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December 15, 2016
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August 28, 2002
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April 19, 1949
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Approved For Release 2002/,UU9.RRftfMIP19-dib9OAO6mbOO2OOO3-5 25X1 s`;eek1 y Contributions CIA 19 April 1 ' 9 Of the developments reported on this week, the situation in Ecua- dor (p. 9) merits special attention because, with the present critical economic situation, any significant change in the present balance of political alignments could very well have serious effects on the ad- ministration. CURD NT DEVELOPW ENTS GENERAL: At the coming ILO conference three unscheduled controversial issues are likely to arise (p. 2). NORTITERN DIVISION: Cuba es Communist Party could very well lose its effectiveness as a political party as the result of quarrels between FSP leaders and militants (p. 2).' The Cuban Government is greatly con- cerned over the renewal of gang warfare in that country (P. 3). CENTRU DIVISION: R In Colombia inter-party violence continues? but the array is considered able to prevent dangerous and widespread fighting (P. 3). In Colombia there is a marked lack of confidence in the econo- mic prospects for the immediate future, even though long--term prospects are not unfavorable (p. !a). .Brazil's Communists have received a do- finite setback as the result of government action to end Coi nunist- inspired "peace conferences" (p. 5). SOUTHERN DIVISION: In Paraguay, the election of bolas L6pez as Presi- dent consolidates the position of the I)craocratic Colorado Party (p. 5). Chile's trade with the US has been sharply curtailed, and its 1uropean trade has been increased, because of dollar shortages (p, 6). Argentina is expected to push the cause of Spain before the tIN (p. 6). SPECIAL SLBJI'CTS The Current Situation in 12. Salvador The Current Situation in Ecuador . . DOCUMENT NO. NO,,,GNANGE IN CLASS. CLASS. CHANOFD TO: T S C NEXT REVIEW DATE:: DAT,e!" State Dept. review completed 25X1 Approved For Release 2002/10/10 : CIA-RDP79-0109OA000200020003-5 sa.,.t Approved For Release 2002/10/10 : CIA-RDP79-01090AOOS60020003-5 Weekly Contributions, (CI.A Working Paper) 19 April lk3.9 1. t E73EFtAL: Serious Controvers1 Possible at condnrr ILO Conference US res#s n i IIe isphere soli ri173:-9-8-012-0-Very- yr Gourd very well be impaired at the Fourth Regional. Latin American Conference of the International Labor Organization to be held in Yontevidco from 25 April to 7 Lay? as it is likely that certain highly con- troversial unscheduled issues will be interjected into the pro- ram. No serious controversy is expected from items on the proposed agenda, which is limited to such primarily non-political problems as (1) the Director General's report on industrialization efficiency of labor force, training, and health; (2) conditions of life and work of indigenous populations; (t) conditions of e iployraent of agricultural workers; (14) adjustment of labor dis- putes; (5) migration; and (6) the relationship between OAS and ILO. Three controversial issues, of concern because they could have an adverse effect on Hemisphere solidarity, are likely to be brought up at the conference, however, even though they are not .scheduled. One such item is the reaction of labor ro~.ilas to the military juntas. This problem is'likely to arise if worker dole-- gates challenge the validity of credentials of worker delegates from Peru and Venezuela; it may be side-stepped, but not solved., if Peru and Venezuela do not sand labor delegates to the confer- ence, since, even in the absence of Peruvian and Venezuelan dele- gates, the issue could be brought up and referred to the governing body of the ILO. If Peru and Venezuela boycott the conference entirely, this action could to some extent weaken the ILO. A second controversial issue likely to appear is the problem of racial discrimination in the Panama Canal Zone, The airing of this problem could provide anti-TJS elements with a handy propaganda tool even if the AFL delegate is able to point out some progress toward amelioration of' discrimination. Still another problem is the possibility of a clash be- twreen pro-Peron and anti-Peron elements at the conference. As there is to be a very large Argentine delegation -- evidence in itself that Peron expects to have his labor views vigorously exb pressed - the formation of an anti-Peron' bloc may be expected.; acrimonious debate between the two blocs could aggravate existing antagonisms,, 2, CUBA : Communist PartrS :l.it Possibly in the 1Saking AA possible Crxru'nis Pa &y (I rift o xy v lop over the position of the Party in the event of a US-USSIR war, The diffi- culties of the leaders stem from the fact that (1) positive ad- vocacy at the present time of help for nussia and sabotage during Approved For Release 2002/10/10 A-RDP79-01090A000200020003-95' Nuoi Approved For Release 2002/10/10,51iC]A4RDP79-01090A000 0020003-5 Weekly Contributions, (CIA Working Paper) 19 April 1949 a war would weaken further the already diminished political and labor power of the Party; (2) only an estimated 20,000 of the Party's 155000 members now favor support of Tiussia in the event of a US-USSTl war; and () sabotage activities that militant Corr munists would be ordered to execute in the event of viar would lower the Party's prestige among enough members to destroy it as -a political organization. The "old guard" under the leadership of I3las rota has re- cently avoided a showdown over the issue of aid to ''ussia. The statement of support recently issued after a serios of talks among municipal, district and national leaders was so mild as to be little more than lip service to international Communism rather than an aggressive statement of behalf of "oscow. Subsequent international developments could, therefore, conceivably divide the militant Communists from the majority of Party members and thus destroy it as a popular political, party. 3w Tienewal of Gang . rfare Just.ci 7`uc-.nNes,'Jire; 'rESident of the 'highly influential FEU, a semi-autonomous student organization, was fatall,; shot on a downtown Havana street on 2 April 19)49, Fuentes, an active rre:aber of the UIIR __ on inally a student group but now a gang of brigands who cloak criminal intent in ideology-: and propaganda on behalf of political issues was probably murdered by the UST, a rival group dominated by student :gangsters and militant artarch- ists. This was the ninkh -a try murder in the last six months, .any Cubans fear that it presa, es the reopening of lane-scale gang warfare. The Prio government is especially concerned over Fuentes' killing because he was an. active and respected member of the FEU, upon which the government depends for so much of its student and youth-roup support, TheREU has demanded that Presi- dent Prio move to punish. ;ainst then.. V hile the "''anifesto for the Preservation of Peace" which heralded the beginning of the campaim bore the signatures of many prominent non-Communist politicians and journalists who have lent themselves to other Communist-sponsored movements, the absence of military support was noticeable from the start, The campaign, in fact, has not appealed to the patriotic and national- istic feelings which gave the Petrole wn Defense centers their Corce, The publication in ':arch of a manifesto si~nod by Luiz C;7rlos Prestes and four other top Brazilian Communists (all of whom are in hiding;) declaring; that they would never take up arms against the Soviet Onion, but vmuld "take up arms, should it be necessary, against the oppressors of our people" may have helped to crystallize non-Corarrninist opposition to the "-peace" movement by directing attention to its origins, and early this month the non-Cor,,mu-list press started a campaign against the movement, de- nouncing it as an instrument of Soviet policy. 7. 711kly for 22 Lar L9). ..'olas' success, howeverprobably falls short of his ambition, since his present position carries with it only the prestige and not the power usually accompanying the office. His continuance in office largely depends upon the extent of his cooperation with the Democratic Colorados, who PARAGUAY: The elction of aril of ,r. -el" Jolas Lopez, unopposetc :olorado party candidate for i re s,~ dent, really consolidates the position of the `.,er:?rncratic Colorados in the government, althour h it technically i;arks the successful at- tainr!ent by Colas of the position to which he has at pired since i.ovember 1447. wince that date "olas, a leader of the militant faction of the Colorado Party, has fi aired nror:rinently and has improved his position in every political maneuver. His election became a certainty when he broke with his political partner, L berato 1ioddguez, formed a coalition with conservative Demo- cratic Colorados, and became the only presidential candidate r Approved For Release 2 D 10-j? IA-RDP79-01090A00020002000i5 $ECR1,T Approved For Release 2002/10/10 : CIA-RDP79-01090A000020003-5 '-Veekly Contributions, (CIA Working Paper) 19 April 1,949 have emerged as the real power in politics and in the armed forces, If they maintain their present strength, they will. be able to implement the democratic measures which they have pro- mised, and to restore tranquility and relative stability to the country, The recognition of the Nolas regim by the Us. Argen- tina and &azil has provided additional strength to the Demo- cratic Colorados, S. CHU , r US trade with Chile is being adversel affected by ~e s o ar s ortaue an i can Government's policy of encouraging the use of soft-currency earnings to pay for Chilean imports, Since Uuropean countries are unable to pay in dollars for substantial amounts of copper, nitrates and other products obtained from Chile, that country is accepting payment in terms of their monetary units and thus is in receipt of con'- siderable soft-currency exchange. Chile's diversion of many pur- chases to soft-currency countries to use these soft"eurse:ney earnings has contributed to a sharp curtailment of orders from the US, 9. AfGENTIMA: Position on.-Spain in the UN cation to a US U2 representative "to save the 'L'S any embarrass- ment" by taking the lead in introducing a motion for the resump- tion of ambassadorial relations with Spain was evidently calcu- lated to take advantage of any division in LS opinion on the matter by (1) renewing Argentina's bid for leadership of the pro- Spanish tin American bloc, (2) maintaining the appearance of a desire to collaborate with the M. The Argentine representative's further statement that Spain must eventually be admitted as a member of the Atlantic Fact as well as to UN technical a:~encies is an indication that Argentina mill adhere to its customary role as Franco's leading advodate despite recent Argentino-Spanish differences on corrmmu;x- ci.al affairs, 6W Approved For Release 2002/10/10 : CIA-RDP79-0109OA000200020003-5 Approved For Relea a 2002/10/1WWQI-RDP79-0109OA000020003-5 'weekly Contributions, (CIA v7orkin; Paper) Situation L.'emorandur.- 219 19 April 1949 The Current Situation in El Salvador The situation in El Salvador has continued to develop along the lines indicated in ~Situation T'enorandur:i 3-49 (1 Feb 49). Constitutional government, based on free elections (one of the basic objectives of the December ] .G~a revolution), will probably not be realized for another year. The draft constitution will not be ccnr pl ted until fall, and the Constituent Assembly may not be called until. t.e 1949 or 1950. In the interim, L jor Oscar Osorio will remain .. . dominant figure in the government. Partisan political activity, in the absence of a state of siege, id at a high point, though 0sorio (who believes in maintaining a show of unity and cor.?nromise in the -overnin;, junta) has cautiously avoided committing himself in favor of any particular party. flevertheless, conservative elements, both civilian and rii,litary, are engaged in an organizational campaign on his behalf, and possibly at his instigation. They feel they will be able to win the support of the former followers of reactionary Colonel Osmin Aguirre, General Pena Trejo, General ;-'.s- pinola Castro, and other conservatives. The moderating i;V'luence of the Osorio-dominated junta in the recent strike threat against the International tAilways of Central America, and Osorio's statement (for the junta) that S1 Salvador is not prepared for, and not large enough for, a labor code, indicates that the government will compromise cer- tain liberal goals. Opposition to 0sorio may therefore be expected to increase amon leftists, but it is unlikely; that their opposition can influence junta policy. At present, there is no one powerful liberal or leftist party. The Comr11unists, as are all -roues,, are currently en- gaged in an intensive organizational caripai-n. Althou-h their slight influence may be increasing, they will probably not Bain control over the country's most important labor union --?- the i.ailwny ?;or! crs. The economic situation should ranain favorable. The l-L4'9 ;;udget, now coripleted, calls for government expenditures of 2,)47'C,000 --? al- most as much as last year's record budget. The government is now socking to improve the arry and air force. A special :Cnglish language course has been planned to facilitate ")Lure training of officers in the US, and a Salvadoran purchasing co;rmission is currently in the I'S buyin, trainin ~ planes and other e ?u.ipnent. Approved For Release 2002/10/10 : CIA-RDP79-0109OA000200020003-5 S~;CIU~T Approved For Release 2002/10/10 : CIA-RDP79-01090A00 200020003-5 Weekly Contributions, (CIA Working Paper) Situation I.Temorandum 21-49 19 April 11) h9 In the field of intnrnationel relations, Salvador is illustrating its desire to r~aintain the goad will of the US. It has earmarked about, .:1150,000 for payment on its lend-lease accounts it faithfully supports its raprosentatives on the Lfl Korean Corimissi n; it has named observerk to the Arniency Conference of fl/-T`I", It appointed a deleo-ate to thp Fourth Inter-Ai erican Radio Conference The governmcn is continuin ; cooperation with the US through a joint agricultural cxperiment station, through support of US mii tar'y and ground missions, and aid to a field party of the Health and Sanitation Division of the Institute of Inter-American Affairs. It has also naiad delegates to the Second Session of the Commission of the Census of the Americas of 1`,0. in the recognition of Venezuela, 1:1 Salvador has followed the US lead, the? t 7Ys not without the "proper" amount of hesitation. US ini`luence aside, it has also t4i.ven indication of the Central American liberal ideals through support of Cuat}:?raala es claim to Belize. 25X6 Approved For Release 2002/10/10 : CIA-RDP79-0109OA000200020003-5 Approved For Release 2002/10AW~WA-RDP79-01090A00 100020003-5 .'+eekly Contributions, (CIA T;orking Paper) Situation .'einorandum 22-49 The Current Situation in Ecuador 19 Jspri1 1949 (Surrrma : The most serious problem facing Pcuador to,-ay is its worsening economic situation which, to a growing extent, is making the overnmont of that coun- try more vulnerable to those forces opposed to Presi- dent Galo Plaza. Itt this tire, the political opposi- tion groups checkmate one another, but certain military groups, that are more unpredictable, may upset the present balance by a shift in support. Communists are active and a potential source of trouble in any emr- gency, but are at present ,under control. In interna- tional policy and activity, Ecuador is less inclined to follow US leadership in Hemisphere than in extra- Hemisphere relations.) Economic conditions in Ecuador are critical and constitute the foremost threat to the government's stability. The nor::aal constriction of trade and credit this time of the year has been accentuated by other factors: the unusually tight credit situation ree-,ltin- from over- extended credit and the lack of credit resources; business apathy due to the reluctance of buyers to place orders (as they anticipate lower prices and a relaxation of exchange controls); and a deterioration of the textile industry (due to excessive stocks which will not move be- cause of their poor quality and high prices). The econonW of the country is basically a _?ricultural. tiny decline in world prices for rice, cacao and coffee adversely affects Ecuador's economy, since the export sales of these commodities are the most i:ap- ortant sources of ouadorts foreign exchan!vo. The feelin: is prevalent in Ecuador that world prices for these products decline. LLealizing that agricultural diversification and increased efficiency are vital to any improvement of ?,cuador's compoti tive position in the world : arkct, President Plaza has atterlpted to inalrmwuratc a lon?-ran,_e prod;r7n of agricultural development based on a liberal system of ..overn,Vio.:t loans and the introduction of new products and modern methods of production. Ser~ous labor and economic difficulties, however, have interfered with the implementation of his program by forcing, the President to concentrate his efforts on currant economic problems rather than upon his long- range development progran. In an effort to resolve the countr2r's present economic difficulties, the President is taking measures to relieve the tight credit situation, expandinc the operations of the Production P.ev-- elopr.nt Institute, and implementing the tariff restrictions on the Approved For Release 2002/10/10 : CIA-RDP79-01090A0002000g0003-5' .SEC; it~~T Approved For Release 2002/10/10 : CIA-RDP79-01090A000020003-5 ',eekiy Contributions, (CIA ':orking Paper) Situation -emorandura 22-4c) 19 April 11);q importation of textiles. Thus far, these measures have. not succeeded in alleviating the situation to any appreciable extent. Although agri- cultural credit is freer, commercial credit is still ti,-ht and there is a general feeling of caution and apprehension. The political -maps which menace the stability of the Plaza ad- ministration are rendered ineffective by their mutual suspicions and fears that an overthrow of the present government might resnnit in placing a rival group in control. The Conservative.; Party has shomn the least opposition to Galo Plaza. This umy be explained by its ap- parent satisfaction, for the time being, with its control of a few strategic political positions (such as the vice presidency and comptrol- 1 ~,>hip of the Treasury), and its traditional antagonism to the rrili- tary . The Socialist Party has characteristically and systematically been the least cooperative and the most persistent in its attacks upon the Plaza administration, The Socialists are using harassing; tactics in the hope of forcing the President to take ill-considered and preci- pitate action. The Liberal Party,, on the other hand, is consolidating its strength at every opportunity. The recent appointment of the strong Liberal of exceptional ability, Dr. "duardo Salazar 00":rez, to the key position of ;: inister of Government will ingtirove this party e s prospects for success in the next presidential elections. Colonel Carlos :?ancheno was recently appointed leader of the radical :ving of the Liberal Party of the Province of Pichincha. Although these element of the party does not appear to have any substantial stron ?tb at pres- ent, the appointment ic more significant than nit-ht be the case other- wise, since :'ai.cheno is linked. with subversive activity in the art.. The military groups also checkmate each other. Subversive acti- vity led by Colonel Carlos ;'ancheno and Lt. Colonel Cesar Alfaro appears to be a t f th par rom e subversive movement of a leftist character among the enlisted Tien. It is not possible, however, to predict with cer- The, Communist Party is taking advantap_e of the present economic crisis by agitation among the vr. rkers and by actively participating in strikes. Fortunately, the adninistratiorl has been able thus far to cope adroitly with the strikes as they occur. The Coraiiu rist policy at present appears to be that of harassin- the discreditiri r the administra- tion short of forcing its overthrow. The Communists are reported to be under orders not to precipitate a revolution at this time out of fear that such action would brim- the ri,,htists into power. The party is increasing its organizational activity in order to revitalize and 25X6 ,..?r!'"- 10. Approved For Release 2002/10/10 : CIA-RDP79-0109OA000200020003-5 Approved For ReleSse 2002/1 f7 79-01090A00` 00020003-5 Weekly Contributions? (CIA 17orkin Pap-,r) Situation I.:emorandtn P2-49 19 April 1949 r, rengthen its position with labor and with rnerhers of the arrnd forces, In atterptin' to rein control of the labor syndicates, the Communists will have to meet the opposition of the Socialists who have succeeded in reakenjng; the authority of the Conmuriists by talcin` over the national offices of the ?~cuadoran Labor Confederation, The Socialist president of the confederation has stated that there will be no general nation-- oti.i.de strike until after 1 "ay, when the next confederation elections t ilce place. This, however, will not lessen the a,-itation am on- the rx&rkers, since the Comr:iunists will hake strong attempts to maintain the lnoorers l state of dissatisfaction to better their chances of .' : rtzrl of the confederation in these elections. rurrdarnentally the Plaza administration is very friendly to the US,, and the L?S could rely upon ':e;.rador's support in vital international situations, In matters of US interest visa'-vis the other Latin American countries, however, _)cuador is more 1iikeI to Zro 'alon., ? with the r a Jeri ty of the Latin American countries, .'or example, cuador has indicated its vd.llinVness to support Aunt ::bale's claim to elize, It Is expected that Ecuador will do so in a passive mariners There is a definite development of a closer spirit of ^ooperetion with Joolo: bia. strerr,~theni--:^' of trade ties has already been announced, and a military a reer:;cnt as a means of defense in case of ag -ression from Peru is a further possibility. Informal discussions alon,-~ that line have already been reported. Approved For. Release 2002/1 L1 , RDP79-01090A000200020003-5