ORIENTATION IN URUGUAY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00429A001100050044-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 20, 2016
• Document Release Date: December 27, 2006
• Sequence Number: 44
• Publication Date: June 28, 1963
• Content Type: IM

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10101 -100
OCI No, 1577/63
CENTRAL INTELLIGENCE AGENCY
Office of Current Intelligence
28 June 1963
CURRENT INTELLIGENCE MEMORANDUM
SUBJECT: Orientation of Uruguay
1. The current Uruguayan flirtation with the
Soviet bloc and Cuba seems motivated primarily by
economic rather than political concerns. The weak
and somewhat ineffective government has been at-
tempting for some months to reverse a steadily de-
clining economic situation. Uruguay suffers a con-
tinuing trade deficit, has found it difficult to
expand exports because of high labor costs, and
contemplates that future agriculture policies of
the European Economic Community will jeopardize the
country's traditional European market.
2. Bilateral trade with the Bloc has long
been championed by leftist and Communist elements,
and a number of influential business leaders and
government officials have joined the chorus. There
are signs, however, that Uruguay's interest in such
trade may be waning.
3. During the past four months, trade nego-
tiations have been conducted sporadically with the
USSR, Bulgaria, Rumania, North Korea, and Cuba.
An Uruguayan bank official apparently thought up
the proposed barter agreement with the Soviet Union,
and may have been the government's spokesman at the
Soviet legation in Montevideo. The other bloc coun-
tries and Cuba, however, probably took the initia-
tive in approaching Uruguay first.
4. The only trade contract that has actually
been signed is with Cuba. There are good indica-
tions that the negotiations with the other bloc
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countries have become deadlocked, and that no agree-
ments will be consummated in the immediate future.
In any case, the Uruguayans are more anxious to sell
than to buy.
5. Last year an arrangement was made with
the USSR whereby Uruguay sold 5 million dollars
worth of beef, and in return was to purchase Soviet
products worth 70 percent of this amount. Uruguay,
however, bought practically no Soviet products, but
instead continued importing from traditional US
and West European suppliers.
6. The Cuban contract signed on 21 June re-
flects Montevideo's eagerness to sell but reluctance
to buy bloc goods. At the beginning of the talks
in mid-May, Cuba pressed for a bilateral trade and
payments agreement. The deal consummated on 21
June calls for Cuba to buy 7,500 to 15,000 tons of
rice worth one to two million dollars, but does
not require Uruguay to purchase sugar on a recip-
rocal basis. Havana radio reports that the Uru-
guayan government will soon approve a decree
authorizing a purchase of 50,000 tons of Cuban
sugar, but this has not yet been confirmed.
7. The present government is controlled by
the Union Blanca. Democratica (UBD) faction of the
Nationalist (Blanco) party through its control of
the plural executive body. In general, the Blancos
are conservative but have no clear-cut ideology,
platform, or program. The job of governing is
made extremely difficult by the division of the
party into four mutually ante
largely on personal grounds. 25x1
educe 25x1
government efficiency. The
present nine-man executive is pro-US and anti-
Communist, but lacks prominent and capable leader-
ship.
8. The Colorado party is the major opposi-
tion political party in Uruguay. It, like the
Blancos, is factionalized. It is non-Communist
but follows a more leftist, anti-US line than the
Blancos.
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9. The Communist Party enjoys legal status in
Uruguay and has one senator out of 31 and three dep-
uties out of 99 in the legislature. The party enjoys
a high degree of freedom and mobility and, when
called upon, can exert a greater degree of influence
in the country's political life than its'parliamen-
tary strength would suggest. There are about 5,000
card-carrying Communists and perhaps 20,000 sym-
pathizers. The leadership is pro-Soviet, but there
is growing pro-Chinese sentiment among the rank and
file. A small faction tends to respond to Castro's
leadership.
10. The Soviet Union, Czechoslovakia, Bulgaria,
Poland, Rumania, Hungary, and Cuba have diplomatic
representation in Montevideo. In addition, East
Germany and North Korea maintain trade offices.
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