VENEZUELA: CALDERA AND THE MILITARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R00967A000200020005-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 16
• Document Creation Date: December 20, 2016
• Document Release Date: August 17, 2006
• Sequence Number: 5
• Publication Date: June 17, 1970
• Content Type: MEMO

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Secret
OFFICE OF
NATIONAL ESTIMATES
MEMORANDUM
Venezuela: Caldera and the Military
Secret
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WARNING
This document contains information affecting the national
defense of the United States, within the meaning of Title
18, sections 793 and 794, of the US Code, as amended.
Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
GROUP t
EXCI.IHDED PROM AUTOMATIC
DO.NONADINO AND
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C E N T R A L I N T E L L I G E N C E A G E N C Y
17 June 1970
SUBJECT: Venezuela: Caldera and the Military*
Last year the community began to have.doubts about
Venezuelan President Caldera's ability to deal with continu-
ing student riots, illegal strikes, a deadlocked Congress,
and growing military unrest. In recent months the concern
has eased. Caldera has taken a firmer stand against student
and labor violence, he has mollified the military, and a new
working agreement with the opposition seems likely to break
the legislative logjam and get important economic programs
moving again.
But Caldera's term has over three years to go, and more
serious problems may lie on the horizon. The present paper
points up the longer-range economic factors and political
trends which might combine to challenge Caldera's adminis-
tration -- and possibly revive the threat of a military coup
-- as the elections of December 1973 draw near.
This memorandum was prepared by the Office of National
Estimates and coordinated with representatives of the
Office of Current Intelligence, the Office of Economic
Research, and the Directorate of Plans.
GROUP I
Excluded from Auto-_
S-E-C-R-E-T matic downgrading
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1. Since the overthrow of Perez Jimenez in 1958, three
successive popularly-elected governments in Venezuela seem to
have established a commitment to democratic procedures. During
the decade small groups of officers tried to organize revolts,
and rumors of anti-government plotting among dissident military
elements have persisted. But in no case has the discontent
seriously threatened the survival of the system. The bulk of
the military has appeared to be generally satisfied with its
offstage role and content to leave political decision-making to
the politicians.
2. Keeping the right balance between established civil
authority and a still-powerful military establishment has not
been easy. Under Caldera's Social Christian (COPEI) government,
the relationship has if anything become less comfortable for
both sides, as compared to the preceding era of Accion Democratica
(AD). Having learned the hard way the dangers of ignoring the
interests of the military during the short-lived AD government of
1945-19+8, Presidents Betancourt and Leoni went out of their way
to anticipate and defuse the causes of military unrest under their
administrations of 1959-1969. Regular promotions and generous
pay scales kept Venezuelan officers among the most affluent in
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Latin America. The armed services' share of the national budget
(about 10 percent) was never seriously questioned, despite other
pressing national needs. And the armed forces were given a
generally free hand in breaking the back of the guerrilla movement
in the country.
3. In contrast, Caldera has tightened the government's rein
on the military. Faced with debts inherited from his AD predecessors,
greater demands on government revenues, and a slackening of economic
growth during his first year in office, he suspended all promotions
to general and ordered an eight percent cut in the military budget.
With an eye on his small plurality in the December 1968 elections
and on a Congress dominated by the opposition, he purged some
officers with suspected anti-government tendencies and set up a
special investigative unit under the Ministry of Interior to
keep track of suspected conspirators. Discontent over pay and
promotions appears to have caused some unrest in the services,
particularly at the junior-grade level and there have been some
indications of an upsurge in the chronic waves of coup talk.*
In late March a number of Army Officers were allegedly involved
in some sort of anti-government conspiracy. Though the plot
was not confirmed by the Caldera government, one account had it
that the officers were seeking to form a government on the
Peruvian model.
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4. Still, despite Caldera's apparent concern, anti-govern-
ment plotting does not appear to pose a serious threat at this
stage. Even if feelings against the government were widespread
in the officer corps, a group of conspirators would be faced with
formidable organizational and psychological obstacles. A success-
ful anti-government action would require substantial army backing
and at least the tacit approval of key leaders in the other armed
services -- especially those with units in the Caracas area.*
But cooperation on such matters has always been difficult to
organize and even more difficult to carry through to the point of
actually challenging the government. Though hot-heads inthis or
that garrison may rebel sporadically (usually at some distance from
the power centers in Caracas), most Venezuelan officers are
sensitive to shifting political winds and are usually inclined to
fence-sit until the pressures for united action become over-
whelming.
The armed forces, totaling roughly 43,000, are among the best-
equipped in Latin America but smaller than those of other Latin
American countries of comparable size, e.g., Chile, Colombia,
and Peru. They include a 22,000-man Army, an 8,000-man Navy,
a 3,100-man Air Force, plus the National Guard, a paramilitary
force of some 10,000 men. In addition, there are three national
police forces under various non-military federal and local
jurisdictions with a combined total of 23,000 men.
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5. This natural caution is reinforced by inter-service
competition and suspicion. Rivalry between the Army and the
National Guard has persisted since 194+6 when Betancourt made the
Guard nominally coequal with the other three services. In
addition, political cliques cut across professional interests
within each service. Though intelligence on these cliques is
scanty, they appear to be largely informal and often overlapping
groups rather than clear-cut organized factions. Based in many
cases on personal loyalty to an individual officer, they include
remnants of AD partisans, inheritors of the old-style caudillo
tradition, and followers of Perez Jimenez' more recent brand of
military dictatorship. One group seems to have formed around
Defense Minister Garcia Villasmil, an able and ambitious officer
considered loyal to Caldera but a focal potht for discontent among
senior officers. Finally -- though again hard information is
lacking -- there appears to be a number of officers, especially
at the junior level, who have been inspired by Peru's Velasco and
his experiment in military populism.
6. Caldera has skillfully manipulated his more controversial
policies to keep his military opponents from uniting against him
and their discontent within bounds. When the grumbling among
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officers over suspension of promotions became too audible, he
backtracked and suddenly promoted 16 colonels to general early
this year. When military impatience with student and labor dis-
orders grew last fall, he closed Central University and ordered a
crackdown against illegal strikes. Finally, though many officers
have been angered by his pacification program and its "softness"
on communism, he has been careful not to push the new look too
far.* He has permitted strong military action to continue against
die-hard guerrilla bands who have rejected the government's offer
of amnesty, and he has restricted the number of personnel the
Soviets will be allowed to bring in to staff their new Embassy.
7. Under Caldera, as under his AD predecessors, the Guyana
border issue has served as a safety valve for military unrest.
Pressing a territorial claim revived by the Betancourt administra-
tion, Leoni gave military support to an unsuccessful revolt in the
The Embassy describes Caldera's pacification program as a
"style of government" which seeks to reincorporate the Marxist
left into the body politic, to lower the level of violence,
and to widen the government's options in foreign policy. In
practice, the program has meant the re-establishment of
diplomatic relations with the Soviet Union, legalization of
the Venezuelan Communist Party, and attempts to entice anti-
government guerrillas back into the legal political process.
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Essequibo region of Guyana during the last days of his administra-
tion. Caldera has not been as vigorous in pressing the claim, but
he has continued the military presence and construction program
along the border. Failure to negotiate a settlement with Guyana
has now led both sides to consider a 12-year moratorium on the
dispute. If such a stand-off is agreed upon, it could involve a
military disengagement along the border. There are indications,
however, that Prime Minister Burnham of Guyana might take advantage
of a truce period to develop the largely barren Essequibo region
in order to buttress Guyana's claim. If this happens, Venezuelan
army officers (whose academy teaches a course on offensive operations
which uses the Guyana border dispute as a model) would be likely
to demand some type of a military reaction, and Caldera would feel
renewed pressure to turn on the Guyanese safety valve again.
8. Still -- like student and labor problems, and the
pacification program -- the Guyana issue does not appear to be
the kind of thing that Caldera will let slip out of control. Even
within the terms of a moratorium he will probably be able to keep
the military construction along the border and the development program
throughout the Southeast going at a pace and scope sufficient to
satisfy the military's nationalistic spirit of adventure. On other
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larger political and economic issues, on the other hand, Caldera
may have much less room for maneuver. During the remainder of
his five-year term his major troubles are likely to come from his
political opposition in the Congress and from an economy whose
growth has been slowing down in recent years and which has failed
to satisfy Venezuela's needs and expectations.
9. Though the economy is basically sound and Venezuelan per
capita income the second highest in Latin America, government
efforts to develop new industry and to expand and diversify
agricultural production have not reduced significantly the country's
overwhelming dependence on oil.* The slow growth of oil exports
since 1958 has reduced economic growth from an average annual rate
of 82 percent during the fifties to Zr percent in the sixties.
This, combined with one of the highest population growth rates in
the hemisphere (3.6 percent), has resulted in a leveling off of
per capita income and a drop in investment.
Oil is the source of over 90 percent of export earnings and
two-thirds of government revenue. The US, the biggest
customer, currently takes about half of Venezuela's oil exports.
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10. Caldera's failure to achieve a satisfactory working
relationship with his AD opposition has not helped matters. Over
the past year he has been forced to rely on ad hoc majorities to
get even minor bills through the opposition-dominated Congress.*
In early 1970 the impasse was finally broken when AD and COPEI
agreed to work together to pass essential legislation. If the
agreement holds up, the government will be able to move ahead on
pending service contracts with the foreign oil companies and to
initiate a major public investment program. The breaking of the
legislative logjam will, Caldera hopes, produce badly-needed
investment in the petroleum industry and get the economy moving
again.
11. If, as now seems likely, the service contracts win AD's
approval and are signed, they are likely eventually to increase
the government's profits and possibly also to improve its managerial
control over the country's remaining oil reserves. Over the shorter
# COPEI has only 16 of the 51 seats in the Senate (compared with
AD's plurality of 19) and only 59 of the 216 seats in the
Chamber of Deputies (compared with AD's plurality of 66).
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run they are likely to spur business confidence in the economy and
to stimulate investment in non-petroleum sectors. The government
hopes to encourage this trend through its planned investment
program supported largely by foreign borrowing. The combination
of public and private investment should give a healthy boost to
economic growth over the next year or two.
12. But over the longer term Venezuela must depend on
petroleum if the economy is to resume a high rate of growth. For
a more permanent solution Caldera is looking to the US to redress
the oil industry's deteriorating international position. During
his visit here in early June he made a strong appeal for a US oil
import policy which would give Venezuela the same preferential
access to the US market that Mexico and Canada now enjoy. For
Caldera, the long-range alternatives are clear: unless there is
substantial improvement in Venezuela's position in the world and
particularly in the US oil market, petroleum production and exports
are unlikely to increase appreciably, and the government's ability
to finance needed economic and social development programs and to
promote export diversification will become increasingly strained.*
The US announcement, following the Caldera visit, that the US
will increase oil imports from Venezuela by an unspecified
amount during the second half of the year will undoubtedly strengthen
Caldera's hand and give a psychological boost to the Venezuelan
economy. Unless the increase leads to a substantial preferential
position for Venezuelan oil in the US market beyond the current
year, however, its political and economic effects are likely to
be minimal and short-lived.
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13. Thus, though Caldera is likely to resolve -- or at
least postpone -- most of his economic and political problems over
the next couple of years, he may find himself increasingly on the
defensive as the end of his term draws near. His AD opposition,
eager to return to power in the December 1973 elections, will
almost certainly break its working arrangement with him and return
to the attack.* An economy that has failed to respond to Caldera's
ministrations could become the major political issue for opposition
leaders of the left and right who seek more drastic cures.
14. In this context the influence of the new breed of
economic nationalists who resent Venezuela's seemingly unbreakable
dependence on the US could be decisive. The new nationalist mood
has been growing steadily across the political spectrum.
It is best organized and most vocal in the business organization
Pro-Venezuela, whose president, Reinaldo Cervini, seems to be
trying to establish a new nationalist political movement outside
the regular parties. But it has also gained support among writers,
politicians, and ideologues of the Marxist and non-Marxist left.
Particularly since Caldera is ineligible for re-election and,
as a lame-duck President, will be politically vulnerable.
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It is reflected, for example, in the nationalist slogans of the
"Neuva Fuerza," a new congressional bloc formed by the three
minor parties
the Movimiento Electoral del Pueblo, the Union
Republicana Democratica,, and the Fuerza Democratica Popular --
as a political alternative to AD and COPEI. Sensing the political
winds, even the Venezuelan Communist Party -- seeking new respec-
tability and perhaps anticipating a major target of opportunity
for the new Soviet presence in the country
seems to be moving
toward closer cooperation with non-communist nationalist spokes-
15. The effect of all this on the military is not likely to
strengthen the commitment to constitutional government. Faced
with an economy which is falling short of Venezuelan needs and
expectations, Caldera will be hard put to avoid another round of
belt-tightening in the military budget. But another squeeze on
military pay end promotions and on new equipment purchases would
almost certainly be regarded by most officers as a new threat to
their status and role as guardians of the political order. For
many of them the anti-US arguments of the economic nationalists
would become increasingly persuasive, and some might begin to look
outside the regular parties to the new nationalist movement for
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political allies. This would be particularly likely if a deadlock
between AD and COPEI again immobilizes the government and raises
new doubts about the ability of the present political party system
to achieve economic progress. In such circumstances Peru's
military revolutionary regime might become an increasingly
attractive model for political action.
16. Again, none of these trends is likely to pose serious
problems for Caldera over the short term. But the ingredients
are there, and their coalescence in the manner projected is
plausible. In short, despite its seemingly firm democratic footing,
Venezuela may not be all that immune to a revival of golpismo as
Caldera approaches the end of his term.
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