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Current Intelligence Weekly Review
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CENTRAL INTELLIGENCE AGENCY
WKl Of CUBBENT INTELLIGENCE
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rOP SECRET DIXZR
CURRENT INTELLIGENCE WEEKLY REVIEW
BRAZIL
GouIart-Kovo&in Brazil ban strengthened its political position by adding Alfredo Kasner of tho Social Progressive party to tho cabinet. Kasser's appointment was approved by the Chamber of Deputiesotenctober. The Social Progressive party, based largely la Sao Paulo, vas not previously represented in tho government and had beenone of the most Important potential opposition groups.
Nearly all gonerala hostile to the governnunt nov have been removed from top commands, and similar moves against regimental and battalion commanders aru planned.
However.propagandato proparo for Janloreturn to an active rolo lo Brazilian politics ismomentum. Pro-Quadros sentiments aro being oxpressod openly, although not wldoly, and tho hostility generated by his sudden resignation onugust from the presidency is tending to disappear.
Quadros' decision on shether to run for the governorship of Sao Paulo oreat in theof Deputies will probably be based on the outlook forof theamendment of 2vhlch at tempts toexecutive power from tho President and the ntstoto prime ministersto tho rospectlve legislatures.
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If Congress rofusos to repeal the amendment and succosBfully rebuffs Goulart's efforts to circumvent it, Quadros is likely to seek election as aand subsequentlyid for the prime ministry. All seats in the Chamber of Doputios, as
well as two thirds of those in the Senate and half thoposts, are at stake in next October's elections.
Should ropoal of theamendment seem likely, however, Quadros would probably aeok the governorship of Sao Paulo, Braziloat powerful state. The amcndnoDt impairs the attractiveness of that post, bIqoo it applies to the states after the incumbent governors' terms oxplre.
The hostility ofmilitary officersto be accentuated byof those menunimportantSylvlo Heck, navyunder Quadros and aamong Goulart'sopponents, la said toa group ofoust Ooulart In favor ofdictatorship. isof
action InrTatoTvol or2 but does not appear strong enough to carry out its plans.
Failure of the Goulart-Neves government to takeaction in the oconomic and social fields would enhance Quadros' chancesolitical comeback and would lncroaseunrest. Finance Minister Walter sa licit amPm-vamamma1 belioveo that tho financial situation is critical) In part because money is not being received on US loans which had been granted to tbe Quadros government.
Goulart malahat ho would remove officials and change public statements if necessary toUS suspicion of Communist leanings on bl* part.
A law signed by Goulartctober providingpercent lncroaao in the mi minium wage Is likely toinflation--one of Brazil's principal problems
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