The ""arena"" of the title is Latin American, and the decisions under discussion here are extremely complex political ones, not new, and not likely to be satisfactorily formulated soon, if at all. Yet unless they are somehow dealt with, the United States and her southern neighbors face many dangers. Mr. Pflaum, a Chicago Sun-Times editor, is not the first to raise the crucial issues involved or to provide the basic outlines of necessary action, but his knowledge of the subject is his own, gathered mostly at first hand over the past quarter-century, and his grasp of the prime elements is good. He has real sympathy for the aims and desires of Central and South America, as well as solid comprehension of the difficulties they present in Washington. The Alliance for Progress and the Organization of American States provide an insufficient answer to the ""rising expectations"" within and the threat of subversion from without, and he calls for ""imaginative leadership to refashion... a new community of American States"" with real unity and real strength. Of particular value here are the cogent, detailed assessments of recent developments in such sensitive spots as Bolivia, Brazil, Eucador, Venezuela, and the Dominican Republic.