Foreign Relations of the United States, 1961–1963, Volume XII, American Republics

195. National Intelligence Estimate¹

NIE 91-62

Washington, November 21, 1962.

THE SITUATION AND PROSPECTS IN ARGENTINA

The Problem

To analyze the political and economic situation in Argentina and estimate the prospects over the next year.

Conclusions

A. The central political problem in Argentina is how to integrate the Peronists into a democratic political system. Seven years after Peron’s overthrow, Peronism remains a political force representing perhaps one-quarter of the electorate. The Peronist masses, whose strength is concentrated in labor, view Peron as a symbol of the economic advantages and social prestige which they achieved under his rule. Peron’s continuing influence over the voting habits of his followers enables him to affect the outcome of any free election. The conservatives and many moderates fear a return to the radicalism, corruption, and economic irresponsibility of the Peron era. (Paras. 1, 14-15)

B. The military, largely conservative and mindful of its subjugation under Peron, is determined not to allow the Peronists to return to political power. The military is split, however, on how to cope with Peronism. The “legalist” faction, currently predominant and the force behind Guido and his cabinet, favors early elections with safeguards against a Peronist resurgence. The “hard line” faction favors stern repression of Peronism and several years of authoritarian government before elected government is reinstated. (Paras. 2, 5-10, 41)

C. The non-Communist political parties provide only unsteady foundations for civilian government. They are generally divided internally by personal rivalries, ideological positions, and disagreements over future political tactics. They are unable to cooperate with each other and are in various degrees bidding for the support of the Peronists. Some Peronists are inclined to make a peaceful effort to secure legal participation in government; more radical elements favor use of Peronist power in many key labor unions to engage in militant opposition, and even alliance with the Communists to gain their ends. The Communists, also well established in the labor movement, have had some success in allying themselves with the leftwing Peronists. (Paras. 17-24, 42)

D. Guido and the “legalist” military faction have announced presidential and congressional elections for 16 June 1963, with a new President to take office the following October. At best, the problem of electing and installing a civilian government will be difficult. Militant Peronists—probably with Communist support—will resist restrictions on their political activities and may resort to strikes and violence. On the other hand, much of the military opposes any concessions to Peronism, and as elections approach, military apprehensions over the risks will increase. These sentiments could lead to a preventive coup against Guido and the “legalists” in advance of elections, or a military move to negate the elections if they should result in significant Peronist successes, or a coup against a newly elected government unacceptable to the military. The great majority of Argentines favor holding elections and we think that, in spite of the obstacles, there is at least an even chance that they will take place. Any new government will live under the shadow of being ousted by the military if the latter believes the evils of the Peron era threaten to recur. (Paras. 9, 12-13, 17, 42-45)

E. Solution of the Peronist problem is also complicated by the country’s economic stagnation and the dim prospects for an early recovery. Longstanding neglect of the agricultural sector and decline in overseas demand for Argentine exports have severely reduced the country’s export earning capacity. Despite promising basic resources, Argentina is plagued with critical balance of payments problems, inflation, budget deficits, and a high unemployment rate. (Paras. 27-29, 31-32)

F. Guido’s Minister of Economy, Alsogaray, has sought strenuously and with some success to impose a mild austerity program, to improve the climate for private investment, and to obtain foreign assist-ance. His methods, however, have antagonized influential political and military elements and his room for maneuver is dangerously narrow. The government will probably succeed in obtaining some new loans and other outside assistance, but it seems unlikely to undertake the many basic reforms necessary to begin economic recovery. (Paras. 11, 33, 35-37, 40)

[Here follows a “Discussion” section of 12 pages.]

1. Source: Central Intelligence Agency Files, Job 79-R01012A, ODDI Registry. Secret. According to a covering sheet, this estimate was prepared by the Central Intelligence Agency and the intelligence organizations of the Departments of State, Army, Navy, Air Force, and the Joint Staff. All members of the Board concurred with this estimate on November 21, except the representatives of the AEC and FBI, who abstained on the grounds that the subject was outside their jurisdiction.