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

212. National Intelligence Estimate¹

NIE 93-61

Washington, August 8, 1961.

THE OUTLOOK FOR BRAZIL

The Problem

To estimate the situation in Brazil over the next few years, with emphasis on the character of the Quadros government and its foreign policy orientation.

Summary and Conclusions

1. In Brazil the pace of change is greater than in any other Latin American country except Cuba, and its national sense of achievement sets it apart from the rest of the continent. Brazil is conscious of its growing strength and population, and powerful drives for more development and international standing underlie the nationwide political and social ferment. Consequently, Brazil’s relationships with the US and the rest of the world are changing swiftly. (Para. 11)

2. Janio Quadros assumed the Presidency in 1961 following five years of headlong economic development under President Juscelino Kubitschek which went far toward modernizing Brazil, but cost the country economic stability. The flamboyant and free-wheeling Quadros was the popular choice to rescue Brazil from its economic difficulties, to set the financial and administrative house in order, and to enhance greatly Brazil’s international prestige through an “independent” foreign policy. He has restored a measure of economic stability—aided by considerable external assistance—and has made a good start toward introducing administrative reform and reducing corruption. (Paras. 17-20)

3. The financial problems the Quadros government inherited include a large foreign and domestic debt, and serious pressures on the balance of payments. However, Quadros will probably be able to engineer some improvement in the Brazilian financial and economic situation over the next year or so. He is certain to press for additional large-scale external assistance from the West and will also accept Bloc trade and development offers when he thinks it will be advantageous. (Paras. 40-44)

4. Despite his auspicious start Quadros is finding it difficult to make rapid progress on Brazil’s main problems, and the period through October 1962, when congressional elections are scheduled, will be critical. He has already encountered criticism from conservative forces, especially the military, the press, and the Church, primarily on the ground that his foreign policy favors the Bloc. In Congress, he cannot count on a working majority and he faces other difficulties in dealing with labor, and the fellow-traveling Vice President, Joao Goulart. Both the political parties and the labor movement are fragmented and can mount only comparatively weak opposition. Also, his conservative foes will probably be unwilling to run the risks of immediate action against him. On balance, however, we believe Quadros will be able to maneuver more or less as a free agent until after the 1962 elections. (Paras. 21-27, 51, 53-54)

5. The outlook beyond the 1962 elections is less certain. The congressional election will be the administration’s first major political test; should the outcome constitute a vote of confidence, Quadros will be less dependent on manipulation of existing political groups, and will almost certainly step up his efforts to reorganize and reform crucial phases of Brazilian national life. We believe that he will be successful in carrying out substantial administrative reforms in an atmosphere of financial stabilization. Moreover, it is likely that he will obtain sufficient foreign assistance so that he can claim that he is maintaining a reasonable rate of development. Also, Brazil has been for many years one of the most politically mature countries in Latin America and its record in this respect weighs heavily in favor of Quadros. On balance, therefore, it is probable that the Quadros administration will stay in office until the completion of its term in 1965. (Paras. 55-56, 58)

6. The Communist Party (PCB) and its pro-Castro allies will probably be able to keep the poor, rural northeast in ferment. There, the 25,000-member Peasant Leagues, led by pro-Communist, pro-Castro Francisco Juliao, have become a powerful force for social agitation among the rural laborers and tenant farmers. In general, the Communists will probably come into increasing conflict with the administration, particularly on stabilization and other matters of domestic policy. Quadros, however, will probably bear down on them whenever necessary to maintain order. In view of this watchfulness, the Communists and their pro-Castro allies are unlikely to pose a serious threat to Brazil’s political stability over the next several years. (Paras. 28-32, 57)

7. The largely pro-US armed forces will continue to be the major limitation upon Quadros’freedom of action, although they will continue to support his administrative and economic reforms and probably will tolerate a considerable degree of neutralism in his foreign policy. Quadros’ authoritarian bent probably constitutes the most serious threat to his survival as President. His determination to impose his own policies, together with his high-strung temperament, could lead to some hasty action on his part which might cause the military to lay aside their preference for constitutional order and oust him. This would be a likelihood should he move recklessly to reduce the special position of the armed forces, or to abandon Brazil’s ties with the West, or should he take definite steps to perpetuate himself in power beyond 1965, in contravention of the constitution. (Paras. 52, 58)

8. Quadros will almost certainly continue his unorthodox methods to attain a more important role for Brazil in world affairs. Although he is unlikely to adopt a full-fledged neutralist position, he will probably drive hard bargains in future negotiations with the US. It will be difficult to persuade him to renew the agreement, expiring in January 1962, giving the US rights for a guided missile tracking facility on Fernando de Noronha. However, Quadros is unlikely to jeopardize the basically close ties existing between the US and Brazil, although he may risk subjecting them to considerable strain. Should his ventures into world affairs prove unrewarding, he may be disposed, from time to time, to improve his relations with the US. (Paras. 45-47)

9. Quadros is committed to respect Brazil’s inter-American obligations, and seems certain to insist on a key role in any important community action, although his ambitions as a statesman extend beyond the continent. He will almost certainly continue to oppose OAS or US intervention in Cuba, and is unlikely to turn on Castro as long as the issue provides him with considerable leverage with the US. He also hopes to develop closer ties with the underdeveloped nations, especially the Africans; thus, Brazil is likely to demonstrate a more anticolonialist spirit in the future. (Paras. 49-50)

10. Quadros’ efforts to demonstrate independence of the US have resulted in expanded trade and diplomatic relations with the Bloc. He will almost certainly re-establish diplomatic relations with the USSR before the end of 1961. He may instruct Brazil’s delegate to vote for the seating of Communist China at the September 1961 session of the UN; eventually he may go so far as to establish formal diplomatic relations with Peiping. To the extent that Quadros can obtain substantial trade and economic assistance both from the Bloc and the West he will, by his example, encourage other Latin American states to seek closer relations with the Bloc. (Para. 48)

[Here follows the 9-page “Discussion” section of this estimate.]

1. Source: Central Intelligence Agency Files, Job 79-R01012A, ODDI Registry. Secret. According to a covering sheet, this estimate was prepared by the Central Intelligence and the intelligence organizations of the Departments of State, Army, Navy, Air Force, and the Joint Staff. The Director of Central Intelligence submitted this estimate to the U.S Intelligence Board on August 8, and all members of the Board concurred except the representatives of the AEC and FBI, who abstained, the subject being outside their jurisdictions.