Created: 3/2/1954

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The Intelligence Advisory Committee concurred ta this estimatearch IIS4. The FBI abstained, the subject being outside of its jurisdiction.

The following member organisations of the IntelUgence Advisory Committee participated with tht CentralAgency In the preparation of this estimate: The Intelligence organizations of the Departments of State, the Army, the Navy, the Air Force, and The Joint Staff.



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United Slates Information



To assess the situation in Argentina and to estimate probable developments

now dominates Argentina more completely than ever before. He has the active political supportubstantial majority of the population, including especially urban and rural labor, thebureaucracy, and manyHe has also secure control of the armed forces, the police, thelabor organizations, the Peronist Party machine, the national Congress, and the provincial governments.decree and police powers enable him to interfere in any aspect of national life. He has inonopoly of all media of public information. There exists no effective opposition to his regime.

For his own purposes, Peron hasadopted policies advocated by the Communists, but we do not believe that they haveetermining influence on the basic objectives of his regime. The Argentine Communist Party has little popular support. It has had virtually no success in infiltrating the armed forces and little in the bureaucracy. It iscritical of the regime and is being harassed bymall group ofCommunists advocateswith Peron and is tolerated by him.

Peron's most pressing problem is the solution of Argentina'serious crop failureeriously adverse change Ln the terms of trade. Peron can probablylight and gradual improvement in thesituation during the next several years. It is unlikely, however, thatforeign exchange earnings will be sufficient to finance the majorprojects envisioned in Peron'sFive-Year. For this purpose, Peron seeks private foreign credits and investments, but he willbe unable to attract sufficientprivate capital to permit substantial fulfillment of these major projects.

Peron has abandoned his former anti-US foreign policy and propaganda line, and hasapprochement with the United States, stressing the value ofas an anti-Communist force in South America. He apparently hopes thereby: (a) to induce tbe United States toenevolent attitude toward the extension of Argentine political andinfluence in neighboring countries; (b) to facilitate the investment of UScapital in Argentine economic de-


velopment; and (c) to secure US aid in the expansion of Argentine militaryIt is to be expected, however, that Peron will continue to maintainrelations with the Soviet Bloc and will seek to increase Argentinetrade with tbe Bloc.

Peron will probably continue his policy of rapprochement with the United States as long as his internal political position remains secure and as long aswith the United States appears on balance to favor the realization ofnational aspirations. In thesehe will probably continue to curb Communist activities in Argentina.

If Peron should conclude that hiswith the United States was proving unproductive, or if, for anythe Argentine economic situation should deteriorate toegree as to threaten the stability of the regime, Peron would probably revertemagogicpolicy and an antagonistic foreign policy. Such developments wouldresult in some increase ininfluence, but Peron would not be likely to permit the Communists or any other group to become seriousfor his power.

he Argentine armed forces are more than adequate for the maintenance of internal security. In tbe event of general war, Argentina would be capable ofone or two divisions for usethe country, but they would lack modern and heavy equipment andin modern warfare. The Navy and Air Force would require considerablematerial assistance and trainingthey wouldignificant

In the event of general war, Peron would exploit the situation to obtain the maximum price for Argentine goods and services. He would probably seek to avoid belligerent participation as long asand in any case would probably be reluctant to provide forces for servicethe Western Hemisphere.

In the event of Peron's demise the Army would probably have thevoice in the choice ol his successor. Jn its early stages, any successorwould probably attempt to follow the same general internal and external policies as were being followed by Peron at the time of bis death.



eron now dominates Argentina more completely than ever before, ills position has gradually beer, strengthened over the years to the point where It Is virtually unchaller.ged. He has the support of large segments of the population. Ke has also succeeded In concen-

' Thli eiUaiale supersedes NTX-W. "Probable De-telopmenU InubUihedowever, the background InforniaUon contained In NTX-SS Is still considered to bevalid.

trating in his hands such political, economic, and military power that he can almostprevent the emergence of any effective opposition.

he Peronlst Revolution. Ln the name of "social justice, economic Independence, and politicalas wrought many far-reaching political, social, and economic changes which will probably be morethan either the Peronlst Party or its leaders. Peron has shifted the balance of political power by redistributing income for

the benefit of labor and by giving directto industry. The State hasominant role in the economic and political lite of the nation. Peronism has borrowed from foreign Ideologies, including Fascism and Marxism, and it emphasizes ultranatlonalism. Industrialization, the political and socialof labor, and state-supportedmeasures.

Peron's most important source of popular support is labor, which owes to Peron Itssocial and poliiical status as well as such material benefits as higher wages, low-cost housing, schools, clinics, and hospitals. Peron also has the active support of: (a) tenant farmers, who benefited from Peronist tenant-landlord legislation; (b) government employees, who are dependent for their jobs on loyalty to Peron; (c) many industrialists who favor Peron's protectionist policies and his Industrial expansion program; and (d) the country's principal intranational 1stthe Nationalist Liberating Alliance.

Since the death of Eva Peron, theRoman Catholic Church hasriendlier attitude toward Peron. It is now lending its support to Peron's appeals for cooperation of all parties In solvingcurrent problems. Although certain areas of friction in Argentine Church-State relations stLU remain, there is no indication that Peron is contemplating any action against the Church which would cause It to abandon its traditional policy of avoiding open conflict with the regime in power.

Peron's dominant position in Argentina does not depend solely on the popular support his regime commands, Peron has solidified his control over the government and thethrough the following instrumentalities:

a. The Armed Forces: Since the abortiveby certain officers to seize powereron has strengthened his control over the armed forces. He has purged thoseof disloyalty and appointed personal followers to positions of command. He has also opened the officer ranks to enlisted men. who are largely pro-Peron. In addition, he has Improved morale by bettering the living conditions of service personnel.

Police: The Federal Police.and Maritime Police,under the Ministry of the Interior, arePeron personally and are effectivelyby him. These forces haveand are believed capableInternal security, evensupport, but could not prevent an

Labor: The Generalof Labor (CGT) lsrepresents the majority oflabor. Its leaders areof the Peronist Party and manymembers of Congress. Throughexercises considerable control overmasses and can, whenorganize mass demonstrations Inof his policies,economic position has deterioratedresult of Inflation andold-the-Une policy onsinceesultevidences of labor unrest, Perontaken steps to widen his controlby sponsoring the Confederation ofWorkers. By this means,not only to split organized laborgroups, neither of which would beto threaten his position, but alsoprofessional and skilled workersdissatisfied with or would not Joinunskilled CGT.

Peronist Party: The Peronistwell-organized and responsive toIt occupies alleats Inuteats In the ChamberPeron alsotrong holdprovinces through this Party, whichall the provincial governors andmajorities In all the provincialThe national and provincialdominated by Peronist appointees.

ocilegranted Peron extensive decree andwith which he can effectivelyalmost every phase of national life.supervises, and In someand operates, the press, radio,other public InformaUon media. The new


Five-Year Plan gives Peron extensive powers over the economy. Including strict regulation of imperii, exports, credits, wages, and prices, as well as the power to dissolve any political party which opposes the principles of Peron-ism. Peron also has the power to Impose martial law, curtail civil liberties, and apply severe penalties against any who criticize government officials.

pposition to Peron still exists, but it is divided andopular program. Itprimarily of large landowners,groups, some of the more highly skilled workers who belonged to the pro-Peroa unions, and some industrial and commercial elements. Many of Peron's opponents have been mollified by his recent policy ofand amnesty called the "nationalmovement. Moreover, thehas been unable to develop leaders or issues to challenge Peron's popular support, the principal opposition groups either merely demanding greater civil liberties {which has little appeal to labor) or seeking to outbid Peron's appeal to nationalist and opinions- The principal opposition partyRadical Civic Union (UCR)holds onlyeats outn the Chamber of Deputies. It represents primarily urban elements rather than landowners, and Is Itself split Into two main factions. One faction advocates merely passive opposition to Peron; the other advocates and occasionallyacts of violence against the regime. All opposition parties arc further handicapped by restrictions placed on their campaign activi-ties, by legal prohibitions against forming coalitions, and by being denied use cf press and radio.

he Argentine Communists have notopposed Peron. They are divided into two factions. The official ArgentineParty (PCA) has an estimated strengthomposed chiefly ofstudents, and Intellectuals. It has Utile popular support. It has had virtually noIn infiltrating the armed forces and little in the bureaucracy. Its penetration of the CGT has been limited to secondary positions in some unions.mall dissidentgroup (probably now numbering no moreew thousand) split from the official Partylthough there is no evidence that It has abandoned Its loyalty to Moscow. This group held that it could gain more by collaborating with Peron. and from time to time some of Its members have had access to him as advisers.

eron, for his own purposes, hasfollowed policies advocated by thebut we do not believe that either Communist group haseterminingon the basic objectives of the Peron regime Peron accepted Communist advice and support while he was pursuing an anti-US policy. Ke has used the dissident groupait to oppositionists of the left, especially in the labor movement, to throw in their lot with Peronlsm. Now that Peron Is seeking anwith the US. he has stepped up police surveillance and harassment of the PCA. There are also indications that the CGT Is taking steps to expel PCA members from union leadership. However. Peronhas not taken any steps against the dissident Communists. Although Peron'sstand against Communism is in partto Impress the US, wc believe that he Is basically unsympathetic to Communism and would move promptly against the Communists If he felt they werehreat to his position,


Solution of Argentina's economicis the most pressing task facing Peron. The possibility of economic deterioration Is the most Important latent threat to Peron's ability to maintain himself in power.

evere drought was thecause of an economic crisis, economic conditions had beensteadily under the strain imposed by Peronlst economic policies and programs. Ove ram bilious goals for rapidand expansion of social services, and faulty allocation of foreign exchange, were largely to blame. Nationalization of foreign-owned public utilities, repatriation of thedebt, and Inefficient purchasing and

of imported equipment depleted the substantial gold and foreign exchangewhich had accumulated during World War II. Meanwhile, the government's policy on land tenure and farm prices, combined with the movement of agricultural labor to the cities and the lack of compensating farm mechanization, hadrogressive drop Ln agricultural production, and consequently in experts. Insufficient Imports of essential raw materials and replacement parts ledecline Ln industrial output. Total grossproduct (GNP) declined In thet an average annual rateercent, the cost of living Index more than doubled, and the government's internal and foreign commercial indebtedness increased three-fold.

Economic conditions have Improved since the low pointarvest was excellent and thearvest is also good. The resulting rise in exports, combinedharp curtailment of imports,avorable balance of trade3 and permitted the government toits gold reserves and reduce its short-term foreign Indebtedness Inflation was checked by strict management of credit and by freezing prices and wages. However, Peron still faces many economic problems.costs are inflated and productivity is low. Industrial production is hampered by obsolescence of plant and equipment, by tight credit restrictions, and by shortages ofraw materials. Wage and priceIs threatened by strong pressure for another round of wage Increases.

Peron's second Five-Yearas passed by Congress int is an ambitious and exhaustiveof the government's economic objectives and gives Peron virtually unlimited powers to regulate nearly every phase of Argentinelife. The Plan calls for an annual growth of GNPercent and allowsotal expenditure by the national government over the five years5 billion7 billion dollars at the official rate ofhe bulk of government Investment under this Plan Is earmarked for transportation.

fuel, and power. Peron could probablythe domestic costs of the Plan without resort to inflationary deficit financing or credit expansion by such measures as using social security funds and reducing norma)expenditures. Peron is apparently first concentrating on the agricultural portion of the Plan. He Lsubstantialof Argentina's foreign exchange earnings to the importing of tractors, fertilizers, etc. However, Argentina's foreign exchangewithin the next two years are not Likely to suffice for the large-scale importation of developmental equipment envisioned in the Plan.


rgentine manpower available for military service Is of excellent quality. The Argentine armed forces have an estimated strengthivided as follows:

c. Army: The Army has0 men, of whom0 are one-year conscripts. Thereotorizedrmored,avalry divisions,nfantry divisional-equivalentIIotorized),by smaller combat units. The Army's morale and training arc excellent by Latin American standards, but It is short of modern and heavy equipment and lacks training and experience Ln large-scale operations.

b. Navy: The Navy, with personnel totallingaintains the largest fleet in Latin America It consistsld battleships, an oldeavyightestroyersldand various minor combatant ships and amphibious and auxiliary vessels. The Naval Air Arm hasircraft, mainly Ln transport and reconnaissanceaboutf which are assigned tounits,en, includingilots, Although basic seamanship,and morale are good by Latin American standards, the Navy's combat effectiveness is low because of aging ships, obsolete aircraft, prewar doctrine, and an almost complete lack of modern AA and ASW weapons andand electronic gear.

D (Ml D

c. Air Force: The Air Force0 men.rained pilots.fircraft are In tactical unitsthe remainder being trainers or in storage There are aboutloster meteor jetsew operational Lancaster and LincolnThe combat effectiveness of the Air Force is limited by the total lack of electronic early warning and intercept equipment and by critical shortages of fuel, spare parts, and armament.

The armed forces are supplemented by the Federalhe Nationalnd theheir morale and training are excellent and they are believed capable of maintaining internal security.

The Argentine armed forces are more than adequate for Internal security. Peron desires to strengthen and modernize the armed forces in order to: (a) enhanceprestige in Latin America, particularlyis Brazil, and (b) Increase hispower in negotiations for US assistance by pointing to Argentina's capabilities forCommunism and for contributing to Hemisphere defense. In the event of general war, Argentina would be capable of providing one or two divisions for use outside thebut they would lack modern and heavy equipment and training in modern warfare. The Navy and Air Force would requireoutside material assistance andbefore they could make any significant contribution to coastal and antisubmarine patrol and convoy operations.


nder Peron, Argentina has been faced with the problem of adjustingew world-power pattern. At present. Argentina has no secure tie with any great power. The British connection no longer servesajorfor Argentine economic progress and stability. Argentina has been unable toa friendly collaboration with the United States such as Brazil enjoys. Basic political. Ideological, and economicmake it virtually impossible for Peron to align Argentina definitely with the USSR.

Peron's "Thirdhich proclaimed Argentina's independence with respect to the opposing world camps, was developedationalization of changes In the past decade superimposed upon Argentina's traditional isoUuonist tendencies.

2C. Argentina's International aspirationsa dorriiriant position in southern Southosition of leadership in Latin America,lace in the worldto somewhat inflated views of national capabilities. To reach these goals. Peroninternal economicree hand to assert Argentine influence overcountries, and foreign support forpretensions In world affairs. For such purposes, the cooperationajor power Is essential, but such cooperation has 'not been obtained. Consequently the foreign polley of the Peron regime has been unstable,to the momentary requirements of domestic politics, and, inigh degree of opportunism.

Argentine policy toward the US,one of aloofness, has been conditioned by long-standing British ties, limitations on Argentine exports to the US, and US policy barriers to Argentine expansionism andIn the Hemisphere. Under Peron.foreign policy became Increasingly aggressive, and Its antagonism toward the US more pronounced.. Per crust propaganda was lending volume and coverage to ultra nationalist, Communist-line attacks on the US. This aggressively antl-US Line reflected Argentine feelings of insecurity, was colored by the Peromst revolution's heavyon "anti-capitalist" andpolitical slogans, and was intensified by general economic deterioration.

Byowever, Peron apparently calculated that this antl-US policy wasIt was hawing little effect InUS influence in Latin America, and Argentina was making little progress in strengthening its economy andominant position in southern South America. Most Important. Peron apparently concluded that substantial foreign economic support was essential to the achievement of his Internal

economic goals, which In turn was ato Ills remaining in power andhis foreign policy objectives inThe timing of Peron's decisionan accommodation with the US waspart determined by: (a) hispolitical controls which madedependent on the support of antl-USand (b) the change inthe US and the subsequent visit of

present, Argentine anti-USvirtually ceased. The "Thirdhas virtually disappeared,been lifted on US press services andand more favorable conditionscreated for US-owned businessare also Indications that Peron willsupport to US objectives andthe OAS and the UN.

thus seeking anthe US, Peron apparently feels hehis nationalist supporters to theof seeking direct US loans or aid. ora military assistance pact. Is apparently seeking to pursuade(a) toenevolent attitudepolitical and economic objectivesAmerica; (b) to encourage USto invest in Argentina and tocredit terms; and (c) to aid Inof Argentine military facilitiestechnical advice and materialson liberal terms. Peron has stressedsupport would benefit the US bytotronger stand againstin Argentina, and bycapabilities for combattingof Communism throughoutand for defending southernIn the event of external

efforts to extend ItsLatin America have had little successin the cultural field. Thelabor movement (ATLAS),Argentina's extensive network ofhas not attracted the support ofLatin American labor organizations.

Although Argentina has signed "economic union" pacts with Paraguay, Chile, andany significant extension of Argentina's economic influence has been blocked by its inability to fulfill its trade commitments.

Argentine- Brazilian rivalry remains strong and may pose special problems for the US now that Argentina is seeking friendlierwith the US. Each country will be quick to claim that the US is favoring the other. There are already Indications of Increasing antl-US sentiment In Brazil, which may be strengthened if the impression grows that the US is favoring Argentina at the expense of Brazil. Thus, closer US-Argentine relations, in addition to causing friction between the US and Brazil, may complicaterelations with other Latin Americanas Uruguaywhich are suspicious ofexpansionist ambitions

Argentina maintains diplomatic relations with the USSR and all the European Satellites except Albania. All these countries havemissions in Buenos Aires which provide channels for the disserninatlon of Communist propaganda both within Argentina and to neighboring countries. Argentina In turn has resident missions in the USSR.(accredited also tooland, and Rumania (accredited also to Bulgaria).

Argentina's trade with the Soviet Bloc is nowercent of its total foreign trade. This percentage will IncreaseIf commitments under the recent Argentine-Soviet trade agreement are carried out. The agreement calls for an exchange of goods0 million, with Argentina exporting non-strategic raw materials infor Soviet capital goods and fuels. To facilitate this trade, the USSR advanced toillion dollar credit for the Import of Soviet capital goods. There is no tune limit on delivery. Soviet exports would be small in relation to Argentina's totalrequirements, but would satisfyneeds in certain Important categories, particularly petroleum drilling and refining equipment.


The Peronist Party will almost certainlyecisive victory in the Congressional and Vice-Presidential elections scheduled forhus substantially strengthening Peron's position. As long as there Is noeconomic deterioration, politicalto Peron will be ineffective and Peron will maintain his hold over the country.

The principal potential threat to Peron Is the unrest, particularly in the laboring class, that would resultajor crop failure or severe economic depression. We believe that through his control over the CGT leadership Peron would probably be able to prevent labor unrest from becomingIn the event that the COTwere unable to control its masswe believe that Peron would retain the support of the armed forces and the police, and that these forces would be able to control any disturbances or revolt that might occur. We believe that there Is little chance that Peron will be ousted by an armed forces coup.

erious crop failureevere drop ln the world demand or price foeexports, we believe that there willlight and gradual improvement In theeconomyhere will probably be sufficient foreign exchangefrom agricultural exports to maintain essential Imports at present levels and at the same tune to permit: (a) increases Inproductivity through the Import of tractors, fertilizers, seed.nd (b) some rehabilitation and modernization ofplant and equipment. Foreign exchange earnings, however, will remain Inadequate toelaxation of present stringentcontrols or to undertake many of the major development projects called for by the Five-Year Plan.

In these circumstances, Peron willseek to implement the developmental aspects of the Plan through private foreign credits and private foreign investmentWestern Europe and Japan aretheir trade with and investment In Argentina, and West Germany has recently become one of Argentina's most Important sources of short-term commercial credits, Peron apparently believes that the US is his principal potential source of foreign private capital. Peron has already liberalized the law applying to new foreign investment He will also probably offer more attractive terms to Investors ln fields of special interest to the government, particularly petroleum. He may also permit present private Investors to remit accumulated backlogs of profits, royalties, and dividends, to the extent that exchangepermit. Despite such measures, It Is unlikely that Peron will be able to attract sufficient foreign capital, particularly in the field of transport, power, and other basicto permit substantial fulfillment of the major development projects Included in the Fire-Year Plan.

Although Peron will probably concentrate on agricultural and Industrial rehabilitation, there will remain the danger that for political or prestige reasons Peron will feel compelled before the end5 to adopt measures which would have serious Inflationary results. For example, he may feel it necessary, under pressure of popular demands, to relaxon imports, wages, or credits. Ii he does not succeed Ln attracting sufficientcapital, he may also feel compelled to distract attention from continued austerity conditions by pushing ahead rapidly with spectacular projects at the expense of strengthening agriculture and Industry.

The influence of the Communist Party will probably not Increase. Peron willcontinue repressive measures against the official Communist Party, and will attempt to curb its efforts to promote antl-USew "dissident" Communists, however, may succeed Ln Infiltrating the PeronIf Peron should abandon his policy of accommodation with theoreclimate for the extension of Communist Influence would exist, but the Communists would still noterious threat to the Peron regime.

Peron will continue his policy ofwith the US as long as his Internal political control remains strong, and as long

as elaboration with the US appears onCo favor Argentine national aspirations. Percn will be sensitive to any US Intrusion ln foreign markets vita! to Argentina's exports, and resentful of US actions that appear to him to block the extension of ArgentineIn Latin America. During the period of accommodation with the US, Peron will probably continue to facilitate the solution of problems facing US enterprises. Including news services and publications. Argentina will probably be more cooperative with- the US Ln international organizations.rgentina will almost certainly continue to maintain diplomatic relations with theBloc and attempt to increase Argentine trade with the Bloc, especially with the USSR To the extent that Argentine economicobjectives are not attained through collaboration with the US and other Free World nations, Peron will probably seek aexpansion of trade with the Bloc,If the USSR fulfillseasonable rime at least the major part of Itsunder the recent tradeeron will continue to seek to expand Argentine influence in Latin America.prestige throughout the Hemisphere will probably improve during the next two years, provided Peron continues his policy of accommodation with the US and refrains from undue interference in the Internal affairs of other Latin American nations. Althoughtrade with other Latin Americanwill probably increase somewhat,is not likely to develop sufficientstrength to increase significantly Its economic influence in Latin America

n the event of general war, Peron is not likely immediately to enter the war In active support of the US. His primary objective would be to exploit the war to Argentina's advantage. He would almost certainlyhigh prices for exports of food and raw materials to the Allied powers. Although initially he would probably wish to remain neutral, he might subsequently enter the war and offer: (a) to cooperate in measures to suppress the Corrununists In South America, and (b) to collaborate with the US incoastal defense and patrol activities. He would probably be reluctant to provide forces lor service outside the Western Hemisphere.

eron's disregard of personal securityIncreases the chances of his death by accident or assassination. He has kept In his own hands so many of the Instruments of control that the problem of succession would be extremelytruggle (or power would almost certainly ensue. Intruggle, the Army would almost certainlyetermining role. The most likelydevelopment *ould be an Army-backed caretaker government. In its early stages, any successor government wouldattempt to follow the same generaland external policies as were beingby Peron at the time of his death.

Original document.

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