LATIN AMERICA REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00912A001000010018-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 16
• Document Creation Date: December 20, 2016
• Document Release Date: March 8, 2006
• Sequence Number: 18
• Publication Date: February 1, 1979
• Content Type: REPORT

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Foreign
Assessment
Center
Latin America
Review
1 February 1979
Secret
RP LAR 79-005
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LATIN AMERICA REVIEW
1 February 1979
CONTENTS
Mexico: The Undocumented Worker Issue
The Mexicans, counting on the unprecedented
bargaining leverage of their vast petroleum
resources, hope that President Carter's mid-
February visit will begin to dispel their
long-felt self-image of inferiority, as
symbolized by the stream of Mexican workers
seeking economic betterment in the United
States.
1 25X1
Brazil: Figueiredo Outlines Program I I? ? 4
The government program announced on 19 Jan-
uary contains no radical departures but does
call for some significant changes, suggesting
that the President-elect hopes to achieve
major economic and political objectives.
Chile: New Stage in Struggle Over Labor PolicyI 18
A potentially decisive point was reached
last month when the scheduled boycott of
Chilean commerce by the Inter-American
Regional Labor Organization (ORIT) was
temporarily suspended in response to
government concessions, but many basic
issues still remain to be settled.
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Mexico: The Undocumented Worker Issue
Mexico and the United States face, in the undocu-
mented worker question, a fundamental divergence of
short-term interests that dims prospects for any signif-
icant bilateral understanding on immigration during
President Carter's mid-February visit. The issue is an
integral part of the historical complex of Mexican sensi-
tivities regarding relations with the United States. The
Mexicans, increasingly anxious to determine whether their
vast petroleum resources have given them unprecedented
bargaining leverage, hope that they can begin to dispel
the pall of inferiority that has long shadowed their
self-image and that is symbolized by the stream of Mexi-
cans seeking economic betterment in the United States.
Public and Political Sensitivities
Mexico's intense nationalism was stirred up several
times last year by incidents related to undocumented
aliens: the Ku Klux Klan's announcement that it would
police the border to stem illegal immigration; plans by
the US Immigration and Naturalization Service to extend
and replace fencing in two border areas; and former CIA
Director Colby's assertion that illegal Mexican immigra-
tion was a greater threat to the United States than was
the Soviet Union.
This public relations environment tends to dictate
Lopez Portillo's statements, which he repeats with cat-
echistic familiarity:
-- The illegal alien problem requires more study
and must be considered in the context of the
whole package of bilateral issues.
-- It can only be solved by long-term economic
development policies, not by police measures.
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-- The United States should grant special trade
concessions so that Mexico can "export products,
not people."
The immigrants respond to US demand for labor,
they do not displace US workers or burden US
social. services, they make important contribu-
tions to the US economy, and in fact they re -
resent. a drain of talent from Mexico.
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The Lopez Portillo government hopes that President
Carter's legislative package on aliens will be held in
abeyance at least until the US Congress Select Commission
on Immigration issues its report in late 1980. Earlier
action would distress the Mexicans, who fear that the US
Congressional process would move more quickly to strengthen 25X1
and implement enforcement provisions while delaying or
deleting other portions more favorable to Mexico.
Although he argues that all bilateral issues are
inextricably interrelated, Lopez Portillo probably has
no specific linkages or tradeoffs in mind. In a general
sense, he believes his country merits reciprocity because
of its unparalleled cooperation in narcotics eradication.
He would, moreover, like to convince the United States
that a natural gas sale and a long-term oil export agree-
ment, both on Mexico's terms, would still constitute a
Mexican concession deserving of a quid pro quo on alien
legislation.
The Mexican strategy, nevertheless, remains longer
term, including low-key lobbying in Washington, press
campaigns citing violations of immigrants' human rights,
and courting favor with leading Mexican-American organi-
zations in the United States. Over the past year, Lopez
Portillo has consulted in Mexico City with several groups 25X1
of Chicano leaders, ostensibly to strengthen cultural ties,
2 but in part to reinforce Mexican-American o osition to
President Carter's immigration proposals.
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Brazil: Fi ue:Lre.do Outlines Program
The government program that President-elect Figueiredo
announced on 19 January contains no radical departures
from past practices, but it does call for significant
changes. Filling the major cabinet posts will be a group
of highly capable men, two of whom--Mario Henrique Simon-
sen and Antonio Delfim Netto--could become serious rivals.
Figueiredo's program and its formal unveiling reflect
a good deal of skillful staff work and represent a serious
:intention to achieve major economic and political objec-
tives.
Figueiredo, talkative and peripatetic throughout
the preelectoral :period, continued to perform like a popu-
larly elected politician, delivering a highly optimistic
address that offered something for virtually everyone.
For the politically hopeful, he reiterated his pledge to
"make Brazil a democracy." For the disadvantaged and
their advocates, he sounded the themes of income distri-
bution, regional disparities, and inadequate social serv-
ices. He appealed to workers with ideas on how to en-
courage upward mobility, and to businessmen with criticism
of government red tape. Figueiredo's performance was in
sharp contrast to the style of the tight-lipped President
Geisel.
Economic Goals
The main theme of Figueiredo"s remarks was economic.
The President-elect listed several areas that are to re-
ceive special attention:
He vowed to work toward reducing inflation, now
running at 41 percent annually, to roughly
30 percent by "substantially" cutting govern-
ment spending.
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-- He said balance of payments and foreign debt prob-
lems would be dealt with by a concerted effort
to increase domestic savings in both the private
and public sectors. Though not ignoring the
role of foreign capital, Figueiredo stressed
the need to finance Brazilian development pri-
marily through resources generated at home.
-- He proposed changes in the tax structure, along
with other fiscal and credit devices, to
"significantly" reduce income disparities
among people and regions.
-- Figueiredo also proposed to return to the private
sector those public sector companies and services
in which "state ownership is not necessary to
correct market imperfections or to protect
national security."
-- Figueiredo promised measures to revitalize agri-
culture, to bring down or at least stabilize
food prices, and to produce exportable surpluses.
His plans include increased credits, price sup-
ports, regulatory stocks, and improved technol-
ogy and transportation. This effort at least
potentially could be at odds with his promises
to cut spending and lower the government's pro-
file in the economy. 25X1
Managing Policy
Figueiredo will have a strong Cabinet to advise him
and to implement his policies. Several of those chosen
are proven performers from previous cabinets. Of those
who have not held cabinet posts, most have excellent
credentials as specialists or as administrators. The
economic area will be especially strong. Current Finance
Minister Simonsen will remain in the government but will
move to the Planning Secretariat, which will have author-
ity over fiscal and monetary policy. Moving into the
Finance Ministry will be the well-regarded chief of the
Bank of Brazil, Karlos Richsbieter. Rejoining the Cabinet
will be one of Brazil's top economists, Antonio Delfim
Netto, who as Finance Minister almost a decade ago was
credited with overseeing Brazil's so-called economic
miracle. This time, Delfim will head a vastly expanded
Ministry of Agriculture. 25X1
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Under the bureaucratic arrangement F'igueiredo envi-
sions, Simonsen will have greater responsibilities and
have the lion's share of control over the shape of eco-
nomic policy. But the inclusion of the able and ambitious
Delfim raises the prospect of eventual rivalry between
the two. Delfim doubtless relished his earlier role as
virtual economic "czar" and may try to interpret his new
mandate in the broadest possible terms. Whether Delfim
and Simonsen can coexist indefinitely in the same cabinet
is questionable. Delfim may have some reason to expect
that he will eventually take charge of overall economic
policy. Until recently, Simonsen gave every indication
of wanting to leave government after five tiring years,
and he may have agreed to stay on only for a relatively
brief time. Delfim, on the other hand, may have agreed
to what amounts to a subordinate role with the assurance
that at some point--perhaps in a year or so--he would
move to center stage.
By naming his chief aides and listing major policy
priorities, Figueiredo has now established the adminis-
trative and substantive character of his government-to-be.
He has also distanced himself somewhat from the Geisel
administration, not only with his more open personal
st
le but in substantive wa
s
ll
Th
h B
il
y
y
as we
.
oug
raz
is clearly not backing away from its outward-looking
developmental strategy, the new team will be looking
for innovative ways to deal with problems that have
persisted and in some cases worsened. during the Geisel
years.
3
Figueiredo set an overall tone that is at once up-
beat--it "promises" democracy and vigorous economic
policy--and yet vague enough to allow room and time for
maneuver. Because of this lack of specifics, and because
he also paid sufficient homage to the concept of national
security, Figueiredo avoided alarming or angering those
military officers who still feel uncomfortable with the
prospect of broadened civilian anticipation in decision-
making.
Having formally presented his approach to the broad
range of national problems, Figueiredo can now be billed
as a statesman. His presentation, praised by a major
daily often critical of the regime, will add to his pres-
tige. He now seems to have consolidated a "presidential"
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image that could last at least until he commits some
egregious error. In calling for action in such contro-
versial areas as income distribution, Figueiredo has
taken the initiative from civilian opposition groups.
In a sense, he has gotten out in front on the same issues
frequently used in the past to berate the military regime.
He has also demonstrated an apparent sensitivity to the
need for change and, in effect, has placed a formidable
set of issues before the new Congress that will soon
assemble.
In stressing that he will need the assistance of all
Brazilians to make his policies work, Figueiredo may have
been seeking to underscore his professed commitment to
liberalization of the political system. But he may also
have been seeking to pave the way toward blaming civilian
discord in the event any of his programs founder. More-
over, his words may have been intended to warn newly
elected, activist congressmen as well as others who
might be tempted to press the new government for too
much, too soon.
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granted the right of assembly.
A new, potentially decisive stage in the struggle
over a new Chilean labor policy was reached last month
when the scheduled boycott of Chilean commerce by the
Inter-American Regional Labor Organization (GRIT) was
temporarily suspended by a partial, short-term compromise
worked out by the Chilean Government, opposition Chilean
labor leaders, and some elements of ORIT, principally the
AFL-CIO. The agreement evidently exacted from the Pinochet
regime, in addition to a promise to enact a dues checkoff
for union federations, a firm commitment to deliver on its
previously made promise that Chilean workers would be
Chile: New Stage in Struggle Over Labor Policy
On 15 February, ORIT will decide whether the promises
are being kept.. If not, the boycott presumably will be
implemented. If, as is more probable, the answer is af-
firmative, then the contending parties will move on to
the deeper issues that still remain to be settled.
problem within the next six months.
five years of rigorous suppression has put in motion
forces that will compel some definitive resolution of the
In an earlier response to a boycott threat, the
Chilean Government had promised to formulate a complete
labor policy for a "democratic" trade union movement by
30 June. The substance of this overall policy is still
to be decided--by negotiation and political pressure.
Given the disagreements between the regime and its labor
opponents, and. the political resources each side commands
in the moderately free Chilean context, the outcome of
the conflict is uncertain. It seems clear, however, that
the freedom of assembly acquired by Chilean workers after
The ORIT Decision
ORIT, whose boycott threats have previously forced
concessions from the Chilean Government, did not easily
decide to postpone the boycott it had voted in November
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1978. Insiders report a sharp division between those--
led by Venezuela--who wanted the boycott, and those--led
by the AFL-CIO--who wanted to postpone it. The severity
of the split was shown when the ORIT meeting ended with
the statement that each member union was free to apply
or ignore the boycott as it saw fit. 25X1
The reasons for postponing the boycott were probably
varied and complex. According to press reports, some
ORIT members felt a delay was necessary to prepare an
effective operation against the three targeted nations--
Chile, Cuba, and Nicaragua. Others believed that any
boycott attempt would be ineffective and that it would
only bring a permanent loss of leverage. Another impor-
tant factor in the final decision was the presence of a
confidential intermediary who carried promises from the
Chilean Government to enact the dues checkoff and restore
t
th
a
the right of labor assembly. Many in ORIT believe
these two concessions will put Chilean workers on the
road to recovery of union freedom and power. As the
15 February deadline indicates, however, skeptical mem-
i
on.
bers of ORIT will continue to monitor the situat
The Labor Opposition
A key factor behind ORIT's boycott threat has been
the strong link between the AFL-CIO and the organization
of Chilean democratic labor leaders called the Group of
Ten. Although the Group was dissatisfied with the re-
latest effort to enunciate a labor policy, it did
'
i
s
me
g
not insist that the boycott be carried out. Instead, at
the ORIT meeting in Washington in mid-January, the three
Chilean representatives were among those who argued for
postponement, suggesting that an agreement had been
reached with the government.
A further indication of this came when the three
representatives returned to Santiago and were publicly
praised by the Labor Minister for their help in getting
the boycott postponed. He also promised to consult with
the Group of Ten on the formulation of a new overall labor
policy. Moreover, vitriolic regime attacks on the Group
of Ten have greatly diminished, indicating that the quid
pro quo probably involves an end to name calling as well
as the agreement to negotiate. Another part of the ac-?
cord could have been revealed when, after the postponement
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of the boycott, the Group of Ten announced the creation
of a new organization, the Council of Democratic Trade
Unions, which includes the leadership of about 50
i
un
ons.
Although this new body will. be the strongest single
civilian pressure group trying to influence the substance
of a new labor policy, there are two other large sectors
of Chilean workers: those who previously belonged to
5 unions dominated by the Communists and Socialists, and
those
h
b
w
o
eloncr to organizations that support the Chilean
Government. With the labor situation now obviously fluid,
there will be a great deal of maneuvering by each of the
three
t
sec
ors to gain the maximum worker support.
Unresolved Issues and Prospects
The Chilean Government, obviously relieved that the
boycott was avoided, has once again demonstrated its
flexibility and its willingness to pay a price to gain a
desired end. Nevertheless, regime spokesmen have been
careful to emphasize the distinction between tactical
concessions and strategic surrenders. The government
has not sacrificed its fundamental labor poll r. goals
and still intends to enact them into law.
Although the questions of dues checkoffs and workers'
freedom of assembly appear to have been settled, at least
for the time being, other contentious issues remain,
including:
-- The right to strike.
-- Collective bargaining.
-- "De-politicization" of the labor movement.
-- The right of Communists and Soci fists to hold
union office.
These issues and others must be! resolved by the new
comprehensive :Labor law the government has promised by 30
June. To achieve its labor goals, the regime will try to
create as broad a consensus as possible, an effort likely
to be opposed by the newly formed Council of Democratic
Trade Unions. The regime's labor policy may not succeed
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without the approval of the Council, yet it is difficult
to envisage the Council approving the labor policy the
regime says it intends to enact. Meanwhile, Chilean
workers are meeting freely for the first time in five
years to discuss the basic issues, while ORIT waits
watchfully in the wings. The preliminaries are now over
but the decisive con t has just begun.
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