WESTERN HEMISPHERE URUGUAY CONSIDERS SOVIET TRADE OFFER

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005647786
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 2
• Document Creation Date: June 24, 2015
• Document Release Date: May 26, 2011
• Case Number: F-2010-01204
• Publication Date: February 11, 1966

 how ethnic considerations compli-
cate already difficult economic
problems. Forced by budgetary con-
siderations to cut -subsidies and
cause the closing of some uneco-
nomic mines, the government took
care to balance the effects in Wal-
lonia (F each-speaking) and Flan-
ders (Dutch-speaking). It particu-
larly feared repercussions in Wal-
lonia, where economic deteriora-
tion and political alienation have
become marked in recent years, and-
took measures to attract new in-
vestment there. As a result, pro-
test demonstrations were on a low
key in Wallonia but violent riots
erupted in the Flemish coal fields
where chauvinists had evidently
persuaded the miners of government
favoritism for the Walloons.
Foreign Minister Spaak, a So-
cialist himself, has suggested that
the next prime minister will be 68-
year-old Achille van Acker, a So-
cialist prime minister in the 1950s.
He would most likely be considered
to head a Socialist-Liberal coali-
tion or, possibly, a government of
national unity which would include
the Catholics as well. However, a
government might be formed by the
Catholics and the business-oriented
Western Hemisphere
The Soviet Union reportedly
has offered Uruguay a $30-million
trade deal involving five-year
credits at three-percent interest.
Uruguay would buy Soviet crude oil,
agricultural machinery, and indus-
trial raw materials. In exchange,
the Soviets would purchase nontra-
ditional Uruguayan exports such as
rice, shoes, woolens, and other
manufactures.
This offer differs consider-
ably from past proposals which had
concentrated on swaps for Uruguayan
meat and wool, commodities readily
salable on the world market for
dollars. Its presentation at this
time is probably politically moti-
vated and primarily intended to
offset the unfavorable Uruguayan
reaction to Soviet support for the
declarations of the Tri-continental
Conference. It may also be intended
to impede Uruguay's current negoti-
ations for a $15-million standby
agreement with the IMF. Other for-
eign assistance is tied to the suc-
cessful conclusion of this agree-
ment, which would require severe
government retrenchment, a hard
step to take during an election
year.- Should the IMF negotiations
fail,. economic deterioration, with
its favorable climate for local
Communist exploitation, would be
likely to continue.
Although the Soviet trade of-
fer is no doubt attractive to the
Uruguayan Government, press attacks
on the USSR for its role.at Havana
continue unabated. The daily owned
by the dominant faction of the rul-
ing Blanco Party applauded the gov-
ernment's order of 27 January to
investigate the activities of bloc
embassy personnel in Montevideo
and concluded that National Coun-
cilor Heler's December proposal
for a diplomatic break with the
USSR should not be forgotten.
Past bloc offers have gener-
ally resulted in little additional
trade. More may come of this pro-
posal, however, since it seems ad-
vantageous to both parties.
SE T
WEEKLY SUMMARY 11 Feb 66
SECRET