Conditions Adn Trends in Latin America Affecting US Security

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NIE70Conditions and Trends in Latin AmericaAffecting US Security

12 December 1952


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NIE 70: Conditions and Trends in Latin America Affecting US Security,12 December 1952

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NAT I ONAL I NT E L L I GE NCE E ST I M AT ECONDITIONS AND T T O ^ S IN LATm AMERICAA F F E C T ^ tJS SECURITY

N I I - 7 0'. Publiihcd 12 DecemUr 195?

^RPl-nVEi ' TOR I 'ELE

(b)(3)

JTA* following menhir orfanitatkme of the Intelligent!dtvikny Committee portttipie4 with the Central intetti-St nt t Agent? tn the preparation e/ thlt tttlmct e: th eMetUgtnct orfankitiont 0/ the Department* / SlcU,the Army, the Nary, the Air force, end the Joint Slag.iH'memiere. 6} the" iriteWterK* ASvitory Committee- .exma trrtd in


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CONDITIONS A N D TRENDS IN LATIN AMERICAAFFECTING US SECURlfY1

THE PROBLEM- To identify the factors affecting Latin American political stability and cooperation with the United States, and to estimate the tre nds likely to affect La tin Amer

ican political and military cooperation and the availability of Latin American strategic resources.CONCLUSIONS

J. The political instability now evidentin Latin America results from seriousdisturbance of the traditional social order by new economic and social forces.This instability is therefore much more.,fundamental than that which characterized th e personal politics of L atin Am erica in the p ast2. The principal political trend in LatinAmerica is toward nationalistic regimesmaintained in-large part by demagogic. appe al to the depressed masses of thepopulation, of which the Peron regimein Argentina is an outstanding example. -Similar, though not identical, regimesalready exist In Bolivia and Guatemala.Present circumstances favor their development in Chile and Ecuador/Peru,Colombia, and Venezuela are the statesnext most vulnerable to this trend.S. The general trend toward radical andnationalistic regimes in Latin America isfavorable to Feron's efforts to arouse an -

ThU estlnute teUU* cn lj to Us l*ttn AmericanjwbUe*. Esntpeui rxOooia In the re aretueludedfrooiecjtfMtttHoa.

tagonism toward the United 8tales.The same nationalism, however, wouldprobably preclude Argentine politicalcontrol over any neighboring state.4. The Communist threat to US securityinterests in Latin America is greaterthanthe limited and declining partymembership in the area would suggest,because of the ease with which arelatively few Communists, operatingthrough various fronts, can exploit thesocial unrest and Yankeephobia alreadyexisting in the non-Communist population. The Communists, as such, have nopresent prospect of gaining control ofany Latin American state by electoral.means. Guatemala, however, is an example of how a sma ll Communist minority can penetrate a Latin American government and strongly influence itspolicy.6. The pressures of social unrest and extreme nationalism make It difficult forLatin American governments to renderon a ll occasions the degree of d iplomatic

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NIE 70: Con ditions and Trends in Latin Am erica Affecting US Security,12 December 1952

- O B O I V B *military, or economic support desired bythe United States. With the exceptionof Argentina and Guatemala, they havebeen reasonably cooperative in the po litical sphere. Generally, however, theyhave not implemented effectively theireconomic and m ilitary u ndertaking s.6. Eventually the trend toward exaggerated nationalism, if it continues, willseriously affect Hemisphere solidarityand US security interests in Latin America. For th e nex t several years, however, change is not likely to be so farreaching as to reduce substantially thepresent degree and scope of Latin American cooperation. In particular, LatinAmerican strategic raw materials willcontinue to be available, although thegovernments concerned will seek to drivehard bargains in terms of prices and economic concessions.

7. In the event of global war, the LatinAmericans would more fully appreciatetheir community of interest with theWestern Powers and would probablyshow a greater readiness to meet theirinternational military and economiccomm itments. The Latin Americanarm ed forces, however, would not be ableto defend critical strategic areas and vitalsea routes against serious enemy attackwithout the direct participation of USforces, although they would be of valuein supporting roles.8. The more immediate threa t to U Ssecurity interests in Latin America, inthe event of global war, would be Communist capabilities for the sabotage ofstrategic industries. It is unlikely tha ta large-scale and widespread program ofsabotage could be sustained, but the situation would favor, sporadic Communistsuccesses.

DISCUSSIONBasic Social Trends9. In most Latin American countries the oldorder of society was dominated by landedgentry in alliance with the Church and theArmy. There was also a small professionaland commercial middle class, but the massof the population was dependent. Inarticulate, and politically impotent. Within theruling group politics was highly personal andunpredictable, but the social order Itself wastable.10. In recent years, however, the traditionalsocial order has been seriously disturbed, primarily by the accelerated pace of Latin Amer-ican economic development as affected bystructural changes in the world economy,secondarily by ideological influences derivedfrom the world-wide social unrest of thetwentieth century. Although 60 toTOpercent of the population is still engaged in agri

culture, the development of mining, manufacturing, and service industries in LatinAmerica during the past three decades hasconsiderably increased the importance ofnon-agricultural labor and the urban middleclass. In many important countries the preponderance of political power is shifting topoliticians whose strength Is derived primarily from influence over city populations. Thisdevelopment, still incomplete and Si-defined,has given rise to political instability morefundamental than that which characterisedthe personal politics of the past.l i . In some countries new political leadership arises primarily as an accompanimentof industrial and commercial growth. In allcountries its rise has been associated witha rapid expansion of governmental operations. The leaders of the newly-Importantpopulation groups include functionaries

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O B O H O Tstaffing government ministries and state-controlled enterprises, military, professional,and business men, *nd trade union leaders.The majority do not have strong tics to the-traditional order. The most characteristicattitude among political leaders of this newtype is a strong tendency toward nationalism.12. Older social elements and institutionshave adapted themselves with varying degrees of success to the rise of this new andessentially urban political leadership. Intellectuals, who formerly had their spiritual,home in European capitals and were attached to the oligarchy by ties of family andpatronage, are now predominantly both socialistic and nationalistic in temper. Themilitary, - nationalistic by tradition, haveshown considerable interest in the prospectof industrialization. They are sometimesneutral toward the old order, or even hostilewhen alignment with "progressive" forcessuits their purposes. The various nationalCatholic hierarchies have for the most partstriven to preserve the traditional social order,but in a few countries Catholic laymen have.organized Christian socialist parties in a n effort to counter anti-clerical and agnostic tendencies of th e urban population and to divertth e masses from a more radical course. On ly"the landed interests have in general made n oeffort to accommodate themselves to the newsituation.]S . Relations between the masses of the people and the new, essentially urba n, leadershipare much less stable and clear than werethose between the people and the landedaristocracy. Personal politics and "feudal"loyalties are being superseded by the impersonal relations of Capita], Labor, and Gover nm en t The aspirations of urban popula-l ions, especially those of organized labor, tr eoften exploited by demagogues and directedtoward objectives incompatible with the development of stable and moderate governm en t The masses in general are povertystricken, politically inexperienced, and highly susceptible to demagogic appeals.U. The degree of disruption produced by thesocial forces mentioned above varies from

country to country. The traditional order still persists in Peru, Nicaragua, and theDominican Republic, for example. On th eother hand,'Argentina, Bolivia, and Guatemala are now controlled by politicians whobase their power in large part on leadershipof the depressed masses- This latter pattern is likely to be repeated, with local variations, in other countries which have notachieved, like Mexico, a relatively high levelof social and political stability.Basic Economic Trends15. Latin America has traditionally servedas a supplier of raw ma teria ls and foodstuffsto th e highly industrialized countries of NorthAmerica and Europe, and has depended onthose countries for nearly all of its requirements of manufactured products. The LatinAmericans, however, are no longer willing toaccept what they describe as a colonial economic statu s. This attitu de is accentuatedby their experience during and after twoWorld Wars, when, despite large Income fromexports of raw materials, they were unableto buy the manufactured goods they wanted." They seek a greater degree of economic independence and stability through such measures as protective tariffs, exchange restrictions, export controls, and government-sponsored industrialization.~ir One aspect of the prevalent economicnationalism has been a tendency toward theexpropriation and nationalisation of foreign-owned-Utilities and industrial enterprises.This tendency arises from political as well aseconomic motives. Immediately after the-war Argentina and Braril bought out Britishrailway interests. Recently, the BolivianGovernment has nationalised that country'stin mines. In Chile discussion is rath er interms of an expropriation of the product ofthe copper mines through the establishmentof a government m onopoly of copper exports.In Venezuela there is occasional talk of eventually expropriating the oil industry, butthere is no indication that the governmentcontemplates such a policy. A related tendency is illustrated by the unwillingness ofBraril to permit the exploitation of oil re-

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1 O B n o gsources except on terms providing for closegovernment control of such operations.17 . Progress in industrialization wQl be increasingly difficult to sustain in Latin America. Domestic private investors, seekingquick, high profits, are reluctant to financelong-term development enterprises . Foreignprivate investment capital for desired Industrial expansion has not been forthcoming Ineffective quantity in the postwar period, in"l ar ge pa rt because" of the restrictions and~ uncertainties engendered by the prevalenteconomic na tional ism. In du st r ia l is a t i on ,therefore, has been to a considerable extentfinanced with public funds, and consequentlyits form and direction have often been governed by political rather than economic considerations. Development of new domesticindustries and the basic transportation andenergy services will probably involve the diversion of capital and other resources fromdevelopment of the raw material export sector of th e economy.

IS . Latin America's recent preoccupationwith industrial development to the neglectof agr icul ture ha s adversely affected thedomestic supply of agricultural products aswell as. th e earning of foreign-exchang ethough agricultural exports. Even7aL"fela^~~tively small increase in agricultural investment could have brought substantial increases in agricultural productivity, particularly in the growing of food for domestic use. _19. Inflation has Increased the economic andpolitical strain in Latin America. It hasJeopardised the levels of living of the laboringclasses in urban areas, thereby compellingthe governments to expand cosUy social welfare programs. Agriculture in general hasnot benefited from inflation because of theIncreased cost of manufactures and becauseof government interference in domesticmarkets.29 . An economic crisis in Latin America wasverted only by the rise in prices for LatinAmerican export commodities following theoutbreak of hostilities in Korea. If the termsof trade Should seriously deteriorate manylAtin American economies would be severely

shak en. In countries where large-scale programs of industrialisation are underway, amarked slackening ot those programs wouldproduce grave social and political problems.The countries most vulnerable in this respectMexico, Brazil, Argentina, andChileare those which could render thegreatest m ateria] support to the United States- in the event of war.Basic Political Trends21 . The most important political trend inLatin America is toward the rise of radicaland nationalistic regimes like those in Argentina, Bolivia, and Ouatem ala. Such regime*are based in large part on mass support obtained by promises to relieve the wants andfulfill the aspirations of depressed segmentsOf th e population . Recent elections in Chileand Ecuador have brought to power nationalistic regimes more likely than their predecessors to develop in this same direction.Radical mass movements in Peru and Venezuela have been forced underground by representatives of the traditional order. In theirfrustration these popular movements are susceptible of exploitation by imitators ofPeron's techniques; Even to such relativelystable countries as Brazil, Uruguay, "and."Mexico there are extremist elements of considerable political potential.82 . The mounting pressure for radical politic a l , change in Latin America alarms particularly those governments controlled by thetraditional ruling group, as In Peru andColombia, and stiffens their resistance to anysubstantial change.1 This repressive tendencyhinders even moderate change and so rendersmore likely the eventual outbreak of revolutionar y violence. In Colombia ther e is already a widespread guerrilla resistance to th eregime. _ ;23 . Where power has already passed, as inMexico, from the traditional to a new political leadership, the governments are also hostile toward mass movements and toward politicians seeking power on a new wave of revolution. The weakness of these otherwisestable political machines lies in their manyunfulfilled promises to the urban masses,

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' B " B " promises impossible of fulfillment during thepresent phase of economic development.Chile affords a recent example of one suchliberal and moderate regime which has succumbed to this weakness. Only In Mexico Isthe existing political machine strong enoughto permit a reasonably confident estimatethat it would be proof against overthrow bya demagogic opposition.84 . The military retain considerable politicalinfluence In ali_Latn American countries.In those such as the Dominican Republic,Nicaragua, and Paraguay, where the traditional order has not been seriously disturbedby hew social and political ideas, militaryand national leadership'are essentially Identical an d no conflict between t he tw o is likelyexcept In terms of a palace revolution. Incountries where the old order is und er attac k,tout h as no t been superseded, the position andfuture conduct of the military are less clear.and predictable. The Venezuelan Army, forexample, put the liberal Aeclon Democraticain to power in 1W&. bu t turne d It out againthr ee years later. The vacillation of .th e.Army between the old and new orders, inVenezuela and elsewhere, appears due to thefact that the new sort of civilian politicalleaders, while promising to satisfy military_aspirations, also sponsor radical changes inth e social order. Yet even where the Armyhas taken direct control, as in Peru and Venezuela, the resulting governments have been.sensitive to popular demands for social improv em ent Where demagogues gain mess ~support, as In Argentina, or where governments are responsive to a relatively broadand articulate electorate, as In Mexico andtJrugua y, the capacity of the m ilitary for independent action and their influence uponthe government tend to lessen.-25. Feron's success in Argentina has stimulated the existing trend toward demagogicand nationalistic regimes in other countries,- as In Bolivia, Chile, and Ecuador. Peron ha sfostered this trend by giving material ormoral support to tike-minded national lead-. . The trend, however, Is primarily the.consequence of national conditions and aspiratio ns In each case. Even If other govern

ments should adopt domestic and foreignpolicies closely resembling those of Peron,their essential nationalism would precludetheir becoming mere satellites of Argentina.86. The trend toward radical nationalism toLatin America is adverse to US security interests, for a common expression of such nationalism is Tankeephobia. This spirit tt Inconflict with the idea of hemispheric solidari ty and cooperation. As expressed in Argentine policy, It Involves withdrawal Into a"third position" of neutrality between, evenactive opposition to, bote the US and theUSSR, rn practica l application thi s policyadversely affects only US intere sts. Peron Uactively endeavoring to induce other LatinAmerican states to adopt this "third position." Be has had no apparent success sofar, but the general trend Is favorable for hispurposes.Battc M ilitary Trends27. The primary function of Latin Americasarmed forces has always been the maintenance of intern al order. Although international wars have occurred within the area,they have been rare and are outside of normal expectation. Latin American military- establis hme nts ha ve never been developed inthe expectation of having to resist invasionby a first-class military power without thesupport and assistance of some other major.-po we r. " """ _ .287 The Latin American governments havenow agreed to a coordinated approach to the

: general problem of Hemisphere defense, withthe assignment of tasks to particular statesunder an over-all plan and the preparation oftheir forces to perform the tasks assigned.Such planning is proceeding through theagency of the Inter-American Defense Board.At the same time various Latin Americanforces are being modernised and developedunder US influence. This influence is exertedthrough Joint US-Mexican and US-Brasiiun"defense commissions, US military missions Inall other Latin American countries exceptHicaragua and the Dominican Republic (thepresent armed forces of which were established under 178 auspices), the training of

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O P C f t B TLatin Americans at Service schools In theCanal Zone and the U nited S tates, various bt-Sateral mutual security agreements, and theprovision of limited quantities of US militaryequipment39 . The major Latin American powers generally desire to improve their air and navalforces and to achieve a reasonable degree of^elf-sufficiency in ground str ength . Unskilledmanpower is available in adequate numbers,tout these states generally lack the industrialand financial resources, the skilled technicians, and t he qualified officers to achieve thisgoal by their own efforts. Any considerableimprovement and expansion of Latin American armed forces will therefore require USti&sistance in training and in the provision ofsanitary equipm ent Moreover, even in thebest circumstances, the Latin Americans'would never expect to meet attack by a first-class military power without direct US airand naval support.Communism In latin AmericaSO. The Communist threat to US security interests in Latin America is greater than present party membership in the area would suggest, because of the ease with which arelatively few Communists operating-behind'labor, intellectual, and other fronts can exploit the social unrest and YanXeephobla~al-~ready existing in the non-Communist population. Guatem ala is a prime example of how small Communist minority can penetrate aLatin American government and strongly Influence it s policy.31. During the period 1844-1947 the StalinistCommunist parties in Latin America hadsome $30,000 members and polled an aggregate of about a million votes In various national elections. Since then par ty membership hea fatie n to about 240,000. Most of ttdsdecline has occurred in the three most important Communist parties, those In Brazil,Chile, and Cuba, each of which has lost abou thalf of its members. In many countries theCommunist Parly Is now officially suppressed.In none is it an important electoral factor.The Communists, as such, have no presentprospect of gaining control over any Latin

American government by electoral means.Their direct participation in national politicsIs significant only in O uatemala.82. The Communists have had some *uccessIn their efforts to gain control of Latin American labor by establishing reliable Communists in key positions in strategic labor unionsand in national labor federations. They dominate completely the international Confederation of Latin American Workers (CTAL) . I nrecent years Communist control of laborunions h as been somewhat curtailed by government action, but such action has also affected and antagonised non-Communist laborleaders. In Chile and V enezuela, for example,government restrictions on union activityhave tended to give Communist and non-Communist labor groups a common sense of persecution and a common cause. Moreover,even where Communists have been oustedfrom official positions of union control, theyretain some influence as rank-and-file laborleaders or as officials in non-Communistunions, furthermore, the Communists have,sought influence among the m ass of un organized workers. Through their influence in-labor they have a capability for interruptingthe operations of strategically important industries by .means of strikes and sabotage.W. Th e C ommunists h ave also been successful in pen etrating Latin American educationalsystems, intellectual circles, and those patriotic organizations formed to give expressionto the new spirit of ultra-nationalism. In thisway they seek to instill prejudice in th e risinggeneration, to Intensify socialistic and nationalistic tendencies among the intelligentsia, to assume a patriotic coloration fortheir own activities, and to give such direction to nationalism as will most effectivelyhinder Latin American cooperation with theUnited States .84. In the Latin American armed forces, however, the influence of Communists and Commun ist sympathisers is slight. In general,- the officer corps constitutes th e stron gest opposition t o Communism in Latin America.J5 . Since the outbreak of th e Korean war theUSSR ha s shown a markedly increased in terest in Latin America. This increased atten-

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BBCItmf*Uon has been reflected In the larger volumeof Soviet broadcasts to Latin America, themovements of important Communists, andthe resolutions of recent Communist-sponsored conferences.COOPERATION WITH THE UNITED STATESPolitical Cooperation -88, Since World War It the inter-Americansystem has been subjected Jo new strains.Isolationist and anti-US sentiment among-Latin Americans has been kept alive orstrengthened by the political, economic, andsocial problems reviewed above. Lat in Americans believe that the US does not appreciateth e urgency of these problems. They in tur ndo not fully understand the demands of theglobal situation upon US attention-and resources, and resent the failure of the US togive them the financial and military assistance which they believe they should have.37. The o utbreak of hostilities in Korea posed. a clear test of Latin America's willingness andability to cooperate with the US in support ofUN objectives. Initia l enthusiasm was displayed in the united support given by Latin"America to the UK decision for action in Korea and to the resolution passed in t he Councilof the Organization of American States approving this action. Th e five natio ns whichtoad not yet ratified the Rio Treaty quickly didso . (Guatemala, however, has not as yet de-_posited its instrum ent of ratification)Later,all but Argentina voted for th e UN "Unitingfor Peace" resolution and all supported the re- "affirmation, of inter-American unity whichcame out of the M arch-April 1651 meeting ofth e American Foreign Ministers. In additionto this political support, Latin A merica agreed,in principle, to Increase its outpu t of strategicraw materials.38. More recently, Latin American governmen ts, except those of Argentina and Guatemala, have given excellent support to the USon all the important political questions onwhich the US and th e USSR were opposeddur-in g inesixth (1951) session of the UN GeneralAssembly. Moreover, they h ave moved withcautio n on the issues of Ira n, Egypt, Morocco,and Tunisia, despite their strong desire to

support th e national aspirations of other peoples. Finally, since the beginning of 1952,five Latin American governm ents--Cuba,Colombia, Ecuador, Peru, and Chilehaveentered into bilateral military assistanceagreements with the VS. Two othersBra-guay and Brazilhave signed such agreements, but have not yet ratified them.89. Some considerations tend to counterbalance this record of governmental cooperation.In the weeks after th e opening of the K oreanconflict Initial Latin American enthusiasmgave way to an a ttitud e of caution and calculation. Fear of a global war ha s been exploited by Communist and Peronlst anti-U8propaganda, which stresses the theme thatLatin America has nothing to gain and muchto lose from embroilment in a world conflictTo date, troop contributions for Korea havenot been forthcoming, except from Colombia,and the recently negotiated military agreements have been subjected to severe attacksby Communist, nationalist, and other anti-US elements.

-Economic Cooperoiiori40. The role of L atin Am erica as a supplier of. strategic raw materials, particularly in timeof war when -access to materials In other supply areas may be denied, makes Latin American economic-cooperation vital to OS and-Hemisphere defense. Latin America at present supplies the United States with over thir tystrategic mineral, fiber, and chemical products, its output of copper, petroleum, andsine forms a n essential complement to US an dCanadian production. The area Is the onlyWestern H emisphere source of thirteen essential materials, including tin, cordage fibers,mica, quartz crystals, and mo nastic, and it isthe principal H emisphere source of antimo ny,chromlte, manganese, tantalite, and tungsten.The great bulk of these strategic materialscomes from Mexico, Venezuela, Peru, Chile,Bolivia, and Brazil.41. At the 1851 meetin g of American ForeignMinisters the United States obtained from th eLatin American nations pledges to increasethe production and the allocation to the USof strategic materials in short supply. The

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NIE 70: Con ditions and Trends in Latin Am erica Affecting US Secu rity,12 December 1952

S B C R S Yimplementation of these pledges has not beena s effective as the emergency required. Production as a whole has not been expandedabove general postwar levels. Th e feelings ofLatin Americans respecting this form of economic cooperation were displayed at the Foreign Ministers meeting by a request that theUS proposal for increases in the output ofstrategic materials be accompanied by assuranc es of assistance for gen eral Latin A mericaneconomic development. In general, emphasisjupon their role as producers of raw materialsis resented by Latin Americans as impu ting tothem a 'colonial'1 sta tus.42. Latin Americans in general do not opposethe entry of foreign capital for the purpose ofexploiting natu ral resources, but they are becoming increasingly insistent on exercisingcontrol over th e scope and form of such investm en t This insistence stems not only from amilitant nationalism, but also from the con-_cern of some leaders for conservation of re-_sources and the desire of all to obtain a maximum quid pro quo.43 . With respect to trade with Communist-controlled countries, the great majority ofLatin American nations have promised eitherformally or Informally to comply with theprovisions of th e Battle Act. Nevertheless,-some strategic materials, particularly Chileancopper, reportedly have been transshipped tothe Soviet Bloc via third parties In WesternEuro pe. La tin Am erican officials, however,have generally been cooperative when ap-jproached by U S officials w ith instan ces of laxenforcement of trade controls.

.'Military Cooperation44 . The Latin American armed forces are no tat present capable of providing adequate defense for th e area in t he event of war, thoughthey would be of some value in supporting"roles.45 . All Latin American countries except Guatemala have established their eligibility forreimbursable military aid under the MutualDefense Assistance Actof 1949. Most of themhave submitted requests for such aid. Generally they wish to purchase the most advanced types of US equipment, types which

they d o not actually need, in US opinion, andwhich the US cannot provide, either at all orIn the desired quantities, under present priorities. Shipmen ts to Latin America underthi s program have therefore been small. Th sinability of La tin Ai j-ic&n governm ents toobtain desired US equipment for which theywere willing to pay has caused considerableresentment and has led to some purchases ofEuropean materiel, to the detriment of arms.ltandar dilation,46. Only the five countries which have entered into bilateral military assistance agreements with the US are eligible for grant aidund er th e Mutual Security Act of 1951. Theyare Cuba, Colombia, Ecuador, Peru , and ChileTShipments under this program have only Justbegun. Brazil and Uruguay have signed bilateral agreements, bu t have n ot yet ratifiedthem.Such an agreement is under negotia--tio n.w ith the Dominican Reoublic Of thenine co untries so far approached, only Mexicohas declined to negotiate.47. IÛnÂmerica'sJdw priority in relationto Europe with respect to US military aid h ascaused general disappointment and dissatisfaction in Latin American military and political circles...Rivalries and mutual suspicions among Latin American states havealso led to complaints about inequitable tre atment in the bestowal ol US ai d. " 8o~farT Kowêver, these discontents have not seriouslyaffected Latin American military cooperationwith the U nited States. . Fourteen Latin American countries havereceived US Army or Air Force missions, orboth, and nine have received US Navy missions. Oenerally they have been well satisfiedwith the work of these missions, but have cotinade optimum use of them. Argentina, however, has allowed its contracts for Army andAir Force missions to lapse without renew alPROSABlEFOTUREDIVEtOPMENTSGe ne ra l49. Most Latin American governments will beunder Increasing pressure from urban middleclass and labor groups to pursue policies aimedboth at increasing and at redistributing the

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' M o a W "sta tio ns ! Income. These policies will Involveexpensive programs of industrialization andsocial welfare, often beyond the current fiscalcapabilities of the countries which undertakethem. Under these circumstances LatinAmerica will continue to be a fertile groundfor demagogues of the ultra-n ationalist as wellas the Communist type.0 . The best im mediate prospects for a checkupon the extremist forces of social and economic change are to be found in countriessuch as Mexico, Brazil, and Uruguay, wheremoderate urban groups have been establishedas a political factor. Oth er nations, such asColombia, Venejsuela, and Peru , have th e m aterial resources for satisfying immediate social needs, bu t it is doubtful th at the leadership now in powerthe Army in Venezuelaand Peru and the Conservative Party in Colombiawill act in such a way as to tllaypopular disaffection and ensure politicalstability. Countries with only limited humanan d physical resources, such as the DominicanRepublic, Nicaragua, arid Paraguay, seemfirmly set in the traditional social and economic pattern . The example of Guatemala,however, shows how readily this p attern canbe radically changed in such countries by asmall but purposeful minority.SI. The'general trend toward nationalisticregimes maintained in large part by demagogic appeal to the depressed masses may beexpected to continu e. Such regimes alreadyexist in Argentina, Bolivia, and Guatemala,and present circumstances favor their development in Chile and Ecuador. Peru, Colombia, and Venezuela are the states next mostvulnerable to this tr end .82 . In any case, th e trend toward nationalization of basic Industries, especially those nowund er foreign con trol, is likely to develop further . This trend would not in itself deny USaccess to strategic raw mater ials the industries nationalized would still have to sell theirprod ucts but the availability of these materials w ould be affected by political considerations to a greater degree tha n at present. Itis also likely th at production w ould decline, atleast temporarily, in nationalised Industries.

Cooperation with tha United States In oSituation Short of G lobal W ar83 . Both the Communists and the ultra-nationalists, notably the Peronlsts, by propaganda and intrigue, will seek to curtail LatinAmerican cooperation w ith the U nited States.The social, economic, and political conditionswhich have been described will afford them opportunities for anti-US agitation. It is improbable, however, that the Communists cangain direct control over the policy of any LatinAmerican state, at least during tilt next several years, or th at Arg entina can gain politicalcontrol over any neighboring country . I t ispossible that Peron may succeed in aligningother states in a combination to exact a highprice for cooperation; but any such combination would almost certainly be unstable.

.84. The pressure of exaggerated nationalismalready affects the capacity, and at times thewillingness, of latin American governmentsto render on all occasions the degree of diplomatic, m ilitary, or economic support desiredby the United States. Eventually this trendtoward exaggerated nationalism, if it continues, will seriously affect H emisphere solidarityand US security interests in Latin America.Nevertheless, in a situation short of globalwar, the present degree and scope of LatinAmerican cooperation with the United Statesis likely to remain basically unchanged for th enext several year s- Def nite commitments byLatin American governments will be undertaken hesitantly-and their Implementationwill probably be slow, The presen t availability of strategic raw materials to meet US requirements will continue, but the governments concerned will seek to drive hardbargains in terms of prices and of economicconcessions.Cooperat ion in the te t i \ of Global War89. The outbreak of global war would bringto Latin Americans a greater awareness ofdanger to themselves in the global situationand of their community of interest with theWestern Powers. A greater readiness to meettheir international military and economiccomm itments would probably follow. As longas the US military position in the Western

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M e n a r wHemisphere remained secure, even Argentinaand Guatemala might be expected to mod-. erate their anti-US propaganda and, eventually, to cooperate in defense of the Hemisphere.89. The Latin American armed forces wouldnot be able to defend critical strategic areasand vital sea routes against serious enemyattack without the direct participation of USforces. They would, however, be of value insupporting roles. In general they would probably be adequate to maintain internal order,to guard against sabotage of strategic industries and land transportation routes, and to_ protect air an d naval installations from sabotage o r small-seale raids.87. After the outbreak of global war theUnited States could probably obtain anywhereIn Latn America, except possibly In Argentina, t he a ir and naval facilities necessary forUS participation in the defense of strategic -areas and sea routes, including consent for t hestationing of air and naval forces at such In-.,sulfatio ns. There would, however, be greatreluctance, to t he point of possible refusal In .some cases, to perm it the entry of US groundforces unless targe-scale invasion appearedImminent Latin American governmentswould be even more unwilling to admit to th eirterritories the forces of other Latin Am ericanstates.88. In th e event of global war Latin Americangovernments would generally agree to an expansion of their armed forces, but'would require US assistance in the provision of equipment and training and would seek to imposeas much of the increased expense as possible ~on the United States. Expanded Latin American ground forces, US equipped and trained,could eventually assume major responsibilityfor the defense of continental areas. I t Is un likely, however, tha t Latin A merican air andnaval forces could ever relieve the US of themajor responsibility for air and naval defense.

89. Because of the m utual suspicions of LatinAmerican governments, their limited mfiituyresources, and popular sentiment againstservice oversew, it is doubtful t ha t any atgnlft-cant Latin American force would be available for operations outside of the WestersHemisphere. It is possible, however,-thatBrazil might be persuaded to provide a dM-sfon, a s In W orld War n , and tha t other countries might provide token contingents. Thenumber and effectiveness of such forces asmight be made available for such servicewould be limited by the amount of US aidavailable for training, equipping, and transporting them.80. The economic dislocations incident toglobal war, including curtailm ent of economicdevelopment and social programs, would at-. most certainly Increase Internal tensions andpolitical instability in Latin America. Nevertheless, with proper inducements, the production of strategic materials could probably beincreased.81. m circumstances of global war I t is probable that all Latin American governmentswould agree to suppress existing overt Commu nist organizations and would have th e capacity to do so. The ex tent to which tfae_activities of the underground communist apparatus could or would be controlled wouldvary with the determination of the government, the effectiveness of the local intelligenceagencies and police, and popular attitud es ineach country.83 . The g reatest danger from C ommunists inLatin America in time of global war would beth at of sabotage In strategic industries. Although It is unlikely that a large-scale program of sabotage could be sustained throu ghout the area, the dispersion an d vulnerabilityOf key targets, especially In essential transportation systems, and the general inadequacy of police and security forces, wouldfavor sporadic success, especially In th e periodImmediately following the o utbreak of war. -

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Conditions Adn Trends in Latin America Affecting US Security

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