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December 9, 2016
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September 28, 1998
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September 27, 1949
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Approved For Release 1000/08/ 14-Rnp79-O1O9O OO2OOO3OO13-3 '.'.'eekl.v Contributions Latin America i anch, ?, CIA 27 September 1%9 CURRENT DEVLLOK IrTS GENERAL: Latin American responses to the A-bomb announce, nt are expected to have no adverse effects on any important US interests in the area (p. 2). C T R A L DIVISION: Colo.;bia's government, by authorizing" more than one labor federation, has advanced its camraiL-n against the Oommin .st-led Colombian Corkers' Confederation (p. 2). SOUr(IMI ?1 DIVISIOU: In Uruguay, neetinV3 of the 15th Con-;Tess of the Com- munist Party are not expected to have significant effects (p. 2),. In Argentina, present political conditions indicate that US oil companies can expect no relief from ;-,overnment restrictions (p? 2). SP ?:CIAL SIfl3J CTS The Current Situation in Haiti . . . . . . . . . . ? . . . . . . 4 The Current Situation in Argentina . . . . . . 7 DOCUMENTNO._ HANGE IN CLASS. 11 DECLASSIFIED CL SS. CHANGED TO. T'3 C NEXT REVIEW DATE: ALITH. HA 7 e) 4P DATE:/ `ISO ~ REVIEWER: 372044 Approved For Release 2000/08/ CIA-RDP 9-O1 O9OAOOO2OOO3OO13-3 .1JA-RDP79-010 A000200030013-3 Approved For Rele a 2000/08/ --t? ,weekly Contributions, B/LA 27 September 1949 (CIA Working Paper) 1. J NER/ L: Latin American Iles onuses to A-bomb Announcement F.ar1y -and still incomplete reports of non-Communist re- actions in Latin America to President Truman's announcement of the Russian atomic explosion provide no evidence of changes in attitude that would have any adverse effect on important US security or policy interests in the area, nor is it expected that there will be any considerable effect. There was no reported instance of prompt Communist press response, undoubtedly because instructions on how to exploit the incident as Party propaganda had not been received. 2, COLOMBIA: The government's campaign against the Communist-led Colombian Workers Confederation CTC as now been further advancer r a scree aut orizing o icia recognition of more than one labor federation in Colombia. ."Iithout waiting for a decision on its suit to dissolve the CTC (B/IA Wkly, 13 Sep 49), the administration is expected shortly to recognize the Church-and Conservative-sponsored Colombian ":orkers' Union (UTC), a growing rival federation. The administration's willingness thus to anta- gonize the CTC clearly indicates a new feeling of strength in the Conservative Party since, in the past, no serious consideration was given repeated UIC requests for recognition because the Liberals, whose cooperation was needed during the period of national union government, opposed that organization. Granting legal recognition to the UTC would improve the Conservative Party's prospects for political success by enabling it more effectively to refute charges of being opposed to organized labor. 3. URUGUAY: The 15th Congress of the Uru n Communist Part al- ready postponed twice this year, is now sche a for 30 September, at which time a report providing for substantial im- provements in Party organization is to be discussed., No significant effects on US security interests are expected to result from the meetings". 4. ARGENTITAI: Difficulties of US Oil Companies in Argentina Increased icu es o U ail companies in Argentina have irr- creased to the point that the companies believe government policy toward them to be "confiscation by attrition". Approved For Release 2000/68/29 : CIA-RDP79-0109OA000200030013-3 Approved For Rele se 2000/08/29 : CIA-RDP79-010 0A000200030013-3 !111 , U11 1 11 hl, ee ?'.y Contributions, E3/IA. A. 27 September 1949 orking Paper.) The State Clil Fields Admrinistration (YPF'} has avoided !nfird].n? a concrete policy ~Vit c respect to the future of foreign to cripple the operations sii. companies - it continues, however, o, he US companies. The latter have been denied quotas for dir et isaportat5.on of c1-!de under the UK-Argentine agreement, and ;r,ve been denied dollar exchange for essential imports from the US. the situation now stands, the only way W3 refiners enn obtain t;+icir crude requirements is to purchase it from YPF at 22 to 37 percent naartcup with no assurance that the sales prices of mane iactured petroleum products can be increased accordingly. F"urther- z re, a deaf ear has been turned toward requests of the US conr- panies for dollar exchange to import necessary blending oils, equipment, and maintenance materials f rove the 05. While Argentina's shortage of dollars limits possible allocations, the government has recently increased dollar allocations to YPF and has provided none for the US companies. (At present there is no indication of the British. Shell Company's modus vivendi with YPF, but its posi- tion is more advantageous because of - I ritish leverage.. There has been no change in the government's stand against granting addi- tional drilling concessions to private producers, and, conseq?mnt? ly, their production continues to decline, Because the two prin acipal US oil corripanies operating in Argentina are engaged mainly in refining and distributing (one of them produces a small part of its crude requirements locally), they are vitally dependent on YPF" allocations. The US companies believe that the roverauznent is following this course in order to allow YPF to improve its position at the expense of the private refining and marketing organizations, and that continued repressive measures eventually will compel them to withdraw from Argentina. The government has +;arefuliy avoided direct reference to application of the national: -l.zation program to the petroleurn industry ----- quite possibly it has been decided to delay this step because of concern regarding the development of fuel resources, Opposition parties, however, are calling attention to this part of the nationalization program, and are putting it to political use against the Peronistas. The opposition has charged. the administration with "obeisance to North American representatives" and has claimed that importation of petroleum by foreign companies, as provided by the UN-Argentine agreement, is against the basic principle that YPF should import all petroleum products; that it is also against the spirit of Article 40 of the Constitution; and that the only solution is na- tionalization and monopoly. The government's fear of the political. effectiveness of these arguments may very well result in further deterioration of the position of the US oil companies in Argentina. The with- drawal of these companies mould be adverse to US interests as it would lessen further the already dim prospects for efficient dev- elopment of additional petroleum reserves in Argentina. Approved For Release 2000/08/29 : CIA-RDP79-0109OA000200030013-3 Approved For Relee 2000/08/29 : CIA-RDP79-010A000200030013-3 { EX33TFT t1eeldy Contributions, B/Lt (CIA 1+orking Paper) Situation Memorandum 5449 The Current Situation in Haiti 27 September 1949 Summar~t --- The political situation in Haiti is calm. A rise in the value of exports has balanced Haiti's foreign trade, but the fiscal condition of the government remains adverse. The armed forces are loyal. to the government. Communism plays a minor role. Friction with the Dominican Republic persists,, but Haiti is studiously avoiding complicity in anti-Txrujill.o plotting. .- US security interests are not notably affected by current developments.) Poltica1 Me-situation in Haiti now is calm. The Estime regime, however, is faced with the problen of whether or not to lift the state of siege in effect since the three-day "general walkout" of last I.;arch (]3/IA Wkly, 9. ,Par i 9). If full. civil Liberties are restored, opposition elements will be free to expose the administration's shortcomings in the campaign pre- ceding the January 1950 elections. If the state of siege is not termirr ated, the government fears US tourists will. not visit the International position, scheduled to open this December. B/Ids estimates that the Government, because of its stake in the success of thee, position, will. lift the state of siege in the belief that the arnor can control the out- come of the elections. The President is anxious that members of the Chamber of Deputies scheduled for election in January be as tractable as the present ones, since he plans to seek legislative approval of several constitutional amendments, one of which -cril1 permit the President to succeed him elf. Although it is reasonably certain that the army can manipulate the elec- tions in the administration's favor, a falling out betvmen Estime and the powerful Commander of the Military Department of the Palace, Colonel Uagloire, could upset these calculations. This is regarded as unlikely, however, because Esti is fully aware of iagloire's power and probably vwill avoid antagonizing him. Economic We trend during 1948 toward an increasingly unfavorable trade bal- ance has been halted. For the first six nrsnths of the current fiscal year, imports and exports were balanced at P16.5 million each, whereas SEC Approved For Release 2000/08/29 : CIA-RDP79-0109OA000200030013-3 Approved For Release 2000/08/29: CIA-RDP79-010OA000200030013-3 .;F MET ' ontributions. B{LA ikdv` `n Paper) 2'1 September 19L 9. 9L7 Lg fiscal period imports were $3.6.6 and ex- .,.. l_)_Ion. itltho, ,h sugar production was 4 percent greater euiFf; fiscal year. (The Haitian economic outlook depends on the arkei -n-rice of 'U)ese tvo cer. iod;i.tias, Although sisal operations f7xports (iz' ei: al and coffee increased in value by 39 percent respecii%ra.iltiv in comparison with the first six months of =, -1-7. -,,satiably be moderatei ' curtailed because prices and demand are drift- bl f e avora Wr, the disposition of the bumper x-949 coffee crop at pi ;.3u seems assured. The fiscal position of the government, however, continues to be ad s;erse (B/IA 1ikay, 12 Apr );.9). The Treasury deficit as of 31 July Vas ,!,,J20,000 and is increasing by `$200, 000 a month. The nz+r h? ch has e;Yhausted other sources of revenue,, is now seeking to persuade forei n- uiined concerns to buy the unsold portion ($3 million) of the 1957 bond issue so that it can continue construction of the position. The uncontrolled spread of leaf-and root diseases has reduced banana production more than 60 percent below the 19).i6 level when it was Haiti's . ccond export crop. Since it is unlikely that the government will take _gos?ous steps to eradicate these diseases, the banana industry can be erected to cease to be an economic factor by 1951, -,.u_e-1 ,Fa able ofJmaintainint law and order in the capital and larger toms. The operational and admd.nistrative efficiency of the small coast guard has been enhanced by a recent change of commandants and will doubtless be further improved by the US naval mission which is expected shortly. The argr is not big nor mobile enough, however, to control widespread dis- orders such as could occur at election time, or to repel the landing on the outlying coasts of even a few hundred Caribbean Legionnaires who might seek to use Haiti as a base of operations against Trujillo. Subversive has been no increase in the influence of Communism in Haiti, The local Comunist party is unimportant. President Jstime has recently relieved tyro liaitj an diplomats of their posts in Iiurope because of their 1 sown Communist sympathies. Approved For Release 2000/08/29 : CIA-RDP79-0109OA000200030013-3 Approved For ReI se 2000/08/2.x., IA-RDP79-O1eOA000200030013-3 -; Jeeki 7 Contributions, i3/LA CIA orking Paper) 'tuation IAe*'io andi m. L9 . 7 Sep cer 1949 nUrnationai with the Doriini.can It,.c-plibl,c continues to be Haiti's major itcternational problem. The Dominican failure to appoint an ambassador u ince the recall of Brea Messina last spring and the continued residence In Ci,xdad Trujillo of Colonel Roland (B/LA Wkly, 23 Feb 49) are sources of irritation. The government? despite its desire to see Trujillo over- -thrown. Yrill probably avoid implication in anti.-Trujillo plotting because fears the Dominican Republic's overwhelming military superiority. The Haitian Foreign Lini,ater has requested. US cooperation in averting Tru jil3_o's retaliatory measures should Haitian neutrality be violated., Approved For Release 2000/08/29 : CIA-RDP79-0109OA000200030013-3 Approved For RelSse 2000/08jcIA-RDP79-01 OA000200030013-3 Veekly Contributions, B/LA (CIA Working Paper) Situation 1:temorandum 55-49 The Current Situation in Argent a 27 September 191.9 (Summa - The stability of the Argentine Governnzent has improved as the result of the assumption by Peron of per- sonal leadership and initiative in the economic field and the adoption of measures that have pleased the arty. Basic economic problems persist, although the Argentine program for economic readjustment does emphasize several features which are practical and desirable from the US point of view. There has been little change in the subversive pic- ture. The armed forces are militarily in good shape, and the possibility of military action against the government has recently become less. Anti-Argentine feeling has in- creased in neighboring countries; the shift in foreign ministers does not mean a change in international trade policy. - ')haring the last four months the total situa- tion with respect to US security interests has improved. Although Hemisphere solidarity has been impaired by neigh- boring countries' allegations of Argentine support of the ?IINR revolt in Bolivia, prospects for the stability of the government have improved, the likelihood of increased authoritarian measures on Peron's part to maintain himself in power has diminished, and the replacement of Foreign Minister Bramuglia has not so far been followed by relaxa- tion of efforts to improve international trade relations, particularly with the US.) Political eron's reassertion of positive leadership during recent weeks has perceptibly strengthened his administration? and various measures taken., though they have not removed the underlying economic causes of threats to stability, have ameliorated specific situations and have done much to lessen the army disaffection that four months ago (B/LA Wkly.. 31 Uay 49) was one of the dangers to the Peron regime. Peron's strong demands at a July Peronista convention for party loyal- ty and regularity - demands that were accompanied by threats of discip- linary action -- demonstrated his renewed determination to remain in con- trol. his intervention in the cabinet conflict between nationalist prot;ggs of Senora Peron and the more internationally minded adherents of ore gn ,.mister 13ramuglia (see International below) was favorable for the expansion of foreign trade -an-a the array, as did his Approved For Release 2000/a /? A-RDP79-O109OA000200030013=3 Approved For ReI ase 2000/08129n t IA-RDP79-01 OOAOOO2OOO3OO13-3 eekly Contributions, B/ -- 2 -- 27 September 1949 (CIA Working Paper) Situation 1:emorandun 55-.9 public veto an grounds of econoir ' of a 70 million peso appropriation for Senora Peron's social welfare foundation. The administration's intensive campaign, conducted through the government dominated labor unions, headed off some demands for inflationary wage increases which were otherwise to have been expected following removal of coat-of-living subsidies on meat and other items. Strikes have been declared illegal with increasing fre- quency recently. Because of these improvements in the situation, VIA now estimates tha5- there is no immediate likelihood either that Peron will be removed or retire or that he will be forced to resort to conspicuously authoritar- ian measures to maintain his control. Economic Some improvement in the economic situation has been made by assurance of fuel supplies from the US and by provisional settlement of the meat packers' difficulties. Also, prospects for grain exports are slightly improved (total grain acreage remains about the same). However., basic economic problems persist. The economy continues to suffer from an ano- malous credit situation, inflation, and a low volume of foreign trade. Official use of credit continues to expand the money supply, but private enterprise is hampered by lack of credit facilities. Although the trend of inflation continues upward, shortages of industrial requirements, high wages, and restriction of private credit are beginning to be reflected in unemployment and some decline in business activity in certain sectors of the economy. Numerous bilateral trade agreements have been signed during the last three months, but since all are subject to agreement on price, expansion of trade will depend on Argentine adjustment of Its inflated price level and willingness to accept imports in greater volume, both of which are technically and pcli.tically difficult of achievement. The current Argentine policy of expanding trade with the US and the exchange of views within the Joint U5 Argentine Committee, established for that purpose, may lead to implementation of salutary domestic economic reforms in Argentina. E',ecently the government has taken some steps in this direction, such as the removal of certain subsidies., provision for loans and higher prices to farmers and stock producers, attempts to cur- tail wage increases, modification of export prices and exchange rates on certain it+cros, and curtailment of the powers of the State Trading Agency (IAPI). As yet, however, these measures have been neither extensively nor vigorously implemented. ":ith world prices in some cases below the govern- ment support prices, attainment of a competitive position in world trade 8. Approved For Release 2000/08/29 : CIA-RDP79-0109OA000200030013-3 Approved For Release 2000/08/29c A-RDP79-O1(OA000200030013-3 Weekly Gontri.ouf:jons.' / k (CIA Working Paper) Situation iiemoraxadum 55-49 3 .. 27 Septeer 1949 will be difficult And will reQuire further modification of exchan. e rates. Despite current official denial3 of possible devaluation of the Argentine peso, after a brief Period the government may be expected to widi.,r exchange rates at least for certain exports. Since other coun- tries have taken the lead, selective devaluation is now more politically easible. Also, the recent removal of gold backing for the currency may be a preparatory step. subversive The government's ants-Coimnunist measures continued to be carried "'a' -.luring the summer? Federal police refused permits or cancelled issued permits for Com?ninlet-inspired gatherings allegedly staged in support of world peace in several provinces. Communists found it in- ,rea.singly difficult., and often impossible, to obtain permits to leave and re-enter the country. General amnesty to all aliens illegally in Argentina was authorized by the government and provisions were made for these individuals to regularize their status. The decree may be a police measure designed to smoke out Communists. The effect of this de- cree upon "war criminals" 't a number of whom are allegedly in the country illegally, will depend on the personal influence of the individuals with Argentine authorities. ",,Ihile Germans and other fascist technicians con- tinued to enter Argentina, and, in most instances, to be employed in the military ministries and military factories, there appear to have been no concrete indications of organized subversion among the now -subs tant3al number of these individuals. AyLt_aar ! igadier 3eneral Franklin Lucero, Subsecretary of the Arry and an admirer of the US,, is expected to become L;inister of the A a now held by Defense Lilnister Sosa Molina in an acting capacity. Poe effi- ciency, ffquality of manpower The and morale continue exceptionally high by Latin American standards (]3/LA Wkly, 31 Lay 49). Under the 1950 budget estimate,, the appropriation for national defense is increased 25 percent to 17 percent of the total. The threat of direct military pressures or action against the regime has been considerably reduced during recent months. Army loyalty has been strengthened recently as Pero n has assumed leadership in the economic field and has emphasized methods calculated to appeal to the military. International S 'xn~erest in Hemisphere solidarity was adversely affected by Chilean, Uruguayan, and Bolivian charges that Argentina supported the rl revolt in Bolivia although as yet there has been no convincing evidence of WW_ 9. Approved For Release 2000/08/29 : CIA-RDP79-0109OA000200030013-3 Approved For Relese 2000/0 DP79-0J O OA000200030013-3 'Weekly Contributions, B/IA (CIA Working Paper) Situation Memorandum 55-x49 27 September 1949 argentine participation. The new Argentine Foreign Minister, Jesus Paz, azpbasized that his country's policy was one of non-interference in the affairs of other countries and that steps were being taken to guarantee the observance of this policy. Relations between Argentina and Chile were temporarily strained as a result of Argentine press and radio at- tacks on President Gonzalez Videla and the Chilean Government's harming of the recent strikes, there. The attacks were instigated by Senora Peron presumably for vengeance on the Chilean delegation to the Buenos Aires c'.anferenoe of the Inter-American Commission of :Women that opposed her campaign for chairmanship. Peron' a removal of Foreign Minister Bramuglie in favor of Senor Paz cut the ground from under the serious cabinet controversy between Bra- muglia's internationally minded adherents and the obstructionist rate es of Senora Peron (BOLA Wkly, 31 May 49). But this shift evidently not signal ary* sharp change in international trade policy, as there has sub- sequently been impressive evidence that Bramuglia's program for improved trade relations, particularly with the US, will be vigorously pursued. Pursuant to efforts to improve trade relations with the US, Argentina added two important officials of the Ministry of Economy and the Central Bank to its staff participating in the Joint Argentine-US Commd.ttee. Regular payment of commercial debts in the US continues, and recently the percentage of dollar earnings allocated to this repayment was raised from 20 to 30 percent, Since signing a trade agreement with the UK in late June, Argentina has signed trade agreements with Norway, France, Peru, and Czechoslovakia, and has completed preliminary arrangements for agree- ments with Japan and Paraguay. Argentine representation on the UN Security Council having expired, that country is officially a candidate to replace Venezuela on ECOSOC. If Argentine fails of election to ECOSOC, it desires to replace 1 exico on the Trusteeship Council, 10. Approved For Release 2000/08/29 : CIA-RDP79-0109OA000200030013-3