LATIN AMERICAN TRENDS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A001800010001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 20
• Document Creation Date: December 12, 2016
• Document Release Date: June 29, 2001
• Sequence Number: 1
• Publication Date: September 17, 1975
• Content Type: NOTES

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Secret
No Foreign Dissem
MN
Latin American Trends
Secret
September 17, 1975
No. 0527/75
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No Foreign Dissem/No Dissem Abroad
Background Use Only/ControZZed Dissem
Warning Notice
Sensitive Intelligence Sources and Methods Involved
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
Classified by 010725
Exempt from general declassification schedule
of E.O. 11652, exemption category:
? 5B(1), (2), and (3)
Automatically declassified on:
Date Impossible to Determine
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This publication is prepared for regional specialists in the Washington com-
munity by the Western Hemisphere Division, Office of Current Intelligence,
with occasional contributions from other offices within the Directorate of
Intelligence. Comments and queries are welcome. They should be directed to
the authors of the individual articles.
September 17, 1975
Argentina's New Economic Team . . . . . . . 1
Venezuela: Petroven Board Selected . . . . 2
Cuba and the Nonaligned . . . . . . . . . . 6
Guyana: Just Call Me Comrade . . . . . . . 8
Bolivia: Campaign to Break
Relations With Chile . . . . . . . . . .
Cuba: Puerto Rico Solidarity
Conference . . . . . . . . . . . . . . . . 11
Venezuela: Foreign Capital
Welcomed... but . . . . . . . . . . . . 13
Brazil: Security Forces Again
Act With Impunity . . . . . . . . . . . . 15
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Argentina's New Economic Team
Economy Minister Antonio Cafiero, who has himself
performed impressively during his first month in of-
fice, has chosen an unusually talented group of techno-
crats to be his advisers. The reliable financial week-
ly, Review of the River Plate, has judged that "this
is as bright and varied a team as any that has managed
the economy."
Perhaps the most striking of the appointees is
Guido Di Tella, the secretary for economic planning
and coordination. The scion of one of Argentina's
wealthiest industrial families, Di Tella holds a doctor-
ate in economics from the Massachusetts Institute of
Technology, has taught economics at the University of
Buenos Aires, and heads the Torcuato Di Tella Institute,
a prestigious social-science research foundation.
Leopoldo Tettamanti is another well known figure.
He returns to the post of secretary for foreign trade,
which he held under former minister Gelbard. Tettamanti
is a career diplomat, and spent eight years as ambas-
sador to the European Community. These ties may serve
him well in attempting to persuade the Western European
Nine to lift their year-old ban on Argentine beef.
The new head of Argentina's energy programs, Vice
Admiral Pedro Iraolagoitia, is the former director of
the National Atomic Energy Commission. This background
will probably influence him to promote atomic fuel in
preference to other sources of energy.
Argentina's economic problems are primarily polit-
ical in origin and it remains to be seen if these tech-
nocrats, however well qualified professionally, have
the necessary political talent and stamina to maneuver
successfuly. The Review of the River Plate concludes
its appraisal on the worrisome note that "the trouble
is that the economy nearly always does better when it
is left alone, and the brighter the meddler, the worse
the trouble, usually." (CONFIDENTIAL)
September 17, 1975
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Venezuela: Petroven Board Selected
President Perez has named nine men with impres-
sive credentials to direct the operations of Petroleos
de Venezuela (Petroven), the holding company that will
administer the nationalized oil companies after
January 1, 1976. The business orientation of the board
members reflects Perez' own confidence and his assess-
ment of the broad domestic political support he enjoys.
Because of this it was apparently unnecessary to in-
clude leftists or extreme nationalists on the board.
The appointees, who are distinguished Venezuelans,
were obviously chosen by President Perez with an eye
toward the delicate negotiations now taking place with
the oil companies regarding compensation and operating
contracts. Solution of the latter issue would give
Venezuela needed oil technology and continue its inter-
national marketing access. The new board (see accompany-
ing table) blends the talents of oil experts with those
of public administrators, financial pundits and special-
ists in international affairs and labor.
Many of the details of the structure and operations
of the new holding company remain to be worked out.
Nevertheless, plans call for Petroven to have initial
assets of about $2 billion. Future working capital, as
provided in article seven of the nationalization law,
will consist of ten percent of the operating companies'
net monthly revenues from oil export sales. President
Perez has instructed the Petroven board to formulate a
plan to reorganize the 21 local operating companies to
reduce their number, minimize duplication'of effort,
reduce expenses, and improve efficiency. The terms of
an often-discussed plan call for the 19 foreign companies
to be merged into five. The holdings of the four major
foreign firms--Creole (Exxon), Mene Grande (Gulf), Shell
and Mobil--would remain essentially intact, while the
holdings of the 15. smaller firms would be consolidated
into a fifth company.
September 17, 1975
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According to Petroven vice-president Julio Cesar
Arreaza, a proposed plan involving Creole might serve
as a prototype for the industry. Following an agree-
ment on compensation with the government, a new com-
pany--Lagoven--would be formed and wholly owned by
Creole. Lagoven would be presided over by Guillermo
Rodriguez Eraso, a Venezuelan, currently executive
vice-president of Creole. The majority of Creole's
personnel would be transferred to Lagoven, as would
its assets and concessions. On December 31, when the
concessions formally expire, the Venezuelan government
would purchase all of Lagoven's stock, giving the new
owner, Petroven, the personnel, assets, and the expired
concessions, without an interruption in operations.
During the interim period before the state enter-
prises are ready to take over operations, a nine-member
supervisory commission under the ministry of mines and
hydrocarbons will authorize, "fiscalize," and control
all activities of concession holders in the government's
behalf. Seven of the commission members were chosen by
President Perez, including two from a labor list of
candidates; the remaining two were selected by Perez
from a list submitted by congress. (CONFIDENTIAL)
September 17, 1975
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Board of Directors
President:
General Rafael Alfonzo Ravard Well known former
president of Venezuela
Development Corporation.
Given major credit for
industrial development
of the Guayana region.
Vice President:
Julio Cesar Arreaza
Former mines ministry
official, since 1969
has been in private
sector as director of
various companies.
Full Time Members
Jose Domingo Casanova Mendoza Former manager of Creole
tions in
Edgar A. Leal
(EXXON s) opera
eastern Venezuela. Recent-
ly chosen as government
"observer" of Sun Oil
Company operations.
Former vice-president of
National City Bank of
Venezuela.
Part Time Members
Highly regarded economic
consultant with oil com-
panies, OPEC secretariat
world bank and IDB as
clients.
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Julio Sosa Rodriguez
Carlos Guillermo Rangel
Alternate Board Members
Former president Caldera's
personal representative in
dealing with oil companies.
Negotiated Venezuela's
entry into Andean Pact.
Former president FEDECAMARAS
businessmen's organization.
Director of several banks
and insurance companies.
Former president of Central
Bank and Venezuelan governor
of IMF and IBRD. Also well-
known poet.
Active in Accion Democratica's
labor arm and founder of
FEDEPETROL, the largest oil
workers union. Also worked
for some time with Creole.
Jose Martrano Battisti, Luis Plaz Bruzual (former mines
ministry executive), Gustavo Coronel (young Shell Oil execu-
tive), and Raul Henriquez Estrella.
Petroven Legal Advisor
Andres Aguilar
Former ambassador to the US
and UN under the Social
Christian government of
Rafael Caldera.
Petroven Comptroller
Aquiles Marcano
Highly regarded public
accountant with many "blue
chip" clients.
September 17, 1975
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Cuba and the Nonaligned
Havana's intention to capitalize on its member-
ship in the nonaligned movement is underscored by
the formation in late June of a special party-govern-
ment committee for nonaligned matters. The commit-
tee's establishment outside of, rather than within,
the foreign ministry suggests that Foreign Minister
Raul Roa's role in foreign relations may be declining.
Roa's immediate superior, Deputy Prime Minister
Carlos Rafael Rodriguez, as the committee's secretary
general, is its most powerful officer, although Roa,
as committee president, is its titular head. In a bit-
ter verbal battle over a policy matter at a recent com-
mittee meeting, Rodriguez reportedly overrode Roa's
protests, criticized him for his "rigidity", and com-
mented that he was present only because he held the post
of foreign minister. Roa, acutely embarrassed before
the other members of the committee, interpreted the inci-
dent as one more in a series of indications that his in-
fluence in foreign relations is declining, and expressed
the fear that he might not be re-elected to the party's
central committee at the party congress in December.
Roa's fears are probably well founded. He has been
kept on in his position primarily because he is useful
in international forums where the regime occasionally
requires an aggressive, leather-lunged spokesman.
Rodriguez, whose star has been on the rise for several
years, is more inclined to the civil, rational approach
and has probably already decided that the 68-year-old
Roa has outlived his usefulness and must soon give way.
The foreign ministry has a majority on the non-
aligned committee, but it is the party that reportedly
has the real power and influence. This is a reflection
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of the institutionalization that has been under way
in both government and party for about five years.
The party is more influential because it sets policy,
and the government has become more an administrative
apparatus for carrying out the party's policy decisions.
The committee has had several meetings since June.
At one, held just prior to the Nonaligned Nations
Conference in Lima in August, Rodriguez reportedly com-
mented that Cuba's desire to be a leader among the non-
aligned would henceforth be a cornerstone of Havana's
foreign policy. The Cubans have apparently decided
that international forums are important channels for
achieving foreign policy goals; Havana therefore is
likely to make increased use of its membership in the
UN and in the incipient Latin American Economic System,
as well as in the nonaligned movement. (SECRET/NO
FOREIGN DISSEM/NO DISSEM ABROAD/BACKGROUND USE ONLY/
CONTROLLED DISSEM)
September 17, 1975
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Guyana: Just Call Me Comrade
Prime Minister Burnham's ruling People's National
Congress party has taken another symbolic step toward
socialism by authorizing use of the term "comrade" in
the Guyanese parliament. In decreeing the change, the
PNC leaders brushed aside opposition objections, em-
phasizing the "egalitarianism" and "brotherhood" in-
herent in the term and said it would be used proudly
by government officials in parliament and elsewhere.
The government's actions will undoubtedly add to
the suspicion, held by the country's majority East
Indian population, of Burnham's often black-racist and
socialist policies. East Indian concern has been in-
creased by the prime minister's intention to make the
controversial National Service scheme compulsory and
to turn Guyana into a socialist state. According to
a recent press report, leaders of the Muslim community
are planning to meet with government representatives
to discuss these concerns. They may also be seeking
the support of the Anglican and Catholic communities,
whose leaders are increasingly critical of the Burnham
government. (CONFIDENTIAL)
September 17, 1975
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Bolivia: Campaign to Break Relations With Chile
Sensation-seeking Bolivian newsmen are advocating
that the government sever its recently reestablished
diplomatic relations with Chile.
They have seized on the Chilean Government's
publication of a recently amended internal security
law. One article of the 1958 law makes it a crime for
a Chilean citizen to agree to a foreign state's annex-
ing any part of Chile's territory. Several newspaper
commentators in La Paz have interpreted the law as
meaning that Chilean officials currently discussing
with their Bolivian counterparts the possibility
of a Bolivian outlet to the sea are subject to pros-
ecution. The Bolivian newsmen, citing the law as proof
of Chile's insincerity in the talks, have called for a
break in diplomatic relations. One radio commentator
has even advocated that Bolivia use force to reclaim
its lost territory.
Chilean authorities, in an attempt to counteract
what they view as exaggerated Bolivian press reports,
have pointed out that the publication of the law was
a routine matter and that the current bilateral negotia-
tions are not affected. Bolivian Government officials
were nevertheless embarrassed by the publication of the
law and, while they have stated that talks on the outlet
to the sea issue would continue, they have attempted to
assuage at least the more moderate elements of the
Bolivian press by demanding that Chile provide a written
explanation of the controversial law and of its impli-
cations.
President Banzer has a large personal stake in
maintaining diplomatic relations with Chile. He was re-
sponsible for reestablishing relations in February 1975--
after a 13-year break--in hopes that the move would
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eventually pave the way for Bolivia's obtaining its
long-coveted outlet to the sea. Banzer has promised
that Bolivia will achieve its objective while he re-
tains the presidency, which he hopes will be until
1980. He will consequently keep as much pressure on
the Chileans as he can, but he is not likely to allow
the current furor to derail the negotiations.
(CONFIDENTIAL)
September 17, 1975
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Cuba: Puerto Rico Solidarity Conference
The International Conference of Solidarity with
Puerto Rican Independence, held in Havana from Sep-
tember 5 to 8, failed to live up to its advance bill-
ing, judging from its final declaration. Aside from
the expected propaganda blast, the conference apparent-
ly achieved little of substance.
The final declaration made no mention of the for-
mation of a permanent body to initiate and coordinate
activities, although those in attendance urged the
conference's preparatory committee and the various
national sponsoring committees to work toward the goal
of a second meeting. This is clear evidence that if
Havana wants to continue the Puerto Rican campaign, it
is going to have to bear most of the expense. The
Iraqi delegation, which offered to contribute $10,000
"for the cause of Puerto Rican independence," was the
only participant reported to have volunteered to help
foot the bill.
Conference spokesmen claim that 291 delegates and
34 observers from 79 countries and 18 international
organizations attended the meeting, somewhat less than
Cuban expectations of representatives from 120 countries
and international organizations. Except for members of
the Cuban and Puerto Rican delegations, which included
Cuban Communist Party Central Committee members and the
top level of the Puerto Rican Socialist Party, none of
those attending seemed to include high-ranking or other-
wise noted individuals. Several delegations apparently
were hurriedly made up in response to the last minute
efforts of a joint Cuban-World Peace Council team that
visited Latin America and the Caribbean in July and
August to round up support. Two representatives from
Mexico's ruling party attended, but they went as
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observers, not delegates, and they arrived a day after
the proceedings had started.
The participants decided to hold a second con-
ference on Puerto Rican independence within three years.
Havana will have considerable groundwork to do, however,
if it is to avoid a repetition of the poor showing of
the recent meeting in attracting concurrent moral sup-
port in other countries. Press coverage seemed half-
hearted and demonstrations outside Cuba were rare. A
small group of placard-carrying students showed up
briefly at the US embassy in Panama on September 3, and
one or two dozen Costa Rican students demonstrated in
San Jose a day after the conference ended. Because of
this lackluster support, the Cubans may center their
future efforts to press the Puerto Rican issue in the
UN and other international forums. They are also likely
to depend primarily on their own resources, rather
than those of front organizations abroad, to provide
appropriate propaganda support. (CONFIDENTIAL/NO
FOREIGN DISSEM)
September 17, 1975
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Venezuela: Foreign Capital Welcomed. . .but
An influential conservative business association
has lent its support to administration efforts to
regulate foreign capital.
In a major speech on August 26, Antonio Jose Diaz
Martinez, president of the Venezuelan Federation of
Chambers of Commerce (FEDECAMARAS ), praised the contri-
bution of foreign private capital to Venezuelan develop-
ment. He emphasized that times have changed,however,
and foreign investors must adjust to the new order
developing in Latin America and the less developed coun-
tries. He said future investment must adjust not only
to the requirements of "sovereign control" by the govern-
ment but also to the priorities set by economic develop-
ment plans. Martinez claimed that if investors accept
these restrictions they can participate in the economic
"take-off." This would involve opportunities to invest
about $21 billion in basic and strategic industries over
the next several years.
As president of FEDECAMARAS, Diaz Martinez is the
principal spokesman for the country's private sector.
In past years the organization has played a highly influ-
ential and usually contructive role in reviewing and
criticizing government policies--especially in defense
of private enterprise. In September 1974, the group at-
tacked the government's proposed terms for nationalizing
the oil industry, calling them unnecessarily punitive
and restrictive. (See September 11, 1974 Trends).
FEDECAMARAS has usually supported or at least taken
a neutral stand on participation of foreign capital in
the economy. Diaz Martinez's election as president last
May was heralded as the beginning of a new era of recon-
ciliation and cooperation with the government. He is
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reputed to have close ties with President Perez and
his speech closely parallels the President's state-
ments on the role of private foreign investment.
Under Diaz Martinez, FEDECAMARAS appears to have con-
cluded that its interests lie in supporting government
efforts to restrict the role of foreign investment.
Although he justifies this position on ideological
grounds, the practical benefit for increased investment
opportunities by local entrepreneurs is not overlooked.
Despite the political and economic advantages of
FEDECAMARAS' support for strict regulation and control
of foreign investment, it may boomerang in the end.
Venezuela is governed by politicians with strong statist
views. Controls on foreign investment could produce
pressures and provide precedents for the application of
similar measures to the domestic private sector. Al-
though this attitude is so far confined largely to the
extreme leftist parties, it may yet receive broader
support and FEDECAMARAS may find that it has inadvertent-
ly given assistance to its traditional enemies.
(CONFIDENTIAL)
September 17, 1975
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Brazil: Security Forces Again Act With Impunity
Illegal detentions, torturing, and outright
killing of political prisoners by the Brazilian armed
forces are on the increase, but President Geisel, who
has ordered an end to such abuses, has yet to take
firm action.
Although some individuals, including civil po-
licemen, reportedly were summarily killed by military
agents in the wave of arrests that followed the dis-
covery earlier this year of a printing press used by
the communists, the general public's reaction has been
muted. Several major newspapers that initially dis-
cussed the matter openly have been pressured by censors
to temper their remarks or avoid the subject altogether.
Some publications have received anonymous warnings by
telephone, a tactic that has caused them to wonder if
the government is experimenting with a less traceable
censorship technique or if right-wing security officials
are acting on their own.
So far the strongest protest has been made by
Cardinal Arns, Archbishop of Sao Paulo, who has issued
a call for general amnesty in his archdiocese. Pri-
vately, the cardinal has been even more critical and
at one point during a recent discussion with US offi-
cials he implored them to embargo further trade with
Brazil until the nation respects its international
obligations regarding human rights.
Arns has criticized the military-dominated govern-
ment in the past, but was optimistic about improved
church-state relations at the time of Geisel's inaugu-
ration last year. Since then, however, the cardinal
has become increasingly doubtful about the likelihood
of Geisel's eliminating abuses against political
prisoners. Although Arns is too influential to be
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silenced completely, military conservatives could
renew the harassment tactics they used against him
under the administration of President Medici.
In any case, the mounting counter-terrorism and
Geisel's own recent stand against further political
liberalization suggest that the security forces now
have a free hand in investigating and dealing with
leftist activities. (CONFIDENTIAL)
September 17, 1975
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Secret
Secret
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