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June 13, 1952
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sas=a!~ I!1" Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 COPY NO.1 ?* -- w5 qb ASSISTANT DIRECTOR,UONE SECURITY INFORMATION r- NATIONAL INTELLIGENCE ESTIMATE PROBABLE DEVELOPMENTS IN ARGENTINA Published 13 June 1952 CENTRAL I NTELLIGENC-E AGENCY DOCUMENT NO. DECLASSiPIED CLASS. CHA:::GEO TO. TS $ C NEXT REVIEW DATE: AUTH: HR 70.2 DATE REVIEWER: 49014 `00 m Declassified and Approved For Release 2012/10/24: CIA-RDP79R01012A002300010001-6 Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 WARNING This document contains information affecting the na- tional defense of the United States within the meaning of the Espionage Act, 50 U.S.C., 31 and 32, as amended. Its transmission or the revelation of its contents in any manner to an unauthorized person is prohibited by law. Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 1. This copy of this publication is for the information and use of. the recipient designated on the front cover and of individuals under the jurisdiction of,the recipient's office who require the information for the performance of their official duties. Fur- ther dissemination elsewhere in the department to other offices which require the in- formation for the performance of official duties may, be authorized by the following: a. Special Assistant to the Secretary of State for Intelligence, for the Depart- ment of State b. Assistant Chief of Staff, G-2, for the Department of the Army c. Director of Naval Intelligence, for the Department of the Navy d. Director of Intelligence, USAF, for the Department of the Air Force e. Assistant to the Director, FBI, for the Federal Bureau of Investigation f. Director of Intelligence, AEC, for the Atomic Energy Commission g. Deputy Director for Intelligence, Joint Staff, for the Joint Staff h. Assistant Director for Collection and Dissemination, CIA, for any other De- partment or Agency 2. This copy may be either retained or destroyed by burning in accordance with applicable security regulations, or returned to the Central Intelligence Agency by ar- rangement with the Office of Collection and Dissemination, CIA. DISTRIBUTION: Office of the President National Security Council National Security Resources Board Department of State Office of Secretary of Defense Department of the Army Department of the Navy Department of the Air Force Atomic Energy Commission Joint Chiefs of Staff Federal Bureau of Investigation Research and Development Board Munitions Board ' A~wii l;IR ,i a A N.01.1 N 111-V4. Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 ^r111rt+ Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 SEC ITY INFORMATION NATIONAL INTELLIGENCE ESTIMATE PROBABLE DEVELOPMENTS IN ARGENTINA N I E - 6 6 The intelligence organizations of the Departments of State, the Army, the Navy, the, Air Force, and the Joint Staff participated with the Central Intelligence Agency in the preparation of this estimate. All members of the Intelli- gence Advisory Committee concurred in this estimate on 5 June 1952. /''/'1[a AII"1Alr~- 1'r1 A A Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 - 14 9 S(' T FT PROBABLE DEVELOPMENTS IN ARGENTINA THE PROBLEM To estimate the current situation and probable future developments in Argentina through 1953. CONCLUSIONS 1. Despite serious economic difficulties and continuing plots to overthrow the regime, the Peron Administration will- probably remain in power at least 'through 1952, and will probably not change its basic foreign policies: the "Third Position," one of non-alignment with either the US or the USSR, and the promotion of Argentine influence in Latin America in opposition to that of the US. 2. These economic difficulties are likely to persist, but a good grain crop in 1952-53 would probably permit the Peron Admin- istration as presently constituted to re- main in power through 1953. In these circumstances there might be a decline in the intensity of Argentine anti-US propa- ganda. 3. If the 1952-53 crop is no better than average and the economic situation con- tinues to deteriorate, and if Senora de Peron dies, Peron will probably seek to retain power by broadening the base of his Administration to include moderate elements.' If Senora de Peron survives and economic conditions deteriorate, the regime will probably adopt more drastic domestic policies and will, more readily utilize "dissident" Communist and pro- Communist groups, with a concomitant increase in anti-US propaganda. 4. Another serious drought in 1952-53 would so intensify current economic diffi- culties that the Peron Administration would be seriously threatened. If, in these circumstances, the Peron regime were overthrown, it would probably be re- placed 'by the military, allied with mod- erate elements.' Any attempt by the ex- treme left wings of the CGT and of the Peronist Party to seize power would be countered by the armed forces. The lat- ter would probably gain control ' of the country, but only after serious civil strife. 'By "moderate elements" is meant those who are either actively or passively out of sympathy with the more extreme policies of the Peron regime, and who at the same time oppose the views'both of the old ruling groups of Argentina and of the Communists. Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 DISCUSSION Background 5. The 1943 Revolution by which Peron came to power followed a prolonged period of politi- cal and economic dislocation and readjust- ment in Argentina, dating back to 1930. In this period Argentina's lack of economic bal- ance and flexibility - due largely to its rela- tively narrow foreign trade dependency upon the UK - was pointed up by the world depres- sion and again by World War II. The result- ing dislocation created a fertile field for appeals to economic nationalism and for the political use of hitherto neglected mass groups such as labor. But existing parties, beset by corruption and wed to certain vested interests, .failed to meet the demands of economic nationalists and to carry out social reforms. 6. In this situation Peron's assumption of power, though accomplished by force with the aid of a small group of nationalist army offi- cers, soon became more than just another military coup. Peron rapidly developed a mass following that offset the lack of support by traditional parties and eventually counter- balanced the weight of the military itself. In the 1946 elections a Peronist coalition won 55 percent of the popular vote and virtually shat- tered the traditional parties. 7. After 1946 Peron, acting in the name of "social justice, economic independence, and political sovereignty," consolidated his power through a vigorous program of political and labor organization supported by all the means of propaganda and police control. In this Peron was importantly aided by his wife, who assumed the leadership of the Argentine pro- letariat. The regime made a studied effort to shift the balance of political power by redis- tribution of income for the benefit of labor and by direct state assistance to industry and control ' of foreign trade. In the process, a body of doctrine, "Peronism," was developed to explain and popularize the new regime. Originally close to Fascism in its emphasis on ultranationalism and its efforts to indus- trialize the country for "defense" purposes, Peronism, in appealing for mass support, later stressed also the importance of labor and advocated programs which were in line with certain Marxist precepts. The extent of the favor shown to labor began to alienate the armed forces and the nationalist groups that desired economic development but not social change. 8. Peron's foreign policy has been based on the concept of a "Third Position," the inter- national analogy of domestic Peronism. In keeping with Peronist professions of antag- onism toward both capitalism and Com- munism, the "Third Position" is. one of non- alignment with either the US or the USSR in the East-West struggle. It is not, how- ever, a position of passive neutrality. Peron aggressively seeks to induce other Latin American states to follow Argentine leader- ship in adopting the "Third Position" also. Since the USSR's interests in the region are limited to its influence in labor and intellec- tual circles, while US interests are om- nipresent, particularly in tangible and vulner- able commercial activities, Peron's nominally impartial policy has been predominantly anti- US rather than anti-Soviet in targets and tac- tics. In pursuing this policy Peron has inten- sified and adapted to his own purposes tradi- tional Argentine isolationism and rivalry with the US for leadership in Latin America. 9. By 1951 the Perons' control of Argentina had increased so that the- regime received 63 percent of the popular vote. While opposition forces were systematically hampered and the opposition press finally suppressed, it is prob- able that Peron would have won a majority in any event at that time. However, since then a poor 1951-52 harvest has brought the still unsound economic situation to a head and precipitated the present economic crisis, the political effects of which have not yet been measured. Present Balance of Political Forces 10. Under the leadership of the Perons, the Peronist Revolution has inaugurated many far-reaching political, social, and economic changes. The Revolution is, in fact, larger Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 and more permanent than either the Peronist Party or its leaders, and there is little possi- bility that it could be removed root and branch, even if the Perons were to fall. Even the opposition - except for politically unim- portant die-hards - does not reject the goals of the Revolution, although it demands better management of the program and more respect for civil liberties. 11. The Peron regime organized its support through two interrelated agencies, the Per- onist Party and the General Confederation of Workers (CGT). While labor is the principal source of Peron's political strength, the Party also draws support from some elements of the middle class and from industrialists who have profited from protective tariff policies and na- tionalist emphasis upon Argentine economic self-sufficiency. The armed forces, with whose support Peron came to power, have now become largely neutral or subservient. The Party has been held together largely by the personality of Peron; there have been internal conflicts, particularly over the activities of Senora de Peron. Several once-important Peron lieutenants have been removed from office, but have not abandoned the Peronist program and still have a strong potential for leadership in the Party. 12. The CGT, which has acquired a semi- governmental status under Peron, has in- creased union membership in Argentina from about half a million in 1943 to a claimed 5.5 million out of a present labor force of 7 million. The, primary function of the CGT leaders, who are an integral part of the Per- onist organization, has been to enforce the mandates of the regime. This became more apparent after 1949, when CGT leaders estab- lished close collaboration with the police to contain labor unrest. The inability of CGT leadership completely to control the rank and file under economic pressures was illustrated in railway strikes of 1950-1951, when the state had to resort to force. On the other hand, when a revolt occurred within the armed forces in September 1951, the CGT was able quickly to call some 50,000 demonstrators into the streets in support of Peron. 13. Labor owes to the Perons its present im- proved social status, including such benefits as low-cost housing, schools, clinics, and hos- pitals. Senora de Peron has not only func- tioned as party manager of labor, but has also assumed the role of inspirational leader of the labor movement, appealing especially to the depressed masses, the descamisados. Her in- capacitation would probably precipitate a dis- ruptive struggle for power within the CGT. It would also tend to dissipate the effective- ness of the descamisados as a political force. No alternative leader in sight could sustain the fervor which she has been able to arouse. 14. Even if Senora de Peron should survive, however, labor's consciousness of political power and the ambitions of labor leaders would render uncertain labor's faithful ad- herence to Peron in the face of a prolonged deterioration of the economy. Already Senora de Peron's control of the CGT is meeting some opposition from certain leaders of the CGT who are concerned more with appeasing the labor rank and file than with following Senora de Peron's directives. These leaders and in- surgent elements, including Communists and Socialists, in major CGT unions, are driving for independent power and greater privileges for labor. Were the CGT freer of official con- trol, Marxist influences would probably take the lead in a militant trade union policy and would represent a strong force for extremist solutions in general. 15. Politically, organized Communism com- prises two groups: the official party (esti- mated to number 35,000) and a small group of dissident Communists under the leadership of Rodolfo Puiggros that split from the official party after 1946 believing that they could bet- ter secure their own objectives in cooperation with rather than. in opposition to Peron. Peron is apparently trying to use the dissident group as a bait to oppositionists of the left, especially in the labor movement, to throw in their lot with Peronism. The "dissident" group in turn maintains advisory relations with Peron, although the precise extent of their influence cannot be determined with accuracy on the basis of existing evidence. There is also little information regarding the Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 ultimate objectives of this group, nor are there conclusive indications of Moscow's attitude towards it. The official party, although still legal, has been subject to police surveillance and harassment since 1948 and has lost voting strength so that it polled only 2 percent of the total Argentine vote in 1951. It has probably, nonetheless, maintained a hard core of mem- bership among workers, students, and intellec- tuals. Communism's most important poten- tial lies in the labor movement. It has re- tained influence with labor and its proposed "national liberation front" policy has many parallels with the Peronista program. This means that prolonged political and economic deterioration might permit the rapid growth of Communist strength and influence in Ar- gentina. 16. The opposition to Peron comes mainly from the professional, commercial, industrial, and large landholding interests among the middle and upper classes that ruled Argentina before 1943. Its political effectiveness, how- ever, has been sharply curtailed by disunity and by the Peron regime's extensive police and expropriation powers. The Conservative Party, for all practical purposes, no longer exists and the liberal Union Civica Radical (UCR) is almost hopelessly split into two fac- tions. Although the UCR polled one-third of the total vote cast in 1951, this vote undoubt- edly included a considerable number of pro- test votes against Peron's authoritarian con- trols and Senora de Peron rather than against other aspects of the Peronist Revolution. The Socialist Party is also rent by factionalism and is not represented in the national government. The old political parties are discredited by their past records and appear unable to chal- lenge Peron's hold on his mass labor support under present conditions. Even if Peron's opposition were not legally forbidden to form a political alliance, it is extremely doubtful that it could unite against the Administration. 17. The Roman Catholic Church, as repre- sented by its hierarchy, is an important politi- cal force whose position is approximately non- partisan. This position contrasts with earlier evidences of an understanding with Peronism. It appears that cooperation between the. Church and Peronism has declined, largely as a result of the divers activities ,of Senora de Peron and of her Social Aid Foundation. If the regime moves farther left, the influence of the Church may be turned against the Perons. An open break with the Administration, how- ever, should not be expected except under the most extreme circumstances. 18. The armed forces of Argentina (the present strength of which is approximately 135,000 men, second only to Brazil in Latin America) played an active part in bringing Peron to power. Subsequently, however, the Peron's courting of labor groups aroused the opposition of many officers, who came princi- pally from the middle class. In 1945 and again in 1951, elements of the armed forces openly opposed the government, but these efforts resulted only in purges and reorgani- zations reducing the armed forces' political influence. Plotting to overthrow the regime continues among purged officers and others as yet unpurged may be implicated, but these plots are unlikely to prove effective unless and until circumstances arise which would cause the armed forces to act in unison with sub- stantial civilian political support. 19. Nevertheless, the armed forces probably retain sufficient strength and cohesion to be the decisive factor in any open struggle for power in Argentina. In. such circumstances they would be most receptive to appeals from the middle class elements which have opposed Peron, but they might align themselves with the more moderate elements of the Peronist Party and some of the more independent labor leaders, particularly if Peron himself had been eliminated. If assured of some popular sup- port the armed forces would probably put down by force any attempted coup by the ex- treme left wing of the CGT or by any group under pro-Communist leadership,. but could probably do so only after serious civil strife. 20. In the balance of political forces, the lives of the Perons play an important part. The assassination of Peron is always a possibility and there are numerous reports of revolu- tionary plots with that objective. Moreover, Senora de Peron is seriously ill and may not survive to the end of 1952. SECRET Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 5 Present Argentine Foreign Policy and Influence 21. In pursuing Peron's "Third Position" for- eign policy Argentina has engaged in inten- sive anti-US propaganda throughout Latin America, some of which parallels Communist themes. This propaganda is particularly sen- sitive to US actions. Its intensity seems also to vary generally with domestic pressures in Argentina. It has increased noticeably in re- cent months. 22. In the Organization of American States, Argentina has at times adopted positions an- tagonistic towards the US; in the UN Argen- tina has abstained with increasing frequency on East-West issues. Argentina has ratified the Rio Treaty, but Peron has declared that no Argentine soldier would be sent to fight outside of Argentina. Argentine propaganda, which originally supported US-UN action in Korea, has become highly critical of US-UN policies in that area. It has also applauded Mexico's refusal to sign a military assistance agreement with the US. Since the abortive armed forces revolt of September 1951 the regime has been markedly cool toward any form of military cooperation with the US, an attitude which it has enforced upon individual Argentine officers. Pursuant to this policy it has allowed the contract of the US Air Force mission in Argentina to lapse without renewal, and has indicated informally that the US Army mission contract will likewise be permitted to lapse on its expiration date in October 1952. 23. The most conspicuous manifestation of Peron's efforts to project the influence of Peronism throughout Latin America is the activity of Argentine labor attaches, who have spent large sums of money in their endeavor to create a Peronist labor confederation to ri- val both the Communist Latin Amercan Con- federation of Labor (CTAL) and the anti- Communist Inter-American Regional Organi- zation of Workers (ORIT). These Argentine efforts extend throughout Latin America. They have not as yet produced significant re- sults, but they have caused apprehension in certain Latin American governments. 24. Moreover, Peron has seized upon the dis- satisfaction of Latin American governments and industrial interests with the prices obtain- able from the US for strategic materials to agitate for the creation of a bloc to exact higher prices. This potentially effective line, although of general application, is addressed primarily to neighboring states, particularly Chile (copper) and Bolivia (tin). 25. In pursuance of Argentina's long-standing ambitions for pre-eminence in Latin America, Peron has capitalized upon recent unsettled political conditions in the area. He has given propaganda and diplomatic support to the National Revolutionary Movement (MNR) which recently came to power in Bolivia. As a political organization and movement the MNR antedates Peronism, but some of its poli- cies and techniques are similar to Peron's and there have been personal ties between MNR members and members of the Peronist gov- ernment ever since 1944. There are also evi- dences of Argentine support for Latin-Ameri- can presidential candidates such as Ibanez in Chile. Thus far, however, established, national and labor leadership in Latin America has generally resisted Peronist influences and pressures. Present Economic Situation 26. The principal immediate cause of political uncertainty in Argentina is an economic de- terioration which stems largely from Peronist policies favoring forced industrialization and costly social welfare programs at the expense of agriculture. Although the relative role of industry in the Argentine economy has in- creased, productivity per worker has declined. The purchase of foreign-owned utilities and other enterprises has 'depleted government holdings of foreign exchange and has also saddled the government with a source of per- ennial deficits. The internal debt of Argen- tina has increased two and a half times since 1945, largely as a result of expenditures for industrialization. In contrast to Peron's goal of making Argentina for the first time a cred- itor nation, the year 1951 produced the largest trade deficit in Argentina's history. As a re- sult gold and exchange reserves declined 30 Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 percent during the year while the cost of living rose 50 percent. 27. This deteriorating situation has been brought to a head by severe droughts during the 1949-1950 and 1951-1952 crop seasons. As a result exports will be sharply reduced during 1952: no wheat will be available for shipment from the current crop as compared to the prewar annual average of 4 million tons; corn exports will probably be about one- sixth prewar averages, and meat export will probably be 40 percent of the 1934-1938 average. 28. The scarcity of consumer goods, caused by the shortage of locally produced foodstuffs and lack of exports to pay for imports, is of great political importance as it will be felt by the Argentine masses who are unaccustomed to austerity. The need for austerity was recognized by the announcement of an Eco- nomic Plan for 1952 curtailing domestic con- sumption and calling for increased production and saving. Subsidies on consumer goods were to be eliminated and increased prices given agricultural producers in a determined effort to increase the 1952-1953 harvest. Probable Internal Developments 29. Until November, when the new grain crop can be accurately assessed, Peron will prob- ably be able to cope with his economic diffi- culties. If crop prospects are then good, credit can be obtained and the pinch on.con- sumer goods and foreign exchange relieved. Under these circumstances, the regime will probably continue in power, whether or not Senora de Peron survives. 30. If the prospects for the 1952-1953 grain crop are only average, Peron will probably resort to political maneuver. If Senora de Peron is alive and active, this maneuvering would probably consist of added concessions to labor. If Peron is alone, he might obtain new support among the moderates. In either case, the chances for the survival of the regime would be fairly good. 31. Another serious drought in 1952-1953 would so intensify the current economic de- terioration and would impose such a strain on the Peronist labor organization that the regime would be seriously threatened. If Senora de Peron were no longer a factor in~ the situation, Peron himself would probably attempt to come to terms with the moderates in the armed forces and the Peronist Party and even in the opposition. If Senora de Peron were still active, however, her influence would probably lead him to seek to placate organized labor, hoping through its continued support to dominate the situation. A bitter- end struggle would then ensue, with the pros- pect of increasing pro-Communist influence in the government. At some indeterminate point in this development the armed forces and the moderates would be likely to attempt to overthrow the regime. 32. If, before this stage has been reached, both Perons were to be eliminated from the situa- tion, a scramble for the succession would en- sue. In these circumstances internal dissen- sion would probably reduce the effectiveness of the CGT as a political force and the armed forces would almost certainly prove to be the best organized and most effective political force in Argentina. The armed forces might combine with the moderate Peronists or with the middle class opposition to form a govern- ment, or they might establish a military junta on a caretaker basis. It is possible that the left wing of the Peronist Party and the CGT, with pro-Communist leadership, might at- tempt to seize power. In that case the armed forces would almost certainly endeavor to sup- press the attempt and probably would be able to do so, though perhaps only after a pro- tracted struggle. Effect of Probable Internal Developments on Argentine Foreign Policy and Orientation 33. The international attitude of Argentina in the period up to November 1952 is likely to be increasingly marked by jingoism to divert attention from domestic problems. Anti-US propaganda, especially through the activities of labor attaches, will be intensified with particular emphasis against US defense efforts. It is likely that Peron will seek closer economic ties with the USSR and its Satellites Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 Declassified and Approved For Release 2012/10/24: CIA-RDP79R01012A002300010001-6 'T . in an effort to fill some of the gaps in Argen- tine trade with Western Nations. 34. If Peron remains in power after November, his basic foreign policy will continue un- changed. If the economic situation improves, or if Peron seeks alliance with moderate ele- ments, his anti-US propaganda may be toned down. On the other hand, if the economic situation continues to deteriorate and Peron comes to depend increasingly on the support of leftist labor and pro-Communist elements, there would be a concomitant increase in the intensity of his anti-US propaganda. 35. If Peron were eliminated, but the present Peronist groups remained in power under a more moderate leadership, the regime would be more amenable to conciliation with the US. The same tendency would be stronger under a government centered on the armed forces, and Peronism as an exportable ideology would cer- tainly be de-emphasized. However, in neither case would it be likely that Argentina would basically modify its "Third Position" policy or cease its efforts to promote Argentine `influ- ence in Latin America. Declassified and Approved For Release 2012/10/24: CIA-RDP79R01012A002300010001-6 Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6 Declassified and Approved For Release 2012/10/24: CIA-RDP79RO1012AO02300010001-6