SEfiRET
CONTBmlED DISSEM
74
lb; library
Mandatory Review Case
special
national intelligence estimate
The Political Situation in Brazil
Swtunfffed by the
DIRECTOR OF CENTRAL INTELLIGENCE
Concurred In by the UNITED STATES INTELLIGENCE BOARD Al indicated overleaf4
Tha following inleJIigence organizations participated inpreparation
The Central Inlailtganc* Agency ard me inlalligewf theof Sioio. De'er.ie. oed*
ntalligence or>d. Dapoilmanl of
Director, De'enin Ime-tllgance Agency DWeeror of the NoIkwkiI SatufiTy
Afaifoining.
Tha Atomic EnargyIo tha USIft and tha AuUraniFederal BureauIha wb|eci bolng outtlda of
SPECIAL
NATIONAL INTELLIGENCE ESTIMATE
e Political Situation in Brazil
THE POLITICAL SITUATION IN BRAZIL
THE PROBLEM
To assess the stability of the CasteHo Branco regime and the outlook in Brazil during his stated term in office.
CONCLUSIONS
Castelle Branco. whose term runsrobably will provide reasonably effectivealong moderate reformistt is unlikelysupporters ol deposed President Goulart will be able toserious challenge to tbe stability of the new regime,leftist extremists may attempt demonstrative acts ofto discredit it. The principal danger to the stabilitynew regime is the possibilityalling out betweenand some groups within the military who want apurge of the old political order. We believe that,concessions to expediency, he will succeed incontrol of the situation.
economic and socialbutby Goulart's disruptivenot amenable to quick
"The Director of Intelligence and Research. Department of State, feeli that the Lhrust of this estimate ls overly opUmisUc Ln several respecta. He believes that It does not adequately take Into account the enormous gravits and many-sided challenge ot the political situation; the persisting eonfronUUon orforces on both the right and the left which will hamstring necessary reformist action; the pollUeal uezperlenee of the President and moat of Ms Cabinet and Use absence of enoughsecond- and thlrd-letel technical personnel. and the prospective destablllziriE role of some cf the revoluUQns military leaders whoemphasise continuing repressive action at the expense of meaningful social reforms. For these reasons, the Director believes that there Is an even chance that the regime will slip Into Increasing authoritarianism, thus precipitating another constitutional crisis within the period of the estimate.
or painless solutions. The new regime Is likely lo takesteps on several fronts, but over the next year or so it probably will be unable to do much more than toasis for future progress. It probably willumber of social reforms as an earnest of its concern for Brazil's depressed classes, but will concentrate initially on combatting inflation and on otherneeded to get the economy rolling again. For politicalhowever, it probably will stop short of stringent austerity measures. It will need considerable foreign economic assistance to reschedule Brazil's huge short-term debt and to help cushion the shock of the economic stabilization measures it does )
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DISCUSSION
of Brazil's recent Difficulties stem from deeply rootedand social problems common to countries undergoingThey also spring, however, from the easygoing economica succession of post-war governments (notably those ofandolitical instability, and in particularand self-serving policies of President Ooulart Brazil'swill not be amenable to quick or painless solutions, but thehas provided an opportunityew and moreand the Castello Branco regime gives promise of makingeffort.
The New Regime
President Humberto Castello Branco. one of the chief architects of Goulart's overthrow, was chosen by the rnilitary leaders of thewith the acquiescence of the political leaders involved and was subsequently elected by Congress to hold office until the endyear-old career Army officer, he has had no previous poUtlcal experience, but Is noted for his intellect, Integrity, and courage. His cabinet Is composed primarily of technicians without personalstrength, butenerally high level of professional competence. Moreover, he has the advantage of the extraordinary powers conferred upon him by the "Institutionalhich the military considered necessary to implement the alms of then the whole, we believe that Castello Branco will provide the responsible andleadership that was sorely lacking during the presidency of Ooulart.
Castello Branco came to officeime when the country was readyrastic change In national leadership. While few Brazilians expected to see the rnilitarytrong hand In structuring the new
* Castello Branco'i mandate covers the unexpired term of Janlo Quadros, whose resignation In 1M1 led to the succession of Vice President Ooulart.pril the President of the Senate declared that Ooulart had vacated his orSce.the President of the Chamber of Deputies became acting Presidentthe electionew President by Congress. During that Interval, however, the real power of government was exercised by the military SupremeCommand.
'Thia 'Institutionalecreed by the Supreme Revolutionary Cornmand on the basis of Its revolutionary authority, supersedes the ConsUtutlon In certain particulars, confirming It in other respects. It not only provided for theelccUonresident (the ConsUtutlondayut authorised him to cancel the mandates of elected federal, state, and local ofEeials, to remove political appointees andervants, and to deprive individuals of their political rights for ten years. Latulatlon proposed by him will become Jaw unless acted on by Congress withinays; the procedure for amending the Constitution has been simplified.
government, ihey were relieved to seemoderate military figure take office. Some believed Castelio Branco wouldetter chanceivilian of introducing honest and effectiverogressive economic program. Others thought that aman was needed to root out Communist influence in theand the political process.
The post-revolutionary situation still is too fluidefinitive assessment of the political lineup for and against the new regime. For one thing, the Castelio Branco administration ls Just beginning to define Its policies on the numerous problems which confront Brazil To begin with, it had the general approval of those who supported or at least welcomed the revolution: nearly all military officers, mostand state poliiical leaders, and much of the populationubstantial majority of the literate half. Already, however, misgivings are being expressed about the extent of the purge of office holders and the possibility of military-cooservative domination of the government.
The administration ls not formally associated with any political party. On the whole. It Is centrist and moderately reformist In political orientation and ls likely to And general support for its policies In Congress,arge majority of the members are of similarThis Congressional majority is normally fragmented byto particular parties, states, and special Interest groups, but the administration, armed with the extraordinary powers conferred by the Institutional Act, should have no difficulty in obtaining desired
The administrationempting to formalize Its political support byro-government coalition to which the NationalUnion (led by Carloshe Social Progressive Party (led by Adhemar dend several minor parties will probably adhere The Social Democratic Party of Juscellno Kubitschck will probably support the administration without Joining the coalition, ao long as it can hope thereby to avert repressive action against itselfarty in the Vargas tradition. The surviving, moderate elements of Goulart's Brazilian Labor Party have declared themselves to be in "intelligent opposition" to the new administration, which presumably means that they will avoid provoking it.
Some political opposition will almost certainly develop as the administration's actual programs become more clearly defined and as the time for the next presidential election (due to be held lnpproaches. Regardless of party affiliation, the representatives of vested interests adversely affected by administration programs will seek to obstruct or alter them, covertly if not openly. On the other hand, if these programs do not seriously affect such interests, then even moderate
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reformists will criticize them as inadequate and deceptive. Inof the election, all parties will be seeking vote-getting issues, at the expense of the incumbent administration unless they have reason to expect its favor. There are already pressures on Castelio Branco to alter radically the existing party structure, to postpone the election, or to modify drastically the electoral procedure. Administration action along these lines would be likely toolitical crisis.
tability
We foresee no serious challenge to the stability of the Castelio Branco regime from leftistit becomes generallyor loses Its strong military support. Qoulart and his supporters were evidently surprised by the military coup and unprepared to resist It; most of the elements thought friendly to Goulart accepted hiswith apparent indifference or resignation. The leftist extremists who gave militant support to Goulart's aborted drive for Increased powermall minority to begin with and now are ln considerablewith many leaders in exile, in hiding, or in Jail. Moreover, the expulsion of extremists from the official positions ln the bureaucracy, labor organizations, and universities which they had gained under Goulart probably has deprived them of much of their influence over left-leaning sectors of the population. Almost certainly they will be unable to muster sufficient strengthuccessful counter-coup during the period of this estimate.
Some leftist extremists may eventually attempt demonstrative acts of violence to discredit the new regime. The most likely sources of these efforts are the Castrolslthose dominated by Leonel Brtzola, Goulart's brother-in-law; the Peasant Leagues of theand the small dissident Communist Party. The Moscow-line Brazilian Communist Party is likely to refrain from provocative acts, hoping eventually to regain freedom of actionivilian President such ashe extremists probably do not now command enough trained and willing activists to launch insurgency on anscale. However, they probably could engage In hit-and-run guerrilla raids In remote areas and occasional urban violence.security forces probably would be able to quash or at least contain such operations as the extremists do undertake. There may alsoextremist-inspired or spontaneous protest demonstrations bystudent and worker groups, especially in Rio detronghold of these groups. Government security forces probably would be able to control these demonstrations as well.
"Tbe Cc mm unlit* countedonUnuatktn of Goulart'* rule and urged him not to act rashly, fearing that he might bring on hla ownindeed he did.
The principal danger to the stability of the new regime is the possibility of conflict among the military and political leaders of the April revolution- The politicians are already calculating their chances in the presidential election due to be held In5 and are Jockeying for position. For many of the military, however, the April revolutionepudiation, not only of Ooulart and his extremist allies, but also of the entire Vargas tradition in Brazilianhile they have the opportunity, these officers want tohorough purge of the politicians whose corrupt and inefficientthey charge, have perverted Brazil's national development In particular, they (and many politicians) want to ensure against Kubit-schek's possible election In
This issue is present In the purge which began before Castelio Branco took office and is still going on. The initial drive, "Operationesulted In the arrest of several thousand persons. It was represented to be an emergency measure required to frustrate anGoulart-Cornrounist plot to subvert the constitutional regime and was approved by most of the general public. Many of thosehave now been investigated andubstantial number, however, are being held for trial. The continuing purge, which Is being carried on under the terms of the Institutional Act, Involves forced retirements and dismissals from public office and/or theof political rights for ten years In addition to many lesser elected officials, overongressmen and four state Governors have fallen under this ban. Other Oovernors are still threatened. Not all of those purged or threatened are extremists; some are vulnerable to charges of corruption. Considerable political reprisal and maneuvering also appears to be Involved.
President Castello Branco Is himself disdainful of the derna-goguery and deviousness, the cronyism and outright corruption that have characterized Brazilian politics. He has long beenlegalist" who believed that the political role of the military should be limited. He probably desires to restore national unity and tranquility byonciliatory course. He has given repeated assurances that he Intends to control the present proscriptions and he appears to beoderating influence. Nevertheless, the purge continues and his ability to control It remains open to question.
The attitudes of two key military leaders complicate Castello Branco's problem and may limit his freedom of action. GeneralUva, the Minister of War, is the spokesman of the hard-line element among the military. Having exercised power as head of the Supreme
Vargas ruledQ-1MS and again 1KM9M. He founded both the Social DtmocraUc Party of Kublischek and the Brazilian Labor Party of Ooulart- Those parties In coalition have ruled Brazil slneexcept for the brief Quadros interlude in
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Revolutionary Command, he is probably reluctant to "return to theeneral Amaury Kruel, commander of the powerful Second Army, has presidential ambitions and has longersonal enemy of Castelio Branco.
H. It may be that under the coercion of circumstances Castelio Branco will be compelled toarder line than he would himself have chosen, or that he will eventually be displaced by an out-and-out military dictatorship. At present, however, no other military leader can match Castelio Branco's personal prestige and broad support among senior military officers. Moreover, his "legalist" views arearge majority of all military officers. We believe,that with some concessions to expediency he will succeed Ingeneral control of the situation.
are less confident that Castelio Branco will carry out hispledge toree presidential election ln Octoberthat date approaches he may have to choose between carryingpledge and ensuring the continuation of his moderatemay come to supportne-year postponement of thea revision of the electoral procedures designed to prevent theof Kubltschek.0
Economic and Social Problems
Most of Brazil's underlying economic and social tensions were inherited by Goulart when he took officeconomic expansion ins, although generally Impressive, did not benefit some sectors and geographical regions, was achieved at the cost of Inflation and mounting foreign exchange difficulties, and did relatively little to relieve the plight of the majority of the population. Goulart exacerbated most problems with his demagogic policies and his disruptive style of rule. During his lastonths in office the pace of economic deterioration quickened noticeably: the price level nearly doubled; domestic andcapital investment stagnated; economic growth was sharplyand per capita real income fell. In these circumstances the economic condition of the salaried classes, including the military,substantially, while that of the poor remained unimproved, in spite of Goulart's professed concern to better their lot,
In formulating its economic and social program, the Castelio Branco regime must do battle on several and at times competing fronts. Economic and financial reforms are needed to contain Inflation, improve productive efficiency, and straighten out Brazil's external accounts; social reforms are needed to reduce tensions among the poorest classes.
'We plan to treat the problem of the presidential succession and other longer range problems In an tTIE early In Idol,
Foreign Policy
The Castello Branco regime is generally disposed to maintain close relations with the US. Moreover, it will be considerably dependent on foreign economic assistance for progress on the economic and social fronts. Brazil's huge short-term debt maturities (aboutillion In principal, interest, and arrears is due over the nextonths) must be rescheduled with annual payments more in line with its ability to pay. The government will also need economic assistance to helpthe shock of whatever economic stabilization measures it doesFor these reasons, although It Is unlikely to reverse sharply the Brazilian trend toward economic nationalism. It is seeking to revise Goulart's stringent policy on remittance of profits and probably will adopt other measures designed to encourage foreign Investment.
The new regime has broken diplomatic relations with Cuba andool posture toward the USSR and other Bloc countries with which it now has relations. Although it willasicallyforeign policy and seek to avoid the appearance ofto the US, it will probably align Itself with Western nations on most issues and act more responsibly in the international field than did preceding governments.
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