WEEKLY SUMMARY SPECIAL REPORT POLITICAL DYNAMICS IN ARGENTINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A006500020002-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 19, 2016
• Sequence Number: 2
• Content Type: SUMMARY

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Secret .
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Special Report
Political Dynamics in Argentina
Secret
N2 38
14 Tune 1968
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Weeklies issued by the Office of Current Intelligence.
Special Rf norts are ublished separately to permit more
chensive treatment of a subject. They are prepared by
Mice oft orrent Intelligence, the Office of Economic Re-
e;f;, ti,e tlii e of Strategic Research, and the Directorate of
and r .~e:hnologu. Special Reports are coordinated as
hate arnung, the t)irectorates of CIA but, except for the
I sduhstarnove exchange with other agencies at the working
i-, not --peen coord;natedl outside CIA unless specifically
IA l PTPOR 1' contains classified information affect-
nation.;: dete:nse of the I inited States, within the mean-
e 1 a? sections 79w3 and 794, of the US Code, as
by an unauthorized person is prohibited by law.
tw.?sd?d from eu,om taa
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For the past two years, Argentina has been
ruled by a "revolutionary" government which has
banned political parties and dismissed all elected
officials on both the federal and provincial levels.
President Juan Carlos Ongania has assumed both exec-
utive and legislative functions and is supported by
the military establishment.
Recently, however, moderates in the military
have become highly antagonistic toward the national-
ist faction of the government, and relations between
the President and his army commander in chief, Gen-
eral Julio Alsogaray, have deteriorated. An even-
tual confrontation between Ongania and Alsogaray is
quite possible, but neither is ready for an open
clash now. Nevertheless, the Ongania government's
political future depends on the President's talents
as a leader and manipulator, and on the progress of
the Argentine economy.
The Dynamics of
The Ongania Government
The Ongania government is
structurally a dictatorship, but
in practice. there are many re-
straints on the President's power.
The most obvious of these is the
influence of the armed forces,
which look upon themselves as the
force that put this government
in office and has the right to
replace it if necessary. Another
limiting factor is Ongania's re-
liance on civilian experts to
modernize Argentina.
Early in his administration,
President Ongania stated that the
"Argentine Revolution" would con-
sist of three consecutive phases:
economic, social, and political.
Thus far, he has concentrated on
the economic stage, and has not
designated a specific timetable
for a return to representative
democracy. His oft-repeated
goal is to continue present sta-
bilization and development poli-
cies until a firm basis for long-
term financial stability and eco-
nomic growth has been laid.
Since December 1966, Ongania
has followed primarily the ad-
vice of "liberals"--in the local
context--in determining Argentine
economic policies, but several
of his top advisers favor state
control of the economy. Within
this context Ongania has operated
with considerable political acu-
men. He has maintained his flex-
ibility by playing off conflict-
ing factors in the government and
has retained most of his prestige
and power within the army.
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Development of the
Argentine Political System
With the decline of the tra-
ditional elite after World War I,
a new middle-class leadership
took over control but never man-
aged to achieve agreement on pol-
icy or to gain the level and
scope of authority needed to gov-
ern effectively. Political fac-
tionalism and the meddling of
civilian and military leaders in
each other's business prevented
Argentina from attaining stability
under constitutional democratic
government.
By 1930, the absence of an
authoritative or unified civilian
leadership had drastically lowered
the barriers to military activism
and since then Argentine politics
has operated in an abnormal at-
mosphere because of the return of
the military to a primary politi-
cal role. In the previous half
century, no president had been
overthrown by force and only one
military man, General Roca, had
held the presidency. Between Jan-
uary 1930 and June 19 66 , there
were 14 heads of state, eight of
whom were removed by the military,
including five of the six civil-
ians.
At the same time, elected
governments have been unable to
achieve the consensus needed to
institute policies that would as-
sure the stabilization and mod-
ernization of the country. In no
other country in Latin America
has the contrast between economic
potential and actual performance
been more pronounced than in Ar-
gentina during the last four
decades. Since World War II, the
Argentine record has been one of
slow and erratic growth, endemic
inflation, and recurrent balance-
of-payments crisis.
To a large extent, these prob-
lems
reflect the damage inflicted
by the policies of the Peron era,
but the "stop-go" measures and of-
ten inconsistent policies pursued
by succeeding administrations have
deepened the structural distor-
tions that they inherited. Largely
because of the inability of the
Illia government to grapple with
these economic problems, there was
widespread civilian support for
the military intervention on 27
June 1966 that brought Ongania to
power.
Liberales versus Nacionalistas
Within the Ongania adminis-
tration there are varying view-
points, but most officials adhere
to one or the other of two basic
lines of approach to the nation's
problems. Argentines refer to
those two groupings as the
nacionalistas and the liberales.
Both are nationalistic, but
the nacionalistas tend toward
xenophobia, and are particularly
opposed to foreign investment.
They are better described as
statists, because they strongly
support state control of large
sectors of the economy and their
commitment to traditional democ-
racy is at best questionable.
Conversely, the liberales stress
the importance of free enterprise
to the economy. They are lib-
erals in the 19th century sense
of the term, believing in con-
stitutional democracy but favor-
ing laissez faire policies and
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reluctant to admit the lower
classes to positions of govern-
ment influence.
From its inception, the
Ongania government has been in
a more powerful position than
its predecessors to enact eco-
nomic reforms, but for six months
it floundered over choosing the
most effective path to follow.
By the end of 1966, the govern-
ment had been unable to formu-
late an intelligent over-all eco-
nomic program, and. inflationary
pressures were stronger than be-
fore the coup. At that point,
Ongania decided to reshuffle his
cabinet and appointed as minister
of economy Dr. Adalbert Krieger
Vasena, an internationally re-
spected economist and a leading
spokesman for the economic pol-
icies favored by the liberales.
Future of the
Economy Causes Debate
In its first three months,
Krieger Vasena's economic team
drew up and launched a broad and
complex program for financial
stabilization and economic devel-
opment. Under that program, im-
pressive gains have been made in
laying the groundwork for price
stability through fiscal reform
and containment of wage increases,
in rebuilding foreign reserves,
and in increasing the confidence
of foreign investors. Consist-
ent policies over a long pe-
riod of time are needed, however,
if the Argentine populace is to
be convinced of the necessity to
make basic changes in its pat-
tern of investment, production,
and consumption.
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Minister of Economics
Krieger Vasena
It is still too early to
judge whether impatience with the
government's inability to per-
form an economic miracle will
force a change from the course
that has been undertaken. Dif-
ferences over the best means to
achieve economic progress continue
to be evident within the Ongania
government. With political par-
ties banned, the great debates
have focused increasingly on eco-
nomic issues. During the past
year, an influential group of
nacionalistas has repeatedly
criticized Krieger Vasena's aus-
terity measures and opposed his
efforts to induce a major inflow
of foreign capital. Although
there is no organized coalition
opposing Krieger Vasena, several
of Ongania's political advisers,
including Interior Minister
Guillermo Borda and Presidential
Secretary Roberto Roth, report-
edly advocate rejection of present
stabilization measures in favor
of rapid economic expansion with
more state participation.
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The nacionalistas, sparked
by the "Athenium of the Republic,"
an intellectual group to which
many government figures belong,
also have begun to suggest ways
to return Argentina to some form
of representative democracy with-
out returning to what they see
as a discredited political sys-
tem of traditional parties.
Recently, Minister Borda
told the Foreign Press Associa-
tion that the government envi-
sions an eventual return to rep-
resentative democracy, including
elections and political parties,
but that it also wants "community
participation" in an economic
and social council. Borda's
speech has renewed fears among
moderate military leaders who
support Krieger Vasena that the
government is thinking about some
kind of quasi-fascist corporate
state--presumably something along
the lines of Franco's Spain.
Military Influence on
The Government
The armed forces are the
most cohesive political force in
Argentina. In many respects the
military hierarchy resembles a
political party, even though it
lacks a constituency, for it
has no means of legitimizing its
rule except by seeking civilian
support through elections.
Two years ago, top military
leaders brought Ongania to power
and issued the Statutes of Revo-
lution. Since then they have
insisted on maintaining a voice
in policy decisions. Although
some generals favor more popular
(nationalist) solutions to cur-
rent economic problems and others
support Krieger Vasena's liberal
policies, the officers are united
in their commitment to revitaliz-
ing Argentina.
Thus far, Ongania has been
able to remove or neutralize
potential rivals within the mil-
itary before they had an oppor-
tunity to threaten his position.
Recently, however, relations have
deteriorated between the Presi-
dent and the army's commander in
chief, General Julio Alsogaray.
Alsogaray has supported the gov-
ernment's liberal economic poli-
cies and has frequently criti-
cized the influence of statists
in the cabinet. In the past few
months, however, the general and
his brother, Ambassador to the US
Alvaro Alsogaray, have attempted
to broaden their military and
civilian base by telling their
supporters that they favor greater
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General Alsogaray
liberalization, including some
forms of political activity
banned under Ongania.
The President is aware of
General Alsogaray's maneuvering;
in recent meetings with Alsogaray
and other top military leaders,
he told them that he alone would
be responsible for government pol-
icy and personnel. In a similar
situation in December 1966, Also-
garay's predecessor, General
Pistarini, resigned after a dis-
agreement with Ongania over the
handling of personnel assignments
within the military.
General Alsogaray faces re-
tirement in December 1968, when
he will have completed a two-year
term as army commander. While
some of his maneuvering may be
a sincere effort to prevent the
nationalists from gaining sway
over the President, a good deal
of his effort also seems to be an
attempt to avoid losing the in-
fluential and prestigious army
post.
At present the majority of
the military does not want to re-
move Ongania and apparently con-
siders him innocent of the charge
made by Alsogaray and some other
military leaders that he intends
to establish a corporate state.
Alsogaray himself seems aware of
his own lack of support. In his
Army Day speech on 29 May, he care-
fully avoided any political ref-
erences that could create new mis-
understandings. An open confron-
tation between Ongania and Also-
garay is not i-minent, but an
eventual showdown seems inevitable.
Ongania's Position
President Ongania himself
is a taciturn professional sol-
dier who before the June Revolu-
tion had been a strong advocate
of constitutional government sup-
ported by an apolitical military.
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President Ongania
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He had retired from active duty
in November 1965, reportedly dis-
enchanted with President Illia,
and was recalled by the military
commanders the following June to
head the new government. After
assuming power, Ongania reverted
to the idea that the military
should stay out of the making of
national policy and insisted that,
with few exceptions, military of-
ficers on active duty would not
be permitted to hold civilian
jobs.
Since 1966 Ongania has dem-
onstrated his continuing commit-
ment to the ideals of the Revolu-
tionary Statutes by maintaining
a pragmatic centrist position
between the nacionalistas and
the liberales.
Ongania reportedly holds
the government of General Franco
of Spain in high regard, and a
Page 6
good deal of the present nation-
alist philosophy smacks of Franco-
style fascism. Although he may
favor the nationalist philosophy,
he has so far supported an eco-
nomic program that has the back-
ing of the liberals and the ma-
jority of the military.
Other Political Forces
A major point of strength
for Ongania continues to be the
lack of a united opposition.
Although the Peronists comprise
some 30 percent of the elector-
ate, they have been isolated from
full participation in the national
political system since 1955. At
present they are divided into
moderate and orthodox wings,
neither of which has been able
to work out an alliance with the
old Radical movement which is
also badly split.
The largest opposition group,
the Peronist-dominated organized
labor movement, has been hamstrung
by serious divisions within its
ranks and by effective government
handling of labor demonstrations
and disputes. Recently, the Peron-
ist labor confederation split into
two rival groups. On the one hand
are the "participationists," who
in one degree or another want to
keep the door open to cooperation
with the government. This group
includes the leadership of nearly
all the big and powerful unions.
They are opposed by the hard
liners, whose position is one of
defiance of the government.
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SPECIAL REPORT 14 Jun 68
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The Communists, who have
never posed a major threat, suf-
fered an important blow in re-
cent months when a majority of
the Communist youth split away
from the Moscow-oriented party
in favor of a more activist
policy. Another problem may
arise when the party has to choose
a new secretary general to re-
place ailing Victorio Codovilla.
The rest of the far left remains
splintered among a wide variety
of small factions.
Outlook
Impatience with the govern-
ment's inability to perform an
economic miracle may yet force
major policy changes. Continued
economic progress would resolve
some of the major disagreements
between the liberals and nation-
alists. A complete accommoda-
tion of differences, however, does
not seem likely at any time.
Military influence on govern-
ment policies will probably con-
tinue, but a move against Ongania
does not appear likely at present.
It would require a clear consen-
sus among the top military lead-
ership and influential civilian
sectors that a change was neces-
sary, and a prior agreement on
someone to replace Ongania. No
such unity of views exists or
appears to be in the making.
Whatever else may occur, the
principal issue for Argentine
political progress is when and
how the Peronists can be rein-
corporated into the political
process. Ongania has mentioned
his desire to cooperate with
moderate Peronist leaders, but
clearly more time must pass be-
fore practical steps can be
taken. While Juan Peron is alive,
military leaders will resist
any move by the government to
come to terms with his followers.
In the long run, however, the
Peronists will have to be included
in the political structure be- 25X1
fore representative gover
is possible in Ara mina.
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