Foreign Relations of the United States, 1964–1968, Volume XXXI, South and Central America; Mexico

235. National Intelligence Estimate¹

NIE 93–68

Washington, March 21, 1968.

BRAZIL

The Problem

To estimate the situation in Brazil and the prospects for the next year or two.

Conclusions

A. The Costa e Silva administration has many things in common with that of Castello Branco, but is relaxing some of the more stringent economic controls which the latter had imposed. It is also tolerating, and to some extent responding to, a greater expression of nationalistic feelings, which for the most part have long had an anti-US cast. Yet such policies will probably not bring Costa e Silva appreciable new popular support; instead, a troubled economy, plus political restraints which are not likely to slacken, will tend to diminish his popularity.

B. Civilian opposition will probably increase, but it is disorganized and unlikely to coalesce very effectively in the next two years. The military establishment probably will urge further restraints on civilian political dissidence, insist upon stronger leadership by the government, and press for the present moderate program of arms acquisition. The President will probably act strongly enough in these respects to satisfy most military opinion. Hence he is likely to stay in office until the end of his term in 1971, and his administration is likely to become somewhat more authoritarian.

C. Brazil’s economy showed some progress in 1967, but its problems are too fundamental, too numerous, and too interrelated to permit any great gains in the next two years. Problems of inflation, the budget, and the balance of payments will be manageable, but will nevertheless remain serious. The restraints required to maintain a reasonable degree of financial stability will keep increases in production at modest figures. Thus economic improvement will not be sufficient to provide for much higher levels of living or to permit extensive social reforms or advances.

D. Despite Brazil’s increasing nationalism, the Costa e Silva government will maintain a much friendlier attitude toward the US than the Quadros or Goulart regimes did. It will not, however, follow the US lead in international matters as closely as Castello Branco’s did, and we believe it will be less sympathetic toward the US role in Vietnam. It will probably continue to oppose ratification of the international treaty on nuclear nonproliferation in its present form.

[Omitted here is the Discussion section of the estimate.]

1. Source: Central Intelligence Agency, Job 79R–01012A, O/DDI Registry. Secret; Controlled Dissem. According to a note on the cover sheet this estimate was prepared in the Central Intelligence Agency with the participation of the intelligence organizations of the Departments of State and Defense and the National Security Agency. The United States Intelligence Board concurred in this estimate on March 21.