NATIONAL INTELLIGENCE DAILY WEDNESDAY 23 DECEMBER 1981 - 1981/12/23

• Document Type: SPECIALCOLLECTION
• Collection: Argentina Declassification Project - The "Dirty War" (1976-83)
• Document Number (FOIA) /ESDN (CREST): 05100594
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 14
• Document Creation Date: April 3, 2019
• Document Release Date: April 12, 2019
• Publication Date: December 23, 1981

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Director of
Central
Intelligence
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Contents
Special Analysis
Argentina: A New President
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SPECIAL ANALYSIS
ARGENTINA: A New President
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Et.
Lt. Gen. Leopoldo Galtieri, who assumed the presidency yester-
day, has a much stronger power base in the military than his pred-
ecessor, President Viola. Nonetheless, he will face formidable
difficulties overcoming popular discontent, managing the economy,
and resolving territorial disputes with Chile and the UK. The most
important underlying concern for the new leadership is the growin
sentiment that the military government has exhausted itself.
Galtieri, who also will remain head of the Army,
should enjoy solid backing from his Navy and Air Force
counterparts on the three-man military junta. Earlier
this month, Galtieri strengthened his position by replac-
ing key officials in the Army hierarchy.
3.5(c)
The new President lacks Viola's ties to important
civilian groups and this will hamper him in rallying
support for unpopular government measures. He also will
be handicapped by his inexperience in policymaking and
his tendency to act on impulse. 3.5(c)
Political parties, whose meetings officially have
been proscribed since the armed forces seized power in
1976, recently have been calling for an early return to
constitutional rule and urging talks between party leaders
and the junta. The independent press, which had been
practicing self-censorship on most sensitive issues,
also is ing ----cedented criticism against the
regime. 3.5(c)
Since June, the Church has issued two major pro-
nouncements criticizing government policies. Although
the regime has maintained tight constraints on organized
labor, discontent is growing in that sector as well, and
some Argentines describe the labor situation as the
worst since the depression. 3.5(c)
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Economic Problems
Galtieri inherits an economy beset by soaring prices
and declining production. Inflation almost doubled to
about 160 percent in 1981 and national output has fallen
an estimated 3.5 percent. In addition, a succession of
rinerly managed devaluations has spurred capital flight.
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Galtieri has named Roberto Alemann, a proponent of
free market economics, to preside over a newly consoli-
dated economic ministry that now covers major sectors
except public works and services. The military's unwill-
ingness to cede control over state enterprises and allow
Alemann the power to sell inefficient public industries
indicates that strong interest groups are already setting
limits on the economic program.
3.5(c)
Foreign Policy Issues
The country's principal diplomatic concern is the
Beagle Channel dispute with Chile, where the Argentines'
intransigence and inability to accept Pope John Paul II's
proposed solution threaten to scuttle the three-year
mediation. The two sides are so far apart that the talks
could break down completely. If this happens, extremists
in Buenos Aires could resume demands for a military
solution. 3.5(c)
Argentina also is engaged in talks with the UK
concerning sovereignty over the Falkland and other islands,
located some 300 miles from Argentine shores. The UK
believes that any solution ought to respect the desires
of the islanders, who do not want to be ruled by Argentina.
The apparent determination of Buenos Aires to force the
issue could create a diplomatic imbroglio. 3.5(c)
Outlook
The junta's continued failure to restore economic
stability would heighten popular discontent and reinforce
demands for an early return to constitutional rule. An
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economic program that seeks to remedy longstanding struc-
tural distortions would tend to threaten the privileged
position of powerful interest groups. On the other hand,
if the new administration chooses a hybrid program of
regulating financial and foreign exchange markets and
providing industry bailouts, recurrent economic crises
are likely. 3.5(c)
Galtieri and the military reportedly share major
concerns about any quick return of civilian government.
They fear that the Peronists and other discredited party
officials could return to power. The military also fears
reprisals for its widespread violations of human rights.
If Galtieri abruptly dismisses the clamor for greater
civilian participation, the current polarization of
Argentine society wo eepen, leading to a return to
authoritarian rule. 3.5(c)
The new president's tougher approach to domestic
concerns probably will apply equally to foreign policy.
Although he is likely to lend strong support to US ini-
tiatives on Central America, he may be1eas flexible in
dealing with problems closer to home. 3.5(c)
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