ARGENTINA: SCENARIOS OF DRAMATIC POLITICAL CHANGE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T01017R000100820001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 30
• Document Creation Date: December 22, 2016
• Document Release Date: February 17, 2011
• Sequence Number: 1
• Publication Date: May 9, 1986
• Content Type: MEMO

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MEMORANDUri FOR: See Distribution List
Director of Global Issues
SUBJECT: Argentina: Scenarios of Dramatic Political
Change 25X1
1. This memorandum presents a number of possible scenarios
that could lead to the ouster of President Alfonsin or other
dramatic change in Argentina. It thus complements Intelligence
Community assessments and estimates that focus on probable
further developments in Argentina. The analysis, purposely
provocative, aims to ma1:e explicit and bring to the forefront of
our thinking the diversity of challenges that could force
political change in Argentina in the years to come. Because the
analysis out of context is susceptible to misunderstanding,
external distribution has been severely restricted. Please limit
circulation in your office and do not reproduce the document.
Your thoughts on the analysis and suggested indicators are
2. toe will send you similar papers on other countries as
they are completed. 25X1
25X1
Attachment:
Argentina: Scenarios of Dramatic
Political CYian e (GI M 8G-20105L) ,
1 I~iay 1986,
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SUBJECT: Argentina: Scenarios of Dramatic Political Change
(GI M 86-20105L) 25X1
Distribution List
External/non-NFIB :
Copy 1 The Honorable Raymond F. Burghardt
Special Assistant to the President and Senior
Director for Latin American Affairs, National
Security Council
2 The Honorable Elliott Abrams, Assistant Secretary,
Bureau of Inter-American Affairs, Department of State
3 The Honorable Frank Ortiz, US Ambassador, Buenos
Aires, Argentina
4 Mr. Richard H. Solomon, Director, Policy Planning
Staff, Department of State
5 The Honorable Fred C. Ikle, Under Secretary of
Defense for Policy, Department of Defense
6-9 DI Rep/OLL
10-12 Extra Copies (OGI/FSIC/PI Room 2G28 Hqrs)
External NFIB?
13 The Honorable Morton I. Abramowitz, Director, Bureau
of Intelligence and Research, Department of State
14 Mr. Douglas P. Mulholland, Special Assistant to the
Secretary for National Security, Department of
Treasury
15 VADM E. A. Burkhalter, Jr., USN, Director.,
Intelligence Community Staff
Internal:
15 DCI
17 DDCI
18 Executive Director
19 NIO/LA
20 SRP/DDCI
21 C/PES
22 DDI
23 D/OGI
24-26 OGI/E XS/PG
27 OGI/FSIC
23-29 OGI/FSIC/PI
30 D/CPAs
31 SA/DA/CPAs
32-3o C/IMC/CPAs
37 OCR/DSD/DB
38 D/ALA
3g C/ALA/SAD
40 C/ALA/SAD/Southern Cone Branch
41 C/DO/LA
42 C/DO/LA/~
OGI/FSIC/PI (1 May 85)
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25X1
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ARGENTINA: SCENARIOS OF DRAMATIC POLITICAL CHANGE*
This memorandum explores alternative scenarios that could lead
to the ouster of President Alfonsin or other dramatic change in
Argentina. Specifically, it seeks to clan-ify the individuals a:~d
groups that might attempt to seize power, circumstances that could
impel a takeover attempt or major policy shift, and indicators that
would suggest specific scenarios are unfolding. The analysis,
purposely pr-ovocative, does not attempt to predict the likelihood
of specific outcomes othea than in the broadest sense. Rather, it
provides a structured way of thinking about possible dramatic
political change in Argentina on the basis of observable events and
thus a greater ability to recognize the potential implications of
key developments.
SUMMARY
President Alfonsin has weathered two years in office with his
popularity intact. His Radical Party is the country's leading
political force, while its chief rival, the Peronist Party, is in
disarray. Nonetheless, relations with the military remain tense.
According to the US Embassy ar;d other reporting, Alfonsin's
efforts to cut the budget of the armed forces and put formeF junta
members on trial for human rights violations have fueled military
resentment and sporadic reports of coup plotting. The economy also
has been a persistent problem. The "Austral Plan", introduced last
June, checked hyperinflation but at the expense of a recession.
Labor pressure has grown as unemployment has risen, ar,d
*This memorandum was prepared by (Foreign Subversion arx3 25X1
Instability Center, Office of Global Issues. Information available as of 7
April was used in this report. Comments and queries are welcome and may be 25X1
addressed to Chief/Political Instability Branch, OGI Q 25X1
GI M 86-20105E 25X1
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? businessmen, farmers, and government workers have criticized
various aspects of the regime's economic policies. 25X1
If inflation suf-ged and labor and middleclass protests over?
deteriorating living standards intensified, we believe Alfonsin
might conclude that his only remair,irg option was to adopt highly
nationalistic economic policies. In order? to bolster his political
standing, tie would try to shift the blame for Argentina's problems
to the United States and international banks, perhaps acting with
other regional debtors to suspend some or all foreign debt interest
payments. Such a move probably would bolster Alfonsin's political
standing significantly over the short term, but over the long term
the effects of creditor sanctions and lack of trade with the West
would cause the economy to decline and unemployment to grow. If
strong opposition to Alfonsin developed, senior military commanders
might move to oust him from office.
In our view, the unprecedented emergence of a stable two-party
system also could occur during the next few year-s if the Peronists
reggouped under reformist leaders and presented themselves as the
loyal opposition. For this scenario to succeed, economic
conditions first would have to improve in order to mitigate Radical
Party factionalism, undercut the popular appeal of extremist
solutions, and bolstep confidence in civilian rule. In addition,
Alfonsin would have to smooth over relations with the military and
further depoliticize the armed fogces.
We believe a junior officers' coup is less likely, but
possible.
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(Potential
triggers include an extension of the trials foB human rights
abuses, slashes in the military budget, and organizational changes
made without consulting the armed forces.
It is conceivable, but we judge highly unlikely, that both
major parties might begin to lose support as an incipient leftist
movement began to capitalize on popular discontent. Under such
conditions, the Intransigent Party would be well positioned to
spearhead a leftist resurgence and to function as a political front
group for leftwing groups committed to violence. We do not
believe, however, that the military would allow such a movement to
develop momentum; more likely, it would press Alfonsin to crack
down or, all leftists. If Alfonsin insisted on distinguishing
between legitimate and illegal opposition, however, rightwing
officers might remove him.
US interests, in our view, would be best served by the
evolution of a stable two-party system. The emergence of two
mainstream parties and the depoliticization of the military would
be a majoF triumph for the democratic process. It is unlikely,
however, that future democratic governments would renounce
Argentine claims to the Falklands or abandon the nuclear program.
Alfonsin's ouster by the military would undercut US interests
by setting back the trend toward democratic government in Latin
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6
America. Moreover, the economic mismanagement of the previous
juntas suggests that it would not be any easier for a military
government to implement an effective economic pzogram and finance
the debt. We believe a government led by the military high command
would want to maintain good relations with the United States, but a
regime led by junior or rightwing officers would be highly
nationalistic. Such officers, in our view, would be more likely ,to
take risky action on the debt.
THE PRESENT SCENE
Raul Alfonsin has weathered two troubled years as Argentina's
first civilian paesident since 1976. Alfonsin has remained highly
popular? since he took office in December 1983 and receives
favorable ratings of over 50 percent in opinion polls. Inroads
made by his Radical Party in the pgovinces in midterm elections
last November confirmed its standing as the country's dominant
political force.
The return to civilian rule and the Radicals' victory in 1983
sent the Peronists and the military--Argentina's traditional power
brokers--into eclipse. Expectations of some political observers
that Alfonsin would spearhead a new mass movement and displace
Peronism have proven pFemature, however. Although Alfonsin's party
attracted many votes from the working class--the Peronists'
traditional constituency--in the 1983 election, Peronist candidates
still polled a third of the vote last November. This relatively
respectable showing indicates, in our view, that Peronism retains
considerable vitality and popular appeal. Moreover, Argentina's
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powerful labor unions remain heavily Peror~ist, and some Peronist
leaders still control strong political machines.
We believe the military, similarly, may be down but is not
out. Alfonsin took power determined to depoliticize the military,
and his moves have fueled hostility in the officer corps. In the
most dramatic step, nine former junta members--including three past
presidents--were put on trial for- human rights abuses committed
during the "dirty war" against subversives in the mid-1970s.
According to the public record and US Embassy and defense attache
reporting, Alfonsin also placed the militar-y under civilian
command, purged the general officer corps, and slashed the military
budget in half.
We believe Alfonsin hoped to placate the military by putting
subversives on trial and by making other symbolic gestures, but his
relations with the armed forces have deteriorated steadily.
The massive
budget cuts repoBtedly also have heightened military concern about
declining capabilities and reduced pay, and officers are agitated
by plans to restructure the services that would emphasize a clear
militarry--ratheF than internal political--mission. According to
the US Embassy and other reporting, many also have expressed
concern about the specter of resurgent leftist terrorism--which we
believe is unlikely--and the belief that the government is being
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taken over by~ leftists, a claim often, used in the past to justify
coups.
The economy has been Alfonsin's other preoccupation, and his
policies have produced similarly mixed results. Alfonsin inherited
an economy ir, a shambles. Inflation--a chronic problem--was at 400
percent and the foreign debt totaled over $40 billion. In June
1985 he introduced a new economic psogsam--the "Austral Plan"--that
imposed wage and price controls. By September, inflation was
slowed to 2 percent a month.
The Austral Plan has been highly popular, but its success
against inflation has come at the expense of a recession.
According to the US Embassy, the economy declined by 4 percent in
1985. Labor criticism and strikes over rising unemployment and
real wage declines have grown, and we believe some gover-nment
bureaucrats will resist privatization efforts that threaten their?
jobs. Businessmen probably will press the government ever, hardeF
to remove price controls and provide greater access to credit. In
addition, farm groups are likely to step up criticism of insuffi-
cient credit, high interest rates and export duties, and low
producer prices.
Moreover, Alfonsin's tenur-e has not altered other, less
tangible realities that traditionally have contributed to
instability in AFgentina. According to the US Embassy, many
Ar?gentir~es are frustrated over their country's inability to advance
with the industrialized North over the past 60 years. The
resulting impatience has contributed to a tendency among Argentines
to change position quickly and even seize and support outlandish
positions. Additionally, various sectors of society have yet to
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coup.
Argentina also has a history of violence which is neveF far?
from the surface. Although organized, sustained terrorism has been
absent for a decade, incidents of violence preceded the midterm
election last November and became a political issue. The violence
has since abated, but the US Embassy says the reason why is unclear
and that the potential for violence still exists. Over the near
term, we believe any antiregime violence is more likely to be
initiated by rightwing extremists than by the weaker radical
left. We believe their motive would be to produce a climate of
uncertainty, to discredit the regime, and to provoke a military
to represent their members' interests effectively.
develop a stake in the political system. The military, in
particular, still considers itself a "caste apart"; other
organizations, such as the conservative parties, have been too weak
GROUPS CAPABLE OF SEIZING POWER AND OTHER MAJOR ACTORS*
The Armed Forces
The military has suffered from persistent factionalism acid
Alfonsin's austerity measures. According to defense attache and
press reports, sharp cuts in military salaries and benefits
haveprompted an exodus of personnel from all three services, and
operational readiness has suffered from cutbacks in training,
maintenance, and logistics. Personnel levels, for example, were
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' reduced by more than half, from 157,400 in 1982 to 74,300 in
1985. For the first time in many years, Argentina in 1986 will
have a smaller army than its neighbor and traditional adversary
Chile, a situation once considered unthinkable by the Argentine
military. 25X1
The Falklands defeat also highlighted longstanding animosity
among the Navy, the Air Force, and the politically and militarily
dominant Army. According to the US Embassy, the war wo~ser~ed
existing divisions by sparking mutual recriminations and by driving
a wedge between the Air Force--which believed that it alone had
fought creditably--and the Army and Navy. 25X1
Alfonsin's controversial policies have provided the military
with a common enemy, however. There were sporadic reports of coup
plotting
last year, suggesting 25X1
the development of three incipient, partially overlapping cabals:
o Middle- and junior-grade Army officers, some of whom are as
disenchanted with the high command for not standing up for
their? services as they ar-e with the government. According
to the US Embassy, officers below the rank of colonel
generally are more willing to confront the government.
Retired officers, especially Generals Ramon Camps and
Luciano Benjamin Menendez, both of whom face charges of
human rights violations.
o Segments of the Army high command.
Prospects for a successful coup in the near- term, however, ar?e
dampened by the lack of powerful civilian allies and of popular
support for a takeover. We believe the military has been seriously
discredited in the eyes of the population by its previous
involvement in the "dirty war", gross economic mismanagement, and
loss of the Falklands. Alfonsin's popularity also undercuts
support for a coup, and Argentina is not racked by the social and
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' economic chaos that traditionally has preceded takeoveas. In
addition, the armed forces lack a leader capable of unifying the
plethora of factions in the services. 25X1
The Radical Pasty
Alfonsir~'s party--liberal, center-left, and social
democratic--is the best organized and most dynamic political force
in the country, in~our view. Although the Radicals' share of the
total vote in Congressional elections declined from their 1983
total of 48 percent, the party still polled well last November,
winning 43 percent. It expanded its control in the lower house of
Congress by an additional seat, won several provincial races, and
impBOVed its chances of gaining control of the upper house of
Congress later this year.
The Radical leadership also has managed to keep persistent
factionalism under control, in our view, but important schisms
remain. According to US Embassy and press reporting, differences
over economic policy, foreign policy, and how to deal with the
Peronists and the military divide the party into rightist,
moderate, ar~d leftist factions. Alfor~sir~'s moderate and conserva-
tive supporters favor continuation of the austerity measures and
limiting the trials of military officers to the junta members and a
handful of other offenders. Younger and more leftist party
members, however, are pushing for more expansionary economic
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' policies--which Alfonsin himself at one time publicly supported--
and trials of all military officers accused of human rights
violations. Alfonsin, dominates the party because of his popularity
ar,d the power of his office, and while no one openly opposes him,
his opponents are quietly promoting alternatives should his
moderate approach fail. 25X1
The Peaonist Justicialist Party
The Peronist Party is still very popular but has beer, adrift
since Juan Peron died in 1974. Peronist candidates captured 35
percent of the vote in November but lost 10 seats in Congress and
control of two provinces. Moreover, dissident party leaders ran a
separate slate of candidates. The dissidents--generallly moderates
who want to xreform and democratize the party--are trying to replace
the coterie of discredited political and labor bosses who ar?e the
party's official leaders. So far this "reformist" faction has
lacked the unity and organization to mount a successful nationwide
challenge to the leadership, but its separate list of candidates
outpolled the officialist slate in Buenos Aires Province in
November. 25X1
Meanwhile, 25X1
some of the reactionary leaders--particularly secretary general
Herminio Iglesias--may be involved ire subversive activities.
The US E3nbassy reports it cannot dismiss the
possibility that he might be involved in coup plotting, and we
believe Iglesias would support a takeover if he thought it would
being him to power.
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Labor '
Labor is highly politicized, powerful, and largely Peronist.
According to the US Embassy, ur~ioris represent about a third of the
work force, ar-e well-organized, and are financially strong; most
belong to the umbrella General Confederation of Workers. Until
recently, labor had not seriously challenged Alfonsin. The labor
federation is factionalized, with divisions largely reflecting the
disarray in Peronism. The success a:~d popularity of the Austral
Plan initially took the wind out of labor's sails, but criticism
has intensified since September when Saul Ubaldini was named the
federation's sole secretary general and more moderate leaders were
removed. Ubaldini is eager to confront the government, and we
believe his aggressive stance has been welcomed by the rank and
file impatient with the federation's previous moderation.
~IinoF Actors
Rightwing extremists are more likely to resort to violence
than the far left, according to the US Embassy. They include
former members of the military regimes' security forces who are
still ar-med or have access to weapons and explosives. The groups
involved--including the Brigade 10 and the Argentine Anti-Communist
Alliance --are generally small, scattered, and autonomous.
25X1
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Radical left terrorists were a formidable thr--eat ire the early
1970s but were decimated by the "dirty war" and are in disarray.
The two main groups--the Montoneros, a breakaway from Peronism, and
the People's Revolutionary Army--are small and factionalized,
receive little foreign support, and have limited popular appeal.
Moreover, their leaders are in exile or imprisoned. Although both
groups have abjured violence, we believe it is only a temporary
expediency to allow time to rebuild and avoid rightist reprisals.
We believe violence by dissident elements of either group impatient
with their leadership's cautious approach is possible, as is a
concerted response to any future attacks from rightwing extremists.
According to press repor>ts, both groups also have begun to set
aside longstanding ideological disputes and to work together.
The Intransigent Party is the only party on the left to have
grown over the past two years. It polled well in November and
doubled its representation ire the Congress to six seats. we
believe many party members are middle-class socialists, but left-
leaning wor--kegs and other? middle-class voters alienated by Peronist
infighting also find the party's nationalist, populist rhetoric
attractive. Moreover, the US IInbassy and the press report that
since 1983 the party has attracted numerous hardcore Marxists who
have helped party radicals defeat moderates in recent internal
party elections. Some evidence also exists that members of the
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People's Revolutionary Army have inf filtrated the par? ty and, now hold
SCENARI05 OF DRAl1ATIC POLITICAL CBANGE
Alfonsin Dies oII Is Incapacitated
turning points.
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Five scenarios are presented below. The first outlines the
path a succession crisis could follow. The others examine; possible
mechanisms for Alfonsin's ouster og other dramatic political change
in Argentina. Following each scenario is a list of indicators--a
series of observable events--which signal milestones in th'e
scenario's progression. Like a major road from which a,riumber of
forks can be taken, several scenarios share some of the same
signposts. Each scenario though is likely to manifest these common,
indicators in different combinations along with othe? indi;cato~ss
that are unique. Hence, the observation of some indicators may
merely suggest a eneral direction, while others may represent major
I
If Alfonsin were to die os be incapacitated, the Consititution
specifies that his more conservative Vice President, Victor
Martinez, would succeed him. We believe the transfer of ;power
would proceed smoothly, but Alfor~sin's departure could precipitate
power struggle within the Radical Party. In the economic arena,
~~
moBe statist members would press Martinez for a return to the
party's traditional commitment to social equity and economic
I
growth. Those on the night would push for more rapid decontrol of
prices and trtade liberalization. Martinez would face similar
,opposing pffessures on how to .deal with the opposition as 'well as'
the military, in our judgment.
Ma~etinez could have difficulty exercising leadership,,)
especially if economic conditions deteriorated, because he~lacks
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charisma and is not as politically astute as Alfonsin. Political
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paralysis could set in if he proved unable to impose party]
discipline or--more important, albeit less likely--repeat'e c3
,~
. ~
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Alfonsin's early mistake of vacillating between the competing
groups. The legislative process--already slow--then could get
hopelessly bogged down as Radical leaders were forced to focus on
mustering the votes of their own representatives. Tensions between
the executive and the legislature would increase, and Martinez
would have to devote a major effort to keep the government
functioning.
Indicatogs of the Developing Scenario
o Alfonsin dies or is incapacitated and is succeeded by Vice
President Martinez.
o Leftist and doctrinaire statist Radical Party members, such
as former Economic Minister Grinspun, openly criticize the
economic plan, press for more statist policies, and urge
Martinez to revamp Alfonsin's economic team.
o Economic Minister Sourrouille and other supporters of
Alfonsin try to block the initiatives of the statists,
warning Martinez of renewed inflation.
o The economy remains stagnant or? deter-iorates, and labor
protests mount.
o Statist members intensify criticism of Martinez and
austerity and vote against government positions in the
legislature.
o The legislature gets bogged down over issues such as sales
of government-owned industries, interest rate ceilings, and
tax reform, and Martinez is preoccupied with Radical Party
infighting.
Economic Problems Propel Alfonsin on a Nationalist Course
We believe Alfonsin could decide to adopt a highly
nationalistic courrse if he believed that protests ovep his economic
policies jeoparrdized his ability to r-emain in office. We believe
such a move would be a last resort after intermediate measures
proved insufficient.
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? Alfonsin faces a major challenge in trying to revive the
economy. We believe he will tFy to avoid major pump-pr-iming
policies because they would boost inflation and risk stirring up
criticism if gains were unequally distributed. However, under
pressure from labor, business, and statist Radicals, he could
resume his previous practice of providing selective concessions in
an attempt to mollify their concerns. In our view, Alfonsin can
safely grant labor a series of small wage increases if he maintains
a tight money policy. If he bows to pressure to create jobs,
loosen monetary policy, os increase goveFnment spending, inflatior~
probably would increase, in part through the larger deficit, but
also by reigniting inflationagy expectations.
Labor activism would resume if real wages fell pr-ecipitously
as inflation took off. Workers' protests also could attract
middleclass support if rising prices under-cut living standards ar~d
fueled fears of hyperinflation. At the same time, Alfonsin could
come under pressure from the IMF and other international creditors
alarmed at his economic policies. Alfonsin's position would become
especially tenuous if a sensitive political issue, such as a
corruption scandal or a major legislative battle over a proposed
divorce bill, erupted simultaneously.
With the Austral Plan totally discredited, problems with
inter-national creditors looming, and his political position
eroding, Alfonsin might look for a dr-amatic gesture to bolster his
support. He might announce an "Argentina first" campaign,
reasoning that the political benefits of rallying the population
outweighed the costs of returning to austerity and staying ire the
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creditors' good graces. Alfonsin then would blame Argentina's
economic plight on external factors beyond his control, such as the
trade and monetary policies of the industrialized countries. He
also could declare that an unjust international economic order
thr-eatened Third World democracy and stability. This would provide
him with justification for abandoning Argentina's agreement with
the IMF and suspending some or all debt servicing.
Alfonsin's gamble could pay off politically and bolster his
standing over the short term. Nationalist appeals generally go
over well with Argentines, and labo~e conceff ns would be satisfied if
wage increases accompanied debt repudiation. Moreover, Argentina
probably could weather a cut-off of Western credit in the short
term. The country is r~ear?ly self-sufficient in oil and food and
enjoys substantial trade relations with Third World and non-Western
paFtne~-s, including the USSR.
Such a dramatic policy shift by Alfonsin could backfire over
the longeg term, however. We judge that a cut-off of Western
cr--edit that disrupted Argentine trade--particularly if imports
dropped by more than 25 percent--would cause the economy to decline
and unemployment to grow. At a minimum, we believe it would feed
the inflationary psychology. Under these circumstances, we believe
the initial enthusiasm for Alfonsin's nationalist course would
dissipate quickly. If labor protests resumed, Alfonsin's new
policy initiative would have accomplished little. Moreover, he
would face serious opposition from the right, especially
businessmen hurt by the loss of trade credits with Western
partners.
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Military anxiety would grow if the economy continued to
o Alfonsin announces labor wage hikes and introduces labor-
intensive public work projects.
o The administration loosens credit restrictions, and
interest rates fall.
officer op a conservative civilian puppet as his successor.
IndicatoBS of the Developing Scenario
foundeF, protests intensified, and Alfonsin appeared to have run
out of options. Evidence that the president was losing support
from all quarters could make the high command receptive to appeals
from conservative businessmen and rightist Peronists that they
should intervene for the good of the country. The joint chiefs
then would demand that Alfonsin step down and impose a senior?
o The deficit grows, inflation picks up, and large segments
of the middle class support work stoppages and aritigovern-
mer~t r? allies.
o Alfonsin fires Economic Minister Sourrouille, Foreign
MinisteF Caputo, os Finance Secretary Brodersohn.
o Alfonsin announces a new self-sufficient economic program,
blames Argentina's problems on Western creditors, and asks
Latin governments to support Argentina in taking more
radical action on debt service.
o Alfonsin announces a suspension of debt service and grants
wage hikes to labor.
o Alfonsin renegotiates his long term grain and trade
agreements with the Soviets to expand trade.
o Polls show greater approval ratings for Alfonsin, ar~d
editogials uniformly applaud the government's action.
o Inflation edges up, consumer shor-tages appear, black market
activity grows, and Alfonsin's approval rating falls.
Stable Two-PaEty System
Consolidation of a stable democratic system in Argentina has
been elusive. Parties have been factionalized and mutually
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mistrustful, and the armed forces are seers as a legitimate
political actor. These obstacles are of long duration and part of
the political culture but, in our view, not necessarily
immutable. Over the next few yeaFS, the Radical and Peronist
parties may be able to overcome them and lay the foundation for
stable democracy.
The Peronist renovators now appear to have a chance of gaining
control of theig party. Their November victories over the
officialist leadership could set the stage for a unified push to
take over the party through inteFnal elections. We believe the new
leaderrship would include:
o Antonio Cafiero, whose slate bested that of Iglesias in
Buenos Aires Province.
o Carlos Grosso, the head of the party in Buenos Aires.
o Carlos Menem, the reelected governor of La Rioja province
who enjoys good relations with Alfonsin.
The officialist faction subsequently might bolt the party, but the
overwhelming preference for the reformists and the bandwagon effect
probably would keep most of the rank and file loyal to the new
leadership.
The reformists then would begin the process of democratizing
the party and developing a platform with broader appeal. We
believe they would be able to rrecapture the middle class as well as
independent and centrist voters whom the party needs to regain
prestige and ir~fluer~ce and who are alienated by the leadership of
Iglesias and the party's First Vice President, Vicente Saadi. The
new leaders also would seek to improve the party's organization at
the shop level in order to reverse the gains that the Intransigent
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U
Party has made with labor groups. Ultimately, the new leadership
would set the party up as a loyal opposition to the government.
Meanwhile, the Radicals would continue to revitalize their own
party. We believe the economy first would have to stabilize ar~d
begin to grow in order for the Radicals to resolve their internal
disputes and establish popular confidence in civilian rule.
Economic growth would bolster Alfonsin's standing in the party and
undermine the position of those advocating more statist policies.
Private sector growth also could increase the party's appeal to the
conservative upper class, giving them a stake in a major party foa
the first time. Moreover, a revitalized economy and an administra-
tion that functioned relatively smoothly would heighten popular
support for the government and erode suppor=t for military
intervention.
For such a scenario to succeed, we believe Alfonsin would have
to make major progress in depoliticizing and reforming the
military. Tensions with the armed forces could be reduced by
issuing some form of an amnesty for? officers charged with human
rights abuses, and new allocations could be made to the military
budget as the economy improved. Meanwhile, Alfonsin would force
coup plotters to retire while convincing the lower r?ar~ks that he
would riot carry out a wholesale purge. Military commanders would
allow Alfonsin to implement a revised military academy curriculum
emphasizing civilian control of the forces and external, rather
than domestic, security responsibilities.
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Ultimately, the stage would be set for power to pass from or,e
party to the other on the basis of elections. The emergence of two
capable, mainstream political parties would undermine the appeal of
extremist groups, and smaller parties eventually would dissolve or
merge with them.
Indicatoas of the Developing Scenario
o The refor--mist faction wins elections to leadership
positions in the Peronist Party, tomes down antigovernment
rhetoric, and disciplines members with ties to coup
plotters.
o Labor activism is limited to criticism of economic issues,
and laboF leaders eschew political demands and rhetoric.
o Inflation remains low, the economy grows, and reports
indicate that Radical Party factions are cooperating in
formulating government policy.
o Conservative businessmen tell government officials that
they appaove of Alfonsin!s policies, and opinion polls
indicate greateg confidence in civilian government.
o Government leaders bargain in good faith with labor
leadership, and the Congress becomes an effective policy-
making institution.
o The human rights trials are not extended to the lower
ranks, military salaries are increased, coup plotters ar?e
allowed to retire honorably, ar~d officers state that the
administration is treating the armed forces with more
respect.
o The ranks of the Intransigent and other extremist parties
dwindle as their members join the Radical and Peronist
parties.
Junior Officers Coup
Discontent in the lower ranks of the armed forces already is
extensive and could reach critical proportions if junior officers
believed their services were under growing and unjustified attack
from the administration. Although we believe Alfonsin is aware of
the hostility that already exists, he could bow to political
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? pressure--particularly if the 1987 gubernatorial elections were
approaching--to take additional measures against the armed
forces. Potential triggers which we believe would intensify coup
plotting ar~d provoke junior officers to rebel include:
o Trials of junior and midlevel officers fog- human rights
abuses.
o More arrests for coup plotting similar to those last
October.
o Organizational changes in the armed forces made without
prior consultation or which abolish the militaFy's role in
key aIIeas, such as intelligence.
o FuFtheg deep, across-the-board cuts in the military budget.
MoreoveF, hostility toward the military leadeIIShip--for example,
fog- failing to defend their services from such regime actions--
would have to be intense enough for lower-ranking officers to
disregard efforts of the high command to impose discipline and to
take matters into their own hands.
A series of rebellions and mutinies could occur shortly after
any of these triggers. Army officers at or below the rank of
lieutenant colonel might lead gaarison revolts in Buenos Aires, for
example, or a key province such as Cordoba, Mendoza, or Santa Fe.
Anger at the government could be intense enough to supescede
interservice divisions and prompt various factions to cooperate.
Moreover, a charismatic officer might emerge from a successful
local rebellion to provide leadership for a conceFted coup
attempt.
Rebellious units that moved against the government would meet
with little resistance if their rejection of and anger against the
government were shared by other segments of the armed forces as
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? well as the police. Under these circumstances, it is unlikely that
Alfonsin could count on any major units to defend his administra-
tion. In an alternative outcome, the high command might realize
that the junior officers were ors the verge of rebelling and that
the potential for postcoup violence was high. The joint chiefs
then would remove Alfonsin in order to preclude a junior officer
takeover and restore military discipline.
Indicators of the Developing Scenario
o Junior officers are arrested as terrorists or ordered to
stand tr-ial for human rights abuses.
o Major cuts are made in the military budget, and pay acid
benefits a.re slashed.
o Members of the high command voice little or no opposition
to the government or are dismissed if they do.
o Army officers at or below the rank of lieutenant colonel
hold a flurry of meetings and try to enlist the support of
Navy and Air Force officers; reports of coup plotting
increase.
o Rebellions occur at garrisons in key provinces.
o A charismatic officer rallies dissident forces in the
military and coordinates the deployment of Army units
around Buenos Aires.
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o Police and military units assigned to defend the goverrunent
offer ineffective r?esistar~ce to a takeover attempt.
Leftist Resurgence and a Rightwing Officers Coup
A strong leftist movement might develop over the long term if
the various groups on the left--both legal and illegal- -cooperated
to capitalize on a decline in the popularity of the two major
parties. If Alfonsin's austerity measures failed to turn the
economy around, support for the Radicals could begin to evaporate.
The Peroriists also might begin losing supporters if their leaders
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were too preoccupied with internal party politics to offer more
than lackluster criticism of the government's economic policies.
With its more radical leftist program, the Intransigent Party
would be in a good position to court disaffected voters. The party
would step up antigovernment rhetoric, launch recruitment drives,
and work to extend their presence among workers at the shop level.
The Intransigents also could try to expand their- legislative base
by securing the support of minoa leftist parties and leftist
Per?onists.
With the party's popular base expanding, infiltrated members
of the People's Revolutionary Army would move to secure their hold
on the leadership and edge moderates out of party posts. Party
fourides Oscar Alende, however, might be left as a figurehead. With
a political front in place, leaders of the People's Army would be
emboldened to begin planning a return to the armed str-uggle. A
tactical alliance with the Montoneros would be formed to mount a
concerted challenge to the government, and gecruitment and training
would be stepped up. Appeals for support would be made to radical
governments including Cuba, and funds would be obtained through
robberies and kidnappings.
We expect that the potential for political violence would grow
even before the leftist movement resumed armed action. Strikes and
rallies easily could tu~en violent, and extreme rightists probably
would step up deathsquad activity. Alfonsin would allow the security
forces to crack down on the People's Army and Montoneaos,
but he probably would order them to repress the death squads as
well. Moreover, Alfonsin might resist military pressure to repress
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` the Intransigents, preferring to maintain a distinction between
legitimate and illegal opposition. Rightwing military officers
might be less inclined to differentiate. If security continued
to deteriorate, they might oust Alfonsin.
Indicators of the Developing Scenario
o Austerity continues, and the popularity ratings of Alfonsin
and the Radical Party fall.
o Union members complain that the labor federation is
ignozing them and argue that more forceful leadership is
needed.
o The Intransigent Party steps up criticism of the government,
holds large political rallies, and coordinates successful
nationwide.labor? strikes.
o Members of the People's Army take control of key leadership
positions in the Intransigent Party.
o Reports proliferate that the Intransigents, People's Army,
Montoneros, and other leftist groups are stepping up and
coordinating the is recruitment, training, and funding
activities.
o The far right attacks lef tist tatt~gets, and the Montoneros and
People's Army retaliate with bombings and kidnappings.
o Alfonsin orders the armed for-ces to repress rightwing
terrorists as well as the radical left.
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IMPLICATIONS FOR US INTERESTS
Alfonsin's tenuae generally has been beneficial for US
inteFests, particularly in the area of democracy and human
rights. A staunch proponent of civilian r-ule, Alfonsin has said
publicly that he hopes to consolidate democracy by completing his
term and handing power to a freely elected civilian successor.
His commitment to human rights is equally stFOng--he identified
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a
`~ himself with the human rights movement long before it was popula~-
or safe--and he has carried through with the trials of the junta
members.
Alfonsin's economic policies--an equally critical area for
the United States, in our view--also have been generally
favorable. Alfonsin has continued to honor Argentina's
obligations to service its $50 billion foreign debt, and
creditors publicly have praised the success of the Austral Plan
in lowering inflation. However, Buenos Aires has been reluctant
to agree formally to participate in the plan outlined by US
Treasury Secretary Baker.
On other issues--nuclear- nonproliferation, the Falklands,
and Argentina's foreign policy orientation--improvements have
been more limited from the US perspective. Although the nuclear
paogram has been scaled back because of austerity, the US Embassy
geports that sensitive progEams have continued to receive funding
and that Argentina still refuses to accept full-scope
safeguards. Moreover, Alfonsin has continued to press Argentine
claims to the Falklands and has moved to expand economic ties
with the USSR, the single largest buyer of Argentine exports.
Alfonsin .has done so, howeveE, only to a limited degree and to
rectify a trade imbalance. According to the US Embassy, he
distrusts Soviet intentions and has resisted Soviet offers of
arms sales .
US relations probably would be more strained under a weaker
Martinez presidency, particulagly if Mar?tiriez assumed power at a
time of economic stagnation and increased labor activism. In our
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A coup by junior military officers or rightwing officer