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t4 Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Vf -aavawrasea.ammraf4 (J DEPARTMENT OF STATE ItITYINQkTI0N Intelligence Report Intelligence Estimate Number 34 LAT IN AiiERICAtS SUPPORT OF US OBJECTIVES Prepared by The Estimates Group Review of this document by CIA has determined that o CIA has no objection to declass A. it contains information of CIA intsrest that must remain classified at TS S Authority: RR 704 o It contains nothing of CIA interest nate 1-30 - 5 1 Reviewer 00q2, 5 Office of Intelligence Research Date: November 239 1951 1:F==ainiterintin -MML- _ 336 Cozy No. TT Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 SECRET - SECURITY INFORMATION TABLE OF CONTENTS LATIN AMERICAIS SUPPORT OF US OBJECTIVES ABSTRACT0*4 ?0?0 a ???? o???? 3 ? t Pages i-ii INTRODUCTION: Statement of the Problem . . ? . .? ? . . Pages 1-2 DISCUSSION t Factors Conditioning Latin Americals Support of US Objectives A. Social Factors , . . . 4 . . . . . Pages 2-5 B. Economic Factors .. 6 0 0 6 4 . 0 .. Pages 5-7 C. Political Factors . ? . . . . . . . Pages 8-9 D. International Factors . . . . . . ;Pages 9-11 CONCLUSION; Prospects for Latin,Americats Participation in the East-West Struggle Pages 12715 SECRET - SECURITY INFORMATION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 SECR:d?,T - SECURITY INFORMATION 1. ABSTRACT . . Onmatters_of broad,principle which are 'at issue in the Eat7Illept.7, struggle'it:is expected that ,Latin Atherica:will,An.general; continue to support-the:US. Barring the pressure 01 more generalized East-7Westhoe7 tilitiethoweverjatin American pre-occupation With it's, own interests willedfeative Tealization-of-cOmmitMenteviil be inhibited. in the near future, . _ That cooperation is limited, in part, by the social and economic changes that are now taking place in Latin America. These changes have brought to the foreground potent new groups in Latin American society and have given vitality to some older group aspirations, e.g., those of the Indians. There is now a vigorous urban proletariat in Latin America, which is motivated by a desire for material progress and for an improved social and political status. The ambitions of 'Lis group, in turn, have spilled over into the rural population, There is also a small but growing middle class which, together with the new commercial and industrial interests, provides leadership for tle intensified nationalism of this area, These new group aspirations challenge the traditional social and economic order of a class society dominated by the landlords, the army, the Church, and the Latin-Catholic cultural tradition. A variety of poli- tical movements have reflected that challenge9 e.g.: the Mexican Revolu- tion, with its appeal to the underprivileged urban, agrarian, and racial groups; the more recent movement in Guatemala, which stresses the rise of the laboring class, the emancipation of the Indian population, and the economic independence of' the nation; and the Per6h regime in Argentina, which leans heavily upon the support of' the proletariat and extreme nationalists. The traditional Yankeepbobia of Latin _America has been greatly exacer- bated by such movements, of which nationalism, anti-colonialism, and anti- capitalism seem to be common denominators. As in the middle East, not only new governments which draw support from, but also old governments which have been threatened by, such movements are reluctant to confront these xenophobic popular emotions. Against this background, the negative attitudes recently displayed by extremist Argentina and Guatemala are more readily understood. So also is the difficulty that even moderate governments, normally friendly to the US, have in defying popular social and nationalistic pressures against outside "interference". This difficulty is particularly keen for Latin American governments which have not yet been able to sone with specific race and class grievances, especially if, as in Cuba and Chile, a reason- ably democratic setting affords some opportunity for the vocal expression of these grievances, There are few grounds for expecting an early resolu- tion of the difficulties which inhibit such countries' cooperation with the US. :SECRET - C UR I Y INFO R.TION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 SECRET SECURITY JNFORmATION In the short run, the best prospects for securing support of US objectives willgenerally be found in countries, such as Nicaragaa or Peru? -where conseryatisth seems still firmly in the saddle, more promis- ing ii the long run, however, are the prospects in countries like Uruagusivor Mexico, where modifications in socio-economicAndqualities have been doMbined with reasonable achievements in the realm of consti- tutional government. SECRET - SECURITY INFORMATION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 C SECRET 7 SECURITY INPORATIOh' LATIN AlviERIGAIS SUPPORT OF US' OBJECTIVES. Introduction 1. It is reasonably certain that should a showdown come with the USSR in the near future the Latin American ,countries would align them- selves solidly with the US. But in situations short of general war, LPtin America's support of US objectives will be tempered by considera-: tions of what each country conceives to be its national interest, and -' by the ability of -the governments to organize and channel the energies of their peoples. Should the stresses of the present period of poli- tical crisis and localized warfare be protracted indefinitely, and, were the USSR to advertise a conciliatory position there would be less cer- tainty of Latin America's solid support at the point of showdown., 2. To estimate he disposition and capacity of the Latin American countries to support the US it is necessary to bear in mind the multi- plicity of factors and the essential disunity which characerizes this area of 150,000,000 people. There is a complexity of geography:and climate in Latin America wnich produces more variations and extremes than , may be found in other geopolitical areas of Western Civilization. The social pattern of Latin 2merica includes a mingling of colors and a mix- ture of the social traditions of American antiquity, primitive Africa, colonial Spain and Portugal, nineteenth century liberalism, and twentieth: century century socialism. Politically, the Latin Americans tend to be non- conformist who pay homage to democratic and constitutional government bu.4', support autocrats. In terms of economics the area offers.the.Con-, ? trasts of subsistence living and a predominantly agricultural and pas- toral society existing to serve a highly industrialized western world which Latin Americans seek diligently to emulate. They are also: increas- ingly desirous of playing a larger role in the family of nations, but lack the political experience," the economic strength or the imagination and ? the intellectual power to do -so with the effectiveness that they might - desire. ' 3. Latin America is an area of Change, which,-on the one hand,. creates instability and thereby requires that a careful distinction be drawn between the willingness and ability of the I.tin American govern.- ' ments to support the US. trithout stable societies and economies beneath : them Latin America's leaders who are disposed to be friendly toward the US, ' are handicapped. On the other hand change produces new: forces which may become the stabilizing factor of the future, This becomes particularly important in long range estimates., Conversely, Latin Aierica is an area of strong tradition. Ilhere is it strongest it provides a stability which makes the intelligence estimate a simpler task for the near future. 9 SECRET - SECURITY INFORI/IATION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 SECRET - SECURITY INFORKATION 2. Where it meets effective competition from newer forces an internal struggle ensues and the:consequent inconstancy and instability makes it correspondingly more difficult to estimate the potential of the country'inctermSof US interests. ? Factors Conditioning Latin-America's Suoport of US 0bjective6 44 '-,Stodial ,Factors... Pviblems of race and -Class. haye:plagued.the :efforts of those Latin Americans who have tried to.treatea,pattern of social unity. The racial foundation:pfIatin Americas-society is un),ike, and. is more complex than) that of the United States, Europe, tre4en MUch'offisia. ' The Pattern, of course., yeriesfrom- country-to-tountrY: Argentina is predOminatelkwbite;. Colombia is a complek mixture_of.white, 'red,' and black, Bolivia is largely Indian.- Iiigenerali however, theyhite?man?isihistoricallythe most _influential element in the areaas e?whole; even'irLthemountainand plateau region 1,741.ct stretches from Mexico to Bolivia where he con- stitutes a small minority Of the 'population The Indian, where he, remaine,UnasSimilated4 clings to mach of his prepolombianoUlture, farms -or shepherds on e.?Subsietence, level, ? is politically impotent, and contributes little tole, constructive oli- tia]. ticaland*Onomic,affaire:- On the other hand; where. a sizeable: ,mestito-racial:group haSomergedi.the potential of a:.pationAs. titre, definite.; eithoAg4iat-the same time, itapopulatien-istoreunatable and its direotion.more.uncertain,,:.. $exicans in the twentieth century, for example have been blown from pillar to poet between the motiva- tions of a glOrified,Inclian heritagei.a-classital Spanish-tradition anda desire to achievefthematerial rewards of thetWentieth:centUry? and'in northern Brazil the negro substitutes for the Indian in the racial picture, and the mulatto,'' has emerged, like the mestizo, as an important'sbtial the color barrier does,not,have the same -degree of social significance in these regions that fit.does'in the United States, racial?fription_-- does exist,-.S.ocial.unityand stability is lacking for avariety of reasons other thanrepetithe roots : of the plantation Society are , stronger?in'the'tropical and semi-tropical.zeneS; political freedom and.the:thande to work out:their'en4roblems'in time has come late to these people, limitations of the area preclude the where-- withal to undertake needed. social reform. ,? 6. .011Se divisions which'prevent unity and stability in Latin SECRET - SECURITY INFORMATION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 (?? 1???? SECRET - SECURITY INFOR:ATION 3. America are not as clearly defined as those of some parts of Asia but are much more rigid than those of estern Europe.- They are based upon racial and economic factors end they stem from a colonial experience in which the chief social pattern consisted of a wtite landlord or mine owner -gto gas legally the political and social master of a colored, dependent labor force, Nor .has the economy ef Latin America as yet been so radically altered as to aVoid the perpetuation of this traditional type of ,relationship. There are, however, two new cIasses,whieh have emerged in twentieth dentury ' Latin America, primarily as a.consequence of the introductionof the Industrial Revolution 'and modern urban societies.' Of these, the relatively small middle and upper middle class is, perhaps, the . potential stabilizing force of the future. It includes commercial men and industrialists, professionals, and the white collareCgroup. Its numbers have grown with the economic expansion of the present, ' century. In part it is -the social product of the late nineteenth and early twentieth century wave oi European immigration. In terms ed material interests the modern businessman of this clasF, supports economic nationalism and its-restrictive policies while at the same time he has the imegination to realize the extent of his nation's dependence upon more mature edono-ies, On the domestic scene he can usually be counted upon to fqsttr political and social stability. From this class, too, come many of the Modern -intellectuals of Latin America, although sons of the 010_ landed hierarchy are increasingly_ t supplying leadership in the avant g arde. The intellectuals tend to be intensely nationalistic. -?Consoi us of their 4merican 'environment, they are inclined to be critical Of their' classical Latin Tradition_ and will foster that which they believe to be an independent _American culture. They are the reformers of Latin America, the sponsors of the downtrodden Indian or tie economically underprivileged of the cities. Despite its instability and, cultural restlessness, it is this group which, perhaps to a larger degree than any other, has the expansiveness and imagination with which to face, and, 'seek solutions te, global problems. Many accept the principle of the unity of the - West, are appreciative of the role of the US, and, lend support to the work of the UN and to the Latin American governments which have been most friendly to the US, Most in this group/ however, Tre addicted to excessive nationalism, or are wedded to a militant idealism, which leads to political and 'social radicalism, leany are the product of simple disillusionment by which they arrive at the conclusion that the only issue in the East-est conflict is one of imperialistic competition between two great powers, 7. The most dramatically powerful of the new groups in Latin American society is the large, sub-articalate proletariat, which SECRET - SECURITY INFORMATION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 SECRET - SECURITY INFORMATION 40 under the influence ofjabor.or,political demagogues, can, and:bas,- seriously disturbed the political and economic life of these countries --as the Argentina bears witness. .Depending upon the racial pattern of. a, given country the groupfisoomposed of poor whites,. Mestizos, and mulattoes, with an ever-increasing ? fringe of Indian or Negremigrantsfrom the rUral.areastothe.cities.i. Mired in poverty and without that sense Of Union. with or responsibility toward society as a whole which characterizes. labor in the United . States, this new Latin American social force is susceptible kinds of ideological extremes and negationsf inaluding.communismand: Yankeephobia. The ease with/which Peron can Whip.Up,apti7US feeling:. has been demonatrated on frequent occasions. In.Guatemalaoommunist. or pro-communist labor leaders can muster commanding political:support, produce -a sustainedsnti-W campaign, and proMoteeXtreme,social ? demands--these despite the fact that Most of the laborers are-con- cerned only with immediate problems of' economic well-being and?have- only the foggiest notions: about the ideology Of cOmmUnism? ? 8. There are cohesive social and?cultural America which tend to counter instability and disunity, The most positive of thede,Terhaps? is-the concept of an Americanism in the sense of an emerging New World civilization. It is an .American experience which has helped to promote the degree of sUccess..- achieved in the relations between the US and' Latin America, despite the many fundamental differences between them. Within Latin:America, and notwithstanding the rebellion against it, Lat1n4athelic tradi- tion prevails, Hispanic language, law, philosophy, and customs.are common denominators. The Roman Catholic Church is the only religious- institution of importance in Latin Amerioal and, where it is vigorous,: it usually can be counted upon to exert :a conservative :influence.. Where the Church seemingly .'has' been crushed, aS in Mexico, it: has returned to life., In Guatemala its anti-communist Influence is obvious, if. unofficial., And yet the Uncertainties of Latin America' - emerge, even within this organization which traditionally, has symbolized unity. Catholic youth groups have been increasingly active in support' of depressed groups and have been, at times, criticized by churchmen' ' for radicalism; like:the?nationalist, they find themselves.pursuing objectives with which the CommUnists'are asseciated. ? 9. At the same time that the Church and Hispanic tradition 7 . assist in producing a basic unity in Latin .America they also associate'? SECRET - SECURITY IWORMATION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 SECRET -?SECURITY INFORMATION 5. the area with western civilization as a whole through their link with Latin Europe. 'The Latin Union Congress held recently in Rio de Janeiro represents; in part, a re-emphasis of these ties. 10. The social picture of Latin America, then, is a confused one. In the sense that society is welded by a common emotional and intellectual experience, which forms a clearly recognizable and predictable pattern, Latin Americans have not achieved true nationality. Any government has beneath it a variety of conflicting group interests and this will remain true until such time as the new middle and laboring classes have achieved greater proportionate strength, along with a sense of responsibility toward society as a whole--barring,'of course, the improbable circumstance of a successful class revolution along communist lines. 11. Economic Factors. -Latin America has long been noted, often ? in exaggerated terms, farits mining, pastoral, and agricultural output and potential: Chilean copper and nitrates, Bolivian tin, Prgsntine beef and cereals, Brazilian coffee, Venezuelan oil, or Cuban sugar. This has been a comfortable.picture for those asso- ? ciated with a highly industrialized economy such as that of the US. In fact, however, the picture is much more complex, and, in time of world crisis, there are serious weaknesses and problems concerning the Latin American economy which need analysis. Since the early part of this century the economy of Latin America has under- gone a disturbing transition. Following the dictates of economic ? nationalism, and a desire to raise the standard of living, Latin Americans have sought to broaden the basis of a structure in which most people farm or tend their flocks on a subsistence level, and in which 'the bulk of the national inCome is gained from farming and mining operations for export. The level of achievement in diversifica- tion and industrialization has sometimes been compared with that of the US in the 18605, but, :unlike the US; the process has been forced as a political necessity,in the face of a popular desire to emerge as nations free of what is described as'a colonial economic status. It also appears to the Latin Americats'to be necessary in the light of experience gained in the international crises of the past two decades. Unfortunately, the goals are difficult and costly to achieve for reasons of economic inadequacies and twentieth century social demands. 12, ribe ruijor Latin American countries--all those that are important suppliets of US needs--are presently spreading their ,resources very thin in their effort to industrialize. The basic services?Prime movers and transportation--are designed to serve a raw material economy and an urban development that has been an accident SECRET - SECURITY INFORMATION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 SECRET - SECURITY INFORMATION 6. of this type -of economy. Industrial development, which has concen- trated at these urban centers, competes with the process of producing raw materials for. export: Foreign loans on investment that might have expanded the basic services to supply the needs both of new industry and production of raw materials have not been forthcoming in significant quantity in the postwar period except for 'mining oper- ations. The foreign private investment that might have provided capital for manufacturing industry has been slow to enter largely because of the uncertainties caused by economic nationalism. Current symptoms of the major changes occurring in Latin Amerioa are a heavy drain-6f population to the urban centers, persistent demand for - industrial labor, inflation, and the resultant social unrest. 13. At present the Latin American economies are under both physical and financial strain. They are seeking to stretch the physical means of production to cover new development and tradi- tional types of production together with the rising cost of social welfare programs. They must seek financial resources for purchases abroad from expansion of; or at least maintenance of, their export' surpluses, Internally inflation has become the preferred method of capital formation. Thus? in the present state of technology and capital availabilities, industrialization in Latin America is being financed to a large extent from low wages and inflation. 14. Arserious financial crisis in Latin America was deferred foii6.3)Ing_tha-autbreak of hostilities in Korea. If the unit value of raw material exports agiilidn'TIE;;-ad volume continues on its present level, many Latin' American economies would be severely shaken. he mast vulnerable to a downswing in economic aoIlvity-or-to-interrnpti5-47517:sNaly..such 76.?migh-Thur in a general _war_are_Vae_countrles-thatze.Lin the- miTgr-o-f?ilializing their, economies.. These are also the coaritTierifia have the most material-support to offer'to the US in the event of a-general war. 15. Superficially the economic conflicts in Latin America bear - some resemblance to strains on the Western European economies. 'Both areas must meet new demands on national income, especially for welfare purposes, when the means to expand national income rapidly arelacking. The conflict appears in both areas in the form of competition between" current consumption demand'and Capital requirements. Here the parallel ends. Latin America's problem is not to increase the efficiency of an established industrial plant and of a settled industrial population. The bulk of the population is still scratching out a living with. , pre-modern tools. Industry is a poorly establidhed, high-cost sector SECRET - SECURITY INFORMATION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 SECRET - SECURITY DEFORMATION 7. of the economy. In this setting economic management has difficulty in maintaining an adequate level of production for export while sustaining the momentum of industrialization. Should the latter slow down, social problems of the most serious order would supervene, leading to threatening political crisis throughout the Latin American area. 16. Latin American economic cooperation desired by the US calls for expansion of production of raw materials and their allocation to preferred uses, even though such an expansion might entail downward revision of the program of industrialization. Latin Americans have had Some misgivings about the manner in which US mobilization might affect their economic position. Since the beginning of hostilities in Korea, it has been feared that US price controls right nullify in part the improvement in terms of trade and that US mobilization would substantially reduce the supply of capital goods, thus impeding the progress of industrialization programs. In the background _there has been resentment over the alleged US habit of taking Latin American support for granted and of showing concern for Latin America only when support was immediately urgent. When the US asserts that Latin America has a common responsibility in defense of the West, Latin American leaders reply that they cannot discharge this responsibility if their economic development is slighted in US plans and that Of their competitors in other underdeveloped areas favored by US foreign aid programs. 17. Many of these fears and feelings were assuaged at the Fourth Meeting of Consultation of Foreign Ministers. Latin American govern- ments were by and large willing to agree to US terns in regard to strategic materials production and allocation of output. Where price and terms of development had become political issues, the cost to the US was or promised to be relatively, higher or the arrangements less satisfactory, partly because of pressure from nationalists and com- munists. Such pressure was also a factor in negotiations over Bolivian tin, and Mexican and Brazilian oil.. But disputes were relatively few because of the terms offered by the US, price trends favoring Latin America, and the basic good will of most governments., In this situation, the issue between development in support of US -purposes and that re- quired by Latin American economic policy has not been fully, joined. Furthermore, many of Latin Americate economic leaders are realistic and possess d breadth of view. They accept their reliance upon outside aid, particularly that of the US. They are also cognizant of their dependence upon international trade as a source of capital, This group is likely to temper the politico who interprets economics in terms of extreme nationalism and to support a reasonable degree of coopera- tion with the US. A few Latin American countries, of which Mexico is the best example, have shown signs recently of acting in accord with this kind of thinking, and have expressed a willingness to re- ceive seleoted private foreign investment, although most of the re- strictive legislation has remained on the books. . SECRET - SECURITY INFORMATION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Declassified and Approved ,For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 SECRET.,..7 SECURITY I1TOWTION 8, 18. Political Factors The political instability of Latin America is well known. In terms of ideology and practice, most of Latin America, upon winning independence) 'chose to follow democratic 4nd republican theory despite the fact that their experience was related to autocracy and monarchy and that their society was totally unprepared to support democratic practices., Under such circumstances the tradition of the demagogic military dictator developed. There were political parties, but they tended to represent personalities, rather than issues or principles. This tradition even though attenuated still survives in Latin America. ? - 19, But this simple picture is now in the process of transition. The middle class through its newly found prestige and by reason of its desire for stability, has reduced the influence of the military. In challenging the old style ca.udillo, the laboring groups also have come to play an increasingly important role. 20. With some exceptions this new appeal for po ar support has neither led to democratic practices, as they are known in the United States, nor to orderly constittltional government. Rather, it has pro- duced a new type of dictator, li3ce Peron, who, in the name of democracy, appeals to the laboring class for suppolt, end thereby intensifies the social conflict in All.gentina. Vargas, in Brazil, practices similar demagoguery, if, not to the same extreme. In some cases the traditional military dictatorship remains in the saddle, as in Venezuela an Peru. In each instance, however, powerful popular groups are in the background as a constant threat to the political stability ot uhe nation. Only in a few countries, as in the cases of Mexico and Uruguay, where the political recognition of new social forces is of-long and continual'standing, have cons.bitutional processes followed, 21. The most recent complication to be added to the social-political picture is communism which has sought to capitalize on the needs of the masses and the cultural prejudices of the intellectuals and the youth in Latin America, as elsewhere. _Thus, the governments, when playing to the underprivileged, or even when seeking moderate reform, find themselves paralleling the communist line. The Arbenz government in Guatemala is perhaps an extreme example of this. 22. Aside from direct social-political relationship, extreme national- ism and economic conditions determine, to some extent, the political , stability of the Latin American nations. Peronts administration is a good example of one which cultivates not only class conflidt, but excestive pride in the nation and its destiny. In all Latin American governments, these attitudes must be taken into account. Even in a country such as Mexico where the social and political. foundations have broadened and, matured recently, no official could safely acknoWledge to the public the reality of the military and economic dependence of Mexico upon the, United States. Economic inadequacies and problems, such as those noted above, accentuate the instability of Latin American governments which are SECRET - SECURITY IHFOREATION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 0 SECRTT'r:SECURITY INFORMATION 9. supported by neither soune social foundations nor a politically mature electorate. 23. There are positive characteristics related to Latin America's political experience which should be taken into account in estimating its capabilities, particularly in relation to the East-West struggle. For one thing Latin Americans have never relinouishee the ideals of democracy and individual freedom which they inherited from the Wars of Independence period. Few Latin American dictators, whatever their practices, have challenged the validity of these ideals, This conviction strengthens the ideological conmunity with the West even if it does not insure Latin American political stability, Another stabilizing factor is that of the Church which can and has exercised its influence to promote social balance by working with depressed groups. In short term it can, in alliance with dominant, conservative secular groups, assist the State to enforce unity, although only where the underprivileged are particularly weak. Also in short term, the Army can play a political role similar to that of the Church. At the same time the military has, on the whole, shown sighs of a greater sense of responsibility, bowing, if reluctantly, to civilian rule, as in Mexico, and eschewing politics, as in Uruguay. 24, Notwithstanding these positive indications, stress must again be given to those factors which suggest the need for a cautious evaluation of Latin America's capabilities, Within the past few weeks there have been two revolutionary attempts in Latin America. In one of these (Argentina) factions of the military unsuccessfully challenged Peron whose power is rooted in well-organized labor unions. In the other (Venezue3; ) liberal and leftist groups unsuccessfully moved against a military dictator- ship. Contrasting illustrations such as these, representative of the political repercussions of Latin America's basic conflicts, could be re- produced many times over in an examination of Latin America's past. 25. Internat.iona.l Tpetoxs_ Latin America has only recently emerged from a relatively isolated position in liorld, or even Western, affairs. The emergence has been both reluctant and aggressive. With their peculiar talent for international law, and because of their natural concern for the rights of small and weak nations, the Latin Americans have generally played a positive role in the establishment of regional and world organiza- tions, National pride and an increasing awareness of the extra-national character of their economic problems are equally important motives in the projection of Latin American interests and aetivity on the international scene, These factors must be balances against the basic political, economic, and social weaknesses of the area which produce a tendency toward isolation- ism. The result has tended to be a vacillating and uncertain policy in international affairs. In the two World Wars, Latin America's record has varied. Participation on the side of the Allies in Horld 'Tar I was limited; in World War II it was general. Presently, under the strain of economic dislocation and the war of nerves, apathy and strong isolationist sentiment exist. These attitudes are exploiLed by extteme nationalists and communists who are thus able to circumscribe the effectiveness of the more realistic SECRET sEcupmf,TPTQINTION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Declassified and Approved For Release 2013/01/18 : CIA-RDP79R01012A002400010009-7 SECRET - BECURITY.INFORWION leadership. 10. 26. The relations between Latin America and the .DS in general, and specifically as they bear upon the problems of the post-war world, are of obvious importance, They are colored by the circumstance that Latin America historically has often viewed the US as an aggressive, mate- rialistic power. The rapid spread of US econonic control, political interference, and military interventions in the Western Hemisphere, ? beginning around the turn of the century, seemed to confirm Latin America's worst fears. And British, French, Spanish, and then, German interests were not loath to make capital Of what has been called "Yankeephobia" -- as the Russians are now doing. " 27. The withdrawal of US Marines from the Caribbean beginning in the twenties, acceptance by the US of the principle of non-intervention, and the outward transformation of the Monroe Doctrine frau unilateral to multilateral responsibility -- all -were brought into focus by the so-Called Good Neighbor policy. The US concessions in principle, combined with economic recovery, transforned the Pan American Union into an effective instrument of inter-American cooperation for the first time and paved the we:- for Latin Americas cooperation in World War II. This situation has been instrumental, during and immediately after the war, in making possible the strengthening of the inter-American system through the Rio 'Treaty and the formation of the Organization of American States (OAS). 28. The post-war period in general, however, has placed stress upon the inter-American system as it has been called upon to further the ob- jectives of the US. The economic and social problems noted above, US occupation with the strengthening of Western Europe, combined with either a lack of sympathy with, or an understanding of the US position with respect to the global issues at stake have kept alive and at times strengthened isolationist and anti-US sentiment. 29. The outbreak of hostilities in Korea posed a very specific test , of Latin America's ability and willingness to support the US-UN vis-a-vis the USSR. On the positive side there was initial enthusiasm as gfsplayed in the united support given by Latin America to the UN action in Korea and to the resolution passed in the Council of the OAS approving this action. Furthermore, five nations which had not ratified the Rio Treaty quickly did's?, although Guatemala has not as yet deposited its instrument of ratification. Later, all but Argentina voted for the UN "Uniting for Peace" resolution designed to enable the General Assembly? to cope more ef'ectively with future aggressions and all supported the re-afrirmation of inter-American unity which came out of the March-April 1951 meeting of the American Foreign Ministers. More recently, virtually all Latin American countries have agreed to abide by the Kern Amendment and the Battle Act designed to stop the flow of specific ,materials to Russia, its satellites and Red China. In addition to this support, Latin .America agreed, in principle,to boosting its raw material output. In terms of SECRET sEgupIT14_,INFOROATION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 1 Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 fl SECRET - SECURITY INFOTMTION 11. reactions to issues raised in Iran and Egypt, the Latin Americans have shown a sense of responsibility as they have weighed , the dangers. of .war against a natural':dire to *Stipport, the. 'national_ ambitionS Of 'other peoples. are .:other factors to :belOalanded?sagainst these more .positive inc1ication In the weeks succeeding ?the 'opening of ?'the Korean War the initial. enthusiasm gave :way to ,a..cautiOnti and calculating' attitude..?`. Fear - of a generals wr hassince boon heightened:15Y the. slow. ,progreass of . Korean truce. negotiations which : has added-. strength to the ranka. of , the isolationistr? There has. been some growth of the. Opinions:that' thiO 'Contest,. fort power between sthe.:s.U.S and:the USSR To...datei trobp .bontributiOns., . except in the case: of Colombia, have?:not ?sbe?en.?forthcomiligas.: -Ebonotic aSsiStance, while agreed ? to in ?principle,'?:18 to be had '-only atja. ? stiff pri9e. and amid much concern ?over the anticipated' sacrifice of 'broader.. economic objectives. the.: threat: of ..war 'and the groWth. of inflation. have given.. the communists fellow travelers ?? and the extreme ?nationalists:: a ? .field day. ? Militant anti-US ? forces are .in the sathae only in . Gnaternalk and ?.P.sip.entina, but hey are trotiblesome Chile,in particularly noisy, n .Brail;*?and..may ? elsewhere &Cite to the surface .'ilherever .'clissatisfactiOn? exists. :?. ? , . ? . ?.. SECRET SECURITY -INFORMATION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 I SECRET - SECURITY iNi0R4TI0N :L"aiiri America's ?Potential in the East-Nest. Struggle . ? ? 120 ? . ? :31 Assessment of trends?sobial, economic, and political-- inLatin,America with'an'eye to estimating its potential in support - of,US;objectives requires first a distinction between short and long term prognoses, and$ Utweenthe'individu'al nations Of: the area. - Among the social factors, for examiple?. the "struggle'an6fig various groups for what each donsiders, its share of the material , benefits at the disposal of the nation unquestionably conditions -", an estimate of Latin America's immediate potential:, Further, this social?economic cleavage is aggravated by the ?oontinlarig'force Of -- deeply rooted clasS'diision..-There is\a-diredt,..if not exclusive, e, relationship betweenTeron!s%sensitiVity to the urban labor mass, his, initial promise to the UN of a contribution of troops, and his subsequent hasty.withdrawal of this offer in the face of popular opposition 'Class-- , coMiSodition$,.strengt11$ and ambition is even1116re iiportant in long range estimates, however: -.Where labor isi becoming firmly established as part of the economic and social pattern--as it is in countries such as Ar:en- tina, Uruguay, Chile, Brazil, ,Cuba, and Mexico?it mar, in time, become a responsible political force. Insofar as such respOnsibility 'consti- tutes a positive basis for estimating Latin America'a potential to the US, much less can be hoped for from Guatemala in the near future. In that country, the proletariat, despite its present influence, is com- paratively weak in numbers and most extreme in its program. Insofar as social factors are related to a nation's capacity, Peru provides perhaps the best example of stability, both with respect to the immediate and the fol'eseeable future. The gulf which exists there between the creole ? and the Indian is as groat as any in Latin America. And the position of white leadership is dominat. 32. Political s tability, as a prerequisite to the maximum realization of Latin American support, may also vary in terms of time and place. A long run estimate, in view of the great variety of factors involved, would be largely academic. In g eneral, however, where modifi- cations of social-economic inequalities has been combined with reasonable achievement in the realm of constitutional government, as in Uruguay or Mexico, stability can be expected for some time to come. So it can in countries such as Nicaragua or Peru, where conservatism is apparently firmly in the saddle. Where restless, economically depressed groups can express themselves in anenvironment which is reasonably democratic, as in Cuba or Chile, instability will continue to threaten. So it will, too, in countries such as Argentina where dictatorship tends to exploit class competition. In any case, external forces which contribute to the raising or lowering of inflation, determine peace or war, or exercise this or that ideological influence - -all will have a bearing upon whether or not the Latin American governments will be able to pursue their SECRET - SECURITY INFORMATION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Declassified and and Approved For Release 2013/01/18 : CIA-RDP79R01012A002400010009-7 SECRET SECURI3INFORMATIUN 2.; 6'1. , . !... ? , re s pe c.t ive cpuraes- inct ep.endr e_it p re a eui-es 5-;1W71-'''':7iCe:-'3 :41 ? Er, 33 ,..,zykTith'irespectyto'r. the filidiedraterfuture' the political pic?' tur e ? IA: complicated, by;. -a-t spat e o fmaj 'ciaddigfiSridiffirig,"whiaic;'11J, eri mos t, sensitiveto dirt 4. al .CV").1,003.-at-i0iiiii6 ? timent . -Ruiz rtine -the ri admd_iiistrp.t5.ori s',candidate and prooable next president:;ok:Pie*lep,,:haaj-",attt his ;earlY::st ai Y, of !,:th'S-Caiifiaaigii; 8 edly referred-,to his ;.d eterrninat, ion :?-tb-:Prot-ePt against npOne,;in.,,partioular,':-andr.haatcoMe:ii-eryCii:iai':i6ifieLlimPlica2 tion that Mexico will pursue a neutral coUrid'Authg:iroaa'-'eaSii;l'74'17p.4 Peron, of course, has recently raised anti-US feeling in a new, high in the -courserof ;his teaulfiai6ixi. ? . . are s till , s chercluled-to .ro c Panama (May' l92), ix!i Cuba ad Ecuador7' _ _ ( 'June )1:-Mexico c( JulY,;19.52); ,Arid ?Chil.44(S.et5t-gliaier -1952).) fter1this" - perioli, -and ,..under.?,s at isfactorj? 'Conditions?ithe..Presents degree of anti= I US feeling may -abate zconsiderably 'end':rcormall37 7pie;.-us go ve ? f eel a Ode-what. e . to, act '-in favb f.1.-ofithetUS pand'; tO7talc.d 'stronger hand in , molding -public y Op inion f; ? %!L ;24 el!t 'cr:.1j*' +I r. 34.; In ecorpc!inisft er-ms the LS is irnmediateljc'oncernedr'ilith 7tlie., ? ' n capacity and :Willingness:.of-:;Latin-Ame4C-ain ;g dverria'. erit r71 strategic. . pe t role um; . dopp r ci;5-rel,r- and .;.-th'el' like Iii this regard' it is expected that most sts?:of the ' Latin Aheiidan ' governments will go along with the US program to. expand, such production. They will ?51.ol so with-,reluctance.N.,,and: be ..r ? under pre-ssure;Yrom4hie , 1 eft is t s to ,FeMalif ?-albCf-=thei.ebY-idefying;.:1)S;?-?:t:4,4rq'*:1: , impe ts e)-thei: Lain ? '11 America 'Co ::awar,w-hich, is I none of the i r*Cbriee-rn Will deo la ism"-. or,,,The .gbVerrinterit .421t43-67=iirider pres , snr e, at 1."2-6.:St .61'.?economictaid to support, ? c,rcns1vfi,7,11'2,:re ipro'grams!:and:1ocal-YeeOnomic?..azil3itio:MI a !nor e?g ene rous price;:for the in.. Ctil: that; erial t'ksibater:I. . important ,ziiems,-tin'IshOrt:.,suppli andle.1 e Jt he 713 riee s They will also ask guarantees against.the:;c6ns equeriab ,of AivereXparided' f. production in t hepo st-er is is period. The negotiations with the ,Brazilian government pr ovid examplezof c a tkind of,leitUation be '4expeeOt ed . That grOylltherit;4Pparetltl:yi.seeethe problem as one of:z!bafgaiiiing-betv4e61: public ooinion and the Ui-:pret..ifiting:::ea6h%:WitlY.--thE;a-diiantagia''w1Vich.; it may gain :4-gni -;:the support: of the other--for e0Ort.onil.C. for the ,.US -t US bff its international objectii/esand e ? the re'it more solid bcking for:, Brazilian'', cqop:Oiatiori no and .irniierle' 1 ? serious ,Woi-fd. ;&ei -/: y'.? ti .1 4,1 rre j1.4 ? 5. c,:,%?/-r"_VTCVOr! ..?:41-4.4. ?-7" :tr?;:* 3 On the, internat.ional sceno it is expected that the Latir American , f g-Ovrnrilenta-Igenerally .',wilI-..icbrntinuel to 615"Ploro'ii;%t US -1e*I'del--41 ship irt the 'UN on broad pririciples related to the East-West conflict. That is to say that they will support the principle of Russia-Satellite 13. . . :I") ;Vs: %.:k.:.717 SECRET - SECURITY INFORMATION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 SECRET - SECURITY ,INFORMATION, . ? ? : ??.? . 14. containment. They will not always, however, place first things first in accordance with the US point of view._ They.rw141,? fori!, example;'in' obedience to their): ottznThraditionl? t end to iire More uncompromising im- mediat e ?support to the political and backwardr..e.teaSAhan taUld'the US; whiOtseei.the4sOupatiniionger*..range.. Thia4e1:149.40 an..:;theiljart of the Latin Americans needs qualification, 119, .tgrav-e ??problem, ?such . C.:closer .an,..!.:rj.,:?:s'..,4.),f..,-:setteral?I',War, the Latin Americ.01.#ill modify their position. The ah1,4 it.4?41exican :fopinion frOin obi4946:: synpathyifor , the Irani. anationalization program to one 0,iirfia:tgr:,eawtion: and ????? ? ? responsibilityi.:iai A '.case ? ; ?"`" ? ? ? ? ? ? .t ? Pp- he regional level the:V.8:is likely to face more direct" and outspoken:. oPpatitiOn't-in the OAS' :ane,thHugh,bilateraI talks to? tregatding mflitaiy aid.414' do ,n4 't,,..159,,,intOaOtount; sufficiently. domesticas they, .are seen by titin, Aimericana...n., it As at this lei.Ofr,that.liffixic9 is,tnational;.,sensi4 c:9 tivio,, 4F, g resentment of :the tit? ? = funeric.gnj.s.Yateat, -:?antt? GUatemala s negatiismll be rno&t definitely?'-? ? ".? ? ecpreased. It is expected, however, that, In principle, the US will have the support ..of most of the Latin .fimerican countries -an ;the regional level in t1e;.:Ores:eeable -future;'-effe?tive; et?PPOqitiO..440 the: US or, jUbef plain apathy, 1,s more. likely to be 'delii9ilat'reted throughf:the:. slow imple mentation of paper ;ctitialitmentB.e; ? = ;;L ? ; .-'? ? ? '. ? I , ? " 37 Perhapsi;ithe most difficult sPecific. T'S objective to be realized i that of Lati4-11?Ilet10$/l...t4.9OPS..6/7 serviceoutaide . of the khmiepttere '?this ? issue the'.;.1.`ablationist !-en4 anti-US preS-? sures ,will.:understandably be most intense govern- ment viil br hesitant. ? Of the ? big fOtir.,:r4igentina? !-Chile41.?larazil; * ? ..? ? ? ? ?? ?? .??? me=14P:qurctraYi Brazil seers to be on the ? verge of thia?kind .of ? - as sia-t anPA. .-.:.AMOng the ? smaller! bouritriea, . there is .:.none; whicE.See.Ma? likely, .in,theinear future," to ..join 'Colotabia In. supplying ?troops ik ;7 al- though::(YFu.g1.1a,Y;.!,..he.s : committed herself to ?regiment:: in., ACCiordande)'-:=":. with. th;e, Uniting i Or s Peace resolution'. ' : , .1 - ? - OP ,i,WoCi special -eirCiUstietancesi..:Slii,04 .the,y,,,,be,.: realized, WOuid'"'":' ? aiter the Xt4t-14111,;Ameili.aari potential j. 14 94$ e Varv'in !- ? the near future rendei,ingAinten6blet.'the-...`C;OmfOrtabl;e belief.that:Latin - America ,:ft18'70e$.:e 43.'04 fee,r; the .12r1mt of ASoviet I aggx:Osioni 51r;,:ttini=ltmer-baan..;:gaiigriiidfi?t3 .-WOUld; ,undoubtedly.2.: see :the iesi,tei more cloarJy and trc harder for action, ind ni0y:grottiztd?* on the fringe,.yo.ild jump on the: band ifiagOn.' .-'ifekiertlieless, the :-apathy of the massed and the ability of anti-US groups to intimidate governments in the Korean crisis and to frustrate a ctive, upport of. the US, suggest some difficulty in mebilitiig the popular? be-eking that n: be- needed' ? ?:' ? ? ? ? 5:2 " ;: ? - ? '? ? - SECRET - SECURITY INFORMATION Declassified and Approved For Release 2013/01/18 : CIA-RDP79R01012A002400010009-7 . . : A Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7 SECRET - SECURITY INFORMATION 15. for effective Latin American support in a full-scale crisis. Without such popular support for Latin American governments and in the face of shortages and e conomic hardships, maintenence of production might be seriously hampered. 39. If, on the other hand, the USSR adopts conciliatory policy, transparent though it may be, the task of pro-US governments will become greater. Soviet useof propaganda and diplomatic weapons in preference to military aggression would increase the s usceptibility of neutral and isolationist groups as Communist propaganda c ontras ted Soviet conciliatory moves with US measures of mobilization. It would be under such circumstances that many of those intellectual leaders who have sought to look at the East and West ideologies "objectively" would be confirmed in their neutrality, that those who were already in the Communist camp wogld find their maximum moral support, that ultra nationalists would find reason to turn even more from thoughtful consideration of global issues, and that the masses, already apathetic and inclined to isolationism s would be most attentive to anti-US and Itpeace" leadership. Under these circumstances even the strongest and most friendly governments, such as Uruguay and Brazil, would be hard pressed to maintain their allegiance to the West and their support of US leadership. SECRET - SECURITY INF'ORTG.TION Declassified and Approved For Release 2013/01/18: CIA-RDP79R01012A002400010009-7