STAFF NOTES: LATIN AMERICAN TRENDS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000300120009-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 14
• Document Creation Date: December 20, 2016
• Document Release Date: August 7, 2006
• Sequence Number: 9
• Publication Date: March 5, 1975
• Content Type: REPORT

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Secret
Latin American Trends
State Dept. review completed
Secret
'.?3
March 5, 1975
No. 0499/75
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This publlr~ation I. prepared for regional specialists In the Washingtor corn-
rnunlty by the Western Hemisphere Division, Office of Currant Intalligance,
with occasional contributions from other offices within the Directorate of
Intelligence. Comments and queries are welcome,, They should be directrd to
th!; authors of the Indivi'Jur,I articles.
CON7'li 1`J 7'S
March 5, 1975
Latin America: The Oil Scene . . . . . . . . 1
China Cultivates Latin America . . . . . . . 3
Paraguay: Church and State
Fight Again 5
Argentina: Fl.ect{.cns in
Misiones 7
Salvadoran Military Grows
Restive 8
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Latin America: The Oil Scene
incor-
rectly stated that Trinidad is second only to Vene-
zuela ix: Latin America as an oil producing country.
In fact, both Mexico and Argentina produce consider-
ably more than Trinidad, and Ecuador and Brazil are
at about the game level.
While Venezuela is far ahead of all other Latin
American producers, its output is in fact declining,
while several other countries--notably Mexico--are
augmenting production. The Latin American countries
are also consuming a growing percentage of their
crude production; both Argentina anti Brazil must im-
port to meet this demand.
The following table gives unofficial projections
for 1975 of crude production and exports by the lead
ing Latin American oil countries.
PRODUCTION
EXPORTS
(Thousai-d3 of barrels per day)
Venezuela
2,400
2,100
Mexico
800
200
Argentina
417
-57
Trinidad
200
140
Ecuador
200
165
Brazil
225
-65G
Peru
80
5
Marrs, 5, 1975
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Recent i information indicates that Trinidad has
again applicO for full membership in the Organiza-
tion of Petroleum Exporting Countries (OPEC), in
which it currently is an observer. Trinidad's first
application in 1972 was rejected, probably on the
grounds that, it was then only a minor producer and
because of ;,ts role as an offshore refining center
for two mt.t:i-national companies--Texaco and Shell.
Since then its production has risen to at least
200,000 bay::rels per day, and the government has
bought oiit; all of Shell's producing, refining, and
m:Arketing operations in Trinidad and has established
a nati.ona'. oil 'company--TRINTOC--to operate the
former Shell properties. The government also has
repeatedly stated its intention to acquire some
equity participation in the remaining foreign-owned
oil operations.
Prime Minister Williams would like to place
Trinidad squarely in the camp of the third world oil
producers, and is optimistic that this time he can
gain e.-. rance into OPEC. This may have been one
motivo for his stop in Indonesia during his recent
trip ;..) the Far East. It could also explain his
25X1 exprei ion of concern to President Ford about the
effec?; of the new US Trade Act on OPEC members.
March 5, 1975
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China Cultivates Latin America
Peking's Third world rhetoric notwithstanding,
Latin America has long been the neglected child of
China's foreign policy. Lately, however, the Chi-
nese have shown more interest in increasing their
contacts with certain countries in the region, and
a greater flow of delegations is one indication of
this trend.
China's vice minister of fuel and chemical in-
dustries, Tang Ko, recently spent six weeks touring
Venezuela, Mexico, and Trinidad, an unusually long
overseas visit for a vice minister. Next month,
Poliburo member and vice premier Chen Yung-kuei,
accompanied by a retinue of 21 Chinese, will pay a
one-week visit to Mexico. This delegation will in-
clude a vice minister of agriculture and forestry
as well as a ranking official of the Ministry of
Foreign Affairs. Although Chen probably has less
influence than his position would suggest, he is the
highest ranking official ever to visit Latin America.
Both political and economic considerations seem
to be behind much of this activity. Tang Ko's trip
to three petroleum-producing countries was avowedly
to determine whether they could assist China in off-
shore exploration and drilling; it is not known if
any agreements were concluded. Over the longer term,
though, Peking probably calculates that these oil
producers will grow in political influence and that
they may prove useful to the Chinese in pursuing their
anti-Soviet aims in the region. This helps explain
why Chen Yung-kuei is being sent to strengthen re-
lations with Mexico, a country whose petroleum in-
dustry appears to have great potential.
March 5, 1975
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Trade scorns to be another important litre for
the Chinese.
C na in. increasingly interested in a n
erica as a source of raw materials. Chile is a
case in point. Despite certain political liabilities,
the Chinese have carefully cultivated relations with
Santiago to ensure a steady flow of natural fertil-
izers and copper to China. Peking also hopes to in-
crease its exports to Latin America and has recently
held a number of trade fairs in the region,
The Chinese would like to strike a balance
between economic and political goals in Latin America,
and seem determined not to sacrifice one for the other.
For example, in the interest of maintaining cordial
political ties % th Brazil, China agreed to make a
hard-currency purchase of a significant quantity of
sugar this year at a time of very high world prices.
I I
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Paraguay: Church and State Fight Again
President Stroessner and Archbishop Rolon are
again on the outs despite recent efforts of a papal
nuncio to resolve a seven-year-old feud between ce?-
formist elements within the Catholic Church and tre
right-wing government. The torrent of protest that
has erupted following a police and military raid on
a church--aponsored agricultural cooperative thr
weeks ago could lead to a serious confrontation,.
Actually, however, the temporary rapproclhiryrient
achieved last year began to break down last D,::crmber
when Stroessner over-reacted to the discovery of an
assassination plot and began arresting several of
his old political f es. On Christmas Eve the 11.rch-
bishop of Asuncion, Ismael Rolon, lashed out at the
governmen.. by accusing authorities of using torture
as a "normal means of interrogation." He al:,* 'Le-
cri-d corruption in high places and blamed Stroessner
for creating the pre-conditions that eacourage
plotting.
The reasons for the raid are not clear. Govern-
ment claims that the cooperative w-s engaged in sub-
versive activity have not been substaiitiate?d. Al-
though the Interior Minister has privately told US
officials that security forces discovered a weapons
cache, he has not produced any evidence. It appears
that Stroessner diulikes privately sponsored socio-
economic experiments, especially in rural areas remote
from government supervision. More important, the
cooperative is led by a priest who has been expelled
from other parishes for his anti-government positions.
He could well have aroused suspicion by refusing to
pQ*_-* _c visits by local police, as well as political
and education officials.
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Other possibilities that have been suggested
are that the cooperative was uncomfortably close
to a ranch used by a high government official for
illegal contraband operations; and that local
merchants who have close ties with the government
resented the cooperative's marketing scheme, which
they feared would cut into their profits.
In any case, Stroessner's failure to defuse
the issue in any way is only making matters worse.
Denunciations have come from all pulpits and the
press has pul'sisheu several church communiques
attacking the government. Archbishop Rolon and
other church leaders are also publicizing their
efforts to secure a writ of habeas corpus for the
release of clerics and peasants who are still under
detention. A prolongation of the conflict will un-
doubtedly commit the prestige of high government
officials and members of the Church hierarchy to a
battle that could conceivably result i a papal
excommunication.
March 5, 1975
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Argentina: Elections in Misiones
Government leaders in Buenos Aires have demon-
strated concern over the forthcoming provincial
elections in Misiones where five groups are attempt-
ing to field candidates, each claiming to represent
the "true" Peronist ideology. With elections only
a little more than a month away, the government is
seeking to avoid publicly aci%nowledging a split
within the Peronist movement. At the same time,
however, it does not want to precipitate a scandal
by overtly manipulating the contest. Election
fraud, although frequently committed, is a sensitive
issue in Argentina, where political tradition forces
major parties to maintain the appearance of complying
with legal election procedures.
It is, still not known if the left-wing Peronist
"Partido Descamisado" will enter the elections.
Last week an effort was under way by leaders of the
Peronist Movement to bar the party from participation.
Peronist headquarters has told the Descamisado Party
it must change its title and drop the use of the word
Peronist. The party's reaction is not yet known.
The Descamisados are reportedly allied with the
underground left-wing terrorist organization known
as the Montoneros. Because of the assassination 25X1
last week of US honorary Consul Egan, the government
may take a hard line against all groups it believes
are associated with terrorists.
March 5, 1975
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Salvadoran Military Grows Restive
A group of young military officers has grown
increasingly impatient with the Molina regime's
insensitivity to the nation's worsening socio-
economic situation. Thcir quarrel is not ideolog-
ical, but rather that Molina has let the country
drift away from the moderate reform course pursued
by his two predecesso,?s.
So far, the President has used patronage and
other favors to maintain a measure of military
support. Disaffection is spreading, however, and
Molina's most loyal army friends may conclude that
it is in the country's best interest to remove him.
Also, members of Molina's own National Conciliation
Party, which has held power the past twelve years,
fear that this administration's poor showing will
spell the party's doom. Unless a viable leader
emerges from the disgruntled lot of civilians and
officers, however, the stalemate between Molina
and the military elements willing to risk a con-
frontation will probably endure until the 1977
elections.
Molina himself is worried about the widespread
restiveness. When prodded by newsmen recently, he
acknowledged that the military is concerned about
the economy but stressed that because of his close
contact with officers and responsiveness to their
complaints he enjoys their full support. He has
also tried to win public favor by boasting of his
administration's efforts toward settling the dis-
pute with Honduras, and by insisting that govern-
ment officials set an example by adhering to a
strict austerity proggam.
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Regardless of what policy initiatives the Presi-
dent takes, it is highly doubtful that he can pro-
duce the overall economic progress that would satisfy
his critics. He is caught between the conflicting
demands of the campesinos, who make up the majority
of the population, and the financially strong land-
holding elite. For example, last year a modest in-
crease in the minimum wage failed to satisfy the
workers and provoked heavy criticism from the land-
owners. Thus,afraid of alienating one interest
group in favor of another, Molina will probably avoid
any concrete action and thereby invite more attacks
on his "do nothing" image.
March 5, 1975
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