1. UNIT 12 VARGAS OF BRAZIL AND PERÓN OF ARGENTINA 12:1 Latin America 1900-1950: ● Increased industrialization and urbanization diminished power of agricultural elites. Armed forces would support group they thought would secure order and progress. ● To gain power urbanized upper and middle classes advocated populist programs. ● Populists used protected industries to pay for their programs. ● Great Depression encouraged Latin American leaders to try to develop industrial self-sufficiency. ● All Latin American countries, except Argentina, received US aid during World War II and their economies benefited.

2. 12:1 Latin America 1900-1950 continued: ● Latin American countries started Import Substitution Industrialization (ISI) programs—a country placed protective tariffs on imports on products that it wanted to produce locally. Protected industries are also assisted by the government. ● ISI programs meant that countries had to import expensive technology and led to balance of payment deficits. ● ISI programs led to urbanization, increased industrialization, high prices, foreign debt, and inflation.

3. 12:2 Brazil during the First Republic (1889-1930): ● After independence the 26 states of Brazil were given more power than the central government. São Paulo dominated country. Wide gap between rich and poor states. ● Brazilian economy was dependent on coffee production. Government supported coffee prices.

4. 12:2 Brazil during the First Republic (1889-1930) continued: ● During World War I Brazil declared war on Germany. Major effort was providing supplies to the Allies. ● Political bosses known as coronéis (colonels) ran the states. Presidency was alternated between São Paulo and Minas Gerais. ● The Great Depression greatly hurt the Brazilian economy. Coffee prices fell and the government could no longer afford to subsidize coffee prices. ● In 1930 the military put Getúlio Vargas into power.

5. 12:3 Brazil under Vargas: ● Vargas represented a heterogeneous coalition that made it difficult for him to satisfy all groups. ● Vargas’s first task was to reduce the power of São Paulo. ● The Constitution of 1934 gave the Brazilian government the right to nationalize industry. Using the new Constitution Vargas increased workers’ rights and in return labor unions went under strict government control. ● In 1935 a leftist uprising was crushed. ● In November 1937 Vargas assumed dictatorial powers based on European fascist models (Franco of Spain and Mussolini of Italy). The new regime was called the Estado Nôvo (New State). ● Under the Estado Nôvo Brazil started an ISI program and industrial production doubled.

6. Vargas and FDR 12:3 Brazil during World War II: ● Prior to Pearl Harbor Brazil and the US signed a secret agreement giving the US the right to build and use Brazilian airfields and naval facilities. ● In August 1942 Brazil declared war on Germany. ● The Brazilian navy was put under direct control of the US navy. ● Brazil sent a division of troops and a fighter squadron to fight with the Allies in Italy. ● The war accelerated industrial growth.

7. ● Vargas was disposed by the military in 1945. ● General Eurico Dutra replaced Vargas and started an anti- inflation austerity program. ● Vargas was re-elected President in 1950, and could not solve Brazil’s problems. ● With the economy a mess the military ordered Vargas to resign or be overthrown and in August 1954 he committed suicide. 12:3 Brazil during World War II continued:

8. 12:3 The Impact of the Estado Nôvo on Brazil: ● Society was heavily controlled and regulated. ● Women’s rights were not improved. ● Vargas promised the middle class upward mobility based on merit, better education, and health care. He did not deliver on his promises. ● Although Vargas did little for the average Brazilian he was popular because in his rhetoric he treated them with respect. ● Brazil still remained a hierarchical society with a fragmented infrastructure and with little social security or equality.

9. 12:4 Juan Perón’s rise to power: ● From 1932 until 1943 the Concordancia ran Argentina—a coalition of parties that ruled through repression. ● President Ramón Castillo refused to support the US war effort in World War II and remained neutral for the following reasons: ✓ Argentines competed in world markets with US grain and beef and this had led to bad relations between the two countries. ✓ Many Argentine military officers were pro- German because of German training, and the belief that the US and Britain conspired to keep Argentina poor. ✓ When it appeared that Germany might win the war Argentina wanted to be able to trade with a German occupied Europe.

10. ● Of all the Latin American countries only Argentina received no US aid during World War II. ● Fearful that Castillo’s successor might end Argentina’s neutrality and angry at the continued repression and corruption of the government, the military overthrew Castillo in June 1943. ● After the military coup Colonel Juan Perón became Argentina’s Vice President, head of its Labor Department, and Minister of War. ● Perón recognized that instead of attacking organized labor the military government should co-opt it into its nationalist industrial program. In late 1943 Perón began a program of government support for labor demands and in return union leaders agreed to government management of labor unions. ● Even though conservatives and the US opposed Perón, his popularity among the people was so great that he won the presidential election of 1946. 12:4 Juan Perón’s rise to power continued:

11. 12:4 Perón the Populist: ● Perón used the military to stay in power and increased his popular support by having the government give workers benefits and by increasing social security and services. ● Perón’s wife Evita was extremely popular and she helped cement his support among workers, the poor and women. Died in 1952 at the age of 32.

12. Perón and Franco 12:4 Perón the Populist continued: ● The government controlled the nation’s banking system. ● Perón wanted to build-up Argentina’s industrial base because agricultural exports had a difficult time bringing in foreign exchange after World War II. ● Perón created the Argentine Institute for the Promotion of Trade (IAPI in Spanish). Set prices of agricultural export products and used the profit created by the difference from what the farmers received to the export price to fund industrialization and purchase foreign assets.

13. 12:4 Perón’s fall from Power: ● After 1949 Argentina underwent a severe recession. ● Farmers were frustrated that they were receiving less than the export price for their products. Many farmers shifted to non-export crops and the IAPI stopped bringing in profits. Inflation reached 30 percent per year. ● Perón attempted to resolve the economic decline by soliciting foreign investment and this angered nationalists. ● As the economy continued to decline Perón’s government became more repressive using violence to intimidate his opponents. When the Catholic Church refused to canonize Evita, Perón attacked it and this attack turned-off many of his followers. Perón and Evita

14. 12:4 Perón’s fall from Power continued: ● Perón refused to decrease wages and benefits and this angered industrialists. ● Inflation hurt workers. ● Giving foreign companies greater access to Argentina’s economy turned many military officers against Perón since they were heavily involved in Argentina’s industry. ● In September 1955 the military overthrew Perón and he went into exile in Spain. ● Perón’s programs solved none of Argentina’s major economic problems—the transportation system was poor, there was a lack of electrical power generation, fuel imports hurt the balance of payments situation, heavy industry was limited, and the inefficient hacienda still dominated the countryside.