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NATIONAL INTELLIGENCE ESTIMATE
The Situation in Uruguay
y DIRECTOR OF CENTRAL INTELLIGENCE
Co-;ltodUNITED STATES INTELLIGENCE BOARD As ifTOico'ftvd owl#<jf
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The following intelligence organizations participated intiie'phparatian of is estimate, .
This materialnformation within the meaning of tho espiom mission or revelation of which in"
WARNING
l Defense of the UnHod States
USC,, the rram-
onner to an unauthorized person Is prohibited.
SPECIAL
NATIONAL INTELLIGENCE ESTIMATE
The Situation in Uruguay
THE SITUATION IN URUGUAY
THE PROBLEM
To assess the economic and political situation in Uruguay, the potentialities for extremist subversion, and the involvement of Brazil and Argentina, over the next year or so.
CONCLUSIONS
is growing dissatisfaction with Uruguay's presentsystem, particularly with its nine-man executive, theCouncil of Governmenthis device, designedone-man or one-party rule, has also prevented effectiveaction Loteady economic deterioration markedbudgetary deficits, an acceleratingeclineanking crisis. )
the period of this estimate, the NCG may beconstitutional amendment, or there mayrediblethe adoption of such an amendment in the general election toinowever, the political andeform are great. Moreover, reform of the NCGin itself, end the factionalism which characterizesor ensure effective action to cope with the
Uruguay there is already some apprehension of ato alter the political system. We consider it almostno such move is now imminent. If, however, the situationto deteriorate without effective remedial action by thea credible prospect of constitutional amendment, the odds ina coup attempt will mount. If there shouldoup, itcertainly be initiated by non-Communists. If initiated by a
President who liad full military support, the actual takeover would almost certainly be quick and effective. Any other coup attempt would almost certainly encounter both military and popular resistance and might result in prolonged and widespread violence and disorder.)
Communists have no illusion that they could seizeUruguay in present circumstances. They are apprehensive ofcoup, however, and are preparing to stimulate popularto one.onfused and disorderly situation, theirand paramilitary capabilitiesn importantis unlikely that they couldominant influence, but. iftoubstantial contribution to the defeatemocratic counter-coup, they would gain respectabilitypolitical opportunities.
is seriously concerned about the subversive threatresult if Communists or extreme leftists were to gainimportant influence in Montevideo. Brazil would be reluctantmilitarily in Uruguay without US and ArgentineOAS approval, but would almost certainly do so if convincedsituation there required it. )
Brazil were to intervene in Uruguay, the Argentinewish to intervene also. An incidental consequence mightoverthrow of the constitutional government in Argentina, if itsanction Argentine military intervention. If Argentina didit would almost certainly be In collaboration (rather thanwith Brazil. )
DISCUSSION
I. THE INTERNAL SITUATION
A. Political and Economic Problems
During (his century Uruguaycn outstanding in Latin America for its political stability. Ceneral economicigh literacy rate, respect for civilwo-party system, and an advanced social welfare program have facilitated the maintenance of representative government and democratic Institutions. Tlie population of nearly three million is almost wholly of South European derivation; there Is no problem of religious or racial strife.esult of free education through the university level and the absence of rigid class barriers, Uruguay's middle class is large by Latin American standards. Over the years, moreover, the Uruguayans haveertain pride in their country's civilized approach to political matters and haveendency to abhor violence.
Since Independence two parties, the Bkmcos and tlie Colorados, haveUruguayan politics. The Coloiudos were the dominant party forentury, until the electionhen the Blancos look the lead. In modem times the Bloncos have generally represented upper class and agriculturalthe Colorados urban middle class and labor interests. There are few sharp ideological differences between these parties, both of which spread across most of the political spectrum, but, there arc sharp factional cleavages within each. Only the adoptionnique political device has kept the widely divergent factions within their respective parties and maintained the facadewo-partyhis device, however, has institutionalized the factional cleavages within each party. The passage of important legislation almost always requires extensive political log-rolling; In practice it has been extremely difficult to secure passage of any measure that runs counter to the specificof one of die principal political factious. (See Figureof the Uruguayanthe representation of the present parties and principal factions in Congress.)
A constitutional amendment2ine-man National Council of Government (NCG) lo exercise the executive power in lieuinglehis device, intended to prevent arbitrary one-man or one-party ride, has also prevented decisive executive action. Its built-in tendency to prolong discussion and to compromise important decisions has been particu-
1 Th* Uruguuynn dcctoml law provides not only for the proportional representation ofutties, but abo for proportional representation of the friction* within each parti* on the basis of their shares of ihe party vote.
'Six of the nine members are from the leading party, three from the second ranking pustv. The major fictions of those parties are proportionally represented. Tlie presidency of the Council rotates annually among members representing the majority party.
FIGUREOMPOSITION OF THE URUGUAYAN CONGRESS
National Patty (BUmtta)
PMfc Bttwoir#k* (UBDi T
Blanco AaU {Htmrutai fl
Oithodo* ft
Sub ToUl
Colorado Party (Cdormloi)
ft
V*id*alHuta 4
Colorado Uat ft
Sub Total
ChrtKUO Civic 1
Como-onUW (FIDEI.)"
Chamber of Divnni
National Party (Blew)
Daafci Blanc* DewocrMtm (UBD)
Blanco Ada [HrmrttUt mmd
Orthodox ft
Sub
Colorado Pwty
Colorado Uit 15
t/nldn Colorado i, BallliM
Colorado Uat 99
Sub 44
aaWaar, Democrat* (PDC) ft
CoranuntMa (FT ft
Popular Union Party (PUP) 1
Total
Liberation Frontiimfi deo electoral front formed and dominated bv the Comn-unntut imludlng ai well various uuali lefUslntn group*.
larty apparent hi live dltficult economic and political conditions of recent montlu.imilar council, establishedas abolishedresidential coup)
uring the past decade there hasteady decline in the Uruguayan economy. Indeed, ihe government's inability to lake needed action hasontributing factor to Uruguay's economic deterioration Althoughincrease has been moderate (Leu than twoer capita grossproductias declined steadily at an average rate of almost one as*
tl used here. Instead of the inure familiar CNP, becnua* In Uruguay, at in must Inlln Americanationiil account* air almostIn term* of CDP. CDP diffrn (rocn CNP lo that CDP ineaaure* the valueall production within the country bcfoia net naynraU abroad io ownen of (acton ol nrodiMtloo are deducted. In theol Uruguay llu ditTeraxe appear) to be sfuwportan:.
cent annuallygriculture, on which Uruguay depends lor its foreign exchange comings, suffers from low productivity and discouraging gov-eminent lav and exchange policies. Both crop and pastoral production have tended toward stagnationoreover, during the last five years the output of manufacturing industry. Ihe largest single economic sector, has been declining in real terms. The economy it now unable to provide the goods and services necessary to Imts advanced system of social welfareIn fact, that system has become short of liquid funds and actuarially unsound, but the government has taken no effective remedial action.
Unemployment lias now risen to aboutercent of the Ubor force and ii largely concent ruled in the Montevideo metropotitiin area, which includes about half tlie population of tbe country. Over the lastonths real wages have decreased about IS percent and organized labor Is pressing for wage Increases. However, wage increases for employees of the Inefficiently operated public enterprises would farther increase the growing budget deficits of those enterprises, over which the NCG lias only limited control.
Tlie annual rate of inflation has been increasingith consumers' prices risingercent3 andercenthis mtc. which mayercenterives in large pari from unrestricted private credit expansion, as well as from the monetizauen of the government's growingdeficits and the deficits of state-owned enterprises.
Uruguay Is confronted by an external payments crisis and some debt service payments are in arrears. The Uruguayan peso, fn ft* official exchange rate, has been devalued twice in lessear4 and. During tbe last six months the value of tbe peso on the free market has declined fiomoesos per US dollar.
Uruguay's Steal pioblems are now further compoundedanking crisis in which the management of over-extended private banks has been assumed by the Bank of the Republic. Recent disclosures indicating corruption involving political figuresth major parties have led the governmeni to Assume direct control of the Bank of tlie Republic Itself. The upshot has been loss ofin the country's banking system and serious Impairment of Investorin Uruguay's economic prospects.
This pattern of economic deterioration lias intensified dissatisfaction among almost allof the population. The accelerating inflation and the banking crisis have alarmed btisinessmen; the level of wages and tbe growth ofhave antagonized labor; the continuedhe cost of living has upset the consumer The fragmentation of tbe political parties and the inability of the politically mixed NCG to provide decisive leadership has preventedaction by the government Consequently the considerable and growing dissatisfaction In the country is directed increasingly against the governmental systemparticularly against the cumbersome plural executive and its tendency to reinforce factionalism and indeclsivenesi. umber of civilian
and military leaders have become convinced that effective administration can only come through change in the plural executive system.
B. The Extreme Left
The Communist Party of Uruguay (PCU)ell established legal political party with0 members,f whom are actively and regularly involved in party affairs, Communist support Is concentrated in the metropolitan area, but the party is increasing Its propaganda andactivities in the countryside. It has organized an electoral fronthich Includes several small pro-Castro groups. Under the system of proportional representation,0 votes in25 percent of the total) enabled it to elect one senator and three deputies. There are also small pro-Chinese and Trotskyitc splinter groups: these have noin the Congress and not much potential lor attracting votes.
The PCU derives most of Its support from organised labor and student groups. It dominates the leadership of the principal labor confederationhich represents abouthird of organized labor. Thehave used the CTU to exploit legitimate labor grievances and to call major strikes. Recently, however, public awareness of their use of Ihe CTU has led them to use another labor front (CNT) for this purpose. Through the CNT they were able, in early April, to secure broad support from non-Communist unionshour strike, their most effective strike effort so far. The PCU's small youth organizationonsiderable Influence among politically active university students (aboutercent of tbe total number ofut it is by no means as Influential as arc its counterparts in such other Latin American cities as Caracas and Lima.
Under the Uruguayan political and legal systems, the PCU and other extremist groups have considerable freedom of action. Meetings ofinternational fronts are frequently held inefuge for foreign political exiles, Uruguay has longonvenient base for Communist Bloc and extreme leftist operations in other Latin AmericanThis situation tends to exacerbate Uruguay's relations with the other countries. Brazil is presently the outstanding case in point: the Uruguayan Government has only reluctantly imposed limitations on the range of rrsovemenl of Leonel Brizola. the exiled Brazilian leader of the extreme left, and has not prevented him from keeping conspiratorial contacts with followers from across the Brazilian border.
acronym, derived from Frontc Izquicrda de Liberation, is manifestly intended to appeal to the non-Communist admirers of Fidel Castro.
'The N'CC, however, recently prohibited the holding in Montevideo ofeeting railed to promote "continental solidarity" on behalf of Cuba and the Dominican Rejtublic.
USSR, Cxecfaoslovoxfa. Poland, Rumania. Yugoslavia, Hungary, and Bulgarin all have diplomatic missions there. In addition, there are trade missions from East Germany and North Korea.
Tlie PCU has followed tlie Soviet Union's lead in urging Communist unity and solidarity. While It seeks to attract the support of Castroltes through such devices as FIDEL, the PCU has continued to stress legitimate political activities aimed at exploiting general discontent with the existing economic and political situation. The PCU hopes to attract disillusioned supporters of the traditional parties and new voters to FIDEL and thus to increase sharply its legal political influence. At the same time, the PCU has taken initial steps to Improve its capability to foment violence. It is prepared to organize strikes and street demonstrations and has trainedctivists to irtclle rioting.
Tlie Communists have no illusions that they oould overthrow theIn the present circumstances in Uruguay their strategy is essentially defensive. They arc concernedightist-military coup bring drasticof their present freedom of action and havearamilitary uniten specifically to take part in opposingoup.
C Security Forces
Tho Uruguayan security forces number0 men:; Air; Nationalaritime. They are generally reliable and efficient, but are handicapped by sliortages of modern equipment, especially communications equipment, For this reasonould have difficulty controlling widespread disorders. Almost certainly,they could prevent the overthrow of theofajor portion of the security forces themselves were engaged in the attempt,
The security forces have usually kept aloof from interference in tbe political life of the country. There is, however, considerable dissatisfaction among military and police officers regarding the ^effectuality of the existing system of government, and particularly regarding their relatively low pay and declining economicew of them are probably disposed toove toore effective system by coup, if needhey would be united in opposing any revolutionary attempt by extreme leftists.
II. THE PROSPECTSHANGE IN THE POLITICAL SYSTEM
growing dissatisfaction with the present political system,the NCC, may bring about Its alteration by meansuly adoptedamendment. Influential leaders of both major parties arcconcerned about the deteriorating economic situation, thegetting remedial action through the N'CC. and the danger of ancoup or Brazilian military intervention, and have publiclyamendment to refoim tlie NCG. We must emphasize, however, tliatthere is no consensus on how the NCC should be reformed.Beltran, with support from some leaders in both majoradvocated the substitutioningle executive The idea of adrawn exclusively from tbe principal faction of the leading party has
also been suggested. For Hie present, the llerreratas are generally opposed to anyven if the termsonstitutional amendment were io be agreed upon, it would still be almost impossible to obtain its early adoption. Tne quickest method would be the enactmentconstiiutionalhich would require the affirmative votes of two-thirds of the members in each house of Congressopular majoritypecial referendum. It is highlythat the required two-thirds vote could be obtained except under the most compelling circumstances. Alternative methods would boetition signed either byercent of the registered voters or else byercent of the members of Congress, subfect to popular acceptance at (he next generalthe next general election will not be held untileanwhile, Beltran is due lo turn over the presidency Io Alberto Heber, an Heneiista, in
We must emphasize, further,eform of the NCG would not, of itself, end factionalism in Uruguayan politics or ensure effective action to cope with the economic situation.
In Uruguay there is already some apprehensionilitary coup to alter ihe political system. We consider it almost certain that no such move is now imminent. If, however, the situation continues Io deteriorate without either effective remedial action on the part of the NCGredible prospectonstiiutional amendment, the odds in favoroup attempt will mount.
ln such circumstances, the coup initiative might come from the top, as it did inIs,rustrated president. If Ihe move had the support of ihe military and the police, as would be likely inase, the actualwould be quick and effective. The coup group would almost certainly promise an early return to constitutional normality, subject to such reform of the executive as would enable it to deal effectively with basic national problems. There would be some adverse popular reaction and perhaps some disorder, but Ihe security forces would almost certainly be able to control the situation.
oup might be attempted by some impatient military leaders, with some political support from Hetrerislas who would be morein seizing power than in constitutional reform.ove would almost certainly encounter both military and popular resistance. It might be quickly smashed, or it might precipitate prolonged and widespread violence and disorder. Even if the coup succeeded initially, the resulting situation would be highly unstable, with an early counter-coup likely.
The Communists would attempt to lead popular resistance to any coup. In the caseoup from the top. ihey would no! have muchto do so. In tlie easeoup which precipitated prolonged andviolence and disorder, their labor leadership and paramilitary
"The tttrretutat arc the followers oi the late Luis Alberto de Herrera. tbe outstanding Blanco lender during the. Herrera was nn admirer ol Iheegimes of Mussolini, Vargas, nnd Peron. The Heirrrhtat are generally ultraiutfonaliitic andbut are also highlytunbtio.
s
capabilities could become an important factor. It is highly unlikely that they couldominant influence, but, if they were toubstantialto the defeatoup attempt oremocratic counter-coup, they would gain respectability and further political opportunities.
HE INVOLVEMENT OF BRAZIL AND ARGENTINA
Since the4 revolution in Brazil, Ihe Brazilian Government has been sensitive regarding the failure of tbe Uruguayan Government to control effectively the activities of Goulart and Brizola in Uruguay and apprehensive of tlie increased subversive threat lo Brazil which would result if extreme leftists were to gain power or important influence in Montevideo. In flu's connection. Brazil has sought to bring pressure to bear on Uruguay by open discussion of the possible contingencyreventive Brazilian military Intervention in Uruguay. The precedent of the US military intervention in the Dominicun Republic and Brazil's prompt support thereof have redoubled the effect ol this psychological campaign and have occasioned considerable apprehension in Uruguay.
Leading Brazilian officials undoubtedly think that Uruguay would be far better offegime more like their own. Brazil's experience under Goulart may lead them to overestimate the actual dangerommunist takeover in Uruguay. They have good reason to fear subversion in Rio Grande do Sul. the Brazilian state adjacent to Uruguay, which is the home ground of Goulart and Brizola. The Brazilian commander on the Uruguayan frontier and the Brazilian ambassador in Montevideo are particularly nervous in these respects. They have almosi certainly sought to alarm the Brazilian Government regarding the trend in Uruguay. They have probably also conveyed their views to their Uruguayan military contacts. There is no evidence, however, that they have more directly sought toilitary coup in Uruguay.
Undoubtedly Brazilontingency plan for military intervention in Uruguay toommunist or extreme leftist takeover there, Brazil woidd be reluctant to putlan Into execution without US and Argentine concurrence and OAS approval, but. bearing in mind the Dominican precedent, would almost certainly act unilaterally if convinced that the occasion required it.
Uruguay came into existenceuffer state between Brazil andwhich neither would allow the other to dominate. The Argentine military leaders are as concerned as the Brazilian toommunist takeoverin Latin America. There have probably been discussions between them regarding the potentialities farevelopment in Uruguay. If Brazil should decide to intervene militarily in Uruguay, the Argentine military would wish lo intervene also, not only to combat communism on the borders ofbut also in order to prevent Brazil fromominant position in Uruguay.
A Brazilian intervention in Uruguay would probablytrong anti-interventionist political reaction in Argentina. The Illia administration's
relations with the Argentine military arc already strained by its failure lo secure foreading role in the Inter-American Force in the DomiiiicanIllia would be caught between this political reaction and the desire ofrgentine military to participate. Thus an incidental consequencerazilian military intervention in Uruguay would probablyolitical crisis in Argentina and the possible overthrow of the constitutional government by the Argentine military.
f both Brazil and Argentina were to intervene in Uruguay, they would almost certainly do so in collaboration. There would be almost no chance of an armed conflict between tbe two intervening forces. The Intervention would be an affront to Uruguayan nationalism. Nevertheless, the intervening force* would be unlikely to encounter serious opposition outside of the Montevideo metropolitan area. There the Communists and ultra-nationalists might be able toie-hard resistance. Even if the Intervention were accomplished without too much trouble, the subsequent political settlement andwould be likely to present great difficulties, compounded by the mutual distrust and antagonisms of all the purties involved. Argentine, Brazilian, and Uruguayan-
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