THE POLITICAL OUTLOOK IN ARGENTINA*

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00937A000500030008-7
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 9, 2016
• Document Release Date: February 12, 1999
• Sequence Number: 8
• Publication Date: October 11, 1957
• Content Type: MEMO

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C E N T R A L I N T ELLI GEN CE A G E N C Y
11 October 1957
DRAFT STAFF AMOIRANDUii NO. 47-57
SU)JECTs The Political Outlook in Argentine
Was
1. In a memorandum to the L'CI on the "The Argentine Situation"
dated 19 April 1957, we stated that the Aramburu government, now in
the last scheduled year of its temporary receivership, *still faces
serious political and economic problems," and probably will "become
increasingly vulnerable to overthrow." We concluded that the "chances
for an orderly transfer of power" to a constitutional regime were
somewhat less promising than the "slightly better than even" estimate
made last year in NIE 91-56. Developments since last April have supported
those judgments, and have stimulated even greater concern over the
prospects for a constitutional succession.
2. The pout .ca-1 situation. An increasing number of difficult
political problems confront the present regime as it prepares for a
return to constitutional government. The results of the July Conti..
tuent Assembly elections have not assured the government that the
People's Radical Civic Union (UCRP), the moderate left-of-center party
to which it would be willing to transfer power, would win the
February 1958 general elections. The vote for the pro-government
This memorandum has been discussed with OIR, OC1, and DDP.
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parties, led by the UCRP, only about equalled the opposition vote, divided
between the Intransigent Radical party (UCRI) of leftist Arturo Frondizi
and the largely Peronist-inspired blank vote* The disposition of the blank
vote, for which Frondizi has made the strongest bid, will probably play a
major rolf in determining tt outcome of the general election. Frondizi,
although strongly opposed by army elements within the regime, thus remains
a powerful contender for the presidency.
3. Moreover, there has been little indication that the civilian
political party leadership is.a'.fficiently concerned with, or capable of
Dandling, the difficult economic az political situation which will face-,
a successor government. Neither the UCRP nor the UCRI has advanced a program
for coping with the country's serious problems. Virtually no progress
has been made on reform of the 1853 Constitution at the Constituent
Assembly because of disagreement among the delegates over the nature and
extent of necessary reform. In this connection, Froadizi'a UCRI has
permanently withdrawn from the assembly after an abortive attempt to have
Constituent Assembly Election Results: U E total vote
Pro-Government: Peoples Radical Civic Union (UCRP) 25
minority parties 25 (eat)
Opposition: Intransigent Radical Civic Union (UCRI) 21.5
minority parties 3.5 (eat)
Blank vote: 25
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the convention declared illegal. The subsequent withdrawal of
other opposition delegates has left a barely safe margin of delegates
over the necessary quorum.
4. Divisona within the two leading parties are contributizx* to
general uncertainty about the electoral outcome and the capabilities of
either tone viable successor government. The UCRP is made up of four
Radical factions united principally by their opposition to Frondizi.
They have demonstrated at most only a tenuous unity in their pre.
parations for the selection of a joint presidential candidate and in
their positions on constitt.tional reform. The withdrawal of one such
faction fra'm the UCRP in favor of Frondiai has already been rumoured.
The UCRI is also divided between moderate elements and members of
more leftist orientation. Should Frondisi obtain the Peronist support
he seeks, he might lose some of his moderate following to the UCRP.
5. The economic situation. The Aramburu regime has had scant
success in trying to overcome its serious economic problems. Agricultural
production for export has decreased, and prospects for the coming year
are not encouraging. The service sector of the econompr has witnessed
no significant development other than partial rehabilitiation of rail
transport; and foreign private investment has increased only slightly.
Argentina's financial position shows little improvement, although the
government has succeeded in reducing its anticipated 1957 balance of
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payments deficit from X210 million to 375 million, principally by
seeking extensive credits. Dollar reserves dropped over 357 million
between the end of April and the and of July, end now amount to only
about .?38 million. If the same rate of depletion is maintained through
the remainder of the year, the government will have to dip heavily into
its gold reserves, now reduced to 3156 Billion, to pay for needed imports.
Thus, the regime will leave a legacy of depleted reserves and heavy
debt to a successor government.
6. The regime's economic problems have been aggravated in
recent months by serious domestic inflation, which in turn has given
rise to intensified pressures from labor grestps for wage boosts. In
its attempt to restrain inflationary tendencies, the regime froze wages
through December 1957, and granted labor only fringe benefits. However,
the cost of living index for the worker class in Duenos Aires rose by 16
percent during January-August 1957, and benefits from 1956 wage indreases
have virtually been wiped out. General labop dissatisfaction recently
culminated in a Peronist-dominates 24-.hour getneral strike, which had
a partial measure of success. The government responded by promising
only minimal concessions. In an effort to conerol continuing labor
demonstrations, it has arrested numberous labor leaders and impose
a 30-day state of siege in Buenos Aires Province. Such measures are
likely to intensify labor discontent and unrest,
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7. The attitude of the , military. The survi l of the present
regime, as well as a successful transfer of its power to an elected
government, still depends upon the position of the armed forces.
Controversy and di 'ision within the military over appointmeMta and
over the i egime ?s political and economic policies are continuous.
Although the majority of the military still appears to favor general
elections as scheduled, there is an apparently wall. group-of rightists
which favors postponement of elections and coati uance of the military
in power. Reports and rumors of projected coup attempts by aru
elements have recently increased. However, dissatisfaction with.
the current situation and fear that an acceptable and effective
successor government will not emerge have not yet appeared sufficient
to weld together an effective opposition within the armed forces to
either the present government ar the scheduled transfer of power.
8. Profs is for a transfer of ower.. We believe that th
Aramburu regime.sti7.1., intends to hold elections in February and to
relinquish its power in May of 1958. It will probably co2t:Lnue
to try to strengthen the UCRP s prospects for visauing thet elections.
If necessary, the regime would probably rig the elections. against
Frondisi, particularly if he had obtained Peronist support.
9. At the sam time, however, we believe that the revolve of
certain powerful military elements within and st porting the regime
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to permit elections and the subsequent transfer of paver has been weakened
as a result of recent developments. Those ;elements are likely to become
increasingly concerned over the civilian leadership's apparent inability
to cope with political and ecotaoeic problems. They also will probably be
alarmed by the uncertainty of the electoral outcome and the capability of
Pero rt.ste to continue to incite labor unrest.
attempted coup prior to the transfer of power scheduled for next May. The
success or failure of any such attempt is likely to depend upon the degree
of discontent and apprehension sti=ulzted among the military during the next
several months. A successful coup could result in an increasingly authoritarian
Military regime;
even an abortive coup conceivably could cause p.orapoement
of the elections. In any event, wee now believe that tbfre is a slightly
less t3 even chance for a successful transfer of power to an elected
governmeet in the spring of 1958.
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