BRAZIL UNDER COSTA E SILVA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A006400080003-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: December 19, 2016
• Sequence Number: 3
• Content Type: REPORT

Approved For Release 2006/12/27: CIA-RDP79-00927A006400080003-3
Secret
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DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
SPecial Report
Brazil Under Costa e Silva
Secret
N?_ 43
24 May 1968
No. 0021/68A
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Brazil has enjoyed relative stability since
1964, but the political situation has been slowly
deteriorating since the Costa e Silva government
took over in March 1967. Economic progress, however,
has been encouraging, despite some adverse develop-
ments in the stabilization program. President Costa
e Silva began by loosening the strong political con-
trols inherited from the predecessor Castello Branco
regime, but as popular dissatisfaction has spread,
some of these controls have been reinstituted and
tightened.
Many of the observable changes in the Brazilian
Government stem from the personality of Costa e Silva.
He has greatly changed the style and method of gov-
ernment operation, moving away from the highly cen-
tralized organizational system of Castello Branco
and delegating more extensive authority to his cabinet
ministers. He has failed to exert strong leadership
in either domestic or foreign matters, and some of
his more politically ambitious cabinet ministers have
exploited their freedom to make political hay. The
65-year-old president apparently has a heart condi-
tion and arteriosclerosis, and this may account in
part for his listless style of governing.
Costa e Silva retains the support of the majority
of the military, the final arbiter of Brazilian sta-
bility. Widespread political turbulence, however,
could divide the military and weaken its support which
is so vital to the government.
Signs of Dissatisfaction
There are already signs of
dissatisfaction in many of Bra-
zil's politically significant
groupings. Most visible and vocal
are the students. Student agita-
tion has led to nationwide demon-
strations on several recent oc-
casions, the most serious from
28 March to 4 April. Communists
and other extremists have begun
re-exerting the leadership that
they exercised over politically
motivated students under leftist
President Goulart. They have ex-
ploited legitimate student griev-
ances to broaden their influence.
The government is basically out of
touch with students of all political
persuasions and takes serious note
of student problems only when
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stabilization efforts and are r~-
gaininq the influence they lost:
following the 1964 revolution which
ousted Goulart.
Liberal elements of the Catho-
lic Church have added to the crit-
icism. Relations between the,
church and the government, partic-
ularly its military backers, have
crown increasingly strained. This
is due in part to differences in
philosophy and to the involvement
of certain churchmen with subver-
sive student groups.
One of the key failures of
the Costa e Silva government--a5
it was with Castello Branco's--has
been its inability to establish a
genuine civilian base as a counter-
poise to its military backing. ?he
two political parties (the pro
government National Renewal Al-
liance and the opposition Brazilian
Democratic Movement) were estab
lished during Castello Branco's
rule following the abolition of
the 13 parties that had existed;
prior to 1965. Both parties ha'e
failed to attract grass roots sup-
port. They are, in fact, popul rly
known as the "Yes" and "Yes, Sir"
parties. Neither is a disciplin+d
entity, and personalism and re-'
gional rivalries continue to go!
ern most politicians' behavior.Al-
though the politicians resent the
administration's neglect, there is
little prospect that this dissatis-
faction will crystallize into ojen
opposition. Some liberal oppos}-
tion deputies, however, have been
increasingly vehement in attackjng
the government, giving vociferous
support to student and labor pro-
tests.
Costa e Silva
directly challenged. The educa-
tion minister is widely reqarded
as the most inept member of the
cabinet. The government's indif-
ference, "hard-nosed" attitude,
and frequently heavy-handed use
of force against student opposi-
tion have contributed to the ex-
tremists' ability to gain broader
student support. Any fairly rea-
sonable motive is enough to get
students to protest--partly be-
cause parading in the streets and
shouting slogans is fun and partly
out of genuine opposition to the
government.
Another disaffected sector
is urban labor, which has been
suffering from a steady decline
in real wages--perhaps as much as
10 percent since 1964. Communists
and radical leftists are exploit-
ing labor's belief that it is
bearing the brunt of government
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Traditional radical leftist
groups were badly disoriented by
the 1964 revolution. Communist
Party membership has shrunk from
about 30,000 in early 1964 to no
more than 15,000. The party is
divided, but is continuing its
efforts to gain control of stu-
dent and labor groups and to un-
dermine the government's prestige.
A dissident sector of the party
under the leadership of Carlos
Marighella, who advocates violent
revolutionary tactics, recently
broke away from the party. Mari-
ghella has promises of Cuban sup-
port if he and his few thousand
sympathizers mount active oppo-
sition to the government, and he
is seeking to put together an
alliance with like-minded groups.
Extreme leftist Leonel Brizola
continues to plot from his exile
in Uruguay The dissident pro-
Chinese Communist Party has only
750-1,000 members and is badly
split.
There is no conclusive evi-
dence that these groups are co-
operating at this time. Earlier
attempts at rural guerrilla ac-
tivity sponsored primarily by
Brizola have been quickly rolled
up by security forces, and a shift
to urban terrorist tactics now
seems likely.
The Military's Role
The Brazilian military is
united on its views of its mil-
itary functions, but it is not
and never has been united on po-
litical matters. The growing
popular discontent with the gov-
ernment clearly has an impact on
many military men. Costa e Silva
is under pressures by the mil-
itary to take even more author-
itarian measures to cope with
political disorders. These pres-
sures will increase if strong op-
pos_ition to the government per-
sists as it almost surely will.
Many officers, particularly
the "hardliners" who once enthu-
siastically backed the President,
now are concerned about his lack
of firm leadership. They fear
that his efforts to broaden his
popular support have not only
proved ineffective but have jeop-
ard-_zed progress toward the goals
of the revolution. They suspect
that the President may be toler-
ating corruption by some high
officials. If the military were
to become convinced that Costa e
Silva's administration is tar-
nishing its reputation, formi-
dab:_e pressure for corrective
action would be swift to form.
At present, however, these pres-
surEes are aimed primarily at get-
ting the President to replace
some of his cabinet ministers and
to crack down on his most vocal
political adversaries--particu-
larly the fiery Carlos Lacerda.
He will probably yield to these
pressures sufficiently to prevent
any widespread military opposi-
tion. For example, the govern-
ment: has recently banned activity
by the "Broad Front"--a political
movement headed by Lacerda and
former Presidents Kubitschek and
Goulart, both of whom lost their
political rights after the rev-
olution.
In addition to its concerns
for political matters, the mil-
itary is also putting considerable
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pressure on the government for
better pay and more modern equip-
ment. Military equipment pur-
chases between 1965 and 1967 av-
eraged about 5.7 percent of the
total defense budget.
The Air Ministry is very
conscious of Brazil's obsolete
aircraft, and favors acceptance
of the recent French offer of
Mirage supersonic jet fighters.
Brazil has in fact no modern jet
fighters, except for some T-33
trainers. One F-8--an aircraft
first operational in 1945--is in
service but is used only for
parades and demonstrations.
The French may have also
held out the possibility of con-
structing a plant to build jet
trainers in Brazil. Although
Costa e Silva probably would
prefer to buy US F-5s, no deci
sion has been made. If delays in
obtaining the US planes continue,
the appeal of the French deal will
increase. The air force inspector
general and the chief of materiel
are in Europe presumably looking
at aircraft or related equipment.
The Brazilian Air Ministry plans,
to replace 20 of its obsolete
Paris MS-760 jet trainers with
seven Fouga-Magister trainers.
The navy's ten-year modern-
ization program calls for the
construction of 80 warships, in-
cluding four submarines and four:
destroyer escorts that will be
built in private US or European
shipyards. Brazil probably would
prefer to contract for these
ships in the US, but it will turn
to Europe if commitments here are
not finalized soon.
Brazilian Military Expenditures Compared with Selected South American Countries*
1961
Total
(Million US $)
Per Capita
(US $)
1964
ARGENTINA
280
12
2.0
BOLIVIA
15
3
1.5
CHILE
130
1.7
COLOMBIA
70
1.4
PARAGUAY
11
1.8
PERU
170
14
3.0
VENEZUELA
200
22
2.1
In Relation to GNP
(Percent)
1965
1966
196
1.5
1.9
1.7
1.7
1.9
1.9
1.8
1.8
1.9
1.3
1.3
1.3.
1.9
2.2
2.*
2.8
2.4
3.411
2.2
2.4'
Exclude police force include expenditures for non military items such as the construction of
roads and schools and the provision of services to the public in the fields of public health and civil
services
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Economic Factors
Costa e Silva has generally
maintained the development and
stabilization program initiated
by Castello Branco. A business
recession was halted, economic
activity has recovered and is on
the upswing, and the cost of liv-
ing now is rising at a slower
rate (41.1 percent in 1966, 24.5
percent in 1967). Emphasis is
on development as well as on
slowing inflation, but the basic
problem remains that of maintain-
ing the necessary stabilization
efforts while producing some
tangible gains for the Brazilian
masses. The population continues
to grow at the alarming rate of
3.1 percent per year, nearly eat-
ing up the benefits of increased
economic growth. More rapid sat-
isfaction of the people's needs
for education, housing, improved
health standards, and many other
legitimate aspirations is essen-
tial if Brazil is ever to achieve
the base for long-range internal
stability and a responsible and
consistent role in world affairs.
Foreign Policy
Although Brazil retains its
basically pro-Western outlook,
foreign policy under the Costa e
Silva administration has shifted
toward a more independent stance.
Foreign Minister Magalhaes
Pinto--a wily politician with
strong presidential ambitions--is
the chief architect of this new
look. He has pushed for more na-
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tionalistic positions, accu-
rately gauging their popular ap-
peal to Brazilians who believe
that their country stands at the
threshold of great power status.
This rising nationalism is sharp-
ened by a sense of dissatisfac-
tion with Brazil's lack of orog-
ress and by a fear that Brazil
may always be the land of the
future.
One of the most prominent
signs of the growing nationalism
is the heavy emphasis on nuclear
development. Brazil has consist-
ently opposed the draft nuclear
nonproliferation treaty on the
grounds that it would relegate
Brazil forever to second-class
status. The foreign minister has
stated repeatedly that his coun-
try will not accept any limita-
tion on its nuclear energy devel-
opment program, including its
right to develop peaceful nuclear
explosive devices.
Other foreign policy shifts
have also occurred. For example,
the government has backed away
from Castello Branco's position of
open support for the US effort in
Vietnam. The foreign minister has
instead stated Brazil's position
as one of "complete neutrality."
In hemisphere affairs, Brazil has
lost its enthusiasm for the con-
cept: of an Inter-American Peace
Force and instead preaches eco-
nomic and social development as
the best remedy for the hemi-
sphere's ills. The foreign min-
ister has not favored strong
sanctions against Cuba and, in
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SPECIAL REPORT 24 May 68
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I
fact, would like to re-establish
relations, if it were politically
expedient.
Brazil maintains diplomatic
relations with the USSR and all
of the Communist countries of
Eastern Europe except East Ger-
many, which has commercial mis-
sions in Rio de Janeiro and Sao
Paulo. Brazil is seeking to ex-
pand its trade with the Soviet
bloc, which takes about 6 percent
of its total exports annually.
In 1966 Brazil and the USSR con-
cluded a $100-million credit
agreement, but none of the credit
has yet been used.
The new look in Brazilian;
foreign policy has resulted in,
some cooling in Brazilian-US r--
lations, which were unusually
close during the Castello Branco
regime. There have been numerous
outbursts of anti-US sentiment!,
and although most Brazilians re-
tain their good will toward the
American people, there is in-
creasing suspicion of the inten-
tions of the US Government.
Brazilian foreign policy is
likely to diverge more frequently
from that of the US, but the in-
evitable fr' should prove
tolerable,
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