PROBABLE DEVELOPMENTS IN ARGENTINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01012A002300010001-6
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 27, 2016
• Document Release Date: October 24, 2012
• Sequence Number: 1
• Publication Date: June 13, 1952
• Content Type: NIE

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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
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 ^r111rt+
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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
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- 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.
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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
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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
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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
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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
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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
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'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.
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