WEEKLY SUMMARY SPECIAL REPORT ARGENTINA: LANUSSE'S POITICAL GAMBIT

Document Type: 
Collection: 
Document Number (FOIA) /ESDN (CREST): 
CIA-RDP85T00875R001500030044-1
Release Decision: 
RIPPUB
Original Classification: 
S
Document Page Count: 
15
Document Creation Date: 
December 22, 2016
Document Release Date: 
January 6, 2011
Sequence Number: 
44
Case Number: 
Publication Date: 
December 10, 1971
Content Type: 
REPORT
File: 
AttachmentSize
PDF icon CIA-RDP85T00875R001500030044-1.pdf1.6 MB
Body: 
Sanitized Copy Approved forl Release 2011/01/07 : 1.. CIA-RDP85T00875R00150003 Sanitized Copy Approved for Release 2011/01/07 : CIA-RDP85T00875R00150003 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 25X1 Secret DIRECTORATE OF INTELLIGENCE WEEKLY SUMMARY Special Report ARGENTINA: Lamise's Poll iical Gambit FfiF copy i 1&5j Secret NE 659 10 December 1971 No. 0400/71A Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 25x .Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 apuo.,,tokwai. NESSIMCIKOMICEMICIMI =4.4 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 Sanitized Copy Approved for Release 2011/01/07 CIA-RDP85T00875R001500030044-1 SECRET ARGENTINA: LANUSSE'S POLITICAL GAMBIT When General Alejandro Lanusse took over the presidency of Argentina from General Levingston on 23 March 1971, his leadership capabilities were widely recognized but his political abilities were suspect. He announced that he would return Argentina to an elected form of government and immediately set out to regenerate the political life suspended since the armed forces seized power in 1966. Lanusse visualizes a Grand National Accord in which deep-rooted political differ- ences will be set aside to enable the nation to progress both politically and economically. He is making a concerted effort to reintegrate the Peronists into the political process from which they have been excluded since 1955. The Peronists make up at least one third of the electorate. This effort is dependent partly on his 25X6 ability to outmaneuver/ \or otherwise persuade Juan Peron himself to lend at least tacit support. At the same time, he must convince the military tnat he will not give the Peronists control of the new government or even put them within striking range. The President's problem of balancing the Peronists and the military is compounded by a deteriorating economy that will require politically unpopular actions to correct. Despite these and many other problems, Lanusse will doggedly pursue his objective of an elected, constitutional government with, if all goes well, himself at its head. The Making of a President General Alejandro Lanusse was to all appear- ances the antithesis of a politician before he was thrust onto center stage by events only partially of his own making. A somewhat dour man from one of Argentina's leading families, Lanusse typi- fied the soldier's soldier. He fit well in his role as the strong right arm of President Ongania, who appointed him commander in chief of the army in August 1968, and even better as the power be- hind the throne, which he soon came to be. He led the ouster of President Ongania in June 1970 but was content to stay behind the scene and installed General Levingston as president. When Lanusse did remove President Leving- ston less than a year later, he was motivated more by a strong instinct for survival than by driving political ambition. Though no puppet, Levingston chafed under the controls imposed on hirn by the military junta and finally initiated a showdown. Special Report 25X1 When Levingston tried to fire Lanusse as army commander, the armed forces backed the latter, and, on 23 March 1971, the three-man military junta reclaimed from Levingston the office it had earlier entrusted to him. General Lanusse was designated to serve as president until 1973, when he is scheduled to be succeeded by the air force commander. Despite public apathy toward yet another change of generals at the top, Lanusse approached his new role with vigor. He announced. that his presidency would be dedicated to returning Argentina to elected, constitutional government within three years. The exact timing, he said, would depend on how long it took to reconstitute the election machinery and reorganize political parties, which had been banned by Ongania in 1966. In this, he seemed to be expressing the desire of the vast majority of the military to get out of the business of government, but he recog- nizes the many obstacles that lie in his path. - 2 - 10 December 1971 SECRET Sanitized Com/ Approved for Release 2011/01/07 CIA-RDP85T00875R001500030044-1 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 SECRET Lanusse's Grand National Accord It has been said that now, 16 years after the overthrow of the populist dictator Juan Peron, Argentina is again ripe for a demagogue. It has been further said that Alejandro Lanusse lacks the necessary qualities for the role. Indeed, Lanusse does not exhibit the traits of a charismatic leader, but he appears to be developing into an adept politician. He will, in fact, need considerable skill at political maneuvering, if he is to succeed in his plan to hold national elections and permit the full participation of the Peron ists. Lanusse's political plan envisages the welding of diverse political elements into some sort of national unity, which he terms the Grand Na- tional Accord. His first step toward this end was to invite representatives of all politicz.I parties and movements to participate in planning the me- chanics of restoring political activity and moving toward elections. Recommendations for a new statute governing the organization of political par- ties and for new electoral procedures were re- ceived Crom the military and ali major political groups except the Communists Emerging from this process were new guide- lines for political parties. They are aimed at halt- ing the proliferation of small parties and factions and at encouraging the emergence of new, Ruling Junta, (Left to Right) Admiral Petro Gnavi, General Alejandro Lanusse, and General Carlos Rey Special Report 25X1 younger leadership in the traditional parties. The development of only a few mass-based parties is being encouraged, and younger politicians are being given greater opportunities to achieve lead- ership positions by the institution of political primaries. Recommendations for constitutional and electoral reform are open to publiL debate until, according to Lanusse's electoral calendar, the gov- ernment's final decision is made on 31 May 1972. Recommendations by the Coordinating Com- mission appointed by the President include op- tions on a four- or six-year presidential term and on two methods of electing a president. The first calls for direct popular vote for president and vice president by party lists. The second would estab- lish an indirect election by the new congress in which the president and vice president could rep- resent different parties. Both methods call for run-off elections if a majority is not achieved on the first ballot. The most controversial provision is that the constitution can he amended by decree with rati- fication automatic if the new congress does not call for a constituent assembly within three years to consider the amendments. There is widespread opposition to this in political and juridical circles, but President Lanusse seems intent on obtaining the changes he believes necessary to thc success of his plan. Reorganization of the political parties is moving slowly and there appears little likelihood that they will be ready by next May to settle on presidential candidates. In this case, it is likely that Lanusse will opt for the indirect election of a president by congress. This method would pro- vide Lanusse with another pressure poiht and would facilitate the promotion of his own candi- dacy through a confederation of provincial parties if other avenues have been closed off. Lanusse's original conception of the Grand National Accord may well have had a grand alli- an:e of the leading political parties nominating - 3 - SECRET 10 December 1971 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 SECRET Iquique An PACIFIC OCEAN PARAG BRAZIL ASUNCION Resist encla Cordoba. Santa Fe Porto Alegre SAN TI Concepcion Mendo a Rossrlo BUENOS RGENTINA AIRES Olavarrtil. R GUAY DEO Bahia Blanca Puerto M ATLANTIC ?T'..z;1(1, AREA: 1,070,000 sq. miles POPULATION: 23,638,000 Comodoro Rivadavia OCEAN FALKLAND ? ISL tilo Gallegos (U.K.) 0 300 MILES 552233 12-71 Special Report ; . t! ril: "'"J""' (Clolmed by AIS.ofinn) c=" ?al (Claimed by Argentina e"" anti - 4 - SECRET 25X1 10 December 1971 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 SECRET and electing him as the only major national candi- date. Indeed, the new law governing political par- ties provides for the formation of confederations and electoral alliances, although as yet this has not been utilized. Two political coalitions have developed over the past year but so far ilave demonstrated little popular appeal and have had little success in smoothing over traditional polit- ical divisions. President Lanusse seemed to be counting on the Hour of the People movement?a loose coali- tion of moderate Peronists, Radicals, and smaller parties?but in recent weeks has appeared to be less interested. The movement has declared that it has no intention of running agreed-upon candi- dates, and recently it was dealt a blow by the shake-up in Percnist leadership. Jorge F-aladino? one of the original motivating forces behind the Hour of the People?asserts that his dismissal as Peron's chief political representative will have no effect on the coalition. He was strongly criticized by other Peronists for his role in it, and it is questionable whether Peronist support will con- tinue. The National Assembly of the Argentines is a coalition of the left: Communists, left-wing Peronists, and smaller leftist parties. It attempts to pattern itself on the Popular Unity front of Allende in Chile or the Frente Amplio in Uru- guay. It has held successful rallies in Buenos Aires but is too small to figure prominently in elec- tions, particularly as long as the Communist Party remains illegal. It has been over five months since Lanusse officially opened the season for pi iitical reorgan- ization, and so far the Grand National Accord? insofar as it relates to political parties?has not made significant progress. The divisions that have afflicted Argentine politics for decades remain, and, despite the new regulations, there is little evidence that political leaders are willing to sub- merge their differences in an effort to organize mass-based parties. The Radical Party has made little or no effort to draw its major factions back Special Report 25X1 together; rather, there are hints of even more infighting. All the major political parties are having difficulty in attracting new members. Public apathy toward the parties probably stems from skepticism that the promised elections will actu- ally be free and open as well as from disenchant- ment with the traditional parties and their lead- ers. Politically aware Argentines are skeptical that the military will allow Peronist candidates com- plete freedom of action. They have ample histor- ical justification for believing that, if the elections actually do take place, the resulting government will be closely watched by the armed forces. The Key to Success.., or Failure Juan Peron and his diverse group of follow- ers will play a major role in the outcome of President Lanusse's ambitious plan. Peronists make up approximately one third of the elector- ate but have been effectively excluded from full ELECTORAL CALENDAR 1972 1 Feb Evaluation of organization of polit- ical parties 31 May Decision on constitutional reform and electoral system 30 Jun Organization period for political parties ends 15 Aug Printing of provisional voting list Oct Convoking of elections 15 Dec Completion of voting lists 1973 25 Mar Elections 25 May Installation of new government ? 5 - SECRET 10 December 1971 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 - ,? Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 SECRET political participation since Peron was ousted from power in 1955. Lanusse has correctly per- ceived that there is little chance for political sta- bility without their participation. To reintegrate them into political life, howovor, Lanusse must overcome both Peronist suspicion and military opposition. Lanusse, himself, was imprisoned for four years by Peron and was regarded as a staunch anti-Peronist. With this background, he has the credentials to carry out a rapprochement with the Peronists without being open to the charge of a sell-out. Nevertheless, as political activity inten- sifies, apprehension in the military is almost certain to increase and add to Lanusse's problems. Special Report 25X1 When Lanusse announced that he would work to turn the government over to a constitu- tionally elected president and congress, he was fully aware that the Peronists made up the largest electoral bloc in the nation and would in all probability win national elections. He therefore devised tactics aimed at turning this Peronist power to his advantage or at least neutralizing it. His tactics were along two lines. First, he hoped to convince the former dictator to support the Grand National Accord or at least not oppose it actively. Secondly, the President hoped to di- vide the basically moderate Peronists from those who advocated an uncompromising hard line or even a violent approach to achieving power. Various inducements have been dangled be- fore the old dictator in an attempt to gain his cooperation. The Lanusse government has already taken steps to rehabilitate his image in Argentina and has hinted at a willingness to go much fur- ther. This appeal to Peron's vanitj has been coupled with an apparent willingness to contrib- ute financially to support his splendid exile in Madrid. Peron is widely believed to have stashed millions of dollars in Europe before he was over- thrown in 1955 I he has asked for, and received, $50,000 from th3 govern- ment and ha5 applied for the presidential pension available to him under new regulations. Other possible inducements include re;nstating Peron in the army with a retired general's pension, al- though this would be strongly opposed by the military. 25X1 The second part of Lanusse's two-pronged offensive has produced more immediate results. His effort to attract the more moderate Peron- ists?and particularly labor?has met some degree of success. Large segments of the Peronist labor movement, and particularly the leadership, have cooperated in varying degrees with Lanusse. 6 - SECRET 10 December 1971 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 Sanitized Copy Approved for Release 2011/01/07 : CIA-RDP85T00875R001500030044-1 SECRET Moderate Peronists in the political sector have also demonstrated a willingness to work with him. One of the first things Lanusse did to attract Peronists, or at least blunt their opposition, was to lift the wage ceiling imposed by Levingston. Although this contributed to inflation, it launched the President's drive toward the Grand National Accord on a positive note. Subsequent meetings between government officials and top labor leaders inaugurated a working relationship that has minimized labor problems over the past eight months. In fact, some national labor leaders have indicated that they would prefer to improve upon their relationship with the current military government, and particularly President Lanusse, rather than deal with an intermediary layer of Peronist politiciens that might result from elec- tions. Following on this overture toward labor, Lanusse turned to the politicians. Peronist politi- cal leaders were included in the discussions that preceded the promulgation of the new political parties Ratute. Their opinions were sought on the other questions, such as electoral and constitu- tional reform. Lanusse hopes to tarnish Peron's image in the eyes of the working masses?many of whom view his return as ranking in importance just behind the "second coming"?by demonstrating :hat it is the aging dictator himself, not the gov- ernmei:t, who has ruled out his return to Argen- tina. Toward this end the government has indi- cated that there arc no legal barriers keeping Peron out of Argentina ard has dropped the charges of statutory rape stemming from Peron's keeping of a 16-year-old mistress following the death of his wife Eva. Lanusse also made a strong appeal to the Peronist masses when in September the body of Eva Peron was removed from a secret burial site in Italy and turned over to Juan Peron in Madrid. Before her death in 1952, Eva was worshipped by the working class as much as or more than her Special Report - 7 - 25X1 husband, and the Peronists were outraged when her body was spirited away from its place of honor in the Labor Ministry following Peron's ouster. There is still some doubt as to whether her remains will ultimately be permitted final burial in Argentina, but Lanusse's action in ending the 16-year-old mystery has, at least partially, accom- modated another long-standing Peronist demand. Peron's Divided House President Lanusse's attempt to attract at least the tacit support of certain segments of the Peronist movement has been aided by existing divisions within the movement. Peronist labor has three major factions: the "participationists," who have long advocated working with the govern- ment; the orthodox "62 organizations," which have ranged from moderate to militant; and a small minority of extremist unions?such as those in Cordoba?which consistently advocates con- frontation tactics. The political sector has been similarly divided. The factions include the neo- Peronists, who preach the social and welfare doc- trines of Peronism but without Peron; the moder- ates, who are willing to work through the Hour of the People coalition with the Radicals; the hard liners, who oppose any cooperation with the SECRET Mobs Demonstrate for Peron's Return 10 December 1971 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 Sanitized Copy Approved for Release 2011/01/07:' CIA-RDP85T00875R001500030044-1 SECRET government or other parties; and the extreme leftist fringe, which is actively working toward the violent revolution it believes must come. For years, Peron has perpetuated these divi- sions. The sirnultaneou:, existence of moderates, hard liners, and extremists has provided him with several options in pursuing the ultimate goal of bringing Peronism back to power in Argentina. He could at one and the same time negotiate with the government, play the role of loyal opposition, and seek to subvert the sysLem. The divisions have also served to prevent any one politician or labor leader from achieving sufficient power or influ- ence to pose a serious threat to Peron's leader- ship. In recent weeks, there has been a major shake-up in the Peronist leadership along with several pronouncements from Madrid of a forth- coming reorganization aimed at unifying the movement. Jorge Paladino, Peron's personal rep- resentative in Argentina and leader of the Supe- rior Couhcil of the Peronist movement, has been Evening, 8 October j Lanusse Denounces Colonel? Revolt 25X1 eased out. Hector Campora, described as little more than a yes-man, has been named to replace him. As chief negotiator, Paladino had been the Peronist most closely identified with President Lanusse. He had also been the driving force be- hind the Hour of the People. It is not cleat whether the downgrading of Paladino resuIted from the criticism he received because of these roles or whether it was simply that Peron wanted to be in complete control as negotiations with Lanusse enter the crucial phase. The shake-up touched off considerable con- fusion. There was even a shoot-out at Peronist headquarters. Nevertheless, both the labor and political sectors now are led by men little noted for their leadership, and both sectors are focusing on reorganization. Cannpora arrived in Buenos Aires on 26 November, after talks with Peron in Madrid, and announced that he was empowered to negotiate with the government and to reorgan- ize the movement. The youth sector and the mom extreme Peronist factions reportedly are being upgraded and will be represented on a nine-man superior council. 9 October A BUSY 24 HOURS Tanks Roll to Crush Rebelliot Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 SECRET Peron faces difficulties in unifying factions that have long worked independently of one another, but his prestige as the ultimate leader remains unchallengeable. Many, perhaps most, of the leaders wish that Peron would "stay in his rocking chair in Madrid," but none would dare openly to challenge his duthority. Ultimately, it seem, Peron will find it necessary to move either toward support of Lanusse's political plan or into more open opposition. It is doubtful that any unity he achieves can stand up under the strain of his decision./ A decision by Peron to support the Grand National Accord would go a long way toward ensuring the ultimate success of Lanusse's plan. On the other hand, a decision to oppose La- nusse?for instance by nominating for the presi- dency Peron or some other candidate unaccept- able to the military?would even more surely en- sure the failure of the Lanusse effort to restore a viable elected government to Argentina. FOR LANUSSE 25X1 The Military - The Ultitnate Arbiter If Peron and his followers hold the key to success for Lanusse and his political plans, it is the military that will have the final word. It took armed force to oust Juan Peron in 1955, and the mere suggestion of a Peronist eturn to power has been anathema to the military ever since. Twice since 1955 the Peronist vote has been circum- vented to elect a civilian president from the ranks of the Radical. Both times, the president was removed when he was unable or unwilling to contain the surging Peronists. The success of La- nusse's maneuvering will therefore doubtless be determined primarily on the basis of the role the Peronists are accorded or seem capable of achiev- ing in the new government. When Lanusse assumed the presidency, he retained his position as commander in chief of the army. With this dual role he is in much greater control of his destiny than were his predecessors. Not only has Lanusse derived strength from his positio.i as army commander in a system where the chain of command is rigidly adhered to, but the majority of the senior officers, at least, are in Evening, 9 October 'INIF ? . ? ? ? ? ? . Sanitized Copy Approved for Release 2011/01/07 : CIA-,RDP85T00875R001500030044-1 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 SECRET agreement with his effort to withdraw the mili- tary from direct responsibility for governing. The inability of the Ongania and Levingston admin- istrations to deal effectively with Argentina's myriad problems prompted the growth of a strong back, tr, the-barracks sentiment. Nevertheless, an undercurrent of opposition to Lanusse has surfaced twice in his eight months in office. This opposition has been almost exclu- sively among colonels and lieutenant colonels, and, although it has at times stirred into some- thing more than a nuisance, it has never posed a serious threat. This apparently rather loose con? spiratorial group known as the "colonels' move- ment" has, however, survived two attempts to eliminate it and continues to present a possible nucleus for future, more serious opponents. The colonels' movement has suffered from a lack of leadership and a resultant inability to coordinate plans and actions. The philosophy of the officers involved is basically ultra-nationalist with strong statist leanings. Despite their espousal of populist economic programs, these would-be ideologues outlined a basically rightist political line in their manifesto last May. The colones sought adheients by playing or, the themes of a sell-out to foreign monopolies?i.e., US business interests--and the reappearance of the serne old tried-and-found-wanting politics under La nusse's Grand National Accord. In May, President Lanusse moved to break up the conspiracy before the colonels could make their move to oust him. Little disciplinary action was taken beyond the forcible retirement of a few of the known leaders and the reassignment of others. In October, an apparent attempt by La- nusse to again pre-ernpt the plotters touched off the revolt in the garrisons at Azul and Olavarria. Threatened with reassignment to distant prov- inces, the leaders in Azul and Olavarria revolted and called on units around the nation to join in. Caught unprepared, the hoped-for allies never joined the rebel cause. In his role as remmander in chief of the army, President Lanucse assumed Special Report 25X1 personal direction of quellinc the insurrection. He dispatched troops to the rebel-held area the night of 8 October. By the following evening the revolt had been crushed and the President was giving his daughter away in marriage to a popular music star in the society wedding of the year. l_anusse's coolress under pressure, plus the fascist leanings of the rebeis, inspired messages of support from the usually apathetic public. In the wake of this mini-revolt, Lanusse moved more strongly against the dissidents. He is using year-end assignments and promotions to place officers personally loyal to him in strategic positions. The naming of General Sanchez de Bustamante to command the important First Army Corps in Buenos Aires is a prime example. General Sanchez de Dustamante is the military representative on the Coordinating Commission that made the recommendations on constitutional and electoral reform and has become a leading political spokesman for the President. Similarly, General Lopez Aufranc, a loyal Lanusse sup- porter, commands the powerful Third Corps in Cordoba. The placing of Lanusse's own men in key assignments may add to discontent in the army, already resentful of being used as his personal tool. But, over the short run at least, it should have the desired effect of strengthening the Presi- dent's position. At the same time, it is always difficult to determine just how deep personal loyalties go. For example, Lanusse himself played the leading role in the ouster of President Ongania, to whom he owed his post as com- mander of the army. There have been hints that both Sanchez de Bustamante and Lopez Aufranc harbor ambitions of their own. President Lanusse appears to have secured his position for the next few months, but as the political situation begins to crystallize in the first half of 1972, he will probably become more open to military criticism. If the President seems to be losing the initiative to the traditional political forces, or if the Peronists cc out of the - 10 - SECRET 10 December 1971 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 SECRET reorganiz,iion phase of Lanusso's political plea as by far the strongest party, new coup talk is not unlikely. Likewise, continuing deterioration of the economy could provoke those officers at- tracted by Brazil's economir success under a mil- itary regime to undertake active oposition to Lanust.e and his plan to return to a civilian-b? seJ govern men t. Other Obstacles The ultimate objective of the Grand Na- tionai Accord appears to be to inaugurate an elected, civilian-based government with Lanusse at its head. Ho must, of course, overcome the Peronist and military obstacles, but there are other hurdles in his path. Chief among these is golfing himself elected. Lanusse has publicly re- nounced any intention of putting himself forward as a candidate, but he has left the door open for a draft. flis potential candidacy has also been floated publicly by various cabinet members and political six'. tismen. There as yet has been no attempt to put together a Lanusse electoral party or front, arid the questien remains as to what organization he plans to use. A confederation of provincial parties or a coalition of Peronists and radicals have been suggested, but both pose con- siderable difficulties. The risk and the difficulty would, however, be reduced if the president were to be elected by congress rather than by direct popular vote. Lanusse is also hampered in any potential campaign for the presidency by ',1??: damned-if- you-do, damned-if-you-don't conflict between Argentina's economic nee:-.'s and its political real- ities. It is probably partly for this reason that he has embarked on a series of official visits that bear 'he marks of politicking from abroad. He has already met twice with President Allende of Chile and has traveled to Peru to talk with President Velasco. His trips to these "progressive" nations have met with favor among leftist elements in Argentina and have enhanced the President's image as a statesman. By the end of the first quarter of 1972 he will have balm-iced his travels Special Report 25X1 ideologically with trips to Paraguay, Ecuador, Colombia, and Brazil. By the time he completes his itinerary he will he one of the most widely traveled Latin American presidents in recent years. His effort to reassert Argentine influence and leadership in the hemisphere also will not be lost on opinion-makers at home. They ;:re increas- ingly concerned over the aggre3sive drive for lead- ership being waged by Argentina's traditional ri- val, Brazil. The Lanusse drive toy) ard elections and re- generation of the Argentine political scene could also be sidetracked by a turn for the worse in the economy or a marked upsurge in urban violence. Either condition would increase political insta- bility and make elections a risky undertaking in the eves of the military. The Lanusse government has had significant success in combating terrorism in recent months, but the Argentine terrorists are still second only to the Uruguayan Tupamaros in activity in South America. The People's Revolu- tionary Army?the action arm of the Argentine Trotskyist party?is currently in a state of up- heaval following the arrest of most of its top leaders, but it is still the most active of the several terrorist groups in the country and could yet pose a serious problem for Lanusse. The government has had a good deal less success in coping with economic troubles. In September, stop-gap measures, including wage and price controls, curbs on imports, and new currency exchange regulations, were imposed. The government has had considerable difficulty in devising a longer term program to replace its temporary measures. The latest attempt at a long- range program is weakened by the government effort to avoid overly ant3gonizing any major group, and has little chance of significantly re- tardirq the inflation rate or spurring the econ- omy Labor has been promised a maintenance of real wagc:, and an attempt has been made to balance off other special interest groups. Never- theless, the program is being sharply criticized from all sides, and Lanusse will have considerable difficulty in selling it to the country. -11- 10 December 1971 SECRET Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1 SECRET The problems with the economy and terror- ism come together in the industrial interior city of Cordoba to create a powder keg with a rela- tively short fuse. Riots in Cordoba contributed, at least indirectly, to the downfall of Lanusse's two predecessors, and strikes and terrorist incidents have continued under his administration. The unions in Cordoba, particularly the large auto- motive workers unions, have long been more ex- tremist than others around the country and many of them have been infiltrated by Trotskyists. Cordoba is the birthplace of the Trotskyist ter- rorist group, the People's Fhvolutionary Army. Lanusse is thus faced wh the problem of keep'r the lid on in CordeiJd without appearing too arbitrary or repressive to the rest of the nation. The government's tendency to drift while Lanusse was hospitalized recently for a kidney Special Report 25X1 operation has helped to iliustrate that he has indeed made himself the indispensable man in Argentina today. He is a strong leader and a tough-minded individual who is not deterred by problems or adversity. He is expected to return to his job with full vigor. He has committed himself to a political solution of Argentina's many problems and will pursue this goal with single- minded determination. Many obstacles must be overcome and even insiders have been reported to give him no better than a 50-50 chance of a successful transition to an elected government, now scheduled to take place on 25 May 1973. Within the government and th? military, however, it is generally agreed that if Lanusse can't do it, it probably can't be done. - 12 - 25X1 10 December 1971 SECRET Sanitized Copy Approved for Release 2011/01/07: CIA-RDP85T00875R001500030044-1