Preliminary Views on Argentina

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R00904A000200040016-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: November 9, 2016
• Document Release Date: July 20, 1998
• Sequence Number: 16
• Publication Date: October 11, 1955
• Content Type: MF

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C E N T R A L I N T E L L I G E N C E A G E N C Y
OFF ICE OF NATIONAL ESTIMATES
11 October 1955
MEMORANDUM FOR: The Director of Central Intelligence
SUBJECT : Preliminary Views on'Argentina
1. The rebel forces which ousted Peron are still consolidating
their position. Political power now rests in the hands of an anti-
Peronista military Junta. Major General Eduardo Lonardi, a com-
promise selection by the Junta's army and navy factions, heads
the caretaker government. Neither his military supporters, nor
his predominantly civilian cabinet can be clearly identified with
any political party, but it is clear from the personalities involved
and the policies thus far expounded that the present regime ropre-
sents a shift to the right in Argentine politics.
2. The Juntas immediate problem is to achieve and maintain
political stability. Though Lonardi has shown considerable skill
in solidifying his position, it is not at all certain that he will
continue to head the government, for within the Junta his position
NOTE: This memorandum has been coordinated with OCI.
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is threatened by interservice rivalries and by lack of unity
over policies and appointments. As long as Lonardi remains
Provisional President, Argentina will probably continue to~
make progress towards the restoration of domestic tranquility
and political liberty. Should he fall, however, the army
would probably assume direct control and these trends might be
halted.
3. The greatest potential source of trouble for the
Junta is the powerful General Confederation of Labor (CGT),
which was Peron's principal political prop. Lonardi has made
a bid for labor support by promising to honor all social bene-
fits and to respect union rights. There is some resistance to
his moves to oust the Peronista leaders, but we believe the
military will be capable of suppressing any serious labor.
opposition,
1. Argentina faces government by a military Junta for
a protracted period. ,Because of the presently disorganized
political situation, it is highly unlikely that Lonardi's
promise to hold elections within six or eight months can be
fulfilled. First the Junta must face the task of dismantling
the majority Peronista party. The only anti-Peronista party
of any numerical consequence is the Radical. Civic Union, a
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middle class, nationalistic party which is-badly split and
has thus far shown little talent either for improvising programs
or forming coalitions.
5. The present regime, dominated by devout Catholics,
hopes to settle the church problem by getting a Concordat with
the Vatican. 'Peron Is anti-church policies may be replaced with
equally extreme pro-church policies. If this should happen,
the government would alienate segments of the Radical. party
as well as the anti-clerical Socialist party and thus make
the return to constitutional government more difficult than
ever. The government may try to launch a Christian Demo-
cratic movement, but it would probably take at least two years
to build it into a majority party.
6. Lonardi has expressed his concern over the problem
of Communism and has indicated that his government will nct
be soft on this issue. The Argentine Communist Party will
oppose the present government and will almost certainly take
advantage of any opportunity to aggravate a crisis situation,
but it is not likely that it will be able to play a significant
role in Argentine politics during the next six months.
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7. The regime faces serious economic problems. Argentina's
naturally rich agricultural economy suffers from an archaic socio-
economic system and more recently from Peronista mismanagement.
Agricultural costs are inflated and productivity is low. Indus-
trial production is hampered by obsolescence of plant and equipment$
by tight credit restrictions, and by shortages of imported raw
materials. Continuing price inflation is building up strong
pressure for wage increases. Solution of these problems will
depend upon the regime's success in reinvigorating the agricultural-
pastoral sector of its economy, which produces 95% of Argentina's
foreign exchange earnings. The fundamental problem of economic
development centers about reducing the country's dependence upon
its two primary exports--wheat and beef--and utilizing their
foreign exchange earnings for technological advance and
agricultural diversification. The adoption of sound agrarian
reform policies, including land reform, and of modern techniques
will eventually improve the competitive marketing position of
Argentina's exports and thus help alleviate her pressing balance
of payments problems. To rebuild agriculture, howevor, Argentina
will need and will probably seek economic assistance from the
United States.
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$. Industrial development, in addition to modernization of
plant and equipment, will require large-scale investment in trans-
portation, fuel, and power. The present regime might pursue a
policy of economic nationalism, although it certainly will not
repeat the excesses carried out by Peron in the name of
industrialization and economic independence. The Junta has
allowed the Standard Oil of California development contract to
lapse despite the fact that oil alone accounted for 13% of
Argentina's total imports in 1954. Though the government will
almost certainly resist adoption of new measures likely to have
inflationary results, we believe that in the short run it will be
unable to halt Argentina's continuing inflation.
9. Lonardi has expressed a willingness to maintain
friendly relations with the United States. However, the
presence of strong nationalists in key government positions
indicates that the present Argentina government may be un-
willing to follow the United States lead in promoting hems-
spheric solidarity and cooperation. It is not likely that
Argentina will pursue pre-revolt overtures for a Military
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Defense Assistance Paot. Though she will probably continue
to support the US on important politicad questions on which
the US and the USSR are opposed, tt is inlikol,; that she
will cooperate on international economic problems.
SHIRMAN KENT
Assistant Director
National Estima-,-tes
s,
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