1. El Salvador, Nicaragua, and Brazil

2. IB Objectives Effects of the Cold War on domestic and foreign policies in Latin America

3. IB Paper 3 Sample Questions Assess the impact of Cold War policies on one Latin American nation between 1945 and 1965. In what ways, and with what results, did the Cold War influence relations between either Latin America or Canada with the United States in the period 1945 to 1957? Explain why the Cold War provided favourable circumstances for the establishment of military leaders in any two countries in Latin America.

4. Lecture Outline I. El Salvador II. Nicaragua A. Contras III. Brazil After Vargas

5. Key Terms Contras

6. El Salvador 2% of the population owned most of the land and controlled the country’s wealth. Reagan and his administration believed the rebels were tools of the USSR and the US spend $5 billion in providing assistance tot eh right-wing El Salvadorian government. Between 1979 and 1985 government “death squads” killed thousands of government opponents. With the election of the moderate Jose Napoleon Duarte as president in 1984, the death squads began to reduce their actions and the rebellion ended.

7. Nicaragua In 1979 the corrupt and tyrannical pro-US Somoza family that had ruled Nicaragua for decades was overthrown and the left-wing Sandinistas took control of Nicaragua. In the spring of 1981 the Reagan administration suspended all aid to Nicaragua. The State Dept. accused the Sandinistas of aiding the leftist guerillas in El Salvador and the Reagan administration authorized the CIA to spend large sums of money to support the Contras.

8. Contras In 1982 the Contras began a campaign to overthrow the Sandinista government from bases in Honduras. In response, the Nicaraguan government declared a state of siege. By 1989 the USSR had supplied Nicaragua with about $750 million in aid. In 1983, Congress voted to give $100 million in “humanitarian” aid to the Contras, and prohibited any government agency from providing military aid to the Contras from December 1983 to September 1985.

9. Contras The Reagan administration used the National Security Council to funnel covert military aid to the Contras. The 6 year war had cost Nicaragua 60,000 casualties and created an estimated 350,000 internal refugees. Reagan administration agreed to suspend its clandestine military operations in Nicaragua.

10. Brazil After Vargas Juscelion Kubitschek became president in January 1956 and moved the capital from Rio de Janiero to Brasilia. Janio Quadros, Kubitschek’s vice president and successor, resigned after only 7 months in office. Joao Goular, Quadros’s vice president, became president. Goulart printed money and inflation rose to 65% per year. The US, through the Alliance for Progress, agreed to support the program with $400 million in credits.

11. Brazil under Military Rule On April 1, 1964 the military staged a bloodless coup and Goulart fled to Uruguay. The military would rule Brazil until 1984. By 1973 the guerilla movement was destroyed. From 1968 to 1974 the Brazilian economy grew at the rate of 11% a year. In 1980 the top 10% of the population received over half of the nation’s income, while the poorest 10% received less than 13%.

12. Brazil under Military Rule By the early 1980s inflation was over 100% a year. By 1982 Brazil’s foreign debt of $87 billion was too large for its economy to sustain and the country suspended its debt payments. In 1985 the military allowed elections to be held and Jose Sarney became president.

13. Restoration of Democracy Brazil’s annual debt payments took about 25% of the nation’s hard currency every year. By the late 1980s food riots and strikes were widespread. When elections for the presidency were held in November 1989 inflation was running at the rate of 2,700% a year. Ferdnando Collor de Mello was elected president but he resigned in December 1992.

14. Itamar Franco and the “Real Plan” Introduced in 1984 The new currency was the Real The plan included: Linking the real to the dollar Tariffs and government spending was reduced High interest rates were imposed Initially the plan was successful and inflation fell 5% the next year. Government pensions consume up to 90% of the revenue of Brazil’s 26 states.

15. Brazil’s Economy In 1994 1 real equaled $1; in September 2004 1 real equaled $0.35. On average, even the wealthiest 20% of Brazilians have only a grade school education. The average white salary is 57% higher than the average non-white salary. In 1998 25% of Brazilians earned less than a $1 a day.