Land reform is likely to be a pressing issue in many of these countries. It should be American policy not only to encourage effective land reform programs but also to underline the relation of such reforms to the economic growth and modernization of the society. As an isolated policy, land reform is likely to be politically disruptive; as part of a larger development effort, however, it may gain wide acceptance. It should also be recognized that the problem of rural tenancy cannot be solved by administrative decrees alone. Land reform programs need to be supplemented with programs for promoting rural credits and technical assistance in agriculture.

Lastly, governmental and private planners will at this stage begin to see large capital requirements looming ahead. By holding out prospects for external capital assistance, the United States can provide strong incentives to prepare for the concerted economic drive necessary to achieve self-sustaining growth.

At a third stage in the modernization process are such countries as India, Brazil, the Philippines, and Taiwan, which are ready and committed to move into the stage of self-sustaining growth. They must continue to satisfy basic capital needs; and there persists the dual problem of maintaining operational unity around a national program of modernization while simultaneously decentralizing participation in the program to wider and wider groups. But these countries have made big strides toward developing the necessary human and social overhead capital; they have established reasonably stable and effective governmental institutions at national and local levels; and they have begun to develop a capacity to deal realistically and simultaneously with all the major sectors of their economies.