WEEKLY CONTRIBUTIONS ON LATIN AMERICA 49-50 O/RR, CIA 5 DECEMBER 1950

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200060010-3
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 12, 2016
• Document Release Date: March 19, 2002
• Sequence Number: 10
• Publication Date: December 5, 1950
• Content Type: PERRPT

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Udek1,7 Contributions on Latin America 49-50
OIRR9 CIA
5 December 1950
(Pending completion of reorganization in Office of Research and Reports,
CIA, Ut Contributions on Latin. America will be published on an in-
terim as ic group ? am ate prey ous1v responsible for Ra192.1a
Contribubions.)
PLENTS
GENERAL! There is reason to believe that USSR and the Satellites are shift-
ing the emphasis of their tactics in some Latin American countries (p, 2).
SOUTIMMAREAlt In Pu, the foreign office resents US "intervention" in
the Uwe case (p. 2),
SPECIAL SUBJECTS
Probable Develcpments from the ICJ Decision in the Hays Case . ? 3
The Current Situation in Bolivia ,, 5
The Current Situation in Costa Rica. ... . 8
DOCUMENT NO.
.40 CHANGE IN CLASS. 0
DECLASSIFIED
CHANSED TO: TS S C
FEV:EW DATE?
1-413?7
DATE. /bjflEVLEWER:
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Weekly Contributions, D/LA, 49-50 5 December 1950
(CIA Working Paper)
GENERAle PostAllataarigt1BATEMOs of Soviet Taptics_in LA
As a result of the narrowing field for Communist pelitical
actions the lack of effectiveness of most Communist parties, the
defensive Communist position in labor, and the increasing repression
of the usual type of Communiet activity, the Soviet Union nrobably is
finding local Communists in Latin America Dees effective as an instrue
merit of Soviet foreign policy. The USSR and the Satellites anparently
are Shifting the emphasis of their tactics in some Latin American
countries by developing economic and commercial contacts, by purchase
ing commercial establieheents as cover for agents end intelligence
operations, and by increasing Soviet and satellite embassy activities.
In Cuba, certain small businesses have reportedly been financed by
the USSR and operated by persons euspected of being Soviet agents.
Polieh and Czechoslovakian trade delegations are to negotiate commer-
cial treaties with Argentina and Uruguaye Commercial delegations
from both the usra and Czechoslovakia are possible additions to the
diplomatic entablisheents in Argentina, and a new Soviet ambassador
to that country has been appointed. (The last Soviet ambassador left
Argentina in December 19470) In Venezuela, some increase in activity
of the Soviet embassy has been indicated. The Czechoslovakian embassy
reportedly has been the source of some funds for the Nexican Communists.
It is likely that Soviet tactics will further emphasize
commercial and diplomatic action in Latin America.
2. MaltEsealg.RMSAglawenta US "Intervention' inHa Ca,
The Peruvian foreign minister has characterized as unjust and
unfriendly toward Peru" the US memorandum expressing concern over Peru's
attitude an" offering us good offices in the Haya de la Torre dispute.
The minister states that Peru is being blamed when the fault lies with
Colombia, and it is expected he will nrepare a strongly worded point-
by-point counterememorandum.
While Peru has not flatly rejected the US offer of good offices,
the Peruvian decision not to grant safe conduct out of Peru to Hgya de
la Torre and Colombia's announced decision not to give him up (although
it would welcome any reasonable face-saving solution) make it appear
that the US offer of good offices is destined to failure.
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Weekly Contributions, D/LA, 49-50
(CIA Working Fhper)
Article 12-50
5 December 1950
Zaftlakparj,e oes2nIggibstgistiAzi.1129.
The recent decision of the Internatioral Court of Justice (ICJ) in
the Haya de la Torre case involving a dispute between Colombia ane Peru
over political asylum, even though the court technically discharged its
obligations by furnishing answers to the questions originally nut to it
by the countries welcomed, has provoked considerable adverse criticism
among Latin American lawyers and governnent officials. It is true that
the commenting officials, vith few exeeptiens, do not speak officially
for their respective governments, -which are understandably reluctant to
commit themselves nabliely on this controversial matter urtil the full
text of the court's decision becomes available. This agat.saigne
however, entirely apart from its effect on the bilateral reletions of the
ewo disputant nations, will nrobably have certain effects on the prestige
of the ICJ in Latin America, on the ratification of the Bogota Pact, and
an plans for an inter -American judicial organ? It vill have little effect
on the practice of granting political asylum in Latin America?
It cannot be said the influence of the ICJ has been large in Latin
Americae A malority of the American republics, however, have accepted
Article 36 -- the compulsory jurisdiction clause of the statete of the
ICJ -- with or ulthout reservations. Should the aboveementioned individual
adverse reactions continue after there has been an opportunity to become
acquainted with the official text of the decisiononi should eaner of the
governments also react in a critical fashion after their study of the
decision has been completed, the ICJ's nreatige in Latin America, such
as it is, will have been definitely weakened and search for an acceptable
substitute will have been given new impetus. The weakening of the ITS
nrestige in Latin America will adversely affect such interest as the US
has in the court's position as an integral part of the UN.
The Colombian government has declared that it now will not ratify
the Pact of Bogota, since certain sections therein nrovide for resort to
the ICJ, and that it will urge other American reeublics likewise to refrain
rrom ratificetion. It is true that such.action with respect to the Bogotd
Pact will, for nest of the countries, emphasize their disapproval of the
court rather than affect their obligation toward it, because of the
ineepeneent action they have already taken with respect to Article 36 of
the ICJ statute? Furthermore, in view of the fact that the US delegation
originally signed the Bogota Fact with reservations ane that this instru-
rent has not been, as rt nresented to the US Senate for approval, this
indirect, but adverre, effect of the ICJ decision on the Pact of Bogota
may not be judged detrimental to US interests in the Hemisphere.
Deanne the fact that the jurists on the ICJ did not divide along
geograehical lines in their decision, some Latin American countries have
again raised the old question as to ehether the ICJ is the best "lace in
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(CIA Working Paper)
Article 12-50
5 December 1950
Vetch to have a purely intere9American dispute adjudicated* Such queries
suggest the possibility that, should there be general dissatisfaction with
the ICJ among the governments of Latin America, the idea of adding a judicial
appendage to the Organization of American States may be revived. Such an
arrangement for regional judicial settlement of disputes might at least
reduce the necessity of appeal to the W.T. A solution of this nature might
be deemed undesirable from the point of view of the US, unless the objec-
tions traditionally- raised by the US to an interifterican court could be
met satisfactorily*
It Is not probable that the court's decision will have any marked
effect an the practice of political asylum in the other American republics,
regardless of what may be the end result of the present dispute between
ColoMbia and Peru* This institution is too highly prized in Latin America,
in spite of its rather dubious standing in internrtional law, and has
proved Its utility on too many occasions for it to be abandoned readily*
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Weekly riontributions, ritAs 49-50
(CIA. Wreking Paper)
Situatinn Memorandum 73-50.
5 Decembee 1950
(Summary -- The stability of the eeak Urriolagoitia government
has not improved. The economic situetion remains unfavorable
desnite continued vine. The militery situetion is basieelly
unchanged,, The stren01 of the subversive gronns has not in-
creased. Bolivia's fonetrn relntions continued generally friendly.
-- US security ieterests have been favored by ratifi-
cation of the Rio pact lied OAS charter.)
Pelit4C1:11
...he stability of the weak Urriolagoitia governrent has not improved
desnine supnression of tne MNR:-PIR student disorders in August and Sentember
and irnroved relations with the influential mining industry (see Economic).
Government insecurity Is indicated by the declaration of a state of ciege
rti 16 November folloving tie discovery of a poorly crganized MNR plot.
Purther, the administratica reportedly sponsored the disbanding of the
Congress, because the cont:nued ahsence of governrent party members -- nre-
sumably at party bidding -- prevented the attainment of a quorum. The
administration wen able, this, to avoid the interpellation of the cabinet
concerning economic and fiseal policies and government unwillingness to
permit the return of exiles, e were theoretically covered by the pro-
visions of the 11 Sentemher..sty law. Government nerty congressmen were
enabled by this maneuver to avoid carrying to a decision the politieally
explosive trial of Villarrcel. regine officials. Chief factors contributing
to the government's insecurIty ares (1) popular discontent because of
continuing inflation, (2) increasing political activity of the army, and
(3) intensification of Inter-party and intra-PUSR rivalries arising from
preperations for the May 1'51 elections (though PUSR differences have
nominally been settled by t recent agreement between the party's four com-
nonents to stick together :wanness of the final choice of candidate).
Nevertheless, such eonditions and rn conspiratorial activities will not
necessarily lead to the acerthrow of the government during coming months,
since it is believed to cinmand the support of the majority of the army.
It is believed thet the alministration .:ill give wide nublicity to imaginary
nlots to justify maintenance of the state of siege during the camnaign
period,
?2Z-2Wal
Bolivia's economic situation remains unfavorable although there are
certain favorab, trend t and denelonnents. The recent eejor economic issue
concerned state control f foreign exchange earnings from exnorts of minerals,
emecially of tine The eovernment's arendment of the 11 August /950 decree,
which nracticdly confisiated foreign exchange earnings, and its granting
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Weekly Contributions, D/LA0 49-50
(CIA Working Paper)
Situation Memorandum 73e50
5 December 1950
of more liberal exchange concessions were accompanied by an agreement by
the tin mining industry to raise the annual rate of tin production to
32,000 metric tons within two months and to 35,000 metric tons within six
months.
Tin 'rices per pound rose from 771/2 cents in June prior to the
Korean war to $1.63 an 8 November. Greater production of tin together
with the higher nrices reflecting strong demand should permit much enlnrged
Bolivian foreign exchange earnings from tin exports.
As a result of petroleum shortages and the continuing financial
difficulties of YPFB (government petroleum monopoly), there is a growing
realization on the part of the government of the desirability for the
investment of foreign capital in the petroleum industry to increase pro-
duction. Develanments indicative of such sentiment are the passage of a
bill which lifts the national petroleum reserve in areas not currently
exnloited by YPFB to permit their development by mixed comnanies and the
governmentes decision to call in US experts to survey Bolivials petroleum
industry.
Nevertheless, these favorable developments are offset by the continu-
ing threat of additional deficit financing with a consequent increase in
the monetary supply and inflationary pressures. Tin production during
1950 is expected to fall below the figure of 35,000 tons on which the revised
foreign exchange budget has been based, and further?.the finance minister
has stated that the deficit in the 1950 national budget might exceed US-
$57,000,000.
The military situation is basically unchanged though there has been
a slight increase in the efficiency of the air force as a result of the
reconditioning of some equipment and the improvement of some bases. The
army generally remains loyal and is capable of maintaining internal security.
IliftSThe strength of the subversive groups has not increased. Although
part of the army and influential political figures, such as exeMinister
of Government Mollinedo, are reportedly involved in plots, this party is
not believed strong enough to overthrow the government at this time. Con-
trary to nrevious reports that the PIR had been declared Magni under the
decree outlaying Communism and Communist parties in Bolivia, a government
spokesman has stated that the PIR retains its legal status. The potential
of the PM for creating disturbances has increased sliest:1y as a result
of formation of a terror squad. Nevertheless, because of police intimida-
tion of some of the PIR's congressional renresentatives and the exile of
6.
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Weekly Contributionn, 1)/LA, 49-50
(CIA Working Paper)
Situation Memorandum 7,-50
5 December 1950
the PIR chief, this party remains too weak -- independently -- to make a
major movee Reportedly strained relations with the MIR since the failure
of the student strike make unlikely an alliance with that group, though
individual Piristas may participate in MR revolutionary activities. There
have been no reports to indicate any change in the weak status of the Ocama-
nist Party during the last few months. Thus, since the subversive groups
are believed to be disunited and to be opposed by the majority of the army,
it appears unlikely that these groups till/ effect the overthrow of the govern-
ment at present, although they will aggravate disturbances to the greatest
eossitle extent.
InkriaLrAle
US security interests have been favored by ratification of the Rfo
Treaty and OAS Charter (the latter, however, has been ratified with two
minor reservations); and there is every indication that Bolivia will con-
tinue to support the US in all major international issues? Bolivia's
friendly foreign relations remain generally unchanged. Premature nublicity
given to negotiations with Chile concerning a Bolivian corridor-to-the-seal
however, slightly strained relations with that country and Peru*
The cordiality of US-Bolivian relations has been enhanced by the
passage of a bill renewing service on the defaulted dollar debte A draft
trade-and-nayments agreement with Yugoslavia and a trade-and-barter agree-
rent with Italy are under consideration.
4..-wonee
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Weekly Contributions, CAA, 49-50
(CIA Working Paper)
Situation Memorandum 74.50
nt Sit t
5 December 1950
(agsmscx -- The Mate government* though reasonably stable* is
in a weaker position. The current economic situation is slightly
more favorable. There has been no improvement in the effective-
ness of the ardig,0=30 Communist strength and potential
influence le-OtiatalRioal alresey small* have decreased in the
past six months. Relations with the US* the United Nations) and
Nicaragua remain unchanged, n0 President Mato still finds it
difficult to keep Costa Rica aloof frce Middle American revolu-
tionary activities.
-- US security interests have been favorably affected
by the decreasing strength of the Communists but are endangered
by the weakened position of President Ulate and the possibility
of increased revolutionary activity in the Caribbean area involv-
ing Costa Riese)
Mate governments though reasonably stable, is in a weaker poste
tion than six months ago. Plotting by the Calderonistas for the overthrow
of President Ulate annears to be increasing (DAA May* 15 Aug) 21 Nov 50).
The Civil Guard (Costa Rice's only armed force) is too weak to combat a
well-prepared plot. Moreover* part of the Civil Guard* the bank employees
Oho as a group have considerable Over), and some government employees
are rerortedly more lora to former Junta-President Figueres than to
President Ulate. There has been an increasing question as to the extent
to which they would support Ulato in event of a crisis between Figueroa
and Mate. However* under current conditions* Figueroa seems to leave no
intention of encouraging such a crisis.
It is estimated that there is no immediate threat to the continuance
of the Mate eministration.
BascomIv
The current economic situetion is slightly more favorable now than
six months ago. Stringent exchange controls have halted to improve the
country's poor international credit position* portions of the internal nubile
debt are gradually beirg paid off* and governmental expenses are being met
from current revenues. In addition* world market conditions continue to
favor Costa Bloats chief exeorts* ceffee* bananas) cacao* and abaci. Al-
though Costa Rica will benefit in the long run free nny Point /V aid and
any new foreign investments.* none of the potential develonmen+s will have
any substantial effect on the general economic situation in the next six
611:P5i21511"wm
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(CIA Wrecking Paper)
Situation Memorandum 75-50
5 December 1950
months. In the meantime; eublic dissatisfaction with the present stringent
financial controls may possibly increase in intensity, retarding further
progress toward the solution of domestic financial problems. For these
reasons it is estimated that there mill be no sUbstential improvement in
the economic situation in Costa, Rica in the next few months.
There has been no improvement in the effectiveness of the Ceardie
ayll, and in addition the degree of its loyalty to the president has
become questionable. This sole military body of Costa Rica, 1000 men, is
still not adequate in size, trainirg, and equipment to control or prevent
arms smuggling and revolutionary plotting, nor is the Guard.is capable of
suppressing any large-scale civil disturbances or invasion attempts from
abroad. Moreover, some officials of the Wzgia. are said to be loyal to
former JUnta-President Figueroa rather than to President Mate. It is
believed that the %iW...k cannot be counted upon to support the president
undivideny in event of a crisis.
It is estimated that there will be no improvement in the capabilities
of the Qrciia and probably no increase la its loyalty to the president
in coming months.
807,86Pot
ommunist strength and potential influence in Costa Rica, already
small, have 'decreased in the past six months. It is true that the Comau-
niste are still able to'eublish the meekly news organ, Walls, that they
retain some influence in organized labor, and that they might be able to
give limited aid to plotters in event of revolutionary activity against
the Ulate administration. Nevertheless, anti-Communist sentiment has in-
creased considerably during the Korean war, and Communist Party (Van-
' guardia Popular) activities mere declared illegal by the national assembly
on 26 July 1950. Party activities were virtually paralyized for a while
after the assembly's action, and police enforcement of the new anti-
Communist law still hampers CowAnist activities. Rank-and-file members
have been deserting the party, and party activities have been almost at
a standstill outsiele the cities of San Jose and Pentarenas. Moreover,
Arnold? rerretes work toward becoeing party dictator has forestalled the
rise of future party leaders from the lower eohelons ane has also 'widened
the rift between his followers and those of Manuel Nora, thus preventing
the formulation of a clear party policy for use during the present era of
governmental supnression.
' It is estimated that the Communists Will continue to propagandize
along lines established by Macaw, that they. will work to increase the
strength and influence of the Com6nist women's and youth groups and of
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(SIA Working Paper)
Situation Memorandum 73-50
5 December 1950
Communist-dominated labor syndicates, and possibly may infiltrate non-
Coamunist organizations in ardor to use them as fronts. It is expected,
however, that Communist influence will not increase substantially above
the present low level in coming months.
liatsgMUISia
Relations with the US, the United Nations, and Nicaragua remain un-
changed,and President Ulate still finds it difficult to keep Costa Rica
aloof from Middle American revolutionary activities. Costa Rica has con-
tinued its friendly attitude toward the US. It has. offered the United
Nations sites for bases and troop garrisons. Relations with Nicaragua
remain straineds unconfirmed reports state that President Somoza has been
helping to arm exiled Costa Blooms in nreparation for an attempt against
their nntive land (D/LA Wkly, 21 Nov 50). There have also been reports
of arms snuggling and revolutionary plotting in Costa Rican territory.
Former Junta-President Jose; Figueroa is reportedly connected with such
activities.
It is estimated that there will be no substantial improvement in
Costa Rica's capacity to remain aloof from Caribbean area plotting and
counter-plotting in coming months. Relations with the US and support
of the UN will remain unchanged.
100
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