POSSIBLE DEVELOPMENTS IN THE ARGENTINE SITUATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01012A002300010025-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 27, 2016
• Document Release Date: October 24, 2012
• Sequence Number: 25
• Publication Date: April 19, 1952
• Content Type: MEMO

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CENTRA.L INTELLIGENCE AGENCY
inr*
OFFICE OF NATIONAL ESTIMATES
UM no. 223
29 April 1952
SIMTECT: Possible Developments in the Argentine Situation
This memorandum is designed to serve as background and an interbn
substitute for the peading N1E-66 on Argentina, in which the situation
will be emmained in more detail and more definite estimative con-
clusions readied.
1. Lalgoductioa. For a cosdhinatica of economic, historical and
psychological reasons, Argentina has always represented a spocial.prOb-'
lom to th US, Inside the general framework of relations with the Latin
.-
American repUblies. When Peron came to per In 2943, he merely in-
tensified certain aspects of this problem by pursuing a foreign policy
at vazdance with that of the US and by initiating a revolutionary social
and economic program within Argentina which bad repercussions throughout
Latin Axaerica. To date, Peron has been able to count on relative
prosperity to finance his social mid economic experimentation. Now, '
for the first time, he apparently, faces a period of economic stringency
serious enough to threaten his tenure of power. At the same time,
his able helpmate Eyita reportedly has only a 35% chance to recover
from her present illness, so that Peron may lose the one most able to
muster popular support for him. The situation raises new questions for
theUSs Is it indeed likely that Peron will fall? What 'measures might
Peron take in order to maintain himself in power? If he were to fall,
what government would take his place and what would its policies be?
PRESENT SITUATION
2. The causes Of Argentinate economic difficulties are mainly twos
a longete7B7Warm/E76rU7po cy avor ng us.ri evelopment at the
expense of agriculture, and. current crop failures and reduced
production of meat. As long. as production and prices of basic ,
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Argentine commodities were good, most Argentines were satisifed with the
Peronist program, although economists warned against the eependiture
of war-time profits on industries for which the Argentine economy was
not ready, Nationalistic pride, spurred by Peronist propaganda, '
insisted on Argentine ownership and management of all types of industry
to erase meconomic onlonialiamm, held to be the bane of Latin-American
countries, Levies on agricultural production, by means of state
purchasing of export preducts and managed exchange rates, provided
the funds for buying out ihireign interests and other anbitious
industrial ventures. The pinch affected only the middle-class land
owners who had opposed the Peron regime from the beginning. In 1951,
however, continued drouths affected both grain and meat production.
The 1951-52 grain harvest was the worst on record, and there may be
no wheat to export from the current crop of a country normally one
of the worldos greateet exporters. Meatless days have been instituted
in an effort to meet commitments on meat exports to England, Loss
of exchange from the normal flow of exports will, in turn, increase
difficulties in the supply of essential imports,
3? Peron has had two main sources of war; the Army and
orgeniAscrraS777571FirinTWErariSee tn 1943, but since then
labor has been a much more dependable support. This was true in 1945
when the Army jailed Peron, only to release him when the descamivados
-- the underprivileged masses for whem Evita is an idolisMillae
-- demonstrated in his favor, Again in 1951, military elements were
involved in an abortive plot, and Peron subsequently took steps to
purge the Army of suspeoted opporerts, The power of the CGT, the General
Confederation of Workers, ably managed by Evitas has steadily increased
and has become almost a state within a state, as its leaders and those
of the Peronista party form a single working group. This was a natural
development of the social revolution staged by Peron, in which the lower
two thirds of the population gained political and economic stature
at the expense of the middle class that formerly ruled Argentina,
There is more than propaganda in Peron#s claims that he hes established
anew system, mjusticialismm, midway between capitalism and socialism?
He has at least tapped the sources of power of the masses, the
descamieados, who, in combination with a controlled or nullified Army,
Eiirrisough to maintain him in power,
4. The mPeronista state has been primarily, a system of shaping
Argentini-ETVEElaiiiilrFearlatted to developing the sources of
Perone power. While it has much of Italian fascism and much of the
Portuguese ,corporate state, it has changed with changing conditions?
It has entailed concessions to labor, centralised control of business
and production, detailed governmental economic planning, and intermittent
experimentation with syndicalist institutions. During the early years
.72
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of World War II, Peronism made more of a display of the borrowed trappings
of European totalitarian regimes, but with the decline of the Axis
the appeal to the aspirations of the masses has increased. In the
evolution of Peronismo full use of progapanda techniques has been made
and also of censorship and control of the media of information. Many
affronts to the democratic theories of free speech and free press have
resulted, recently exemplified by the closing of La Prima, which
torourommoftwo
brought hemisphere-wide condemnation. roma.
5. The key to Peron's survival is control of the COT. The reaction
of the ra an e mpac o econo a s ngency affecting
stomachs and pocketbooks will be a major factor in the outcome of the
present situation. Within the COT, there is an apparent alternative
leadership in the person of a number of pro-Communists, who compete
with Evitals stooges for control of the organisation. The ranking
member of this group is a Spanish Republican refugee, Santin, who
holds the number two position, Administrative Secretary, and who recently
came within one vote of defeating Evitats supporter, Jose Espejo,
within the confederation. There has been no open rivalry between
Communists and Peronistas, either within the COT or outside it, because
the Communists have supported the same social and economic program as
Peron and have found his anti-US and anti-imperialistic propaganda
lines favorable to long-term Communist objectival,. Politically, the
cooperation between Peronistas and Communist groups is particularly
notable in the case of a small but influential group of "dissident"
Communists whose leader, Rodolfo Puiggros, has been able to have his
propaganda releases distributed by the Argentine Sub-Secretariat of
Press and Propaganda. The "dissident" Communists -- who split with the
orthodox Communists on the issue of collaboration with Peron -- feel that 4
Peron, may $ in tact, adopt Communists doctrines in tote if he encounters
insuperable difficulties in his own 'Third Position" approach. In /MY
case, the Communist infiltration within both= and Peronista party
groups appears to provide an alternate leadership if discontent with
Peron develops as a result of economic crisis.
6. Opposition parties are disorganised and weak, as often happens
in Latin America after the long continuance of a strong-can regime.
Peron's political opposition consists of the liberal "Radical" party
(which cast a surprisingly large vote in the presidential elections of
Novembers 1551), of former conservatives, and in general of members of
the middle class that ruled Argentina before Peron took over. Most of
the liberal and conservative opponents of Peron, however, are not of the
type to oppose the government by force in person, and they have had
little luck in finding anyone to menthe barricades for them? The
economic pinch foreshadowed by present conditions will affect the middle
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class less than previous governmental measures -- in fact, the rural
landowners will benefit to a minor degree by the adjustment of food
prices, which will at the same time weigh on the urban proletariat*
This facts however, is not likely to change the middle classes' basic
disapproval of the regime. It would be extremely difficult for them,
however, to get together among themselves or to unite with any elements
of the proletariat that might become discontented with Peron's rule.
7. Peron has initiated "austerity measures" to meet the economic
difficultrirt=lirialruey1?"Tneirae wage-price stabilization,
rationing, reduced' governmental spending, and stimuli to increased
agricultural production in the form of incentive prices? The regime is
fully aware of its difficulties and has mustered the old nationalistic
devices of blaming the situation on "foreign imperialism" at the same
time that Argentines are urged to pitch in to min the economic battle for
their national independence? The time has also been deemed appropriate
to increase federal controls typical of a syndicalist state. These are
noted in the constitution of the new province "President Peron", in which
former provincial rights to control education, pliblic works, welfare,
and the courts are all taken over by the central government.
80 Peron's policy in foreign relations has had objectives that
are not arElear. 17--1-7,--/rTharsat the purpose is to increase
Argentines influence and prestige by making it clear that Argentina
determines its own position on each issue, irrespective of the views of
other and larger nations* This policy is the so-called "Third Position,
which places Argentina midway between "imperialist capitalism",
exemplified by US, UK and other "colonial" powers, and Communist
imperialism of the USSR and its satellites? Just as Peron stands for e
different domestic system of government, he maintains& that Argentina
need not be drawn into either of the camps into which the world is being
dividede Rather, he hopes that other Latin-American nations may
follow Argentina's leadership and then join larger pan-Latin aggregations
to reduce the control of world events held by the US and the USSR*
Perfectly consistent with this present stand was Argentina's World
War /I neutrality, which was dropped only in the last stages of the
conflict as a means of rejoining Western Hemisphere and world-wide
organizations. Propaganda supports the "Third Position!' idea, and
Argentine criticism of the US has greatly increased recently?
Argentina opposes the war in, Korea, the Mutual Security Program,'
NATO, the Rio pact (although Argentina is a signatory), and alleged
US efforts to depress the prices for Latin-American raw materials?
"Capitalist imperialsim" tears the brunt of the Argentine radio and
press attacks while the USSR is only occasionally criticised as the
opposite extreme to illustrate Argentina's position as a golden mean.
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9. Efforts to organise an Argentine-sponsored Latin-American
labor federation, in opposition both to the Communist CTAL and the
tY6..approved IntertufterimulEgional Organization or Workers (MIT),
have been a major program. Argentine labor attaches, well supplied
with money, have cultivated the friendship of labor leaders in all
Latin-American countries and in February, 1951, a conference was
called in Asuncion, Paraguay, in the effort to form an inter-American
federation under Argentine sponsorship. Tbe effort has been in-
effective to date, although maw individual leaders work with the
Argentines.
POSSIBLE FUTURE DEVELOPMENTS
10. Until the first reactions of the Argentine public to
"austerity" are noted and the accuracy of medical predictions
regarding Evita establishedoit is impossible to estimate accurately
the possibilities for survival of the present Argentine regime.
U. Peron 'A survive in. ndi economic difficulties by un-
expected r GOO 0 1 ua on, or ncr;....ng controls
and austerity measures while using his old resourcefulness and ability
at propaganda to give the effort the character of a nationalistic crusade.
If &vita dies or is incanacited during the next year, however, Peron's
ability to govern will be impaired and his own psychological state
may make him less able to control events. In any event Peron will
resort to strict internal controls, syndicalist ventures, and a
barrage of anti-US, anti-imperiallet propaganda tending to make the
US appear responsible for all Argentines difficulties -- already
a well-developed Peroniat technique. Given a longer term in which
to operate, Peron might be able to repair many of the economic
errors growing out of the neglect of agriculture and over-ambitious
industrial development.
12. If Peron were overthrown, it would probably be as a result
of the unallIngness of the proletariat to undergo the belt-tightening
initiated by the administration. The leadership for opposition to
Peron would probably be found among the Communists in the COT, possibly ?
some dissident military elements, and the unrelenting opponents within
the middle Oleos. If the CGT took measures to overthrow Peron, with
Army neutrality or support, it would probably create a chaotic condition
for some time as it is not strong enough or able enough to govern by
itself and the likelibocxtof effective combination with other groups is
slight. The disorganisation of the opposition canoed by nine years of
Peroniam is so great that the transition to any other government would
be difficult. The influence of the Communists would increase under such
conditions, so that the ehort-tame prospects, at leatt, would be very
unfavorable to the democratic interests of the hemisphere.
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13. The survival, of the Peronist regime -- even with increased
anti-US propaganda and repressive measures -- could easily be less
harmful to US interests than its overthrow and a resulting period
of chaos in which Communists and other- anti-US elements would
probably increase their influence. The immediate future:, therefore.,
appears to offer two principal lines of development in Argentina--
neither very favorable to the US.
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