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December 12, 2016
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May 7, 2002
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June 20, 1950
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Approved For ReAte 2002/06/11: 79-01090A0C*2400050025-8 Wee Contributions Latin 20 June 195019 considers that the article on antimUS sentiment in Brazil (Pa 3) abd the item on continuingymmest in Peru (p. 2) merit particu- lar attention among this neekvs contributions. CURRENT DEVELOPIENTS CENIRALAItAs See reports on the effects of anti mUS sentimamt in Brazil andonthe current situation in Venezuela, under SPECIAL SUBJECTS, helm. SOUTIERN =Al Unrest in Peru in the critical period prior to presiden- tial elections scheduled, for 2 July mill probab.17 continue, in spite of the government's success in suppressing the Arequipa uprising (p. 2). See also the report on the current situation inCbile, under SPEC/AL SUBJECTS, 'helm SPEC= SUBJECTS The Effects of Increased AntimUS Sentiment in Brazil 3 The Current Situation in Chile 5 The Current Situation in, Venezuela 7 DOCUMENT NO. _ NO MANGE IN CLASS. 0 NO NE Kr REVIEW DATE: I D C 3. CHANGED TO: TS S C AUTH): Al 11169,:20 d. DATEf" a '11WVIEWER:__I kg/ Approved For Release 2002/06/11 : CIA-RDP79-01090A000200050025-8 %.41801210----^ Approved For Ree 2002/06/11 : CIA-RDP79-01090A0b00050025-8 Wee4y Contributions, WU, 25-50 20 June 1950 (CIA Working Paper) 3, PERU: pal%.e.ct..edbopsatinueit colmi and further disorders are possi.. ble despite the government's success in suppressing the Arequipa ? revolt that stemmedlfrom protest at the disqualification of the only opposition candidate in the 2 JU4 presidential elections. The molt failed when expected azwy support did not materializes but not before marqrsere killed or sounds& The opposition oandi- date and many leaders of his group have been jailed, but feeling continues to run high and there are reports that further outbreaks may occur in ti q narth of Peru? shich is quite possible. Dever- theism', if Carla can retain his army support and the loyalty of associates like Noriega, he prdbab2ys131. be returned to power in a farcical election that sill do little to increase ?dries prestige or that of his country. (Sbbstanee used in CIA Wkly40 16 Jun 50.) Approved For Release 2002/06/11 : CIA-RDP79-01090A000200050025-8 '11),Itir Oa' 2. Approved For Reease 2002/06/11 : CIA-RDP79-01090A198"0200050025-8 matEr Weekly Contributions, WIA0 25-50 (CIA Working Paper) Article 6-50 20 Jima 1950 Effects of Increased Anti-US Sentlama in Brazil .0- The increased anti.-US feeling in Brazil may well normally close cooperation of Brazil in inter- national natters as well as delay some of the present eco- nomic negotiations with the DS, but should yield to efforts toward improvement based on longer-term factors.) Anti-US sentiment, which has been increasing in Brazil during the past year (p/La Wkly, D. Apr 504 was further aggravated during the pact few weeks by the announcement of the large Export-Import Bank loan to Argentina (WLA my, 16 May 50) and the published report on the causes of the high coffee priaea of the Gillette subcommittee of the US Senate (D/IA Wkly., 13 Jun 50), The anti-te attitudes are notice- able not only in the press and certain segments of the pUblic? but also among some high government officials and officers of the armed. forces. Underlying this recently increased criticism of the US and its policies is the feeling of Brazilians that the DS is not granting them enough consideration in view of Brazil's record of cooperatimi in World Wars I and I/ and Intl* immediate postwar period. ?am* high Brazilian officials, both civiliaa and military, consider that their contribution as allies of the US InDorldWar II was so much greater than that of aUy' other Latin American country that the US should favor them above all other Latin American countries; they see, in such US measures as the loan to Argentina not the US desire to strength= the Bemisphere as a thole, but a denial of their deserved preferential positi44 S4wdlerily? Brazilian military leaders are less appreciative of the present US Soviet-containment policy in Europe than they are of the fact that European countries including former enemies of both the US and Brazil, receive US military equipment free while Brazil must pay high prices for it. Under these circumstances one sohool of thought in Brazil apparently advocates striving in every' way to reduce their peculiar dependence on, and their peculiar ties with, the US (the recent barter-trade agreementrfthWest Gernmuyis a case in point), countering what they consider US lack of sensitivity to its peculiar debt to Brazil. Although there is as yet no reason to alter the estimate that Brazil would be a close ally of the US in case of another war and probably desire again to send troops to assist in the actual fighting of the war ? some short-range security interests of the US could be adversely af- fected if this anti-US feeling continues unabated. The Brazilians, for example, may become intransigent in their negotiations ea friendship, navigation, and commerce treaty., similar to the one desired by the US tit Oa Approved For Release 2002/06/11 : CIA-RDP79-01090A000200050025-8 3. Approved For Rele?ale 2002/06/11 : CIA-RDP79-01090A06r100050025-8 SECRET Weekly Contributions, B/LA, 23-50 - 2 a. (CIA 'Marking Paper) Article 6.50 20 alms 1950 and drawn up betueen the US and Uruguay; or they may continue to study" US Steel's application to exploit the large manganese deposits in the State of Lletto Grosso and thus may delay the potential flew of that =flea- nese ore to the US, It is also possible that this anti-US feel-imam, further stimulate the nationalistic attitude refloated in the "Brazil for the Brazilians" slogan ehich, along milli the pressure of politicians seeking the votes of nationalists and Communists for the important Octo- ber elections, mgy force passage of a bill nowbofore Congress that could curtail the flow of critical and strategic ndnerals to the US (EAA 11474 13 'Inn 50), It can also be expected that Braltliaillmake every effort to suppeet the present high price of coffee through stib- sidles to the producers as moll as including larger ameunts of coffee in the barter agreemeats with European nations, This latter step mould orient Brazil's foreign trade sligarbly more towards Europe and prejudice someehat the present large exports to Brazil from the US, Mile the prospect is not bright that, saving extraordinary efforts on the part of the US, this anti-US feeling in Brazil mill decrease to may great extent in the immediate future, faotors operating over the longer term? such as those that have for so long favored particularly friars:Ay relations between the tee countries will be available to support efforts of leaders in both countries to ameliorate present con- ditions. Sober second thought among Brazilians will point out, as one publisher of ,a large newspaper chain has already done, that the Gillette report is only a report of a subcommittee of the US Congress and not the official position of the US Government, The sting of the Argentine loan min be somewhat assuaged by publicity of various new Exidhank loans to Brazil for the additional development of its steel industry, cement industry, and electric paver, Evidence of constant US interest, such as that shamelay visits of hidhinataking US officials, both civil and military, will be appreciated, Orders for critical materials, such as the US renewal this month of the quartz-crystalasourchasieg program that had, 'Wm suspended for nany.monthe? will be valued by more moderate and Use nationalistically minded Brazillane, And finally, naturally comple- mentary economies ? rather than natural4 competing, as in the case of US and Argentina ? favor cooperation in the name of common sense; Brazilian opinion can well return to the realization that the US will continue to be Brazil's best customer regardless of additional nera trade agreements with European nations, Approved For Release 2002/06/11 : CIA-RDP79-01090A000200050025-8 4. Approved For ReleNoe ase 2002/06/11 ? CIA-RDP79-01090A009?000050025-8 'SECRET Weekly Contributions, fl/LA, 25-50 (GIA Working Paper) Situation Umwrandam 38-60 20 Jane 1950 The Current Situation ta Chile e- The Chilean government appears reasonably stable esp ;? a political struggle regarding sioonordo planning. Favorable factors slightly outweigh the unfavorable in the present economic situation. There has been mo significant change in the morale, loyalty, training, or efficiency of the armed forces in the last quarter. Chilean Communists continue to devote their principal, efforts to the political field. There has boon no significant change in Chilete international relations. -- US security interests have not been importantly affected by ?yenta in Chile in this period. Political ""---"ITZ-Chilean government appears reasonably stable at the end of the recent quarter, during which the most significant political struggle has boon revolving around econouic projects advanced by the minister of finance. Backed by the increasingly pamerful white-oollar unions (JUDEMO and taking advantage of ehat had been expected to be merely an interim appointment, nlevtater Vial has nought support from Chilean workers by proposing a far- reaohing plan of mace eubsidies to serve as an adjustment to inflationary conditions. The plan, passed by the Chilean lower holm, has proved to have such extensive popular and political support that Vial, mho was expected to ruin himself politically after a short tour in offices now appears to be assuming a major role. The *nal Plan", however, faces its real test in the senate, whim conservative power is greater than in the lower house. President Gonzalez Videla, whose personal position appears somewhat stronger since his return from the US, has shown his usual political astuteness by adopting a receptive attitude towards the "Vial Plan" and is apparently milling to play ball with the new finance minister so long as he can advance his own ende by so doing. The prospect for the fixture, although it un- doubtedly inoludes political turmoil over the 000nomio plans, is reasonably favorable s no really serious threat to the stability of the present Chilean regime is apparent at this time. BOonomic ----"Mrorable factors slightly ottweigh the unfavorable in Chile's present economic situation* The principal item on the credit side is the dramatic rise in copper prices during the past twelve months (fram 17 cents a pound in June 1949 to 22 112 cents a pound in Juno 1950). Against this must be connidered the continued monetary inflation, a politico-eoonamio drive for increased wage subsidies away? of strikes reducing production and income, and the small benefits t: date from the embryonic industrialization pro- gr. Moreover, Chile will not derive full advantage from increased copper prices if the US Congress does not re-enact the suspension -- 'which expires Approved For Release 2002/06/11 : CIA-RDP79-01090A000200050025-8 oszeRtr? 5. sucRur Approved For Ratlike 2002/06/11 : CIA-RDP79-01090A0*200050025-8 Weekly Contributions, D/Lii., 25-50 20 June 1950 (CIA. Working Paper) ' Situation Memorandum 38-50 sp June 1950 of the two cents per pound US duty. On, balances however, the outlook is somewhat more favorable than it mas three months ago; ands if the strikes and inflation do not get out of hands Chile should be able to advance eoonomically in the ooming quarter, 111-11.1* ere has been 334 significant change in the morale, loyalty, training . or efficiency of the armed forces in the last quarter. The arty and the oarabineros have demonstrated their effectivenems in maintaining order dur- ing the potentially dangerous period of widespread atrikes. Their loyalty to the government and capability of controlling violence is expected to continue during the coming months. Subversive -ista continue to devote their principal efforts to the political field -- probably because the now Chilean cabinet is less conservative than its predecessor and contains more members friendly to Communists. The changed Comnuniet emphasis is noticeable in efforts to win political collaboration of various groups for the purpose of repealing the Defense of Democracy Lax. Consistent with this political efforts the Communists have concurrently refrained from overt action in strikes and other dis- tutbaacea although their capability for causing trouble remains high and there have been nUMerous opportunities far such activities within the past quarter. Furthers the elimination of the hated law has taken precedence even over "peace" as a stated objective in ComMunist front groups. D/Lti believes, however, that, although the Communists have made certain political gains and nay continue to vrin further support on this one issue, their drive to repeal or alter the Defense of Democracy Law is not likely to be success- ful in the immediate futures since conservative and moderate groups are as intent on its retention as Communists and many liberals are for its repeal. It is not expected that net Comrunist strength will increase significantly withinthe next quarter. International ---"---VW(Vis been no significant change in Chile's international relations during this quarter. The visit of President Gonzalez Videla to the US was the most outstanding single event on the Chilean international scene. Both the. Chilean people and President Gonzales have seemed satisfied with the results of the trip; the only benefit apparent thus fars'howevers has been the important, if imponderable) one of renewing traditional US-Chilean ties of friendship. President Gonzales' strong denunciations of Communiam during his US trip and his proposal for the creation of a democratic inter- national in order to combat Communiommay be taken as indications that Chile will continue her ardent anti-USSR policy. Chile is expected to resume relations with the new Batten military juntas in spite of a Chilean protest over lack of assurance that democratic elections Will be held. A move to resume relations with the Venezuelan military junta also is possible. Approved For Release 2002/06/11 P79-01090A000200050025-860 Approved For ReleVie 2002/06/11 :bielskIDP79-01090A001960050025-8 Weekly Contributions, 1)/lit, 25-50 (CIA Working Paper) Situation Memorandum 39-50 The Current Situation in Venezuela 20 June 1950 (Summary -- The political situation is somewhat lees favorable than throe months ago. The economic position is essentially unchanged. The military situation also is unchanged except for reorganization of ffea general staff. Communism has received a setback from dissolution of the party. There have been rela- tively minor difficulties with Cuba, the Dominican Republic, and Great Britain. -- Recent developments have not seriously affected US security interests.) Political The political situation in Venezuela iosomewhat less favorable than . three months ago, principally because Acci6n Democriltica and the Communists appear to have entered a phase of more aggressive activity. This has been evident not only in the petroleum workerso strike (see Eeonomic below), but also in a number of isolated dietarbances by armed civilians which, though largely unsuccessful, have created an atmosphere of increased tension. It ie true that recent Clandestine activities have probably strengthened the unity of the junta; it is also true that there is little indication of a decline in the government's ability to control the type of sporadic violence which has occurred recently, and that there is no clear evidence that Al) is now capable of directing more concerted revolutionary action. Nevertheless, the continuation of minor outbreaks, however unsuccessful, would probably delay the restoration of political liberties essential to the preparation for elections, and it is quite possible that such delay, rather than a major revolutionary attempt, is the immediate objective of AD. The announcement of the draft electoral statute on 25 May is only one of the first stepe in the long process of preparing for elections. Progress towards constitutionalism will be slow, and repressive measures will prob- ably continue for some thee. Economic Mere has been little significant change in Venezuela's economic position during the past three months. The government continues to be gravely concerned over the possibility of drastic US restrictions on oil imports (1)/LA Wkly, 21 Mar 50). Meanwhile, the government appears to have become resigned to the prospect of termination of the US-Mexican trade agreement, by which Venezuela has enjoyed, through the most-favorede nation clause, favorable terms for oil exports to the US; and petroleum production has been maintained at a generally high level for the past three months. It is doubtful, however; whether Venezuela can continue to find markets for all its oil at present high levels of production. Approved For Release 2002/06/11,: CIA-RDP79-01090A000200050025-8 Approved For Rattrse 2002/06ftRiliA-RDP79-01090AM6200050025-8 - 2 - Weekly Contributions, D/LA, 25-50 (CIA Working Paper) Situation Memorandum 39-50 20 June 1950 The results of the petroleum workers' strike of 3-13 May are of mixed significance, and its ultimate effects may not be fully apparent for some time. In terms of its alleged objective -- revision of the commissary and wage-scale clauses of the collective contract the strike was a failure. As a test of strength and as a means of embarrassing the government and raising the morale of the workers it was at least partially successful, inasmuch as nearly the entire industry was for a brief period strike-bound. The government showed a certain weakness in failing to issue general orders, leaving strike-breaking measures largely to the discretion of local authori- ties. The most important immediate results, dissolution of the Communist and AD unions and the Communist Party, while creating an obstacle to future united action, will undoubtedly intensify the hostility of the labor move- ment towards the government, which the latter has done little to counteract. Military :There has been little evidence of a decline in the loyalty of the armed forces, and, as long as the junta members themselves remain united, .they can probably depend upon the ihpeort at least of the older officers. Junior officers are a more questionable factor. It is to be expected that AD will make a continuing effort to penetrate the armed forces, and may possibly increase its influence not only among enlisted men, but also among the junior officers. Possibly most important of several recent Changes in the Ministry of Defense is the replacement of the Inspector General's office by the newly. organized Third Section (opera lions and training of the Armed Forces General Staff. The new 0-3 chief, Major Julio Cesar Angola, i?eported to be enthusiastic about US training and organization methods. The Venezuelan government Continues European arms purchases because of the price differential or the non-Availability of the US product. In spite of this obstacle to its effectiveness, the work of the US Army Mission appears to receive increasingly enthusiastic acceptance. Subversive' Communism received a sharp setback with the dissolution (13 May) of the Partido Communiata Venezolano (PCV) as a direct result of PCV leader ship in the recent petroleum workers' strike. It is true that the dis- solution decree was not directed primarily against Communism as such; that it dces not affect the smaller dissident Communist Party (the Partido Revolucionario del Proletariat* - Communiata); and that its effect upon Communist front organizations is not yet known. Nevertheless the decree (together with the decree dissolving COSUTRAPET) affects the principal Venezuelan Communist Party, especially in the sphere of labor from Which it derives its greatest support and in which its greatest potential threat to US interests exists. Approved For Release 2002/0 -RDP79-01090A00020005000,5-8 Approved For Relate 2002/06/11 : 3 Weekly Contributions, 041.1 25-50 (CIA Working Paper) . Situation Memorandum 391-50 P79-01090A001!PA0050025-8 20 June 1950 The theory that Communist partieg are more difficult to control if driven underground, and actually may profit from being outlawed, is not necessarily applicable to the present 'situation in Venezuela. The Com- munists will probably lose large number!, of marginal followers (especially in the labor unions) whose support was predicated on personal advantage rather than Marxist convictions. It may be assumed that the government will be vigilant in apprehending PCV leaders, most of whom are knawn. It is not likely that Communipt Party discipline in Venezuela will be adequate.to the demands of effective underground organization. Therefore, while the AD cause may gain some additiOnal support within Venezuela, Communism will probably decline in strength. International Certain minor difficulties, in which Venezuela became involved with Cuba, the Dominican Republic, and Great Britain during the past three months, seem no cause for concern. Relations with Cuba, strained as the result of a magazine article critical of the Venezuelan junta written by a Cuban official (D/LA Wkly, 23 May 50), will probably be patched up by a Cuban offer of apologies. The Venezuelan government, howevervwill continue to regard as overly tolerant the attitude of the Cuban govern- ment towards AD exiles in Cuba. The asylum episode that threatened to disturb Venezuelan-tlomcan relations is now coming to a close. .The Dominican government has yielded to the extant of delivering the asylees' passports to the Venezuelan embassy, on the understanding, however, that Venezuela would replace its ambassador, whose eccentricities are reported to have disturbed his own government as well as the Dominican government. There is no reason to doubt that the British ambassador's protest over firing on a Shell Company British-flag tanker about 45 miles off the Venezuelan coast by the Venetuelan naval training ship Canaria and the boarding of the tanker in search of arms allegedly being smuggled into Venezuela will lead to an amicable settlement. 2er0805;"?4---- 9. Approved For Release 200 6/11 : CIA-RDP79-01090A000200050025-8