1974-01-17

This is the Latin American Press Review, a weekly selection and analysis of news and events in Latin America as seen by leading world news sources, with special emphasis on the Latin American press. This program is produced by the Latin American Policy Alternatives Group of Austin, Texas. 

Excélsior of Mexico City reports that the United States and Panama have agreed on eight points of a new treaty concerning the Panama Canal. General Omar Torrijos of Panama, who has been negotiating with US Ambassador-at-large Ellsworth Bunker, has described the agreement as non-colonialist. 

While Prensa of Lima, Peru provided background noting that Panama has long considered the canal a natural resource that is exploited by a colonial power. Panamanian Foreign Minister Juan Antonio Tack has stated, "The main aspiration of the Panamanian nation is to have a Panamanian canal." Panama has been at the negotiating table with strong international backing. It had the support of the non-Aligned Nation Summit Conference, the recent Latin American foreign ministers meeting in Bogota, and the UN Security Council, whose vote last March in favor of Panama was vetoed by the United States. 

President Nixon recently asked Congress to approve legislation that would first allow Panama Street vendors to sell lottery tickets inside the canal zone, and second, turn over two US military airfields in the zone to the government of Panama. Foreign Minister Tack welcomed the proposed surrender of the military installations, but he was quick to add that the gesture was strictly a unilateral US initiative and not a product of negotiations between the two countries. Panama considers the massive US military presence in the canal zone illegal and has called for the elimination of all US bases. 

The Pentagon finds this unacceptable. The 500-mile-square canal zone is a virtual US garrison complete with 11,000 troops and 14 military bases and training centers, including the Pentagon Southern Command Headquarters. Southcom is the communications and logistics center, which directs and supplies all US military activities in Central and South America. The Canal Zone military schools, including the US Army School of the Americas, and a Green Beret Center, have trained over 50,000 Latin American military men in the last 20 years, most notably in counterinsurgency and internal security programs. 

The announcement that an agreement had been reached does not settle all these questions, but it does seem to be a breakthrough. Henry Kissinger announced in Washington that he would go to Panama at the end of January to sign the treaty. There are some indications however, that the treaty will meet opposition in the US Congress. Senator James McClure has sent a telegram to President Nixon asking him to reconsider what he calls "this incredible proposal."

One of the controversial points in the return by stages of full Panamanian sovereignty in the canal zone. Panama will gradually gain control of postal, police and tribunal services. Water and land that aren't indispensable to the functioning of the canal will also be returned to Panama. Whether or not Panama will ever have total control of the canal, however, remains to be seen. That report on the United States Panamanian Treaty is taken from Excelsior of Mexico City and La Prensa of Lima, Peru. 

The British News Weekly, Latin America reports that the expropriation of Cerro de Pasco Corporation and its assets in Peru on New Year's Day was a logical step forward in that government's efforts to bring the Peruvian economy under national control, but it had long been avoided for three reasons. In the first place, there was a very real fear that of another confrontation with Washington and of scaring off potential investors in the mining projects which the government was desperately anxious to open up. Secondly, Cerro's operations in the Central Andes are extremely antiquated having been run down over the past few years and would require substantial investment. And thirdly, Cerro de Pasco was deeply involved in the medium-sized Peruvian mining operations, which will now effectively fall into the control of the state sector of the Peruvian economy. 

Sources in Washington have been hinting recently that the Nixon administration was prepared to allow the Peruvian government to nationalize Cerro without making too much fuss and that there will shortly be a package deal covering all the matters still outstanding between the two governments. The vex question of the International Petroleum Company, a Rockefeller concern nationalized by Peru in 1968 will not be mentioned, but the Peruvians are believed to have given some ground in the question of compensation for WR Grace's Sugar Estates. 

Apparently, President Nixon's special representative James Green of Manufacturers Hanover Bank was kept informed of all developments leading up to the expropriation. The packages reported to include a number of United States loans, some of which will be used to pay compensation to the Cerro Corporation, Cerro de Pasco's parent company. 

The Cerro management is very well aware that it's 20% stake in the Southern Peru Copper Company is worth more than all of the assets of Cerro de Pasco combined. Certainly Cerro was unhappy to be losing Cerro de Pasco says Latin America, but the best two thirds of a cake is much better than no cake at all. It may yet be that there will be disputes over the whole issue as to who owes what to whom, but no one apparently expects the repeat of the international hullabaloo, which followed the expropriation of the International Petroleum Company in 1968. 

Cerro de Pasco for many years virtually ruled Central Peru. Not only were its own mines scattered through the mountains, but it purchased ores from independent miners and had large stakes in most important mining operations. It ran a large metallurgical complex, a railway, several hydroelectric generating centers and vast haciendas, which have all been expropriated under agrarian reform legislation. These holdings had been built up during the course of the past half century and formed the basis for a corporate empire with metal fabricating plants in the United States and investments in the Philippines and Chile. 

The Rio Blanco Mine in Chile was nationalized by the popular Unity government in 1971. Cerro has feared nationalization in Peru ever since the military took over the International Petroleum Company in 1968. The management was acutely aware of the company's exposure there, and this was reflected in the persistently low value of the company's shares on The New York Stock Exchange. In these circumstances, the company was reluctant to invest in its Peruvian operations. 

In the preamble to its decree of expropriation, the government accused the company of neglecting essential maintenance of polluting rivers despite government orders to clean up its operations and of exploiting only the richer ores on their mining concessions. This latter point of rapidly mining only the richest deposits just before an expropriation is important since normal mining practice is to maintain steady productivity throughout the maximum economic life of a mine. Asset strippers try to maximize profits for a few years leaving quantities of low quality ores, which by themselves would be uneconomic to mine. 

The problems which the new Peruvian company set up specifically to take over the Cerro de Pasco mines is likely to face, go far to explain why the government was always reluctant to go ahead with the expropriation, that from the British News Weekly, Latin America. 

According to Marcha of Montevideo, Uruguay, many Latin American officials are dismayed at the Nixon administration's choices for ambassadors to Mexico and Argentina. Two of the most critical posts in Latin America, both men, Joseph Jova appointed ambassador to Mexico and Robert Hill appointed to Argentina have been criticized for their close connections with the CIA, the Pentagon and the United Fruit Company. 

Hill, a close friend of President Nixon recently chose to resign from his post as Assistant Secretary of Defense for International Security Affairs rather than comply with a Senate order to sell his extensive defense industry stock holdings 

According to Marcha, Hill's political career began in the State Department in 1945 when he was assigned to US Army headquarters in New Delhi, India. His job actually served as a cover for an intelligence assignment for the Office of Strategic Services, the precursor of the CIA. Throughout the rest of his career, he continued to work closely with the US intelligence community, including the CIA. Marcha describes his biography as a satirical left-wing caricature of a Yankee imperialist. A former vice president of WR Grace and a former director of the United Fruit Company, Hill personally helped organize the overthrow of the Nationalist Arbenz's Government, which threatened United Fruit's investments in Guatemala.

As Marcha details, "Ambassador Hill is particularly criticized for his participation in the CIA instigated overthrow of President Arbenz in 1954." The history of that coup centers to a large extent on the United Fruit Company. Arbenz and his predecessor worked hard to change the inequalities in Guatemala's social structure. Free speech and free press were established. Unions were reorganized and legalized. Educational reforms were enacted.

One of the most wide-sweeping and inflammatory changes was the Agrarian Land Reform Program, which struck directly at the interest of the United Fruit Company. The program called for the expropriation and redistribution of uncultivated lands above a basic acreage, while exempting intensively-cultivated lands. Compensation was made in accord with the declared tax value of the land. The appropriated lands were then distributed to propertyless peasants. 

Immediately afterwards, the McCarthyite storm burst over Guatemala. Arbenz was accused of being a communist agent and as such was thought to be a danger to the power of America and the security of the Panama Canal. The plan to overthrow Arbenz was concocted by the CIA. A Guatemalan colonel, Castillo Armas, was found to head up a rebel force in Honduras, in Nicaragua, and was supplied with United States arms. Marcha says that at the time of the coup, Hill was ambassador in Costa Rica and formed a part of the team that coordinated the coup. In 1960, he was rewarded by being elected to the board of directors of United Fruit. 

Hill has long enjoyed close relations with President Nixon, and in 1972 he returned from Madrid, Spain where he was serving as ambassador to work on the campaign for Nixon's reelection. Joseph Jova, the appointee as ambassador to Mexico, also shares with Hill a spurious background. The Mexican paper El Dia accused Jova of deep involvement in a successful 1964 CIA campaign to prevent the election of Salvador Allende as president of Chile. Jova was deputy chief of the United States Embassy in Santiago, Chile at the time. This report on the new United States ambassadors to Mexico and Argentina has been compiled from Marcha of Montevideo Uruguay and Mexico City's Excelsior.

According to the British News weekly, Latin America, Brazil's growing interest in black Africa was clearly revealed by the visits earlier this year to that continent by the Brazilian foreign minister. In the view of most observers, this sudden interest had been forced upon Brazil by the urgent need for more markets for Brazil's manufactured products and a reasonably reliable and cheap source of raw materials for its industries. 

On the face of it, the more advanced countries of black Africa, such as Nigeria, offered ideal prospects, but these are marred by Brazil's extremely close ties with Portugal and its African territories of Angola, Mozambique and Guinea, and by a rapidly growing commercial relationship between Brazil and South Africa. 

In all its negotiations with Africa, Brazil has maintained an equally distant position between the interests of black Africa and of the colonial powers of Portugal and South Africa. The reason is not far to seek. Brazil's relationship with Portugal is long and very close, and the large Portuguese element in the Brazilian population is an ever present pressure group. More important, Portugal provides a gateway to Europe for Brazilian products by the back door and through its African colonies, a gateway to Africa. 

Although Brazil's relations with South Africa are a very recent origin, they have been strengthened fast. Trade between the two countries has passed the $90 million mark, which is more than Brazil's trade with all of the countries of black Africa combined. Direct air services between the two countries have recently been initiated and a firm invitation for South Africa to invest in Brazil was extended by Brazil's foreign minister at this year's session of the United Nations General Assembly. That report on British interests and black Africa from the British News Weekly, Latin America. 

You are listening to the Latin American Press Review, a weekly selection and analysis of news and events in Latin America as seen by leading world news sources with special emphasis on the Latin American press. This program is produced by the Latin American Policy Alternatives Group. Comments and suggestions are welcome and may be sent to the group at 2205 San Antonio Street, Austin, Texas. This program is distributed by Communication Center, the University of Texas at Austin.

The views expressed are solely those of the Latin American Policy Alternatives Group and its sources and should not be considered as being endorsed by UT Austin or this station.

Our feature this week is the second half of an article on the controversial Brazilian model of economic development written by the United Presbyterian Church and reprinted in the Mexican daily El Dia. Last week's portion described Brazil's economic history, economic development by import substitution in the 1950s and '60s, and the effect of US direct investment on Brazilian economic growth. This week's portion includes the social consequences of the type of industry being built in Brazil, the cultural penetration Brazil, and the political and economic consequences suffered by the poor. 

The second question to be asked about current economic development in Brazil has to do with the kind of industry that is growing up and the social consequences of its operations. Let us remember that Brazil is a country of mass poverty and of social customs and history very different from those of the United States and Western Europe where the industrial revolution was born. United States industries basically geared to the production of so-called consumer durables, automobiles, television sets, air conditioners and the like. 

It presupposes a mass consumer market, adequate capital resources, and a highly skilled and expensive labor force, it has developed accordingly. US industry is capital intensive, meaning that it invests heavily in automated machinery and is able to turn out prodigious quantities of goods with a minimum of human labor. This works fairly well for the United States since it is a relatively affluent country and the national income is spread around enough for everyone to afford to buy all the stuff that the factories produce. 

Even in the United States, however, we are finding that the system produces a sizable underclass which may total as much as 10% of the population. Think what it means to establish this kind of a system in a country like Brazil, where the whole social system is in one sense the reverse of our own. 

In the United States, eight out of 10 people are middle class consumers. In Brazil, nine out of 10 people are poor and five of the nine are among the poorest in the world. Brazil's mass market is sharply limited. Perhaps there are as many as 15 million middle class consumers concentrated in the urban centers, but there are 85 million who fall below any reasonable poverty line. Think what it means for a Brazilian to live in a flimsy shack on a hillside in Rio with scarcely enough food to feed his children and yet to be persuaded every day to buy a Chevrolet Impala, apply for credit and to put a tiger in his tank and to see each day the goods of the new society behind the plate glass windows. 

Brazil's urban poor are subjected to a relentless torrent of mass market advertising, radio and TV commercials, window displays, color ads in picture magazines, outdoor billboards. It is not unusual to see squalid slums behind billboards showing girls modeling expensive swimsuits. The fact is that Brazilians are indeed being flooded with US pop culture and the whole middle class consumer mentality that goes with it. Some Brazilians have called this cultural penetration, "the smooth invasion", and remind us that invasion is also ideological and political. 

What about the Brazilian political structure? The United Presbyterian Church says that Brazil is governed today by a military technocratic elite. Ultimate power is in the hands of a small circle of high ranking military officers committed to saving Brazil from chaos and guiding it to world power status. For the generals, the path to greatness is through resolute and rapid economic growth to be achieved in a military industrial partnership with the United States. The generals have gone far in achieving that goal already, but Brazil has paid a price. In the first place, Brazil has surrendered much of its economic sovereignty to the global corporations. Brazil is not a second Japan, as is sometimes claimed. Japan developed its own technology, built its own industries and controls its own economic life. The Japanese have built their own worldwide economic empire. 

Brazil has done some of this under the tutelage of the generals, it has become a colony in the economic empires of Japanese, European, and United States industries. In so doing, it surrenders enormous profits and allows its workers to be exploited for the gain of these companies. More serious still, the generals and their technical administrators have organized the entire country to serve the needs of foreign interest rather than the needs of their people. 

Economics, after all is the matter of how the household is organized. One way to organize the house is to be sure that everyone in it is included, that all may enjoy its comforts, eat at its table, and play at its games. In most families, special consideration is given to those whose needs are the greatest. The generals and their advisors says the church have chosen to organize the Brazilian household for those already the most privileged and for the benefit of foreign companies. As a consequence, Brazil is becoming rapidly Americanized as the entire American industrial system is imposed on Brazilian society. 

What the great majority of Brazilians need is decent and adequate food, healthcare and housing or to put it another way, what they need is a chance to participate in the building of decent healthcare programs, food production and distribution systems, livable housing and opportunities for recreation and learning. The paper points out that Fortune Magazine said, "There is little question that the policies of the technocrats have been kinder to the capitalists than to the workers." Real wages have yet to recover from their compression under President Campos and in some areas of the country, the real minimum wage remains as much as 50% below the peak of the early 1960s. Incentive capitalism, while serving to rechannel resources to the high-priority uses, has also the effect of transferring income from the wage earners to entrepreneurs. 

Why has this happened? It is a matter of the interests, beliefs, and commitments of those who control and make decisions. The generals, first of all, saw themselves as men compelled to save Brazil from chaos and political corruption. The military had played this role before in Brazilian history. It had stepped into the political arena, straightened things out, and then stepped outside. In 1964, the generals were playing the role again, but the missionary role soon gave way to a tutorial role.

They would stay in command and guide Brazil to economic sufficiency and world power. Once real economic strength was achieved, it was said democracy would be restored. The academic economist and technocrats upon whom the generals have relied to produce Brazil's economic growth are classical economists. They were trained in US graduate schools and are oriented to the North American economic system.

They're shrewd technicians, wholly committed to rapid economic growth, and are succeeding well in their professional goals, but they are simply indifferent to the social cost of their policies. Delfim Netto, Brazil's Minister of Finance is amply on record expressing his own relative indifference to the question of income distribution for a country at Brazil's stage of development. "Rapid economic development," he has said, "is always accompanied by increasing inequality of income."

More important in the long run, however, are the interests of the middle class, the urban elites who participate in Brazil's economic fireworks. For them, there has never been anything like this miracle. They're the ones after all who benefit from the transfer of income from the wage generators. The whole economic system may ultimately be for the benefit of the multinational corporations says the church, but the multinationals exist to serve the needs of the consuming middle class everywhere, including Brazil, and the Brazilian middle class is well-served and loving it. 

An economist recently commented that passenger car sales in Brazil have increased 18% per year since 1968, and the market is beginning to enter the second car in the family bracket. 

There is no question but that Brazil's progress has come at the expense of the poor. It is no small matter that during this period of phenomenal economic growth, the poorest half of the nation receives 4% less of the national income now than it did 10 years ago, nor that the minimum wage for many Brazilians is half what it was when the generals took power. Why don't the poor protest? Why does this vast majority allow one fifth of the population to ride on its back? The answer is they are powerless.

The poor have always been without effective political and civil rights in Brazil and are almost totally vulnerable to economic and physical abuse. Today, with rapid migration to the cities and the social dislocations occurring in Brazil, they're more repressed than ever. Not only are the poor themselves repressed, but their civil and political advocates are subjected to some of the most Byzantine acts of civil barbarity to be found in the annals of modern statecraft says the United Presbyterian Church. The church paper mentions three levels of repression suffered by the poor and their advocates.

One level is the fact that there is no popular representation in government. The poor were never allowed to vote in Brazil. Today, no one votes in anything that could be called a meaningful election. There are two political parties, both creations of the military government. Laws are made by presidential decree. The National Congress may either approve these laws or choose to take no action. In either case, the decrees become law. Similarly, in the courts, all cases involving national security are in the hands of the military. Politics is thus from the top down. No one seems to represent the poor. 

A second level of oppression comes from the fact that there are no restraints in the arbitrary use of state power. Since 1967, there have been no effective civil liberties for Brazilians accused of crimes against the national security. Government opposition is prohibited and is interpreted to include criticism of the government by the press, student demonstrations and strikes. Under the so-called Institutional Act Number Five of December, 1968 Habeas Corpus was suspended for all persons accused of political crimes and in 1971, President Medici signed a decree giving him the power to issue secret decrees relating to any subject concerned with the national security. 

A third level of repression results from the fact that there are no effective checks against illegal and vigilante attacks on the poor and their advocates here says the United Presbyterian Church is where the record becomes most shameful. It speaks of three areas of tacitly and or overtly sanctioned crimes against the poor and the politically dissident. In Rio de Janeiro and Sao Paulo, there are vigilante groups known as the Death Squads.

They're a kind of Brazilian Ku Klux Klan whose self-appointed and tacitly approved missions is to keep the poor under control. The Brazilian publication Realidade, says that, "Generally the squads are not satisfied simply to kill the individuals they believe to be irremediable." In order to publicize their activities, their spokesman did not hesitate to telephone the newspapers and announce in great detail how many will be assassinated by the squad the following day.

They then give the exact location of the corpses. The victims are often found handcuffed with obvious marks of torture and macabre inscriptions. The Journal of Brazil of April, 1970 reports that in one state the number of deaths attributed to the Death Squad is more than 1000, that is almost 400 a year. 

The Death Squads are not the only vigilante groups in Brazil, less known and more political in their aims are the Commandos to hunt Communists. Amnesty International reports that this group kills political adversaries, whether they are communists or not. It is sufficient to cite the attack on this student, Kandido Pinto and a student representative for Pernambuco who was paralyzed as a result of being shot by a machine gun as he was going home one day, or the murder after terrible torture of Father Enrique Nato, guilty of having participated in meetings between parents and students in the aim of bringing the two generations closer together. 

Neither were communists, but they appeared on a list of people condemned to death by the Commandos. 

"Whatever one says about the vigilante groups and the ability or inability of the military government to control them," says the church, "there can be no question that the systematic and widespread use of torture in Brazil is a conscious and deliberate policy of the Brazilian government." Officially, the government does not admit that torture is used. Privately, it is justified as a way of preempting acts of violence against the state. 

We will not describe these tortures here. They are shocking and degrading both for those who are tortured and those who torture and they are adequately documented elsewhere. "The point is," says the United Presbyterian Church, "That they are part of the entire mechanism of repression, which the Brazilian government uses to control its people and create its economic miracle." 

You have been listening to the second half of a two-part feature on the Brazilian Economic Development Model written by the United Presbyterian Church and reprinted in the Mexican daily, El Dia. 

You have been listening to the Latin American Press Review, a weekly selection and analysis of news and events in Latin America, as seen by leading world news sources with special emphasis on the Latin American press. This program is produced by the Latin American Policy Alternatives Group. Comments and suggestions are welcome and may be sent to the group at 2205 San Antonio Street, Austin, Texas. This program is distributed by Communication Center, the University of Texas at Austin.

The views expressed are solely those of the Latin American Policy Alternatives Group and its sources, and should not be considered as being endorsed by UT Austin or this station.