Created: 8/17/1962

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Intelligence Weekly Review


offlce of cuwtent intewgence






politicalla continuing lo Brasilia as tbe leftist Goulart regimeto 1dcrease its poweris the conservative Many moderates In and military clreleathe parliamentary system but are uneasy over moves totrong presidencyof the leftist tendencies of President Goulart and Prime kinlater Francisco Brochado da Rocha. Both supporters and op-poo en ta of the administration are continuing to line upsupport for their roapec-tive positions.

Brochado da Rocha--who acts as an agent of Goulart rather than aa an independenttbreatenlag to realgnlash with congress over bis requestelegation of substantial legislative power to tbe executive and for aon the parliamentary Boat observers in Brazil believe thatlebiscite would reaulteturntrong presidency.

Governors ofrazilian statea. who are meeting inthla week, may help work out some compromise between Goulart and congress. For ox-ample. Guanabara Governor Lacerda, Brazil's leading anti-Communist, is Inclined to support of the powers of tbe except in relation to individual cabinet ministers, who would remain responsible to parliament.

The congressmen are lotont on returning to their homoto campaign for theelections. They may accept some compromlae, particularly In regard to the plebiscite, toew government crisis, but they will probably attempt to limit tbe scope of anyof legislative powers.

The Brazilian Communiat party may shortly be declared legal by the Supreme Electoral Court. ecision would Increase apprehension Inover the orientation of the government.

Preoccupation withpolitics appears to be pro-venting any substantialof several new moves in Brazil'* "independent" foreign policy. East German Foreignnterfirst high Bast Germanto visit the AmericanvisitedIn response to an official invitation tohree-week East German industrialIn Sao Paulo. Poland In late Julyowin Porto Alegro, capital uf Rio Grande do Sul Stato whore Goulart's brother-in-law Leonel Brizola le governor. The Brazilian ministry ofonuly reportedly Informed the Soviet trade mla-sloo to Brazil that it mas Interested in purchasing aof three-place helicopters. Thlaurther Indication that Brazil may be movingcooperation with tbe USSR In the field of civil avlatlun.

Meanwhile,has little knowledge or inter-eat losaid to be concerned over Brazil'sfinancial situation. In recent weeks the gap baa widened rapidly and substantiallythe official exchange rate ofruzeiros to the dollar and the freely fluctuating tourist rate which le now almost eoo.

io costn Rio de Janeiro in tbe first six monthsas upercent for the same in Salvador, capital of Bahiaey city in Brazil's impoverished nort

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