1974-02-21

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. 

In Chile, according to Mexico City's Excélsior, on last September 11th, the day that the government of President Salvador Allende was overthrown, the offices of three of Chile's largest newspapers were destroyed and many of their staff imprisoned or executed. 

Likewise, at the time of the military coup, the offices of the magazine, Punto Final, and the broadcasting facilities of the radio station Radio Nacional were leveled. Immediately after the coup, 10 of Chile's traditional news dailies and magazines were ordered to seize operations indefinitely. Eight radio stations were also dissolved.

Excélsior claims that today the fascist regime in Chile does not permit the dissemination of any opinions other than those authorized by its own office of information. The greatest injustice being committed against those news agencies, which had been sympathetic towards the Allende government is the relentless persecution of persons associated with these agencies. 

There have been more than 20 known executions of journalists and more than 100 imprisoned and tortured. Many Chilean journalists are believed to be held on the concentration camp on Dawson Island. 

Of great importance internationally, says Excélsior, is that nearly 50 Chilean press workers have still not been guaranteed safe conduct passes by the junta in order to join their families and leave Chile. They remain in 15 European and Latin American embassies where they have been granted political asylum. This story on political repression of Chilean journalists from Mexico City's Excélsior. 

Also in Chile, the military junta's economic policy has not yet convinced foreign investors and has caused an important breach with the Christian Democrats. The British news weekly Latin America commented that five months after the coup that overthrew Salvador Allende, the Chilean military junta, is still very far from stabilizing the internal situation. Consequently, it continues to have difficulty in persuading the international financial community to back what might be called "its revolution and economic freedom."

Fernando Léniz, the minister of the economy, returned to Santiago recently from a trip to Washington. Not exactly empty-handed, but with little more than stopgap loans to keep the economy afloat. The International Monetary Fund did its best to point out that, "Chile needs substantial assistance from the international community in terms of credit and investment." But emphasize that at the same time, it must make huge efforts to overcome its own grave difficulties.

The real problem, says Latin America, is that the economic situation is undermining the junta's political support. The chief complaint has been about price rises, particularly of staples like sugar, tea, rice, and oil, which all enjoyed a subsidy in the Allende administration. 

Before he left for Washington, Léniz had to face a meeting of angry housewives demanding that there should be no price rise without a corresponding wage readjustment. Lines for cigarettes have appeared again, almost certainly due to hoarding. 

The economics minister had nothing to offer the housewives and the price increases announced in January make gloomy reading. Sugar has more than doubled in price since last September. The price of oil has not quite doubled and gasoline has almost tripled its price. The problem is that while the consumer can decrease consumption of non-essentials, he can hardly give up buying food altogether. 

Nor is food the only problem. Devaluation of urban and rural property is to be increased 10 and 30 times respectively, which will have a disastrous impact on rents. The existing differentials between rich and poor will be further worsened by next year's abolition of the income tax. New decrees are being brought in to cope with those who abuse these measures. One law specifies that a penalty of up to 20 years imprisonment for speculation, hoarding, and rumor mongering.

The Cuban news agency Prensa Latina has reported that five leaders of the Bus Owners Association in Valparaíso, fierce opponents of the Allende government have been jailed for distributing supposedly subversive pamphlets. They had been protesting against the government's refusal to allow transport prices to keep up with the new prices for fuel. 

Perhaps none of this would matter, says Latin America, were it not for the fact that the Christian Democrat Party has now at last come out with major criticism of the government. A private but official letter signed by the party's right wing president was given to General Pinochet and was made public in Buenos Aires. 

"A lasting order cannot be created on the basis of repression", said the letter. "Many Chileans have lost their jobs, been denied civil service promotions, been arrested, harassed, threatened or pressured in different forms without any evidence or concrete charge being brought against them." And in a reference to the economic situation, the letter pointed out that, "In view of the level of prices and the fact that earnings of workers are insufficient to cover the cost of food and other vital items for their families, we feel it is no exaggeration to say that many of these people are simply going hungry." 

The letter's pointed political message was clear, "We are convinced that the absolute inactivity of the democratic sectors facilitates the underground efforts of the Marxist groups. Without guidelines from their leaders our rank and file members and sympathizers are at the mercy of rumor, trickery and infiltration." 

The reply of the military was not long delayed. General Pinochet said that there were certain bad Chileans who were calling for an end to military rule. He emphasized that there was no prospect of elections for at least another five years. The deputy minister of the interior revealed that the police were investigating the activities of political parties which were not obeying the military decree, ordering complete abstention from political activity. 

Having alienated the Christian Democrats, the question of unity within the armed forces themselves once again becomes important. The minister of the interior is a known Christian Democrat supporter and has shown indications of populous leanings. While the defense minister seems to be emerging as the chief spokesman of the hardliners and has flatly denied that anyone within the armed forces is unhappy about the economic policy. "The policy of the junta," he said in an interview with El Mercurio, "so intelligently and dynamically carried out by Minister Léniz is the authentic Chilean road to development and general prosperity." This report from Cuba's Prensa Latina and the British news weekly, Latin America.

From Argentina, a New York Times story recently reprinted in the Mexico City daily Excélsior reported that in an underground news conference, leaders of the most important leftist guerilla group in Argentina vowed to step up their attacks against the military and threatened to kill an army officer kidnapped last month. The guerrilla of the Marxist People's Revolutionary Army said that they were still awaiting payment of a $10 million ransom from the Exxon Corporation for the release of the kidnapped refinery manager of the company's Argentine subsidiary. 

Guerrilla leaders also announced the formation of a common front with Chilean, Uruguayan, and Bolivian guerrillas that would include joint operations and an interchange of personnel and weapons. According to police sources, there are 3,000 to 5,000 guerrillas in Argentina in five different groups. 

Despite their relatively small numbers, they have created major tension through repeated kidnappings of businessmen and attacks on the armed forces. The People's Revolutionary Army, whose spokesman refused to reveal the size of its membership, is the most important of all these guerrilla groups. 

In explaining the group's attack on an army garrison last month, one of the spokesmen was quoted, "We consider that to halt or diminish the fight against the oppressor army would allow it to reorganize and to pass over to the offensive." The attack in which the garrison's commander was killed, along with his wife and a sentry has aroused conservatives and anti Marxists and sparked a violent campaign against leftist groups in Argentina. 

After the attack on a military garrison, President Juan Perón vowed to crush the guerrillas and pushed through Congress a strong anti-terrorist bill. Mr. Perón's movement, split between right wing trade unionists and left wing youth, was further divided by the attack. Within days, right wing groups bombed more than 20 offices of the Peronist leftists. The growing split between right and left and the Peronist movement worsened this week after the police reported having discovered an assassination plot by Peronist leftists against the president and his wife, Isabel. That New York Times story was repented in the Mexico City daily Excélsior. 

A recent article from the Cuban News Agency, Prensa Latina comments on the role of technology in United States-Latin American relations. If justice were really to be done when Latin American foreign ministers meet with Henry Kissinger in Mexico City at the end of February, the Latin Americans would win substantial changes in the conditions under which technology is currently transferred from the advanced capitalist countries to the nations of the Third World. For more than a decade, the governments of the continent have noted the excessive cost of modern technology under conditions in which foreign private investors control the supply and the subject is sure to come up again at the Mexico meeting.

"Up to now," says Prensa Latina, "the Latin Americans hope of gaining more access to less expensive technology has not passed the resolution stage of simply making declarations or statements of principle. Whenever reference is made to the subject, the US has rejected all such proposals for the Third World, including Latin America as happened in the last UN trade and development meeting in Santiago, Chile in 1972. In the case of all Latin American countries, with the exception of Cuba, advanced technology belongs to the big US corporations and access to it is obtained only when a company chooses to invest in a country or sell licenses. In either case, a very costly procedure for those who don't control the technology." 

Prensa Latina says that according to a recent United Nations study of 15 underdeveloped countries, the price of technology rose to $1.1 billion, a figure equivalent to 7% of the total export income of these 15 countries and 56% of all the private foreign investment they received. Brazil, with its highly-publicized economic miracle, had to pay $780 million to the transnational corporations in 1972 for the purchase of technology and is expected to pay more than $2 billion for the same item in 1980. 

Venezuela in the past decade has paid out nearly $7 billion for the purchase of US technology. This sum was paid out in the form of royalties, earnings, surtax on imported raw materials and payments to foreign technical personnel. "This makes for extraordinary profits for some corporations," says Prensa Latina. The Interchemical Company of Venezuela, for example, annually remits up to 240% of its capital in royalties alone.

According to Prensa Latina, Latin American countries have asked the United States to contribute to the creation of official organizations in which technological information would be centered and from there put at the disposal of the countries needing it. They want the US to reduce the prices of technology and to increase credits to acquire it. Also, to draw up programs for the training of technicians to use part of its gross national product for research on the specific problems of development of the continent, and to support the creation of new international legislation, which could reorganize the transfer of patented and unpatented technology to the underdeveloped countries. 

The United States already made its position known on these points at the Santiago meeting two years ago, when its representative declared that the US government would not help supply financial resources to cover new activities related to the transfer of technology. Speaking in that meeting, the United States representative stated that the official aid his country would be able to supply would not be sufficient, and he recommended that US private investments be used to fill the technological needs of the developing countries. 

"In short," says Prensa Latina, "the US policy for the Backyard continent has not changed and the technological dependency is part of this policy. Ever since Monroe put forth his doctrine that bears his name." That from the Cuban Press Agency, Prensa Latina. 

The Buenos Aires daily La Opinión recently ran a lengthy editorial concerning political violence in Latin America. "Many ideologists," begins La Opinión, "when called upon to justify the use of violence, simply say that violence is inherent in human beings. Such statements say far more about their authors than about the nature of violence. In Latin America, a continent of great social inequities and intense social conflict, it is misleading to speak on such abstract terms when discussing the issue of political violence." 

La Opinión continues, noting that in some Latin American countries, many citizens have suffered great social injustices. In these cases, spontaneous violence often spring from the masses. "A study of the situation in these countries," says this Argentine daily, "leads to certain conclusions, namely that the struggle of the underprivileged people to achieve a better and more civilized standard of living has caused a reaction of the ruling groups who want to protect the existing order. Such reaction often includes political violence." La Opinión then follows with examples to illustrate its point. 

From the beginning of the military regime in Brazil in 1964, for example, violence has been used to protect and defend the system. The so-called Death Squad is an extralegal organization whose supposed purpose is to fight crime and maintain order. Most of their activities, however, seem to be terrorist actions against any political groups opposing the military regime. "It's certain," concludes La Opinión, "that violence has always been exercised by minority groups anxious to impose not only its views, but its forms of government." These excerpts from an editorial published in the Argentine daily, La Opinión. 

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. 

This week's feature based on articles in the Brazilian journal Opinião, and the British news weekly Latin America Chronicles recent forecast and observations on the Brazilian economy. 

There was never any doubt that General Ernesto Geisel, the military government's candidate, would win the presidential elections in Brazil, as he did some weeks ago. Nor is there any doubt that the political scene will remain quiet and continue to be strictly controlled by the military. The present Médici government, since coming to power in October of 1969, has progressively tightened controls over the nation's political life. Most observers consider it unlikely that the new administration, which is to take office in March, will permit any significant relaxation of these controls. 

In the words of the outgoing president, "Brazil's new president," 64-year-old retired General Geisel, "will not permit any deviation whatsoever from the economic, social and political philosophy governing our society." The new president, former Director of Petrobras, Brazil's oil monopoly was formerly appointed in mid-January by an electoral college made up of members of the only two political parties allowed to function, the ruling National Renovation Alliance having the majority. 

Much speculation exists, however, over the question of whether General Geisel will really continue the economic policies of his predecessor. In a country which claims to have fostered an economic miracle, which is world renowned and which takes pride in its role as a host for foreign corporations, any changes in economic policy are bound to have significant results. 

What is behind this economic miracle? A recent article in the Brazilian journal Opinião comments on how the international press views the booming Brazilian economy. The so-called economic miracle was the subject of articles in the North American magazines Newsweek, Business Week, Commerce Today, and the Wall Street Journal and the French newspaper, Le Monde. 

In Le Monde's view, 1974 will repeat the 1971 performance, which achieved a growth rate of over 11%. The industrial sector, the most dynamic, increased its production by 16% and the automobile industry almost 19%. The expansion of this sector was aided by the influx of foreign capital and the growth of electrical energy output. It was also favored by the idle capacity that already existed in many industries, which now, according to the journal, demand a large investment to maintain that current rate of expansion. 

The French publication stated that the oil crisis stimulated Petrobras, the state owned oiled industry, to intensify its explorations in the Amazon and the continental shelf. At a time when all of the world's leaders are preoccupied with the possibility of an economic recession, Le Monde finds that, "Brazilian leaders are among the few who are not troubled by 1974", because they can count on their friendship with Arab countries to maintain their oil supply. In the long run, furthermore, the energy problem can be viewed optimistically because Brazil's hydroelectric potential is immense and its reserves of bituminous coal are second in the world. 

In the agricultural sector, meanwhile, the results have been deceptive. The growth rate of 4% fell short of the Brazilian government's goal of almost 8%. This failure, according to Le Monde, was due primarily to the poor coffee crop, which forced Brazil to import some 2 million sacks of this product from El Salvador to fulfill its international obligations. 

The strong external demand for agricultural products has had bad consequences for Brazilian people. The saleable crops, such as soya, are developed at the expense of other crops, such as black beans, which are needed for the country's own food supply. 

At the same time, the most difficult struggle that the government has to face is that of inflation, which surpassed the 12% mark established as the goal of the beginning of the year and reached almost 14% in the state of Guanabara. Le Monde asserts that in certain official circles, it is admitted that the price increase was 20%, while the minimum wage rose considerably less. 

Who will be the world's next super exporter? According to Business Week, as strange as it might seem, it will be Brazil. Brazilian exports had a phenomenal growth of 57% in the past year and surpassed $6 million. This growth of exports, in Business Week's view, was possible because Brazil, following Japan's example from 10 years earlier, possessed cheap labor able planners and a powerful central government which is dedicated to increasing exports. 

It is vital for Brazil to export in order to keep its balance of payments under control and to import furiously as a part of its magic program for industrial development. According to the Minister of Planning, whom the magazine considers responsible for the increase in Brazilian sales to other countries, "We need to increase our exports at least 18 to 20% a year to maintain our commercial balance." The increase of Middle Eastern oil prices requires a yet greater growth of exports, according to the American magazine. 

In order to achieve its objectives, the Brazilian government makes it almost impossible for companies not to export by conceding exemptions on almost all state and federal taxes. This official policy permits the corporations to sell abroad at prices 50% lower than in the domestic market. Business Week states that this could expose Brazilians to the charge of dumping its products on the markets of other countries. Thus, if the growth of Brazilian exports continues its rapid pace, foreign governments will become increasingly hostile. 

The magazine Commerce Today of the US Department of Commerce, displays optimism towards Brazil's economic growth this year, "Which will occur," it says "unless there is a grave scarcity of oil, since Brazil is extremely dependent on foreign oil, particularly Arabian oil." The publication stated that the Brazilian economy has been characterized in the last few years by a series of positive factors such as political stability and capable economic direction that generates a vast fund of commercial credit and foreign capital. 

Other critics are not so optimistic. In the opinion of the Wall Street Journal, Brazil has an uncertain economic future, since inflation will reach 40% in 1974, according to their estimations. Brazilian authorities will have to confront the problem of impeding their dramatic increase in prices and the subsequent race of inflation brought on by the world energy crisis. Brazil imports almost three fourths of its oil and its industries as well as its automobile sector vitally depend on combustible fuel. Costs, as a result, have increased for Brazilian imports. 450 million barrels of oil, which formally cost $900 million, now costs $3 billion, almost three times as much. This puts pressure on the balance of payments. 

The Wall Street Journal cites the pro-Brazil thesis of the treasurer of General Motors in Brazil, who says that the country can confront the impact of the energy crisis in the next six months and that the current growth is sufficiently dynamic to support it. "This optimism," comments the Wall Street Journal, "seems to underestimate the impact of the world recession on Brazil. A recession widely anticipated, which would reduce consumption of Brazilian products abroad." 

It is the current world crisis, in fact, as the weekly Latin America points out, that is forcing the government's economists to reexamine the nation's economic policies. Observers point to several events that foreshadow radical changes in Brazil's economic policy and indicate that despite apparent achievements of the Médici government, Geisel's advisors are not satisfied with the state of the economy. 

Sources close to President-elect Geisel indicate that he has already selected his cabinet for when he takes office on March 15th. It is understood that a new super ministry to be known as the General Secretariat for Coordination is to be created, with one of Brazil's most outstanding military intellectuals at its head. 

At the same time, the Finance Ministry appears to have been given to an economist and banker who has been known as an opponent of the Delfim Netto philosophy of economic development. 

The picture of the Brazilian economy given by President Médici in his New Year's speech to the nation was one of continuing success. The gross national product had expanded, he said, by an estimated 11.4%, giving Brazil the highest growth rate of any major country in the world. The President observed that in the last five years, Brazil's gross national product has increased by some 63%. A rate, he claimed, which was the fastest known in the modern history. 

Even the outgoing president sounded a note of warning about 1974, when he observed that "External factors can disturb the picture of our financial economic situation." That these disturbing influences are already at work in Brazil is apparent from both discussion in the press and from official statements. At present, three areas of concern have been pinpointed. First, there is imported inflation resulting from the increased prices of imports, which will make it increasingly difficult to maintain the projected 12% inflation level for 1974. 

Second, the high growth rate of industry and increase in exports have been creating considerable problems in the supply of foodstuffs and raw materials to the internal market. Finally, the government has been taking ever more rigorous measures to control the entry of foreign loans to the country since the conversion of such loans into Cruzeiros could put pressure on the money supply and upset the battle against inflation. 

It is in the light of these facts that both government economists and General Geisel's economic advisors are taking a long hard look at the current economic thinking. Up to now, Brazil, like most of developing countries, has concentrated on the expansion of industry and exports at the expense of agricultural and the home market. 

But gradually the realization that concentrating on primary products may be a better investment in the long run than competing with industrialized nations is filtering through to Brazilian government economists. It has long been argued by Brazilian opponents to the policies of Finance Minister Delfim Netto that concentration on manufactured exports with the need for heavy subsidies and the import of raw materials would not in the long run be in Brazil's best interests.

In their view, the formation of a larger internal market with more rapid development of the rural areas would in the end do more to promote exports and would protect the country from the fluctuations of the international economic situation. There are some indications that General Geisel may incline to the same view.

Whatever difficulties may be facing Brazil in 1974, they do not appear to be worrying international investors. A recent roundup of opinion made by the Rio de Janeiro daily Jornal do Brazil showed that although foreign bankers considered developing countries in general would suffer from difficulties in obtaining international finance, Brazil would be an exception. 

The other side of the phenomenal growth statistics of the Brazilian economy says the Brazilian journal Opinião, are statistics not so frequently quoted, which depict the subhuman living and working conditions of the majority of Brazil's population, the common people who produce the phenomenal wealth and share in little of it. At the close of 1973, one observer reported the following effects of the Brazilian economic miracle. In the province of Belo Horizonte, there are approximately 20,000 registered orphans who are street beggars. 

The director of the National Foundation for the Wellbeing of Minors at one meeting explained that the prostitution of 12 and 13 year old girls was common, and that removing them from the trade would mean starving whole families to death. Opinião continues saying that the special commission of the Brazilian League for the Protection of Minors reported that 112 out of every 1,000 babies die shortly after birth and 370 die before their first birthday. And in the city of São Paulo alone, more than 1,100 died from dehydration. 

Dr. Silvio Toledo, director of the School Health Service, said that the reason that one out of every five São Paulo students drop out, have poor attendance, or fail, is poor health. 89% of the students in São Paulo have intestinal parasites and at least one out of four have tonsil and adenoid trouble, and more than 12% are anemic. 

On December 5th, the last day of the Brazilian Congress, which has adjourned until Geisel takes office in March, a deputy from the legal opposition party commented, "There is talk of developing the country, but government statistics are made up of cold numbers; the pain, blood, and sweat of millions of desperate Brazilians. What kind of development is this in which the people did not participate?" 

This week's feature on changing trends in the Brazilian economy was compiled from the Brazilian journal Opinião and the British news weekly Latin America. 

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.