Foreign Relations of the United States, 1961–1963, American Republics; Cuba 1961–1962; Cuban Missile Crisis and Aftermath, Volumes X/XI/XII, Microfiche Supplement

217. National Intelligence Estimate No. 89–61, November 21¹

Caracas, November 21, 1961

THE SITUATION IN VENEZUELA

THE PROBLEM

To estimate the prospects for the Betancourt government, for the survival of democratic government in Venezuela, and for orderly social and economic reform.

CONCLUSIONS

1. Venezuela, an extraordinarily wealthy country in terms of its natural and financial resources, is nevertheless beset by severe economic, social, and political problems which reflect the strains inherent in a transition, in one lifetime, from military dictatorship and an oligarchic social order toward a democratic welfare state. (Paras. 10–11)

2. The Betancourt administration, elected after the overthrow of the Perez Jimenez dictatorship, is a social democratic-Christian socialist coalition committed to the evolutionary reform of economic and social institutions. It is opposed by extreme leftists, including the Communists and other Castro sympathizers, and also by rightist elements, but, with the support of the armed forces, has survived repeated coup attempts, including several attempts to assassinate Betancourt. (Paras. 15–22)

3. Pro-Castro sentiment, once strong in Venezuela, has sharply declined. In late 1960, the successful suppression of serious disorders fomented by the revolutionary left showed that it lacked sufficient strength to coerce or overthrow the government. (Paras. 23–27)

4. Despite the resources available to it, the Betancourt government is beset by severe financial problems resulting from (a) the end of the Venezuelan oil boom, with a consequent decline in the growth of income from the petroleum industry, and (b) greatly increased expenditures for politically necessary social welfare programs. Its difficulties have been further complicated by a serious economic recession and heavy flight of capital. Unemployment now amounts to about 12 percent of the labor force and is rising. (Paras. 33–36)

5. The government is counting heavily on external assistance to restore business confidence and to carry out its programs for economic recovery and development. Even with such aid, progress in these respects is likely to be slow and uncertain. (Paras. 37–41)

6. Popular dissatisfaction and impatience with the slow rate of economic improvement is likely to grow, especially in the congested urban areas. This dissatisfaction will provide the Communists and other revolutionary leftists with further opportunities for agitation against the regime. At the same time, distrust and dissatisfaction in business circles is likely to continue, and some rightists will continue to conspire with reactionary military elements to overthrow the regime. Thus Betancourt will remain under continuing threat from both the left and the right. (Para. 42)

7. On the other hand, Betancourt enters the final half of his term with certain important advantages. His standing in the Caribbean area as a leading exponent of constitutional government and moderate reform adds to his domestic prestige. The military will probably continue to support him against threats from the right as well as from the revolutionary left. (Paras. 43–44)

8. On balance, we believe that Betancourt will probably be able to serve out his term, ending in early 1964. We are much less confident, however, that his administration will have provided a stable foundation for the continuation of constitutional government. (Paras. 45–48)

9. Betancourt has carefully avoided any appearance of dependence on the US, but has done his part to keep relations with the US on a cordial footing. His position at home and in the area has been strengthened by recent developments in the Dominican Republic. He probably is inclined to go along with an inter-American acceptance to the Balaguer government in the Dominican Republic now that the Trujillo family’s power over it has been broken. He has broken diplomatic relations with Cuba, and is supporting the Colombian proposals for collective action against the Castro regime. (Paras. 49–51)

[Here follows the discussion section of the paper.]

1. “The Situation in Venezuela.” Secret. 3 pp. CIA Files: Job 79–R01012A, ODDI Registry.