
Colombia, Mexico and Uruguay.
5) Financial Services and Investment: IBEC manages mutual funds in Argentina, Brazil and
Chile and insurance brokerage operations in Argentina, Brazil, Colombia, Peru and
Venezuela. The Brazilian fund is the largest in the world outside of the devel-
oped countries (New York Post, April 12, 1968). In 1968, IBEC’s fund in Brazil
combined with the Banco de Investimento do Brasil (BIB) to form one of the coun-
try’s leading diversified investment banking and credit institutions.
IBEC’s promotional literature claims the company is helping develop the Third World by
providing necessary consumer products while also making a decent profit. But, on closer examination, one uncovers a business enterprise quite similar to the classic Standard
Oil model, in which weaker competitors are squeezed out and then prices are raised. For
example, IBEC’s dairy company in Venezuela undercut its local competition by mixing im- ported powdered milk with water and fresh milk. Once IBEC had cornered the market it
then raised milk prices to 32 cents per liter, nearly 50 percent over the U.S. price. 5
Furthermore, IBEC’s food marketing network isn’t geared to meet the needs of the under-
nourished masses of the population; rather it is geared to servicing the middle and upper
classes.
IBEC’S GEOGRAPHIC DISTRIBUTION
U.S., Puerto Rico & Canada Latin America Europe
Revenue $101.3 million Revenue $114.2 million Revenue $ 9.8 million
Assets $ 91.5 million Assets $ 49.7 million Assets 10.4 million
Employees 4,605 Employees 4,890 Employees 619
Africa & Asia
Revenue $ 5.5 million
Assets $ 8.2 million
Employees 959
Source: 1968 Annual Report
Note: (1) Largest revenues come from Latin America;
(2) Highest rate of return from assets is in Latin America (nearly double
that of the nearest competing region, U.S., Puerto Rico and Canada).
Footnotes
1 For a description on IBEC, see The Case Study of the International Basic Economy
Corporation, by W. Broehl, National Planning Association, 1968.
2 For a description of AIA’s credit operations in Brazil, see The Case Study of the
Agricultural Program of ACAR in Brazil, by A.T. Mosher, National Planning Association, 1955.
3 Case study of IBEC cited above, p. 8.
4 Information for this section comes from an article in The Baltimore Sun, October 10,
1968 and from IBEC’s 1966 and 1968 Annual Reports. Only Latin American operations
are listed here.
5 The Empire bf High Finance, by Victor Perlo, International Publishers, 1957, p. 160.
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