INDICATIONS OF POLITICAL INSTABILITY IN KEY COUNTRIES - 1983/12/01

• Document Type: SPECIALCOLLECTION
• Collection: Argentina Declassification Project - The "Dirty War" (1976-83)
• Document Number (FOIA) /ESDN (CREST): 05362126
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 63
• Document Creation Date: April 3, 2019
• Document Release Date: April 12, 2019
• Publication Date: December 1, 1983

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Directorate of
Intelligence
A
Indications of
Political Instability
in Key Countries
December 1983
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EO 13526 3.3(b)(1)>25Yrs
EO 13526 3.5(c)
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ret
GI IPI 83-004
December 1983
co� 668
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Directorate of
Intelligence
Indications of
Political Instability
in Key Countries
December 1983
This quarterly was produced by and coordinated
within the Directorate of Intelligence. Comments and
suggestions are welcome and may be addressed to
Instability and
Insurgency Center, Office of Global Issues
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GI IPI 83-004
December 1983
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Contents
S�et
Page
Part 2. Countries in Which There Have Been Developments of Interest
7
Argentina
9
V Sy�t
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South America
Argentina 1
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President Alfonsin's stunning electoral victory over the Peronists�com-
bined with his willingness to compromise and the disarray within the
military�should give him at least six months' grace in which to introduce
reforms. Thereafter, mounting economic and political pressures probably
will increasingly narrow his policy choices. 3.5(c)
Vet
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Argentina
� Raul Alfonsin of the moderately left-of-center Rad-
ical Civic Union was elected president with 52
percent of the vote, provided by a coalition of the
middle class and blue-collar workers
� The Radicals, who also captured the lower house of
the Congress, have promised to reform the military
and the Peronist-dominated labor movement, revi-
talize the economy, root out corruption, defend
human rights, and strengthen ties with the Non-
aligned Movement.
� The Peronists, caught off guard, have not yet
developed a new party strategy; moderate Peronists
so far have responded positively to 11
for national unity and cooperation
� Alfonsin's victory has led to still greater disarra
within the much discredited armed forces
� The shortage of foreign exchange compelled the
government to ban all imports for the first 21 days
of October. Thereafter, quotas were imposed that
allow for only about a third of fourth-quarter 1982
imports
Comment
We believe that the strength of Alfonsin's electoral
mandate, his willingness to compromise, and the
disarray in the Peronist movement and the military
will give the President and his incoming government
at least six months' breathing space. We anticipate
that political opposition will increase toward the end
of 1984, especially if the economy deteriorates, al-
though it will not threaten the regime for some time.
The Peronists will have recovered some lost ground by
then and probably will become more aggressive. The
diverse coalition that elected Alfonsin might begin to
unravel in the face of competing demands and his
willingness to compromise with the Peronists and the
military. We do not foresee any serious threat of
military intervention during Alfonsin's first year in
office, but the reemergence of major social tensions
could again tempt military leaders
9
Bolivia
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Paraguay
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Brazil
Brazil
SANTIAGO*
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South
Pacific
Ocean
Uruguay
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BUENOS ,
AIRES ( MONTEVIDEO
Argentina
Bound ry representatton Is
not ne essarily euthontetive
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Atlantic
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ladtett.d hy UK
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700167 (A03329) 12-83
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In the coming weeks, Alfonsin will use his momentum
to move forward on key issues. Moderate Peronists
have signaled their willingness to cooperate on some
issues. Alfonsin appears to have considerable support
among the Peronist rank and file, many of whom
voted for him, for ousting disreputable union leaders.
Alfonsin also holds an edge over the military, which
leaves office after seven years of economic failure,
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massive human rights violations, and the bitter Falk-
lands defeat last year. The new President will try to
take advantage both of his strength and of the
military's weakness to reassert civilian control and cut
military spending. To forestall military intervention in
politics, he is likely to compromise on two issues
critical to the military�human rights and corrup-
tion�by leaving them to the courts to investigate and
decide. The President also appears to be going along
with the military's nuclear program.
We believe that Alfonsin will achieve mixed results in
his primary economic objectives of restraining infla-
tion, reactivating the economy, and renegotiating the
$40 billion foreign debt. His sweeping electoral man-
date should sharply increase political optimism and
thus diminish the economic uncertainty underlying
speculative price increases and enable the government
to quickly reach wage and price agreements. Conse-
quently, we expect a temporary lowering of inflation
to around 5 percent monthly as compared with a 21.4-
percent rate in September. Alfonsin's plans to stimu-
late growth through stepped-up government spending,
subsidized commercial interest rates supported by
military spending cuts, and improved tax collection
could generate a modest economic recovery. Econom-
ic problems will intensify after mid-1984, however, in
part because large monetary growth in late 1983
probably will lead to a recurrence of higher inflation
rates and jeopardize wage and price agreements
Although Alfonsin has stated clearly his intention to
service the foreign debt to ease bankers' apprehen-
sions, we believe his plans for deficit spending could
stall an agreement with the IMF, which is a prerequi-
site for reaching new terms on commercial bank
debts. There is room for compromise on the amount of
deficit spending, but, if the IMF takes a tough stance,
the result probably will be an impasse that would
increase the attraction of a debt moratorium. If
Alfonsin sticks to his stimulative spending plan de-
spite the shortfall in revenues that we expect will
occur, the widening fiscal deficit in late 1984 will give
an additional push to inflation and create added
conflict with international creditors.
Se,t
Raul Ricardo Alfonsin
The new President, who is 56, has demonstrated
courage and patience in pursuing a lifelong commit-
ment to democratic ideals, human rights, and social
justice. Although his principles represent strongly
held beliefs, Alfonsin is not dogmatic or inflexible
and tempers his idealistic rhetoric with appeals to
realism. He identified himself with the human rights
movement long before it became either popular or
safe. Prior to his election campaign, he organized
mass rallies and, as an attorney, defended numerous
political detainees. Alfonsin 's reputation enabled him
to run as a decent, honest man who offered a genuine
alternative to Peronism. He showed an ability to
compromise and, using consistent and simple themes,
successfully built a winning coalition. On the basis of
his track record, we believe Alfonsin has the skill and
temperament to moderate his campaign rhetoric,
adjust to political realities, and�to the degree any-
one can�walk the tightrope of remaining true to his
principles while working to bring together the dis'a-
rate forces that compose Argentine society.
10
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Key Indicators To Watch For
Prospective Scenario
� Willingness by the Radicals and Peronists to com-
promise their political differences temporarily.
� Renewed confidence in the Argentine economy,
prompting a decline in inflation and an increase in
investment.
� Acceptance by second-echelon labor leaders and the
rank and file of Alfonsin's plans to reform and
democratize labor unions.
� Military acquiescence in Alfonsin's policies and
support for the democratic process.
� Renewed higher inflation rates in late 1984.
� Consequent growing polarization between the Radi-
cals and Peronists.
Alternative Scenarios
� The emergence of competing demands within Alfon-
sin's electoral coalition, leading to its unraveling.
� A major revival of popular support for the Peronists,
prompted by the return of Isabel Peron.
� The rapid end of cooperation by moderate Peronists,
demonstrated by their refusal to endorse Alfonsin's
policies in the Congress.
� Alfonsin's failure to reach agreement with business
and labor in the short term, leading to a renewed
wage-price inflationary spiral, labor strikes, and
popular protests.
� Alfonsin's taking a hard line on military corruption
and human rights violations.
� A rapid increase in military unhappiness with Al-
fonsin's policies, leading to an end of rivalry be-
tween the services, renewed political assertiveness
by the military, and cooperation with rightwing
union officials.
� The reemergence and subsequent escalation of ter-
rorism on the right and the left.
� Failure to reach agreement with the IMF.
� The government's declaration of a long-term mora-
torium on debt repayments
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