Foreign Relations of the United States, 1955–1957, American Republics: Central and South America, Volume VII

217. National Intelligence Estimate¹

NIE 91–56

Washington, July 17, 1956.

THE OUTLOOK FOR ARGENTINA²

The Problem

To assess the character and objectives of the present regime and the pressures operating within it; and to estimate Argentina’s internal stability and foreign and domestic policies over the next few years.

Conclusions³

1. Argentina is currently ruled by a Provisional Government in which the armed forces are dominant. Although the present government is committed to the reestablishment of a democracy, a free trade-union movement, and a free economy, it has thus far been generally unable to implement broadly its basic program. (Paras. 23, 26)

2. Although the downfall of Peron has permitted Argentina’s traditional middle and upper class ruling groups an opportunity to return to power, the changes wrought by the Peronist revolution are too fundamental to be more than partly undone at least within the period of this estimate. The government’s dilemma is that it must satisfy the aspirations of the hitherto favored laboring classes, while at the same time attacking Argentina’s pressing economic problems. The degree to which these two conflicting necessities are reconciled will in large measure determine whether Argentina will move toward political freedom and stability or toward an increasingly unstable authoritarian regime. (Paras. 12–21, 47–50, 52)

3. The government is capable of suppressing conspiracies and maintaining internal security. However, its stability will continue to be threatened by interservice rivalry, factionalism within the army, labor discontent, subversive Peronist activities, and unsatisfied aspirations of the legal political parties and the Church. (Paras. 23, 29–39, 42)

4. At the present time we cannot make a firm estimate of political developments in Argentina. The present regime is viewed by its supporters as only a temporary receivership entrusted with the fulfillment of the objectives of the revolution. It has recognized its limited tenure by committing itself to hold elections before the end of 1957. (Paras. 27, 35, 43)

5. In view of the exclusion of the Peronist party and of former Peronist leaders as candidates, the Radical party is now overwhelmingly the strongest potential contender in a national election. However, the present regime contains strong elements antagonistic toward the dominant Frondizi faction of the Radical party. It may therefore attempt to form a coalition of moderate-conservative groups to contest the election. If a Radical electoral victory seemed likely, the regime, under the influence of elements unwilling to accept that result, might rig the elections or postpone them indefinitely. In either of these eventualities, popular disappointment, Radical party opposition, labor discontent, and continued interservice rivalry and factionalism in the army would probably force the government to move toward a rightist-oriented authoritarian regime. In our view, however, a regime of this kind would probably have to give way in time to a regime commanding mass support. (Paras. 35–37, 44)

6. We believe that the Provisional Government presently intends to effect an orderly transfer of power to a duly elected civilian government, and that the chances are slightly better than even that it will succeed in doing so approximately on schedule. However, pending the accomplishment of this transition, the regime will remain vulnerable to revolutionary upset or a seizure of power by certain military elements within the present regime. (Para. 45)

7. The still legal Communist Party, whose membership has grown from about 35,000 to about 50,000 since the fall of Peron, will probably continue to expand its influence unless it is outlawed. In free elections it could probably organize a substantial protest vote, and for this reason would be considered an attractive political ally. (Paras. 40–41, 46)

8. The present government faces serious political difficulties in carrying out its economic policies. Plans to resist wage increases and offset inflationary pressures by increased production and saving will almost certainly meet growing labor resistance. The latter will demand additional wage increases as long as price controls continue to be ineffective. Demands for increased credit will add to existing inflationary pressures. (Para. 52)

9. The government’s longer-run problem is how to revive economic growth. Solution is dependent upon development of the nation’s inadequate transport, power, and other basic services. Since Argentina will not itself be able to finance such development, it will continue to seek financial assistance primarily from the United States, the World Bank, and Western Europe. However, until the petroleum development problem is well on the way to solution, Argentina will lack the ability to service large foreign investments and will probably not be able to attract substantial foreign private funds. (Paras. 47–49, 54)

10. So long as the present government is in power, Argentina will almost certainly pursue a policy of accommodation with the US, although probably not to the extent of negotiating a bilateral military pact. As to possible successor governments, the degree of cooperation will vary; it would probably be greatest from a rightist-oriented authoritarian regime and more limited if a Radical or neo-Peronist government came to power. (Paras. 56–59)

11. Economic needs will probably lead Argentina to expand its already extensive trade with the Bloc. Argentina might also accept Soviet offers of developmental assistance, particularly if such aid as the United States may offer appears insufficient. (Paras. 51, 53–55, 62)

[Here follow paragraphs 12–62 and an appendix.]

1. Source: Department of State, INR–NIE Files, Secret. National Intelligence Estimates were high-level interdepartmental reports appraising foreign policy problems. NIEs were drafted by officers from those agencies represented on the Intelligence Advisory Committee (IAC), discussed and revised by interdepartmental working groups coordinated by the Office of National Estimates of the Central Intelligence Agency (CIA), approved by the IAC, and circulated under the aegis of the President, appropriate officers of cabinet level, and the members of the National Security Council (NSC). The Department of State provided all political and some economic sections of NIEs.
2. According to a note on the cover sheet, the following intelligence organizations participated in the preparation of this estimate: the CIA and the intelligence organizations of the Departments of State, Army, Navy, and Air Force and the Joint Staff. All members of the IAC concurred with the estimate on July 16 with the exception of the representatives of the Atomic Energy Commission (AEC) and the Federal Bureau of Investigation (FBI), who abstained on the grounds that the subject was outside their jurisdiction.
3. See Appendix for Summary. [Footnote in the source text.]