THE SITUATION AND OUTLOOK IN BRAZIL

Created: 7/15/1963

OCR scan of the original document, errors are possible

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CENTRAL INTELLIGENCE AGENCY Office of Current Intelligence3

CURRENT INTELLIGENCE MEMORANDUM

SUBJECT: The Situation and Outlook in Brazil

1. The Brazilian political situation continuesand uncertain. The evidence concerningGoulart's objectives IsH

ff^Tr^TfBfffffl^^fnd leftist. Under Gou-lart. Communists and their sympathizers havetrong position from which to try to exert increasing fluence on Brazilian policy.

2v Last'month's cabinet shakeup brought extreme leftist Evandro Lins to the Foreign Ministry. He is unlikely to do anything to reverse the government'sbegan during thefromunquestioning support of and cordial friendship toward the" United States. What Brazil seems to be driving toward is "big power" statusiddle-of-the-road position in the cold war independent of the influence of the United States, toward which its attitude from time to time is openly hostile. The conservative Carvalho Pinto accepted the Financein the cabinet change, which also led to the replacement of an extreme leftist at the Agriculture Ministryoderate socialist friendly to the United States.

3. It is still too early to determine howthe economic stabilization program will be executed. The cost-of-living rise in Rio de Janeiro during the first six months3 reachedercent. Arrears in international commercial payments rose3 million onune,2 millionpril. Carvalho Pinto is seeking to reformulate Brazil's financial program which is based on cooperation with the United States..

flPPRHUfOFOBRElEASE DATE: SEP 7CQ0

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Considerable unrest and tension has existed for some time

;ary may be softened,by the prospectubstantial pay raise and by the apparent retirement of extreme leftist First Army Commander Osvino Alves. Selections for expected early command changes and for nine newofficers to be created by promotion onuly are now the focus of military attention and mayindications of things to come.

he chances still favor Goulart'sfrom the presidency at the end of his term in

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of the country, and the strong positions being won by Communists, extreme leftists, and ultrana-tionalists, will tend to push the country toward more radical departures In domestic and foreign policies. This could lead ultimately to theof an extreme-leftist regimetrongly anti-US character.

6. This memorandum has been coordinated with IKR and ARA in the Department of State,

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Original document.

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