WEEKLY CONTRIBUTIONS LATIN AMERICA DIVISION, ORE, CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200040010-5
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: November 9, 2016
• Document Release Date: July 27, 1998
• Sequence Number: 10
• Publication Date: December 6, 1949
• Content Type: PERRPT

-P Approved For Releat'le 1999/09/02 : CIA-Rip74}-0109e000200040010-5
Weald/ Contributions
Latin America Division, OAR, CBI
6 December 1949
CURRENT DEVELOPMENTS
NORTHERN AREA: In Panama, public tension Ms lessened and the situation
is less critical (p. 2).
CENTRAL AREA: In Colombia, prospects for stability have linproved some-
ithat (p. 3).
SOUTHERN AREA: In Bolivia, the government's stability may be impaired by
low tin prices (p. 3).
SPECIAL SUBJECTS
The Current Comm:1st Situation in Latin America 5
The Current Situation in Peru. . . 8
The Current Situation in Argentina
DOCUMENT NO.
NO CHANGE IN CLASS. 0
)(DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE:
AUTH: HR?70-2024
D AT E ?44` C /REvtEwER: 372044 I
/0
Approved For Release 1 9 9 9/ -01090A000200040010-5
Approved For Release1999/09/0L4aZ7?-0109060200040010-5
1,..ekly Contributions, DVLA 6 December 1949
(CIA Working Paper)
1. PANAMA,: _EHEnt_peralepments
WitElii,NEDT95raMilessening and Arnulfo Arias taking ener-
getic measures to consolidate his position, the situation in Panama
for the time being appears to be less critical. The principal factors
affecting the US-Pananm relationship are Arias' seizure of the presi-
dency by force, his considerable popularity eith the Panamanian masses,
and hie anti-US background.
The recent series of coups was another manifestation of the
long-standing and intense rivalry between the Arias brothers Arnulfo
and Harnodio, and the follouers and allies of ex-preeident
In this instance the focal point of the rivalry was control of the
police Panama 'a only military force, and one factor involved was the
rivalry between Harmodio Arias and a group of ehich Police Chief Ron
is a nether, for control of the cattle-slaughtering business. According
to reports, Harmodio Arias persuaded President Chanis to oust Ramon and
appoint a pro-Harmodio police chief. This tactic failed because of
Remonos vigorous action in forcing Chanisl resignation. The ousting
of President Chania aroused public indignation over police tactics,
and, with civil disturbancee imminent, Remon turned to Arnulfo Arias.
In fact, Arnulfo Arias, who has a large popular following and is con-
sidered by many to have been cheated out of the presidency in 1, was
possibly the only man in Panama capable of preventing further bloodshed
by enlisting the support of both the indignant Panamanian population
and the unpopular police.
Tension has now eased locally for the time being. The jimenista
leaders have fled to the Canal Zone and are now quarreling among them-
selves. Harmodio Arias has abandoned his efforts to restore Dr. Chanis
to the Presidency and has joined forces with his brother, Arnulfo Arias
is gaining ram adherents daily and may soon have the support of a major-
ity of the Panananian people. The greatest uncertainty at present is
the outcome of the struggle of the government to free itse/f from the
now thoroughly discredited police clique that placed it in power. The
police have thus far refused to accept any solution involving resignation
of present police leaders, Arias maybe expected sooner or later to
attempt to rid ahaself of police domination, however. While the possi-
bility of a clash remains, Arias may be expected eventually to outwit
the present police leadership without a direct clash. A possibility
that cannot be ruled out at this time is that of the resort by irrespon-
sible elements to effective threata or assassination, thus completely
changing the situation. Moreover, the basic struggle for the perquisites
of power will continue; disagreement between Rome and one or another of
the Ariases remains a possibility, and anti-Arias forces will persist in
plotting the downfall of the new president.
73-Panamanian relations will be considerably affected with
Arias as president, regardless of the status of diplomatic relations,
It is true that Arias has made overtures to US busineismen, offering ?
Approved For Release 1999/042aiagaigiP-Zaz01090A000200040010-5
2.
Approved For Release 1999/09/02 : CIA-RDP79-01d911A000200040010-5
SECRET
Vicekly Contributions, Dym 6 December 1949
(rIT4 Working Paper)
stable government and investment opportunities. In contrast to his
pro-US predecessors, however, Arias has a clear record of being
extremely nationalistic and anti-IS? and as, president, it is quite
likely that ehenever personal or political considerations are involved,
he will pursue a foreign policy often opposed to that of the US. His
expected opposition in matters or inter-Anerican defense is of partic-
ular concern, but he also can be expected to wise no opportunity to
forward (along with his awn interest) the interests of groups or
individuale opposed to the dominant position of the US in the Caribbean.
The opposition of the anti-Communist middle class and Arias' political
opponents to Arias' extreme tactics however, will impose limits oa the
length to Which he can go in asserting anti-US policies.
2. COLOMBIA, : Government's Pros ate
e o anOovex nt is believed to have improved its
control of the country as.a result of the peaceful presidential election
on 27 November.
Although various election disturbances alIegedlT had been
planned, the election was relatively peaceful. Laureano Gomez, the
unopposed Conservative condidate, ran up a total of over one million
votes, and consequently, the Conservative Party now claim to be the
majority party in Colombia. Crhe largest vote ever polled before by
a single party bias the 9340000 Liberal vote in the congressional elec-
tions of last June.)
Liberals called acmes' victory a coup dfitat on the part of
the Conservative Ospina government, and asserted that they would not
recognize the election results. Lleras Restrepe, a member of the Liberal
Party directorate, has openly stated that the Liberals hope for an army
coup.
It ie true that reporte of subversive activity continue, and
it has been estimated that SO% of the army and 90% of the air force are
Liberal in background and sympathy. But it is not clear what percentage
of these forces might be willing to translate their sympathy into action,
nor is it clear how nay of the civilian Liberals favor such a policy.
Further, the Colombian high command has the will and the capaoity to
control any potential disloyaltye and the great majority of the armed-
forces personnel nay- be expeated to follow the tradition of supporting
the constituted authorities.
3. BOLIVIA: Poor Tin Pro ts Ne t ir the Governmentle Stabilit
n pr ces rom ? cents
per pound, reflecting world prices and coming as it did soon after a
significant previous cuts will seriously decrease Boliviafs tin reve-
nues, add to the existing imbalance of the goverment 's fiscal amd
foreign exchange budgets, and further impair the government's stability
(see fl/LA Wkly 25 Oct 49), Because of these price cuts, ti recent
Approved For Release 1999/09/02 : CIA-RDP79-01090A000200040010-5
ee.BEfeffr---- 3.
Approved For Release 1999/09/02 ? CIA-RDP79-016V6A000200040010-5
'SECRET
Weekly Contributions, D/LA 6 December 1049
(CIA Working Paper)
decree designed to stimulate tin exportation will almost certainly-
fail to achieve its object.
The gloomy outlook for tin production and the consequent
adverse effaots on the rh*y Bolivian economy will increase social
unrest and thus add to the Bolivian government's difficulties in main-
taining its control in the face of any possible revolutionary threat.
Approved For Release 1999/a9a4C&MP79-01090A00020004004,0-5
Approved For Release 1999/09/026SI*RDP79-01Zref0A000200040010-5
tiftoi
Weekly Contributions, D/LA
(CIA Working Paper)
atuation Memorandum 69-49
6 Decetber 1949
The Current Communist Situation in Latin America
(SmIU-- The gradually declin(ng trend in Comennism in Latin
America; which became evident at the end of 1947, has continued.
-- For the next few months it is expected that US inter-
ests will continue to be favored by this declining trend.)
Current Trends and Activit'
""--"Silr-giraTW-aird'rrang trend in Communism in Latin America which
became evident at the end of 1947 has continued with activity shifting
someehat toward more defensive lines designed to keep up Communist
morale; to continue its propaganda; and to maintain its organization.
In general, the Communist position is slightly weaker than six months
ago. The Mexico City. "Peace" Congress was the biggest hemisphere-wide
effort; results, however, were apparently negative. Financial cam-
paigns of the various Communist parties have been less successful than
last year, assuring their continued Parfy operations but on a somewhat
smaller scale.
The Ecuadorian and Colombian Communist parties have been the only
ones in Latin America to hold their annual conventions this year. The
Colombian Communist party has been able to bring together its two fac-
tions, and its program of avoiding the appearance of participation in
the recent political violence has been successful. As a result of the
election in Martinique, Communist representation in the legislatures
which has a total of 36 seats, was reduced from 15 to 10.
Organization work in labor apparently is bearing some fruit in
Guatemala and El Salvador, and the Comnunists in Peruvian and Venezuelan
labor organizations are continuing to be relatively freq. from govern-
mental repression. The Communist-dominated Confederacian de Trabajadores
de la America Latina (CTAL) has apparently lost ground during the past
year as contrasted to the Anti-Communist GonfederaciOn Inter-emericana
de Trabajadores (CIT), 1.hich has gained slightly. The Conmunist-
controlled World Federation of Trade Unions (?TU), however, has begun
to publish its journal in Spanish and to distribute it free of charge
to Latin American unione affiliated with the CTAL.
During the next six months, it is likely that the Comnunists will
have opportunities to take advantage of unstable political situations
in several Latin American countries. They will probably continue their
efforts to organize port, transport, mining and petroleum workers, but
will meet considerable resistance to their efforts, particularly when
the new antieCommunist free trade union federation begins to operate.
Approved For Release 1999/09/02 : C P79-01090A000200040010-5
5.
Approved For Relh"se1999/09/02-RDP79-011,10A000200040010-5
1eek1y Contributions, DAA _ 2 _ 6 December 1549
(CIA Working Paper)
Situation Memorandum 69449
Governmental repressive action may be expected to keep Communist demonstra-
tions to a relatively insignificant level, but troublesome incidents are
likely to occur, especially in Brazil and Chile.
Anti-Communist Activities
---IMST-M-15?T?ixass?months, anti-Communist activities by governments
have continued with particularly severe repression in Chile and Brazil;
unusual political jockeying and manipulation of the labor unions in Cuba
and Mexico; increased repression in Argentina; prevention of free move-
ment of Communists between countries; elimination of propaganda outlets;
anti-Coremmist propaganda and counter-propaeanda; and deportation or
exile of some Communists.
The CIT, which has developed into an organization offering serious
competition to the Communist-dominated CTAL, held an impressive conven-
tion in Havana during September and voted to participate in the organiza-
tion of the new world-wide anti-Cormunist free trade union federation.
It may be expected to continue to work vigorously against Communists in
the labor movement.
The continued and increasing governmental repression of Communists;
the anti-Communist propaganda and generally unsympathetic news coverage
of Communists and their activities; and the increasing activities of the
anti-Communists in Latin American labor organizations have played an
important part in containing advances of Comnunism in the Hemisphere In
fact, some defections have been reported vith certain Communist failures
directly attributable to specific anti-Communist activities.
Current Communist Objectives
en s a emen s o ommunist plans and objectives by Latin American
Connunist leaders emphanize two objectives affecting the US: (1) to
reduce the effectiveness of Latin American cooperation with the US through
(a) peace campaigning; (b) anti-US propaganda; and (c) encouragement of
chauvinistic nationalism; and (2) to prepare to stop the movement of strate-
gic materials from Latin America to the US in the event of war through (a)
control of union organization in petroleum, nine, and transport industries;
and (b) development of sabotage plans.
Communist Capabilities
are estimated to be incapable of making a significant gain
in political influence in any Latin American country in the near future.
Communists should, particularly in labor movements, be able to make prog-
ress in Peru, Venezuela, and possibly in El Salvador through increased
freedom allowed them. However, Communism in those countries is so weak
that any gains made during this period should be easily contained by the
governments in power. In Guatemala, although Communists or fellow travel-
ers have been allowed to hold some important positions in the executive
branch of the government, it is estimated that various internal and
Approved For Release 1999/09Sisack-RDP79-01090A000200040q0-5
Approved For Release 1999/09X2R5CIA-RDP79-01Y90A000200040010-5
Feekly Contributions, D/LA
(CIA Working Paper)
Situation Memorandum 69-49
3 ? 6 DeoeMber 1949
external pressures will prevent further infiltration and may even force
replacement of some of them. In Argentina, it is estimated that the
Communists will lose much of their strength (represented by infiltration
of labor), and ale? some of their general propaganda machinery as a
result of increased government repression. In the other Latin Amerioan
countries, it is believed that Communists will be able to maintain their
organization and propaganda machinery for the next six months at about
the sane level as during 1949 or at a slightly lower level. The "Peace"
campaign of the Communists is not expected to produce another major
Hemisphere-wide effort during the next six months, but may well develop
considerable propaganda and other activity (including the organization
of numerous small local peace committee front-groups) on a local level.
Anti-US propaganda, which is oertain to continue from all of the Communist-
controlled press and radio, may be expected to appear also quite often
in much of the neutral press on issues which happen to coincide with those
taken up by the Communists. The growing effectiveness of counterpropaganda
in some parts of Latin America offers promise of checking Communist propa-
ganda efforts to develop suspicions and anti-DS attitudes in those places,
and will further limit their ability to enlist enough people in some of
their causes to prevent or delay developments desired by the US. Delay
and interruptions of the flow of materials from Latin America resulting
from Communist.inspired strikes during the next six months will not
seriously affect the US.
Approved For Release 1999/W5FA-RDP79-01090A00020004910-5
Approved For RelYse 1999/09/02 : CIA-RDP79-04006000200040010-5
SECRET
Weekly Con rihutIcal
(CIA Working Paper
Situation Memoraudum 70-49
The Curr.ent c-ttnt'
In Peru
.6 December 1949
(ElimaKy T7513 ullitary junta, althouGh it has ro?ctently net increased
r:its::,ns its firm grip upon the counv.wy, The economic
situation hue improved slightly. The armed forces rematn substan-
tially loyal to the governnento The Communists, despite ronewcd
overtures toqtard them by the junta, renain isolated end too wk to
make a major -,ove, while tho numerous Lpristae have been further
weakened by t:ile government,s contlnuA oppression i'porta
change 4as oo,.rarred in Peru's international relations.
-- The situation as to US ft.:I-tercets was slightly improved by
prospects for a petroleum law La r&1- to foo 4;n developers and hy
the simplificaLien of P.kJ.pruffs foroign (3.1:change ay6t,3m.)
Political
znuta baa mtaLned its cortrol wrer the couctry although
serious oppacLtiaa de7elopad to the decre,:, of 14 Now.mber that prsotloally
tervinated el,,,:thangt, and price controls (D/LA nkly 22 Driv 49), General
Odria did much tc, Iltrongthan the ILovernmeAts pot5:4.tion by per8uadic,,s Luis
faro Quesada, af the influential daiIy:41 Coulorcis to oats? hia
oppositita to thi, veasuro. The jovorfla roieiF07.0a71-7%o overcome oucr nt
discontent on 'L:23,0 pari: of some importers, me leftist groups, arid the
general pub1i1:-
The -ja:a,tu's oculidence in it own strength has ber!li indicated by
General Odrim's promise that election's will be held in r4d-I950 (D/LA Wkly
18 Oct 4). Elections- apparently will be only for a constituent assemblys
which will amend tht,:t constitution, designate a prosidert? and resolfro
itself :Litt) a congress:, To insure its control over the forthcoming elec-
tions; the jta haz,?provided for the re-afogistration of voters OVERA hax
been .disonfruaohilled) aud has promulgated a 115(w electoral laws which
facilitates .tho elvot:Lon of its chosen candidates., Although opposition
to the juntS preelection maneuvers has developis.d on the part of
rightist and Ioitist groups, this ha,s,app(4rantly been 41ore than. counterac-
ted by the ?limited support of the Unica Rcvolucioll,aria (largest loLaI
party) aud a political agreement beY:moon tne junta and ex-President Manttel
?tear
Prado,, ?The junta hs,is further increased i..42 control cf the elections by
removing two pl,incipal rivalas Lt. Col- Aifolso 1,1csa ad lqbrahal Elm G.
Urstas from tL6 political scene by giving tMm-fore4:n assig1,72nts Dii,A
estimetes1 trofore, that the junta ia likely t. .tain its control of
the counry durin he next quarturs at loaet?
&Deno
ru's ccenali eltiAatich h imIvove Jlightly ranee tii-Isc)49, The
grduA1 upturn ia r,3flezted principatly in to fro3-nar:cet a2praciation
of the- so? aqran,3od Crom 22 to the ioIlar In mid-July to 1E450 in.
Approved For Release 1999/09/02 : CIA-RDP79-01090A0002000400iu-5
Approved For Release 1999/09/02 : CIA-RDP79-010A000200040010-5
SECRET
Weekly Contributioms, DILA
(CIA Perking Paper)
Situation Memorandum 70-49
6 Deoember 1949
November) and in the inoreased possibilities for development of netroleum
resouroes. Although the government has been oonoernod over the ehort-term
difficulties caused by it' abolition of official parity rates (nee Pantie
eel section), the exporters have indicated their intention of cooperating
With the government in keeping exchange rates fairly stable. The new
exChange arrangement is likely to succeed.
Nideyear estimates: of eUbstantial declines in 1949 export totals as
ocepared with 1948 figures were apparently e:eggerated, sine., present
indications are that year-end results will register only small declines --
even lees significant in view of possible proportionate doc1iw, in importze,
A now petroleum law -- now in draftee is likely to be promulgated in
eseentially its present form eith provisions that offer considerable induce-
ments to foreign investment. The effects should be very favorable to Peru,s
national eeonorey. In summery? Peru,s economic prospects for the next quar-
ter appear more promising than the outlook in mide1949.
1115-11.1a
Odrla regime has maintained its oontrol of the armed forces, on
the support of mhicea it depends for ite existence, both by inducements and
by strict surveillance of military loyalty. A. pay increase has been granted
to officers of the armed forces, Guardia Civil, end polinea; promotions have
been announced; and areed forme officers who pass to the retired list are
to receive all the benefits of active service. The government ie making
a speoial effort to check the movements of Lt. Col. Alfonso Llost, who,
because of his dissatisfaction with his Inter-Anorican Defense card essign-
ment and anger at being passed over for promotions has stated that he will
use east of 1950 to prepare a year /a end auti-Odria ocup. The government
La also olosoly watching the activities of Lloaa's adherents among the
armed forces to prevent their capitalizing on exietinn minor discontent in
the army and air force. Some of those individuals have been givon foreign
assignments., edria's secret police are reportedly shadowing the Minister
of Mr General Zenon Voriega and Minister of Government Villaoorta.
To strengthen the Navy0 the junta has issuod a decree that ellote a
certain percentage of income taxes to the Minister of Marine to bo used
for the acquisiticn of naval units. On 14 October, the Peruvian noverament
signed a contract for the delivery of 4 P 80 jot fightere, complotc with
$U565,000 worth of spare parts? despite the advice of the Chief of the
US Air Mission that the fuade involved should be used for the activation
of planee already on hand. These planea ere the first U5 jets contracted
for by any Latin Amerioan air fore?. Despite all the governmentcs effortei,
however, the morale of the armed force is not good and the present con-
trol and surveillance by the government appear to be necessary to aesure
Approved For Release 1999/09/02 : CIA-RDP79-01090A000200040010-5
Approved For Re ase 1999/09/02 : CIAM79=0
Weekly Contributions, DILL
(OIL Working Paper)
Situation Memorandum 70-49
military support. It is not (*embed, however, that any domestic situation
'within the text quarter will place sufficient :train on military loyal*
to:canss the overthrow of the Odria regime.
SUbversive
the Apristas the most maimereus group opposing the present regime -**
have been further disorganised and weakened by the governmentte:cpotinued
surveillance and repression so that they are unable to make nor major *we
At this time.- Their potential for causing difficulties In the future is
'significant primarily in relation to the inner weaknesses of the Odria
mins which may develop over the longer term, though no serious crisis is
expected within the coming quarter. The Comnnaists, on the other hand,.
represent such a email group numerically that they 00 not constitute a
significant forms even though the regime has tolerated their activities in
an effort to break the Aprista grip on the Peruvian passes. Singe there
le little likelihood that Communiots will gain significant strength in
their own right, or that they could cooperate with the Apristas, they de
not pose a serious threat to the Peruvian government for the foreseeable
. future, even though the gradual growth of Communist strength in Fern con-
tinues to be of concern to the US.
International
The most important international eventfcas Peru auring the ourreat
period.eas the official submission of the 84Ya case to the International
Court of Justice on 15 October. Both Peru and Coloml,ia accepted the Court's
jurisdiction and dates have been indicated for the presentation of briefs
by both parties. General Odria oomnented favorably, in a speech of 27 Octo-
ber, on the cordial attitude shown. by Colombia in the latest phases of the
dispute. Mother international event mua the announce meat that Peru laud
Spain are negotiating a cultural and .immigration treaty. Otherwise, there
wee no peroeptible change in Peru's relations with other nations. Relations
with the US continue to be cordial.
ezewit
Approved For Release 1999/09/02 : CIA-RDP79-01090A000200040010-5
10.
tie 8E0E82
Approved For RelFase 1999/09/02 : CIA-RDP79-0 90A000200040010-5
Week.le Contributions, Dfiel 6 Deeember 1949
(CIA, %larking Paper)
Situation Demorandue 7149
Zialbarzataitaistasaladtzleatigus
Short tura stability of the Argentine Government hae been
improve, A rightiot trend in advinistration policy and appointreents
is evident. Politica:14r repressive measures may be extended to labor.
Efforts touard economia reform aid "sales abroad have increased alight-
ly. The government has intensified ite anti-Conmunist activities.
The armed forces remain relativele etrong and even less likely than
before to take militmey action against the realm?. Chatgoe in Argen-
tine diplomatic corm personnel have been effected to Obtain more
effective 'relations on the international beeiness front.
-- VS ehort-term 'security interests are favored by the anti-
Communist measures, the strengthened Army loyalty aed the appointment
of a Violater of War who reportedly admirals the US; the rightist trend
of government, however, is adverse to lame= renge VS Interests in the
preservation and cites:61i= of democracy.
rftsWesid
To at Pateetielly unfavorable political upsets, the Per6n e6r.in.intra
tion has taken preeautionaer and poUtically defensive anti-democratic
measures designed to eAreceise legally the effectiveness of opposition forces
(see DIU MeV 25 Oct 49), The potential impertance of right-wing support
as en alternative to labor support was intimated when, during the emeno of
recent labor unrest, two large unions showed a willingness to shelve tbeir
Per6nista loyalty if denied wage inereases? Though the government reluctant-
ly appeased labor in the latest strike wave, there was evidence that it is
being forced by economic pressures to change its attitude toward labor and
to exorcise stricter control (see grelitikly 22 Coy /M. Such control, ine
eluding the elimination of Commanist agitators y temporarily reduce the
inaidenoe of strikes but could be erpectel to Provoke bitter labor strife
unless the economic refers program is notably successful. The appointment
of a number of mationalieta to important government positions seemed indlea-
tive of PerWe desire to consolidate right-eing sew:et of his sdnialstre-
tame Improved national leadership and cabinet stability centime (pee D/LA
early 27 Sept 49)4
DiLi estimates that for the foreseeable future the oritical factor in
the governmentle stability will be the success or failure of the Per gov-
ernment's efforts toward economic reform, and that that government will =-
term to resort during the conies myths to undenocratie measures to defend
its domestic position.
1129301sta
During the past two Maas inflation and a loot volume of foreign trade
Approved For Release 1999/09/461141Wilk-bP79-01090A000200040040-5
Approved For Release 1999/09/02 :SESAIRDP79-H1 90A000200040010-5
'Weekly Coutributione, DAL
(CIA Working Paper)
Situe.tion filemorandum 71-49
- 2 - 6 December 1949
have continued to characterise the economic situation, A sharp increase in
the money seemly, rising prices, nes tag? increases, and shortages of cone
sumer and producer geode reflect and supportinflatiory pressures 4eispite
increasing unemployment and a decline in business aotivitye The Peron Admin-
istration's efforts to check inflation through price contra and the urging
of increased production have been ineffective, Recent meaoures suchen
relaxation of restriction on neseentialu private credit and iesuance of nee
import permits cannot be exPocted to hare sufficient effect to oorrect dis-
equilibria, in. the econoee during the next few months.
The Perlin Administration has given serious attention to reviving foreign
trade since the abortage of otocks essential to donestic production has re-
duoed its ability to temporize mach longer. The government's efforts toetrds
an eeport drive, though falteringl.have bpen itereased, The .3 October selec-
tive modification of exohange rates (see D/LA Venler 4 Oct 49) was derligned
principally to stimulate dollar-evert trade, although certain other revinions
in this ocaplicated structure of eechange rates are actueale deterrents to
expanded trade, particalarly with Europe. To mitigate such deterrentel new
export price reductions amd limited imports of ',nereeseentialso have been an-
nounced. The price reductions have resulted in lieredation of hide surpluses
and substantial salea af graixi and oil cakes, though sales are still below
the level of last year. Prospects for increased sales of meat and other live-
stock products have been improved by ?went elimenation of ILPI's (Argentine
Trade Promotion Institute) 20-percent commission on meat and termination of
its contra over the majority of minor livestock by-products. Two of the knot-
tiest trade problems facing Argentina are the resolution of difficulties with
the UK: fend the US. The British, thile claiming a 40 percent increase in the
price of petroleum on the grounds that oil is tied to the dollar market, re-
fuse to pay Argentina a SirelAr increase in the price of neat. The activitiee
of the JOint Argentine-US Committee on Commereial Studien have influeneed some
revisions in Argentine trade policy that have already oepanded sales of cer-
tain oommodities, but, alma the committee's pewees are purely advisory, con-
' siderable time must elapse before its recommendations ?nubs implemented to
effect an over-all improvement in Argentine trade.
?.14510bisU
There bave been re significant Communist activities. Increased anti-
Communist neasures have been carried out by the Argentine Federal Police,
Reportedly, Communiet leaders have become conoerned over the largo number
of menbereeotkers discharged trom their jobs, presumeble because of Party
affiliation. The government appears tiredly to have decided to extend its
anti-Communist campaign to Iabor unions to reduce labor =rest aggravated
bp' Commuaist agitators. Also, it now appears more probable that the Argen-
tine government dfl utilize its now ?political parties regulation lee to
dopy legal status to the Coemuaist Party on the grounds of admitted connection
pith an internatioral organization,
Approved For Release 1999/09/02?;41,16f8pP79-01090A0002000400103?.
141100
Approved For Release 1999/09/02 : CfriiiiiiibP79-01b110A000200040010-5
Weekly Contributione,
(CIA Working Paper)
Situation ISamorandum 71-49
ggiusa
- 3 -
6 Decenber 1949
Ar loyalty to the regime appears to have been strengthened recently.
The accession of General Lucero, tho baa bad close ties with Per6 and Sam
Molina, to tho post of Minister of the Amoy (ma DPA Ifaly IS Oct 49) favored
Army layalty and govertment 'stability as did the retention of Minister of
Defense Soda Molina, Aleo tending to strengthet Army loyalty were the overall
rightist trend, eillingneas of the oReirintration to tighten its control of
labor, and a noticeable lull in Senora Peron's activities?possibly due to
illness. NO ?hams has been reported in the efficiency, quality of manpower,
and morale of the military, ail afiableheere last reported to be exception-
ally high by Latin American standards.
attilMateiala
The government !s latest anti-Communist measures, thich place the Per&
administration in a role of opposition to international Communism, favor the
US interest in Hemisphere solidarity, since a revival of the Third Position
(one of oppoaition to both the US and the USSR) now bas become logically and
practically difficult. Increasing recognition by the government of the reed
fbr US financial and economio cooperation and the influx of right-wing nation-
alists into the administration further eltmle'ish the prospects for revival of
the "Third Position!, foreign polio!). There is, however, despite the Argen-
tine need for US cooperation, the poosibility that the currently- cooperative
attitude taward the US maybe impaired because of the influx of riehtisto,
Lu some cases extreme nationalists, into the administration, which may in the
long ran tend to make the governmaat anti-VS as well as anti-democratio. The
prinoipal purpose of the recent reorganization of the diplomatic corps (some
forty zbeplacerkents have been appointed ircluding a number of militant national-
istOtheemmen, vas to remedy the loss of international prestige sustained by
Argentina during the past two years as a result of ita adverse economic situa-
tion end inept diplomacy, %phasic in selection of personnel appears to have
been directed toward the improvement of relations on the international business
front. To the extent that this is achieved, it will favor short-run US security
and coemercial interests, directly through improved trade relations and indi-
rectly through improvement in Argentine economic stability.
As anticipated, Argerktina was ?looted to the Trusteeship Council of the
United Nationeo
Approved For Release 1999/09/024,11184R3.7.9.01090A000200040010-5
13.