SHORT-TERM PROSPECTS FOR CENTRAL AMERICA

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 01469838
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 38
• Document Creation Date: March 9, 2023
• Document Release Date: January 23, 2020
• Case Number: F-2016-02132
• Publication Date: June 8, 1982

Director ui Approved for Release: 2020/01/22 C01469838
Central
Intelligence
-
(b)(3)
(b)(3)
Short-Term Prospects
for Central America
Special National Intelligence Estimate
�
SN1E 82183-82
8 June 1982
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SNIE 82/83-82
SHORT-TERM PROSPECTS
FOR CENTRAL AMERICA
1nformat on available as of 8 June 1982 was
used in the preparation of this Estimate.
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THIS ESTIMATE IS ISSUED BY THE DIRECTOR OF CENTRAL
INTELLIGENCE.
THE NATIONAL FOREIGN INTELLIGENCE BOARD CONCURS.
The following intelligence organizations participated in the preparation of the
Estimate:
The Central Intelligence Agency, the Defense Intelligence Agency, the National Security
Agency, and the intelligence organizations of the Departments of State and
the Treasury.
Also Participating:
The Assistant Chief of Staff for Intelligence, Department of the AYmy
The Director of Naval Intelligence, Department of the Navy
The Assistant Chief of Staff, Intelligence, Department of the Air Force
The Director of Intelligence, Headquarters, Marine Corps
--se6RE.L_
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CONTENTS
Page
EXECUTIVE SUMMARY 1
KEY JUDGMENTS 3
DISCUSSION 7
Regional Overview 7
The Threat From Cuban and Nicaraguan Subversion 9
Support for the Salvadoran Guerrillas 9
Support for the Guatemalan Guerrillas 9
The Threat to Honduras 11
The Threat to Costa Rica 11
Prospects for Sandinista Rule in Nicaragua 12
Trends in the Target Countries 13
El Salvador 13
Guatemala 14
Honduras 15
Costa Rica 15
The International Arena and the Diplomatic Front 15
Outlook: Continuing Threats in the Region 17
ANNEX: COUNTRY OUTLOOKS 19
El Salvador 19
Guatemala 22
Honduras 25
Costa Rica 27
Nicaragua 29
MAPS
Central American Arms Routes 8
Guatemalan "Guerrilla Army of the Poor" Fronts 10
Salvadoran Insurgent Organization 22
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EXECUTIVE SUMMARY
� With important outside support, moderate groups in Central
America have been strengthened in a number of respects,
politically and militarily, in recent months. Domestic support for
Marxist-Leninist groups and radical causes has diminished, at
least for the moment.
� It should be emphasized, however, that the magnitude and
complexity of domestic vulnerabilities and Communist-support-
ed subversion in Central America will remain so great that the
recent positive developments will almost certainly not be sus-
tained in the absence of continuing strong external support.
� The principal threats to US and allied interests will be posed by:
� The development of an increasingly strong Sandinista
regime in Nicaragua, and that regime's continuing cooper-
ation with Cuba in promoting Marxist revolution elsewhere
in Central America, together with its military buildup
toward dominance over its neighbors.
� Heightened foreign-supported subversion aimed especially
at El Salvador, Guatemala, and Honduras, along with new
problems deriving from possible Nicaraguan military repri-
sals against exile bases in Honduras in the event of
continuing provocations staged from those bases.
� The continuing critical nature of economic weaknesses and
needs in El Salvador, Guatemala, Honduras, and Costa
Rica.
� Continuing fragile domestic political situations in El Salva-
dor and Guatemala.
� A probable increase in direct violence against US and
moderate Central American individuals and interests.
� Cuba, Nicaragua, and the Salvadoran guerrillas�as well as
Mexico and certain leftist political groups in Latin America and
Europe�will continue to float negotiation schemes from time to
Scope Note: This Estimate focuses on issues of key importance to the United States concerning El Sal-
vador, Guatemala, Honduras, Costa Rica, and Nicaragua. The period of the Estimate is through 1982.
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time. As before, from the viewpoint of Cuba, Nicaragua, and the
Salvadoran guerrillas, these will be largely for tactical political
use.
� The circumstances of the Falklands war will doubtless reduce the
readiness of some Latin American states to support US initiatives
concerning Central America. The direct adverse impact in
Central America, however, is not likely to be substantial.
� The future holds many continued severe threats to US interests in
Central America. These countries will have great difficulty
maintaining their stability and independence in the absence of
strong external support.
2
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--""t�EN4F.I_
KEY JUDGMENTS
The threat posed by Communist-supported insurgency remains
serious but the momentum of the extreme leftist groups in Central
America has slowed, at least temporarily. A number of developments
during recent months have for the moment strengthened moderate and
democratic groups in the region:
� Fair elections have conferred power on new governments in
Honduras, Costa Rica, and El Salvador, while Guatemala has
moderate leadership; all four governments now have stronger
support than their predecessors.
� Guerrilla forces in El Salvador and Guatemala failed to stop or
disrupt the elections through violence and terrorism. In El
Salvador such forces were repudiated by the people.
� Improved intelligence and military operations by the Salvadoran
armed forces (even before their recent strengthening by the
addition of US-trained officers and men) demonstrated that the
guerrillas can be put on the defensive and contained.
� Factional rivalries have contributed to reducing somewhat the
effectiveness of the guerrillas in Guatemala and El Salvador,
despite Cuba's efforts to mediate these internal disputes.
� The previous assumption among many outside observers�Social-
ist International members and others�that victory for the
extreme left in Central America was inevitable is no longer so
firmly held.
� The growth of the exile anti-Sandinista movement and the
increase in defections from Nicaragua point to problems for that
country's Marxist-Leninist regime.
Despite these positive events of late, the dominant aspect of
Central America's future will remain the weaknesses of moderate
societies there, and the continuing efforts of Cuba, Nicaragua, and their
allies to promote Marxist revolutions in the area.
Accordingly, the principal threats to US interests will be posed by
these situations:
� Nicaragua will continue to build the most powerful armed force
in the region and will have help from some 2,000 Cuban security
3
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advisers. This This military force will continue to be used to maintain
internal control, to intimidate neighbors such as Costa Rica and
Honduras, and to build toward a dominant military position in
the area.
� Soviet arms shipments to Cuba, already running at a higher level
than at any time since the 1962 missile crisis, will probably
remain substantial. These will continue to include new and
sophisticated weapons which will free older Cuban weapons for
transshipment to Nicaragua.
� Cuba and Nicaragua will continue to support the guerrillas in
Guatemala and El Salvador while working to build up the
extreme left in Honduras and Costa Rica. At the same time Cuba
and Nicaragua will continue their covert efforts to divide and
intimidate the governments of Honduras, Costa Rica, and El
Salvador.
� For tactical reasons, Cuba and the extreme left may step up
attempts to explore -political solutions- in order to reduce the
level of counterinsurgency efforts by El Salvador, while they use
the next months to regroup, rearm, and mold additional unity
among the guerrillas.
� The danger of assassinations of US officials and moderate Central
American leaders is likely to increase as the extremist leftist
groups seek dramatic ways to seize the initiative.
� Honduras will increasingly become a key target of Cuban and
Nicaraguan subversion. Castro and the Sandinistas will almost
certainly use a variety of methods--subversion, intimidation,
-peace- initiatives, propaganda, etc.�to try to force the Suazo
government to reduce its strong pro-US stance in the region. We
believe that such efforts will succeed in the absence of strong
external support. Yet, in the event their efforts should fail, Cuba
and Nicaragua might then adopt more militant policies against
Honduras:
� They might well attempt to establish an ostensibly home-
grown Honduran guerrilla group in a remote area. In such
a case, Nicaraguans and other foreign extremists would
probably participate.
� And in the event anti-Sandinista exile groups continue to
mount operations into Nicaragua, units of Managua's
ground and air forces may launch reprisals against exile
bases in Honduras.
4
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� A number of outside entities�including the USSR, Libya, Pales-
tinian terrorist groups,' and various leftist organizations�will
continue to lend a broad array of support to Marxist revolution-
ary movements in Central America. Such support will continue
to include training and arming of some guerrillas.
� Cuba, Nicaragua, and their allies will also continue to augment
their subversive efforts with initiatives for -negotiations and
peace.- These will be designed to attract non-Communist sup-
port for the extreme left, reduce foreign support for the target
governments, divide the target governments, and complicate
relations between the United States and its allies. We consider it
highly unlikely that Cuba and Nicaragua will negotiate in good
faith during the period of this Estimate.
� Meanwhile, the political situation in El Salvador will remain
fragile, its new leaders continuing to have trouble achieving
consensus in the country on national priorities, the reforms, and
the apportionment of power, with the armed forces leadership
seeking to keep repressive forces in check.
� The new government in Guatemala will remain vulnerable to
overthrow, through a combination of possible plotting on the part
of disgruntled military officers and missteps on the part of
Guatemala's very unpredictable new leader, General Rios Montt.
International recognition through tangible support of the positive
changes in Guatemala would strengthen moderate forces.
� Severely depressed economies in El Salvador, Guatemala, Hon-
duras, and Costa Rica will constitute certain of the most critical
challenges to moderate, constructive advance. The slump in
world prices for these countries' agricultural exports is expected
to persist, thereby maintaining pressure on already scarce foreign
exchange reserves. Violence and guerrilla activity will continue
to harm production, erode investor confidence, limit the accumu-
lation of capital, feed inflation, and contribute to already high
levels of unemployment. Furthermore, needed austerity meas-
ures will be highly unpopular and likely to contribute to
additional unrest. These economies will continue to be dependent
in important measure on strong external support.
See the recent CIA/DDI analysis ALA/82-10035
March 1982.
5
PLO Aid to Latin American Revolutionaries,
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For the longer run, beyond the period of this Estimate, the future
holds many severe threats to US interests in Central America. The many
weaknesses there will grow in the absence of continuing strong interna-
tional support, and there is no guarantee that even such support will en-
able moderate forces there to carry the day. Events have demonstrated,
however, that there is no inexorable downward path ahead.
The Marxist revolutionaries and their various backers are beset
with numerous weaknesses and constraints.
There is considerable political vitality in the area�demonstrated
especially by the courageous election turnout in El Salvador.
Judicious infusions of military and other aid have helped in
certain given instances.
Important support for moderate forces and the target govern-
ments has come from Venezuela, Colombia, and other friendly
governments, as well as from the Christian Democrats of Europe
and Latin America along with the international free trade union
movements.
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DISCUSSION
Regional Overview
1. US interests and allies in Central America will
continue to be threatened by subversion and destabi-
lizing forces through the remainder of 1982�the
period covered by this Estimate. Cuba and Nicaragua
will use extreme leftist groups and subversive violence
in pursuit of their objectives in El Salvador, Guate-
mala, Honduras, and Costa Rica.' At the same time,
however, there have been important favorable trends.
2. Opportunities and support for Marxist-Leninist
groups and radical causes have diminished in recent
months, while moderate and democratic forces have
been strengthened. New governments�three of them
headed by civilians�have come to power this year in
the four target countries, while guerrilla and extremist
groups have suffered significant setbacks. Insurgents
failed to disrupt the elections last March in El Salvador
and Guatemala, despite their plans to foment wide-
spread violence. Despite Cuban mediation efforts,
rivalries and tactical differences among the Marxist-
Leninist groups in both countries remain unresolved,
and this somewhat reduces their effectiveness. Inter-
diction has complicated Cuba and Nicaragua's task of
supplying the guerrillas, though it probably has not yet
reduced the net flow of materiel. Recently, after at
least four years of sustained and substantial growth,
the guerrillas have apparently begun to experience
difficulty in recruiting new members�causing some
resort to kidnaping by the Salvadoran guerrillas.
3. The most dramatic improvements have occurred
in El Salvador, where the guerrillas appear demoral-
ized and divided following steady military pressure
and the failure to disrupt the 28 March election.
Though the guerrillas threatened to disrupt the con-
stituent assembly elections and to discredit them be-
fore a large international audience�whose interest in
El Salvador they had done much to attract�voters
unmistakably repudiated the extreme left in over-
See the annex, "Country Outlooks," for discussions of internal
conditions and prospects for these four Central American countries
and Nicaragua.
7
whelming numbers. About 1.5 million people�per-
haps 85 percent of the eligible voters�braved guer-
rilla intimidation and violence in generally fraud-free
elections. Though that extraordinary demonstration of
popular will to restore order did not end the country's
political divisions, it highlighted the resiliency and
resourcefulness of the Salvadoran people.
4. Despite these and other positive trends, the
threat from the extreme left remains serious and will
grow as Cuba and Nicaragua use the next months to
continue to arm, rebuild, and improve the guerrilla
forces in El Salvador and Guatemala. At the same
time, Cuba and Nicaragua are attempting to intimi-
date Honduras and Costa Rica into neutrality or tacit
cooperation while also working with the Soviet Bloc in
a worldwide propaganda campaign to fragment the
target governments, isolate them from outside help,
and raise questions about the dependability of the US
commitment.
5. In the next months, we expect Cuba and Nicara-
gua to continue supporting the extreme leftist groups
while repeating their tactics after the failure of the
-final offensive- of January 1981 in El Salvador�
using offers of negotiations to make political gains and
reducing the level of counterinsurgency pressure while
the guerrillas strive to strengthen their military and
political organizations.
6. Cuba and Nicaragua are using the Falklands
crisis as a device to stir up anti-US sentiment in Latin
America and to divide the United States from the
majority of Latin American countries (such as Vene-
zuela) that have been taking a firm anti-Communist
stand in the Central American region.
7. The reconstruction of severely depressed and
shattered economies will be among the most critical
challenges facing the new governments. The econo-
mies of all four target countries are highly dependent
on the sale of agricultural commodities and have
suffered as prices for cotton, sugar, and coffee have
declined. Also, violence and guerrilla warfare over the
last four years have undermined agriculture and tour-
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Central American Arms Routes
BELMOPAIN
4
Belize
631793 5-82
Caribbean Sea
i\g
Rive
Honduras
,.4TEGucIGALPA
8
Airstrip
Seaborne arms route
Overland arms route
Airhnrna arrne relL1+0
Kilometers
Puerto',
Cabezas,'"
\
)
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ism, eroded investor confidence, caused a sustained
flight of capital, and contributed to growing inflation,
which ranged from 10 to 65 percent in the countries of
the region last year. Unemployment has reached high
rates, from 14 percent in Costa Rica to an estimated 35
percent in El Salvador. Growth rates have ranged
from minus 10 percent in El Salvador to 1 percent in
Guatemala. Needed austerity measures will be highly
unpopular and will be likely to contribute to addi-
tional unrest. Even with some recovery in the world
economy, markets are likely to remain soft for the
region's principal exports, keeping the balance of
payments under severe pressure. The extent to which
imports can be maintained at tolerable levels will
depend heavily on economic assistance from the
United States, other bilateral providers, and the re-
gional and global international financial institutions.
The Threat From Cuban and Nicaraguan
Subversion
8. The guerrilla warfare and subversion encouraged
and supported by Cuba, Nicaragua, and the Soviet
Union will continue to deepen the social and economic
problems which also contribute to the political insta-
bility in the region. Realizing that the momentum of
the extreme left has slowed in recent months, Castro
may well decide to make greater efforts to strengthen
the guerrillas. He is likely to step up Cuban covert
action, propaganda, and threats against the moderate,
pro-US governments in the region, especially Hondu-
ras. Sandinista leaders, who have described the Salva-
doran insurgents as "our shield," will also persist in
their support of the Salvadoran insurgents, whose
survival they link closely to their own. Guerrillas in
Guatemala and small extremist groups in Honduras
and Costa Rica will also continue to be given tangible
help by Havana and Managua to improve their capa-
bilities for violence. In those three countries, as in El
Salvador, the strategy of the Cubans and the Sandinis-
tas is aimed at enhancing their own power by
undermining US and moderate interests and eventu-
ally at creating new Marxist-Leninist regimes.
Support for the Salvadoran Guerrillas
9. Though demoralized and weaker relative to the
expanding military, the five insurgent groups in El
For a discussion of those strategies, see NIE 82/83-1, Insurgency
and Instability in Central America, 9 September 1981.
9
Salvador retain strong capabilities and continue to be
sustained via supply lines from Cuba and Nicaragua.
(See map of arms routes.) The number of direct flights
between Havana and Managua by Cuban aircraft
increased significantly early this year, and they now
make the trip almost daily. We know that many carry
arms and ammunition. During the spring of 1982, at
least 180 tons of military equipment reportedly were
to have been airlifted to Managua, probably for
transshipment to the Salvadoran insurgents. The latter
are likely to receive additional automatic rifles and
heavier antiaircraft weapons. Should they succeed in
obtaining surface-to-air missiles, this would severely
reduce Salvadoran military capabilities.
10. Though the bulk of materiel sent to the Salva-
doran insugents is probably getting through, increased
arms interdiction efforts by the Honduran security
forces and the Salvadoran Navy have caused the
insurgents to shift their supply routes. Some arms
continue to be delivered overland through Honduras
and across the Gulf of Fonseca, but since last year the
guerrillas have sought to avoid detection by giving
greater priority to air and deep sea links.
11. Salvadoran guerrilla forces are not likely to
grow very much this year, and may be able only to
maintain estimated current levels of 4,000 to 5,000. To
do so, however, it may be necessary for them to draw
upon the approximately 5,000 to 10,000 part-time
members of the guerrilla militia. In addition, the
guerrillas are resorting to kidnaping to maintain mili-
tia force levels. Cuba and Nicaragua continue to
provide training for Salvadoran guerrillas, and there is
a good chance that advisers from those countries
operate intermittently with local guerrillas. The insur-
gents have divided the country into five fronts, each
with a commander and general staff. Guerrilla units
are mostly concentrated in about eight base areas from
which operations are launched. More than 50 guerrilla
camps have been identified in these base areas, and
there may be many more. The guerrillas' general
headquarters�the Unified Revolutionary Direc-
torate�is located in Nicaragua, and is linked to the
fronts and base areas by an extensive command and
control system.
Support for the Guatemalan Guerrillas
12. With increased Cuban and some Sandinista
support, the guerrillas in Guatemala have been able to
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Guatemalan "Guerrilla Army of the Poor" Fronts
BouVary representation is
notAkestarily authoritati-ve
ERNESTO
"CHE"
GOEVAR
Quezaltenango'h
HO CHI MIN
� AUGUSTO
.CESAR
-SAND/NO ' ,aPA TA
teaeo
GUATEMALA
-----Front boundary
Highest guerrilla concentration
loo
Kilometers �
632008 6-82
10
ar,bbe it
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mount larger and more sophisticated operations over
the past year. From a force of about 1,000 in 1979,
insurgent groups have grown to an estimated 3,000 to
4,000. The guerrillas concentrate on small-scale oper-
ations, such as terrorist killings and bombings, eco-
nomic sabotage, and ambushes of security forces.
Their expanding military powers have also enabled
them temporarily to occupy important provincial
towns, and for the first time a guerrilla unit recently
was able to overrun a military garrison located in an
area of the Western Highlands where the guerrillas are
strongest. Generally, however, the guerrillas have rec-
ognized that they are not ready for decisive confronta-
tion and have avoided pitched battles with the mili-
tary, even on occasions when retreat has forced them
to abandon significant caches of weapons.
13. Cuban training and advice have been important
factors in the rising competence of the guerrillas. Over
the last several years hundreds have received guerrilla
instruction in Cuba, and another 300 are receiving�or
recently completed�training there. A small number
of Cuban and Nicaraguan advisers may also be provid-
ing instruction at isolated guerrilla encampments in
Guatemala. Arms deliveries�via Honduras, Mexico,
Belize, and possibly Costa Rica�are becoming more
frequent�and the methods of concealment more so-
phisticated. Cuban assistance probably has helped the
guerrillas significantly to improve their external sup-
port network and to establish extensive arms caches
and underground tunneling in rural base areas. In
some isolated places where government presence has
always been tenuous, the insurgents are exercising de
facto control over the population.
14. Castro has also continued his efforts to forge
greater unity among the guerrilla factions. Though
Havana was able to persuade the four active insurgent
groups to form a new umbrella organization last
January, collaboration is still undermined by strong
rivalries and distrust. Factionalism was apparently
responsible in part for the guerrillas' failure to follow
through on their plans to disrupt the elections on 7
March. The largest and most effective of the groups�
the "Guerrilla Army of the Poor" (see map of front
boundaries)�is, however, firmly committed to the
military struggle and generally responsive to Cuban
counsel. In contrast, the "Organization of the People
in Arms"�the second largest group and most ideologi-
11
cally diverse�has been resistant to Cuban manage-
ment. Its maverick leader refused to attend a unifica-
tion meeting in Havana, and some members reported-
ly favor trying to negotiate with the Rios Montt
government. Pressures from Cuba and the USSR have
persuaded the traditionally orthodox faction of the
Guatemalan Communist Party to make preparations
for joining in the insurgency.
The Threat to Honduras
15. Because of its strategic location in the region
and its strong support for US initiatives, Honduras is
likely to come under steadily rising Cuban and Nicara-
guan pressure this year. Castro understands that condi-
tions in Honduras are not as conducive to the growth
of insurgent groups and sentiment as they have been
elsewhere in Central America, but has placed a high
priority on stimulating violence there anyway. The
extreme left in Honduras is small and divided, and
Cuban efforts to coax its components into an effective
united front thus far have failed. Acts of terrorism
have increased, however, and some of them reportedly
have been directly supported by Nicaragua. Castro has
stepped up training of Honduran extremists.
16. Cuban and Nicaraguan concerns about Hon-
duras's role as a base of US and anti-Sandinista
influence are likely to mount this year, and cause
Havana and Managua to take stronger measures to
force the Suazo government to adopt more neutral
regional policies. They are likely to employ a variety
of methods�propaganda, intimidation, and terrorism,
as well as the current "peace discussions" between
Honduran and Nicaraguan military leaders�in a co-
ordinated campaign. Both Havana and Managua are
likely to press new efforts to subvert Honduran mili-
tary leaders and to sow divisions among them. The
Cubans received a setback, however, when the two
senior colonels with whom they maintained official
contact were removed in April as a result of an
internal power struggle. Other Honduran officers and
civilian leaders are undoubtedly also targets of Cuban
operatives in Honduras.
The Threat to Costa Rica
17. Although Costa Rica is much more vulnerable
to terrorist rather than insurgent activity at this time,
Cuba and Nicaragua are likely to attempt to build for
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----gregEL
the future by increased efforts at unifying the dispar-
ate elements of the Costa Rican Communist coalition.
This will require resolving tactical as well as ideologi-
cal divisions between the generally nonviolent policies
of the Costa Rican Communist Party and the small,
extreme leftist Popular Revolutionary Movement,
which has consistently advocated violence. Despite
their differences, both groupings reportedly have
small paramilitary capabilities that could, over time,
be exploited by Havana and Managua. Ironically,
potential Cuban and Nicaraguan efforts at building
unity may already have been assisted by the coalition's
electoral defeat in the February election, an outcome
that probably has strengthened the position of its more
hardline elements.
18. Both Cuba and Nicaragua recognize that Costa
Rica remains overwhelmingly democratic, as empha-
sized by the recent election, in which the country's
small Communist coalition saw its percentage of the
popular vote decline to 6.4 percent from 7.3 percent in
1978. Castro and the Sandinistas are concerned over
the Monge administration's willingness to counter
Communist propaganda in regional and international
forums, its avowedly pro-US posture, and its threat to
invoke the Rio Treaty to defend Costa Rica's borders.
As a result, they are likely to attempt to use their small
but reliable core of political friends in the country, as
well as Costa Rica's severe economic problems, to keep
pressure on President Monge and blunt � potential
damage to their cause from San Jose.
19. Over the period of this Estimate, one likely
Cuban-Nicaraguan thrust would be through the Com-
munist Party, which has extensive ties with labor.
There is, therefore, a strong possibility that Havana
and Managua will attempt to push the party toward
destabilizing actions against the economy, including
work stoppages and violent strikes. Such actions ap-
pear all the more likely because of Monge's recently
announced austerity measures, which are sure to be
particularly unpalatable to organized labor. Further-
more�and despite San Jose's termination of consular
ties last year�Castro's operatives have the necessary
infrastructure to continue and to expand clandestine
operations in Costa Rica which, at the least, could
increase national anxieties over Perceived threats to
the country's democratic institutions. During the past
year, such threats have repeatedly been underscored
12
by increased terrorism in San Jose, some of which has
involved participation by pro- and anti-Sandinista
Nicaraguans and individuals from other Latin Ameri-
can extreme leftist groups.
20. An additional, though longer term, threat in-
volves Cuba's secret contacts with former Costa Rican
Security Minister Johnny Echeverria, who late last
year reportedly accepted Cuban funding to form a
-broad-front" opposition political party. The party
reportedly is to develop a paramilitary component
that could take advantage of political or economic
problems to threaten the constitutional process.
Prospects for Sandinista Rule in Nicaragua
21. Castro's determination to help the Sandinista
leaders strengthen and further consolidate their rule
will continue as his highest regional priority. With
Soviet, Cuban, and other assistance, Nicaragua con-
tinues to build an army and militia force that is
intended to defend against any perceived regional
military threat. Managua already outstrips each of its
neighbors in military manpower, armor, and artillery
capabilities, and could probably beat back an attack
by any of them. Over the remainder of the year,
moreover, Nicaragua will widen its margin and may
receive enough MIG or other jet fighter aircraft to at
least match Honduras's air force�currently small and
aged, but the best in the region.
22. This determined militarization is intended not
only to establish strategic superiority in the region, but
to construct a large and impregnable base of domestic
control. Although there is a paucity of information
about the morale and effectiveness of the Nicaraguan
military, we know that the Sandinistas have worked
hard to indoctrinate and discipline their armed forces.
As in Cuba after the 1959 revolution, the new military
has been constructed around a loyal core of veterans of
the guerrilla struggle who occupy all high-level com-
mand positions. Recruits and volunteers from the
lower classes, whose standard of living, sense of pur-
pose, and nationalism may have increased since they
put on uniforms, probably respond favorably to the
regime's constant propaganda about the need to build
strong defenses and vigilance against foreign foes.
After nearly three years of such efforts, the Sandi-
nistas, we believe, have succeeded in creating a mili-
tary organization capable of and dedicated to main-
taining them in power.
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(b)(3)
23. The Sandinistas have also emulated the Cuban
system by building an efficient security force and
party-controlled mass organizations. Sandinista De-
fense Committees are being expanded at the commu-
nity level throughout the country both to provide the
regime with networks of loyal informants and to
enhance its influence by attempting to dispense low-
level social services. Recruitment drives for the militia
have been accelerated, but harsh induction methods
have alienated many peasants. Through a combination
of pressure and patriotic appeals, the Sandinistas have
succeeded in increasing discipline in the labor force, a
major change in the wake of strikes, absenteeism, and
work stoppages that were common last year. The
Sandinista-controlled labor confederation�with about
125,000 members�is one of the largest of the mass
organizations, and it is steadily gaining ground over
the independent unions, which still number 35,000 to
40,000. Efforts by the government further to strength-
en and indoctrinate "revolutionary" mass organiza-
tions are likely to be intensified this year. New
measures to achieve its Marxist-Leninist goals may be
announced on 19 July, the third anniversary of the
Sandinista victory.
24. Since the state of emergency was imposed in
March, the regime has significantly accelerated its
disguised repression of democratic opposition groups.
Prior censorship is now required, and editors of the
prestigious independent newspaper La Prensa have
been so intimidated that they often now voluntarily
refrain from composing stories likely to anger the
regime. Several leaders of opposition parties and the
independent unions have been arrested on unspecified
security grounds, and a number of others have left the
country. Businessmen have come under tighter disci-
pline through a series of economic decrees that allow
the Sandinistas to control commerce and impose arbi-
trary "war taxes." Relations between the Sandinistas
and Catholic Church leaders have also deteriorated
over the last few months as the bishops have continued
to criticize the regime's authoritarian methods. A
Church radio station was recently closed temporarily,
and the government is also moving to gain more
control over the curriculum in the country's large
Catholic school system. Efforts to discredit the highly
popular Archbishop of Managua, by linking him to the
United States and exiled opposition groups, are likely
to be stepped up. Harsh repression of Indians contin-
13
ues following forced removal of thousands from their
home towns and their transport to detention camps.
While many democratic opposition leaders remain, a
number have left Nicaragua, and some of these have
joined various anti-Sandinista groups in exile. Under
present conditions, we believe that internal opposition
groups are so weak and demoralized that they will be
able to do little more than irritate the regime, and will
probably continue to lose strength through the year.
25. Despite a history of factionalism that dates to
the mid-1970s, the Sandinista leaders have displayed
remarkable unity since coming to power. To a large
extent this reflects the commonality of the Marxist-
Leninist views among the nine members of the Na-
tional Directorate, and probably also the unifying
counsel of their Cuban advisers. Disagreements over
tactics and personality conflicts among some of the
leaders make a leadership shakeup inevitable in the
long run, however. Those most likely to prevail�
Humberto Ortega (who controls the armed forces), his
brother Daniel (who is the junta coordinator), Tomas
Borge (who runs the internal security and foreign
intelligence services), Bayardo Arce (a major foreign
policy and political coordinator), and Henry Ruiz (who
oversees economic planning)�are also believed to be
the most radical and attuned to Cuban approaches.
They are likely, moreover, to react to future domestic
and foreign challenges the way Castro did during the
early years of his revolution, by using each perceived
crisis as an opportunity further to radicalize and
consolidate power. Cohesion among them and other
Sandinista leaders will be reinforced, especially in the
short term, by their probable agreement that the
United States is intent on destroying their revolution
and the recognition that their most critical current
vulnerabilities are the floundering economy and the
increasingly effective raids by anti-Sandinista exiles.
Trends in the Target Countries
El Salvador
26. The prospects appear relatively favorable that
El Salvador's provisional government will be able to
build upon the strong mandate of the 28 March
constituent assembly elections and move the country
toward a national election in late 1983 or early 1984.
Although the government will continually reflect the
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fragility of El Salvador's rigid political system, on
balance we judge that its more moderate and prag-
matic elements are likely to gain greater influence
during the period of this Estimate. The position of
these elements will, as necessary, be reinforced by the
military, which emerged as the major force for moder-
ation during the month of political infighting that
followed the election. During that time the armed
forces repeatedly showed that, unlike the major con-
testing parties, they had not forgotten who the real
enemy is and that they remain aware that national
survival depends on maintaining foreign economic and
military assistance.
27. On the military front, moreover, the relative
balance of strength between the armed forces and the
guerrillas appears to be shifting gradually. The insur-
gents, who in the months before the elections were
able to project an image of growing might and to
benefit from increasing international sympathy, have,
at least temporarily, lost those psychological advan-
tages. As the guerrillas' confidence has seemed to
diminish, Salvadoran military leaders have continued
to improve their counterinsurgency capabilities and
prospects. About 500 junior officer candidates recently
returned to El Salvador after receiving training in the
United States, and will substantially increase the size
of the officer corps. The military has also been
augmented by the return of a US-trained quick-
reaction battalion, by the acquisition of new equip-
ment, and by the continuing expansion of the armed
and security forces from 17,000 at the beginning of
1981 to 28,500 in May 1982. There is, however, a
potential problem of ammunition and equipment
shortages if El Salvador fails to receive its anticipated
level of foreign military aid in the next few months.
28. Nonetheless, serious political problems continue
to threaten the stability of the new government and its
international legitimacy. Currently, there appears to
be a return to the preelection political violence by
both extremes, underscored by the recent murders of
some Christian Democratic officials and peasants by
rightwing extremists. Moreover, at least 3,000 peasant
beneficiaries of the land reform have been evicted
illegally by landowners. The assembly's postponement
of further distribution of rented land to peasants has
exacerbated divisions among the parties and provoked
new problems with the military, which is determined
14
to maintain the land reform. It has also brought
renewed criticism from friendly democratic govern-
ments. Roberto D'Aubuisson's election as assembly
president and his continuing efforts to undermine
reforms and the Christian Democratic Party are de-
tracting from the positive results of the elections. The
insensitivity of some rightwing leaders to the impor-
tance of international opinion, particularly in the
United States, is likely to continue as a major problem
because of the urgent need for external aid.
Guatemala
29. The Guatemalan Government's hold on power
is the most uncertain in Central America, but we
believe there is a slightly better than even chance that
General Rios Montt will remain in power through the
year. While he does not have a political constituency
committed to his continuance in office, his policies
thus far have addressed the major concerns of the
military and the population. He retains tentative
support from the junior officers who carried out the
coup and placed him in power, as well as from key
military unit commanders. Among military leaders
there appears to be an awareness that another change
in government�particularly one involving violence
and a move to the right�would jeopardize growing
international recognition of Guatemala's reforms,
damage the military institution, and detract from their
primary task of defeating the insurgents. Rios Montt
also benefits from the fact that there are no obvious
candidates�from either the senior or the junior
ranks�who have the personal following to lead the
country.
30. The new government has taken a number of
steps aimed at reducing political polarization and the
high levels of violence that have prevailed for many
years. Rios Montt has given a high priority to eliminat-
ing government corruption and human rights abuses,
and to planning social and economic reforms aimed at
improving the lot of the Indians and peasants, who,
over the last few years, have been more attracted than
ever before to radical causes. The regime has arrested
former officials, has disbanded semiofficial rightwing
terrorist groups, and is attempting to formulate civic
action programs in the contested Indian areas. The
new approaches pursued since the coup last March
have already had some significant results, including a
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sharp decline in the number of political assassinations,
an apparent rise in popular support for the national
government, and a renewal of hope in the chances for
moderate solutions for Guatemala's serious problems.
31. Perhaps the crucial factor in Rios Montt's
chances of holding office is his own highly idiosyn-
cratic leadership style. A born-again evangelical Chris-
tian in a conservative Catholic country, he has not
spared his audiences from rambling and righteous
sermons, moody attacks on powerful groups, and other
eccentric behavior. He has made clear, moreover, his
belief in the divine providence of his undertaking.
"Neither the voters nor bullets gave me this position,"
he said in a speech in April. "God placed me here."
32. There is, moreover, considerable dissension
among senior officers concerning Rios Montt's failure
to rein in junior officer advisers. His rebukes of the
officers' personal behavior are also antagonizing them.
Rios Montt's political longevity will probably depend
on his ameliorating the divisiveness within the military
and making progress in addressing the insurgency and
economic problems facing the country. At the mo-
ment, however, his personal traits and lack of an
organized and loyal constituency make him vulnerable
to coup plotters.
Honduras
33. The government of Roberto Suazo Cordova is
providing Honduras with its most competent leader-
ship in years. The new administration's performance
during its four months in office is enabling it to build
on the general public support that greeted the coun-
try's first civilian government in a decade. The Presi-
dent's emphasis on honest and effective government
and fiscal responsibility has been popular, especially
since it contrasts with the corruption and ineptitude of
past years. By staffing government ministries with a
mixture of talented young people and seasoned techni-
cal specialists�predominantly from his own Liberal
Party�Suazo has upgraded the quality of gov-
ernment.
34. Suazo has also been effective in winning the
confidence of top military leaders, especially Com-
mander in Chief Alvarez. The two men share strong
anti-Communist sentiments, and the President has
gone out of his way to help Alvarez prevail over rivals
15
in the military and to defer to the newly promoted
general on military and security issues. The Honduran
Communist Party�probably the largest radical entity
in the country, with about 1,000 members and sympa-
thizers�has taken the lead in intensifying efforts to
establish the ground work for an armed insurgency. At
a meeting early this year, the party leader, who had
just returned from Havana and the USSR, reportedly
purged the party of its remaining "softliners" and won
an endorsement for a "prolonged popular war" stra-
tegy. The initial phase of that plan calls for increased
terrorist activity and an acceleration of paramilitary
training in Cuba. In response to these threats, the
Honduran security forces are beginning to improve
their counterinsurgency capabilities.
Costa Rica
35. The Monge government will return Costa Rica
to policies more consistently in line with US interests
in Central America and less given to the fiscal and
political eccentricities that characterized the Carazo
administration. Nevertheless, Costa Rica faces unprec-
edented economic problems that will defy quick solu-
tions, the strong likelihood �that leftist extremists will
attempt to exploit the economic situation, and the
probability that the woefully inadequate security
forces will be unable to stem the country's use as an
important link in regional arms supply. Additional
challenges involve an increasingly volatile situation
along the northwestern border with Nicaragua, as well
as the possibility of Cuban and Nicaraguan clandestine
operations calculated to destabilize the Monge govern-
ment. Although its strong democratic institutions
should enable Costa Rica to withstand these chal-
lenges, the tranquillity that has previously distin-
guished the country from much of the rest of Central
America will be less pronounced in the future.
The International Arena and the Diplomatic Front
36. During the last four years a variety of other
international forces have become actively involved for
and against the extreme left in Central America.
Various types and degrees of political, diplomatic,
communications, financial, and moral support have
been given to the guerrillas or their political fronts by
Mexico, the Socialist International, many social demo-
cratic parties in Latin America and Europe, and a
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number of European government officials. Libya,
along with the PLO and various other Palestinian
terrorist organizations, has also provided guerrilla
training and weapons. Since July 1979, Nicaragua has
received $400 million from Western industrialized
countries, $300 million from Mexico, and $100 million
from Libya.
38. In contrast, the Christian Democratic parties
and international free trade unions of Europe and
Latin America oppose the extreme left and support
moderate forces in Central America. Also, Venezuela
and many Latin American states (excluding Cuba,
Nicaragua, and Grenada) have essentially supported
the moderate groups and condemned the extreme left
in regional forums such as the OAS. The Falklands
crisis may lead to some reduction of this support.
39. In this complex international arena, where po-
litical symbolism has a large role, Cuba, Nicara-
gua,and the Salvadoran guerrilla directorate have used
negotiations and "peace initiatives" since 1979 in
tandem with their subversive activities in Central
America. Their recent negotiating initiatives were
based in part on the proposals made by Mexican
President Lopez Portillo in Managua last February,
and have been directed at three "areas of tension" in
the Caribbean Basin: (1) US-Cuban relations, (2) Nica-
ragua's relations with its neighbors and with the
United States, and (3) the internal conflict in El
Salvador. Lopez Portillo proposed that negotiations
begin among the parties in all three areas, and hinted
that Mexico could play a helpful role in facilitating
contacts. Seeking to exploit the propaganda advantages
presented by the Mexican proposal�about which
Cuban officials were reportedly informed in ad-
vance�Castro, the Sandinistas, and the Salvadoran
guerrilla groups have all declared their support for the
Mexican plan, as did Moscow.
40. Cuban propaganda is likely to continue stressing
Castro's willingness to "talk, discuss, or negotiate"
bilateral and regional problems. This, and accompany-
ing diplomatic initiatives, are intended to establish a
record of Cuban reasonableness and flexibility in the
face of US "imperialism" and "intransigence." Cas-
tro's efforts are likely to meet with some success,
moreover, especially with the nonaligned countries
and also with certain West European audiences.
41. One of Castro's objectives in stressing his inter-
est in "negotiations" is to increase the pressure�
internationally and in the United States�on US
policymakers and to make it more difficult for them to
pursue policies aimed at constraining him. Castro has
done this repeatedly in the past, while never consider-
ing concessions of any significance, especially in re-
gard to his commitment to revolutionary causes
around the world. As occurred recently, Castro can
also be expected to use any high-level meetings with
US officials to his own advantage, for propaganda
purposes and for spreading doubts about US resolve
and reliability as an ally.
42. Cuba, Nicaragua, and the Salvadoran guerrillas
also use negotiations:
� To attract and hold non-Communist support for
the extreme left, such as that from Mexico and
many social democratic parties; this support
helps to confuse observers about the real nature
of the guerrilla movements; it acts to attract
needed financial resources, and it offers political
leverage against the continuation of foreign aid
to the target governments.
� To reduce foreign support for the target govern-
ments by creating the impression of near-total
international isolation and therefore hopelessness.
16
--5�EGR4Z,_
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� To create or aggravate divisions within the gov-
erning coalitions in each target country and sow
distrust between those governments and the
United States.
Outlook: Continuing Threats in the Region
43. Though a number of developments have
strengthened US interests and allies, and undermined
Marxist-Leninist causes in Central America, the threat
of major reverses remains. A significant�and grow-
ing�threat is in Honduras, which recently has be-
come a key target of Cuban and Nicaraguan subver-
sion. The Sandinistas and Cubans are working to
coerce Honduras away from its support of US policies.
They are now concentrating on covert actions, terror-
ism, propaganda, diplomatic initiatives, and intimida-
tion. Sandinista leaders probably have attempted to
heighten Honduran fears of Nicaraguan military re-
taliations and of wider conflict by reminding them of
the secret defense pact that links them with Cuba.
They undoubtedly have also been warning their neigh-
bors that they cannot depend on military backing
from the United States or the peacekeeping mecha-
nisms of the OAS. US policy in support of the United
Kingdom in the Falklands war has added to the
concerns of Honduran leaders�especially General
Alvarez�about the reliability of their alliance with
the United States. We believe, however, that as long as
the Suazo government is reassured by strong US
support, such Cuban and Nicaraguan intimidation will
fail.
44. The threat of Nicaraguan retaliations against
the Suazo government will increase, especially with
any expansion of anti-Sandinista exile operations from
Honduras. Nicaraguan fears have steadily risen as
exile raids have taken a larger toll. One Nicaraguan
official reportedly claimed that Managua's forces have
suffered some 300 casualties in recent months. If such
trends continue, we believe the Sandinistas�coordi-
nating their policies closely with Havana�are likely to
resort to more aggressive policies before the end of the
year.
45. There might be a good chance that Cuba and
Nicaragua would attempt to establish guerrilla groups
in remote areas of Honduras. In the absence of
sufficient trained Honduran guerrillas, Nicaraguans
and former guerrillas from other Latin American
countries who fought with the Sandinistas in 1979
might be clandestinely included in an ostensibly
homegrown Honduran insurgent force. With suffi-
cient external support, such an insurgent force could
possibly survive in Honduras.
46. There is also a good chance that Nicaragua will
take limited direct armed actions against anti-Sandi-
nista camps in Honduras to retaliate against raids
launched from across the border. If they were to take
such military steps, the Sandinistas�and Castro�
would probably reason that they could get away with
them�in international opinion at least. They would
probably endeavor to camouflage or justify such ac-
tions in a concerted diplomatic and propaganda cam-
paign emphasizing their desire to "negotiate- regional
problems while portraying Nicaragua as an innocent
victim of US "imperialism."
47. They would probably hope that pressure would
quickly build for a negotiated settlement between
Honduras and Nicaragua that would include some
kind of guarantees from cross-border raids. Mexico,
certain West European governments, and most of the
Socialist International and others would probably
again support this Cuban/Nicaraguan position in the
interests of a "political solution.
48. In El Salvador the collapse of the fragile coali-
tion of moderate forces would be a serious setback to
US interests and the gains achieved since the elections.
The interim government there will face many old and
new challenges over the next six months or so: the
insurgency; grave economic problems; the multiple
weaknesses of the ill-defined sharing of power among
parties and the military; continuing distrust among
key groups and leaders; and, perhaps most serious,
rightist efforts to reverse the land reform while the
guerrillas become more active and violence rises. In
addition, the high expectations and widespread sense
of relief among the populace that followed the elec-
tions will be in danger of dissolving if some tangible
progress is not achieved in the short term. Improve-
ments will be contingent, moreover, on the country's
continuing dependence on substantial foreign support.
Despite the dangers, we believe that if foreign aid
continues, the prospects are favorable that El Salva-
dor's provisional government will be able to build on
the strong electoral mandate, in partnership with a
military leadership which has demonstrated its com-
mitment to the reforms and fair elections, and to move
the country toward another vote next year.
17
--S�EGREZ__
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49. In Guatemala, major US interests are not likely
to be endangered this year, unless there is a reversal of
recent moderating trends. International recognition of
the positive steps taken by the Guatemalan Govern-
ment, through tangible support, will strengthen mod-
erate forces there. Rios Montt remains an enigma to
many domestic and foreign observers, and his support
in the military is tenuous. We judge nonetheless that
his government's chances of surviving through the
year are slightly better than even. Though we cannot
predict which of the many possible coalitions of forces
might unseat him, or who would rise to the top, a
successor government would in all likelihood be more
conservative. A reversion to the often violent and
archconservative policies of the military governments
that dominated the country from the late 1960s
through last March would work to the advantage of
the extreme left.
50. Other short-term threats to US interests and
allies in Central America will derive primarily from
the expected increase in Cuban and Nicaraguan sub-
versive efforts and acts of terrorism by radical groups.
The danger of assassinations of US officials in the area
and of Central American leaders is likely to increase
this year as guerrilla and extremist groups search for
dramatic ways to seize the initiative again. Honduran
leaders will probably be special targets of such plots,
though Rios Montt in Guatemala and leading Salva-
18
doran figures are also vulnerable to ample numbers of
enemies. Terrorists from outside of the region could
also pose an increased threat this year. Costa Rican
President Monge, for instance, who recently ordered
his country's Embassy in Israel moved to Jerusalem,
could be a target of PLO and other radical Arab
groups that for several years have had close ties with
Central American extremists.
51. US interests and regional allies may be con-
strained, moreover, by a variety of regional and global
factors that will probably tend to reduce, and in some
cases neutralize, further short-term gains in Central
America. As a result of the Falklands crisis, the United
States is likely to be much more on its own in Central
America. Venezuela will continue to support moderate
forces in Nicaragua and El Salvador but will want less
public identification with US activities there. Reduced
resources will substantially limit Argentina's role in
Central America, and bitterness toward the United
States could lead it to pursue policies there that
diverge from those of Washington. Anchored by their
own crises to close dependence on the United States,
the four target countries there have no reasonable
alternatives at least in the foreseeable future. Bilateral
relations would be subject to erosion, however, if US
resolve and reliability as a partner in internal security,
defense, and economic relations were seriously
questioned.
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ANNEX
COUNTRY OUTLOOKS
El Salvador
1. The prospects appear relatively favorable that El
Salvador's provisional government will be able to build
upon the strong mandate of the 28 March constituent
assembly elections and move the country toward a
national election in late 1983 or early 1984. Although
the government will continually reflect the fragility of
El Salvador's rigid political system, on balance we
judge that its more moderate and pragmatic elements
are likely to gain greater influence during the period
of this Estimate. The position of these elements will, as
necessary, be reinforced by the military, which
emerged as the major force for moderation during the
month of political infighting that followed the elec-
tion. During that time the armed forces repeatedly
showed that, unlike the major contesting parties, they
had not forgotten who the real enemy is and that they
remain aware that national survival depends on main-
taining foreign economic and military assistance.
2. Nevertheless, the government faces many chal-
lenges in the next few months, including an insurgency
that retains strong capabilities and a war-ravaged
economy that has virtually no short-term prospect for
improvement. Attempts to address these problems will
be complicated by unrealistic domestic and interna-
tional expectations that the recent election will quickly
result in a reduction of violence and economic im-
provement. Perhaps the most serious complication,
however, is the institutional weakness of the govern-
ment itself, which is largely an extension of El Salva-
dor's longstanding political polarization and which, at
this point, remains largely undiminished.
3. The unity of purpose that distinguished the
election and the disharmony among the contesting
parties that followed underscore El Salvador's strong
desire for a democratic process on the one hand and
the fragility of its political system on the other. Against
a backdrop of international skepticism and a concerted
guerrilla effort to disrupt the balloting, some 1.5
million voters�perhaps 85 percent of the eligible
constituency�delivered a severe political and psycho-
19
logical setback to the far left in what even the most
critical observers acknowledge was a generally fair
contest. Nevertheless, the failure of the Christian
Democratic Party (PDC) and of the two leading
rightist parties to win a majority in the constituent
assembly precipitated a month of intense political
infighting that exacerbated already pronounced ideo-
logical divisions. Seeing the country's increased politi-
cal legitimacy thus threatened and concerned over
possible erosion of military unity, the armed forces
high command imposed its prescription for a national
unity government.
4. The net result is a fractious 60-member assembly
with 24 seats held by the PDC, 19 by Roberto
D'Aubuisson's ultraconservative National Republican
Alliance (ARENA), 14 by the more moderate rightist
National Conciliation Party (PCN), and the remaining
three by two other tiny conservative groupings. As
essentially decreed by the military, however, the
executive is led by Alvaro Magana, an independent
with close ties to the armed forces, and three vice
presidents, one from each of the major parties. The
power-sharing arrangement extends to the 15-member
cabinet, with each of the major parties controlling four
portfolios and independents appointed by the military
holding three.
5. Despite the assembly's ideological divisions, its
actions already reveal the emergence of a pragmatic
sense among some of the parties as they seek to protect
and enhance their positions. This has been most
evident in the forging of temporary arrangements of
opportunity, best illustrated by the PCN-ARENA elec-
tion of D'Aubuisson as assembly president and later,
by the PDC-PCN ratification of Magana as provisional
executive. Significantly, ARENA's opposition to Ma-
gana-17 votes against�even in the face of intense
armed forces pressure is said to have incensed the high
command, which was already smarting at reports of
D'Aubuisson's tampering with military unity.
6. Ironically, ARENA's refusal to yield has cast it,
rather than the PDC, in the role of assembly maverick,
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a position that underscores the party's political inexpe-
rience and reinforces allegations that D'Aubuisson is
controlled largely by Salvadoran oligarchs living in
Miami and Guatemala. In contrast, the PCN has
shown its political acumen by reinforcing its position
as power broker through the votes on D'Aubuisson and
Magana. By correctly reading the signals from the
military on Magana, it has also firmed up its tradi-
tional links with the armed forces. Similarly, it is likely
that Christian Democratic support for Magana has
increased the party's credibility with the military. At
the same time, the PDC is hoping that the armed
forces' prescription is a further indication that the
mainstream of the officer corps remains pledged to
protecting the reforms of the last two years.
7. Although the military would prefer to concen-
trate on the insurgency, its recent formation of a six-
man oversight committee to help the executive over
major policy hurdles and to mediate serious partisan
fighting suggests that it perceives a continuing need to
exercise its power in the political arena. Its involve-
ment may prove propitious, however, in helping a
political center take shape with the PDC, elements of
the PCN, and possibly the small Democratic Action
party, which holds two assembly seats. Such an evolu-
tion would give the Christian Democrats the option of
moving closer to the center-right position of the
military and the PCN on some issues, while also
enabling it to distinguish itself as the clear alternative
for the national election on others. The PCN, mean-
while, would stand to gain the most recognition by
virtue of its prominent swing role, a position it will
increasingly use in preparation for the election.
8. ARENA's prospects, on the other hand, appear
more limited. The party has recently suffered a
number of serious defections from both its hardline
and more moderate ranks. Hardliners reportedly were
disenchanted by D'Aubuisson's bowing to the military
prescription, symbolized when he abstained on the
Magana vote; in addition, a few oligarchs�disap-
pointed at D'Aubuisson's failure to win the provisional
executive himself�allegedly have withdrawn their
funding. Such erosion underscores both the fragility of
ARENA's support and the naivete of some of its
backers. Further defections over the next six months
are likely, particularly among more moderate ARENA
members�some of whom had previously bolted the
PCN�who are concerned about D'Aubuisson's politi-
20
cal inexperience and fear that party zealots will again
test the military's patience.
9. Despite the apparent erosion of support, ARE-
NA's ability to garner 29 percent of the popular vote
suggests that it has the potential to remain a major
player in El Salvador's evolving political process. This,
however, will require cultivating an image commen-
surate with its aspirations, a formidable task in light of
its narrow ideology. Furthermore, its leaders have
inadvertently allowed ARENA to be maneuvered into
positions of lesser visibility in the government. This
handicap is particularly apparent in the cabinet,
where the PDC's control of the critical Foreign and
Labor Ministries, the PCN's hold on Public Works and
the Ministry of the Presidency, and the grasp of
military-backed independents on the important Plan-
ning and Interior posts are likely to overshadow
ARENA's generally obscure portfolios. Ironically,
ARENA's major cabinet post�the Ministry of Agricul-
ture�is one that could prove politically costly to the
party and to the country as well.
10. The increasing importance of Agriculture and
related ministries stems in part from El Salvador's
continuing economic decline, underscored by a 1982
GDP growth rate of minus 10 percent. Industrial
investment and production are down again this year as
a result of the insurgency, a credit squeeze on the
private sector, and lack of foreign exchange to pur-
chase raw materials and equipment from abroad.
Further agricultural deterioration reflects the effects
of persistent rural violence, problems in implementing
the land reform program, and low world prices for
coffee and cotton. Meanwhile, private consumption is
plunging because of reduced incomes and declines in
supplies of domestic and imported goods. Because of
increasingly acute foreign exchange problems caused
by expanding current account deficits, foreign net
disinvestment, and capital flight, the economy contin-
ues to be heavily dependent on official aid from
abroad.
11. To spur production in the severely depleted
cash crop industries and to restore the confidence of
landed investors, the government recently postponed
further distribution of rented land to peasants. Al-
though the new law explicitly protects all current and
pending claims to the land by peasant renters, it has
precipitated strong opposition from the PDC and
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farmworkers organizations, inspired increased evic-
tions by conservative landowners, and given the ex-
treme left a valuable propaganda issue. The fact that
the controversy has all the earmarks of developing into
a major international setback for the government
could once again inspire the military to force its
prerogatives on the political parties, particularly as
any perceived threat to agrarian reform threatens the
continuation of US and other Western assistance.
12. Whatever its ultimate resolution and ramifica-
tions, the action by the assembly underscores the
weaknesses of the unsophisticated body politic. Symp-
toms of these weaknesses will repeatedly be mani-
fested in an inability to separate partisan and personal
goals from common national priorities, and a failure to
put behind the ideological and personalist conflicts
that in the past have thwarted the democratic process
and nurtured violent vendettas among political figures
and groups. Such negative symptoms have, in fact,
further revealed themselves in recent reports of in-
creased activity by rightist death squads. These actions
may proceed from a number of different and contra-
dictory motives, including frustration over the failure
of ultraconservative forces to control the new govern-
ment, a belief that those elements do, indeed, domi-
nate, or a misguided sense that the Western democra-
cies cannot now back away from their commitment to
support the provisional government.
13. The upswing in political violence is unlikely to
abate soon, precisely because the controversy among
disparate political elements over agrarian reform and
other issues will continue and because the military
increasingly will be distracted by its new battlefield
initiatives. As a result, the myopia characteristic of
certain political elements in El Salvador with regard to
the nature of international opinion and their insensi-
tivity to US policy considerations will also continue.
Nevertheless, there are already signs that the extrem-
ists are becoming isolated by government, military,
and domestic rejection of rightist violence. These signs
have been especially reflected in the armed forces'
recent arrest of a number of rightist vigilantes and
members of the government's security forces, and by
the assembly's assertion of its commitment to restoring
a semblence of law and order through its unanimous
appointment of an independent and fully staffed
supreme court. Moreover, even the ultrarightist ARE-
NA has publicly condemned recent violent acts by
21
extremists aligned with the party, and has unanimous-
ly endorsed declarations by the other parties and the
press for greater military control over undisciplined
security forces.
14. On the military front, the balance appears to be
shifting in the government's favor. The government
gained a strong psychological boost from the elections,
and the recent return of a third quick-reaction battal-
ion and nearly 500 junior officer candidates from the
United States provides the Army with the additional
manpower and leadership necessary to undertake
more aggressive military operations against the insur-
gents. Furthermore, the expansion of the helicopter
inventory to 20 UH-1Hs and the acquisition of some
180 military trucks have improved mobility greatly.
15. Nevertheless, weaknesses remain. Basic infantry
training is generally poor, command and control are
weak, and intelligence capabilities still need much
improvement. Although overland and naval interdic-
tion capabilities have improved somewhat, defenses
are still porous, and the government has almost no
capability for air interdiction. Finally, despite recent
expansion, the 28,500-man military and security force
still lacks the 10-to-1 force advantage over the some
4,000 to 5,000 guerrillas generally considered neces-
sary to defeat an insurgency.
16. The guerrillas, for their part, still have not
recovered from the demoralizing effects of the suc-
cessful elections. Insurgent unity has been shaken by
recriminations over the failed preelection offensive,
and desertions have increased. Furthermore, the guer-
rillas are hurting from the disruption of their supply
network. Stocks of ammunition, medical supplies, and
even food remain depleted.
17. Nevertheless, the insurgents retain strong capa-
bilities, and many appear to be resigned to a pro-
tracted military struggle. The guerrillas are especially
entrenched in northern and eastern El Salvador, where
they have large networks of well-defended base
camps. (See next page for map of insurgent organiza-
tion.) These support increasingly better armed and
trained guerrilla forces. It will take a major sustained
government offensive effort to dislodge them.
18. Furthermore, the Cuban and Nicaraguan arms
pipeline remains open, assisting the insurgents in
rebuilding their supply inventories and permitting
stockpiling for future offensive operations. Personnel
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also continue to be sent to and from training courses in
Nicaragua and Cuba, and many foreign trained guer-
rillas have recently assumed new leadership positions.
The insurgents are planning to resume sabotage and
hit-and-run raids on a greater scale in the near future,
hoping to put the government off balance and regain
the tactical initiative.
19. Overall, while the military appears to be gain-
ing the upper hand, a decisive victory over the
insurgents probably is still well down the road. Much
will depend on the new government's ability to avoid
divisive quarrels and address the country's worsening
economic problems.
22
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20. The March coup that placed the reformist Rios
Montt government in power has given Guatemala new
opportunities to end its international isolation, acquire
needed foreign assistance, and reverse guerrilla mo-
mentum in gaining Indian recruits. Despite public
support and military backing for anticorruption and
human rights measures, however, General Rios Montt
still has only a tenuous hold on power. He has yet to
demonstrate that he has the personal stability and
requisite leadership qualities to grapple with lingering
dissension in the armed forces, a deteriorating econo-
my, and a serious guerrilla challenge. His tendency to
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---1"reREL
isolate himself from major political forces and to offer
simplistic solutions to complex economic and some
military problems also contribute to our judgment that
his chances for remaining in office during the period
of this Estimate are only slightly better than even.
While ongoing political maneuvering could hamper
the military's counterinsurgency efforts, it has made
strides in formulating a multifaceted approach to the
problem. The guerrillas are well entrenched in some
parts of the Western Highlands and are receiving
increasing Cuban assistance, but their persistent dis-
unity, their inability to carry out scheduled operations,
and new government programs to gain the allegiance
of the civilian population suggest that the insurgents
will not succeed in achieving major advances in the
months ahead.
21. Rios Montt appears to be the driving force
behind the new government, deriving his political
power from personal popularity and support for his
policies from most junior officers and key military unit
commanders. By taking steps to curtail government
corruption and human rights abuses he is addressing
the concerns of many of the junior officers responsible
for the coup. The junta has arrested dozens of former
officials involved in corruption, canceled several pub-
lic projects that were sources of graft, and established a
high-level oversight committee for new projects. Na-
tional police units implicated in rightwing murders
have been disbanded, policemen accused of abusing
human rights since the coup are being arrested or
relieved of their duties, and civilians not authorized to
carry weapons are being disarmed. The actions have
contributed to a decline in civilian deaths, particularly
politically motivated murders in Guatemala City.
22. While the public welcomes the reduction in
violence and military officers support reforms that
may bring increased foreign assistance, the stability of
the junta is still threatened by several factors, particu-
larly those stemming from the enigmatic personality
of the junta leader. Rios Montt's ambiguous, rambling
public speeches often undercut the pragmatic direc-
tion of his policies. His public moralizing, moreover, is
offensive to many in the government, and he increas-
ingly interferes in the private lives of senior and junior
officers. Rios Montt's critics also have more concrete
complaints. His increasing preference for riaaking de-
cisions on his own is antagonizing senior commanders,
particularly the other two junta members. And senior
23
officers are pushing for further steps to curb the
influence of junior officer advisers, whose interference
in military command assignments has unsettled mili-
tary discipline.
23. Rios Montt's disinterest in economic and busi-
ness matters is particularly distressing to the private
sector, which witnessed a previously strong economy
grow by only 1 percent last year. The economy is
expected to stagnate again this year as international
market conditions and the insurgency have caused the
demise of tourism and a drying up of commercial
credit, reduced private investment, and increased
capital flight. Rios Montt's claims that Guatemala does
not need bilateral foreign economic assistance have
added to the unease among business leaders, although
government officials are approaching friendly nations
and international lending institutions for assistance to
help cover balance-of-payments deficits.
24. Rios Montt does not appear to be in imminent
danger of being ousted, given his continuing support
from key military commanders and most junior offi-
cers. Among these groups there appears to be an
awareness that another change in government�par-
ticularly to a more rightist orientation�would jeop-
ardize growing international recognition of Guatema-
la's reforms, damage the military institution, and
detract from their primary task of defeating the
insurgents. Political opponents of the former govern-
ment appear divided in their response to Rios Montt's
programs and many are willing to allow the reforms
time to take root. Finally, Rios Montt benefits from
the fact that there are no obvious candidates�from
either the senior or the junior officer ranks�who have
the personal following to lead the country.
25. Rios Montt, a staunch anti-Communist, is dedi-
cated to moving forward with a progressive counter-
insurgency program, but is emphasizing new aspects
designed to elicit civilian support in this effort. He has
offered the guerrillas a monthlong amnesty during
which they can surrender their arms without fear of
retribution. Following the amnesty period the Army
would implement a national defense plan involving a
major near-term effort to undercut the insurgents. In
preparation, the Army has recently been increased to
approximately 17,400 men, with plans for the immedi-
ate mobilization of an additional 5,000 veterans, re-
servists, and civilians for six months. These troops will
be deployed in heavily contested areas in the Western
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Highlands and near the capital. The government has
announced that it will institute a state of emergency in
these areas.
26. The junta is giving special emphasis to organiz-
ing loyal peasants into civilian defense forces (CDF).
Approximately 6,000 partially armed peasants turned
out for a progoyernment rally in the Western High-
lands, and plans in that region call for including an
eventual 17,000 participants. While the Army has
been reluctant to provide these unproven forces with
adequate weaponry�fearing that guns would fall into
guerrilla hands�the civilians have already engaged
the guerrillas on several occasions with some success.
With their knowledge of local terrain, they also serve
an intelligence function and are making it difficult for
guerrillas to cache arms and move freely.
27. The Army still faces mobility, intelligence, lo-
gistic, and equipment problems. It has serious difficul-
ty moving men and materiel throughout a country five
times the size of El Salvador. There are insufficient
aircraft for the expanding task of the counterinsur-
gency. Inadequate communications prevent coordina-
tion of air and ground forces, and residual peasant
distrust of government troops hinders the gathering of
intelligence. New programs will require several
months and greater resources than currently available
before substantial gains can be expected in the coun-
terinsurgency effort.
28. External assistance to the Guatemalan insurgent
movement, particularly from Cuba, is on the increase,
and guerrilla activity is correspondingly expanding.
The return of trained combatants, increased arms
flows, and the continuing deterioration of the econo-
my could again increase the level of guerrilla activity
significantly by the end of the year. But there are
already some signs that the military is gaining new
acceptance among the peasantry, and the government
will be in a position to further weaken the insurgents'
rural support base if it presses forward with reforms.
Therefore, the course of the insurgency over the next
several months will depend as much on the govern-
ment's initiatives as on guerrilla tactics and level of
external assistance. In this regard we judge that the
insurgents will not make major advances in the near
term.
29. Recruitment and training continue to be the
primary focus of the insurgents. The increase in their
numbers over the past year reflects their success in
provoking repression by the prior government. Army
abuse of civilians, which the junta is trying to stem, has
been an important factor�along with poor economic
conditions�in the growth of popular support for the
guerrilla movement.
30. We estimate that there are some 3,000 to 4,000
insurgent combatants in Guatemala. The widely vary-
ing criteria clandestine sources have used to differenti-
ate among kinds of insurgents have complicated ef-
forts to obtain solid evidence on their force strengths.
Last December the Guatemalan military's analysis of
captured guerrilla documents and insurgent interroga-
tions led it to conclude that there were 3,800 insur-
gents in just the "Guerrilla Army of the Poor--the
largest guerrilla group. With this information�which
was partially corroborated by guerrilla sources�we
tentatively raised our estimate to 4,000 to 5,000,
thereby more than doubling our benchmark figure of
2,000 in early 1981. Subsequent reporting, however,
fails to support such a dramatic increase. Moreover,
guerrilla inability to follow through on plans to disrupt
the March elections has cast further doubt on the
December information. Nevertheless, guerrilla units
numbering as high as 200 to 300 have staged attacks
over the last six months. This and the breadth of
insurgent activity reinforce a general picture of sub-
stantial growth in guerrilla ranks, and reflect the
insurgents' ability to call upon organized local forces to
expand their numbers for specific missions.
31. The guerrillas have concentrated on economic
sabotage and political terrorism, while avoiding major
confrontations with full-strength Army units. Since the
coup, however, the insurgents have placed new em-
phasis on attacking the civilian defense forces in order
to discourage Indian cooperation with the military.
This demonstrates guerrilla recognition that the Army
is more effectively competing for the support of the
peasantry. At the same time, consistent abuse of
civilians by the guerrillas could undermine their re-
cruitment efforts. The insurgents, backed by Havana,
also have initiated a broad propaganda campaign to
discredit the new government, another indication of
guerrilla concern about the potential of the junta's
reforms.
32. Cuba remains the principal ally of the guerrilla
movement, providing training, arms, funds, and inter-
national propaganda support. In recent months, Cuban
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arms shipments through Mexico and Belize have accel-
erated. Further increases of aid will probably follow
the same pattern of "supply-following unity" that
preceded major Cuban involvements in Nicaragua and
El Salvador. Nicaragua, echoing Cuba, has also been
pushing the insurgents toward unity. Although repre-
sentatives from the four main guerrilla groups formed
a tenuous umbrella organization in Havana in January,
subsequent evidence indicates that they have attained
only minimal political cooperation and military
coordination.
Honduras
33. While the Suazo government is providing Hon-
duras with its most competent leadership in years, its
pro-US stance and firm response to radical leftist
forces in the region have made the country a growing
target for Cuban- and Nicaraguan-backed subversion.
Havana and Managua are pushing the extreme left in
Honduras to accelerate preparations for revolutionary
violence and are stepping up attempts to cajole or
intimidate the Hondurans into adopting a more neu-
tral stance. The Honduran radical left is splintered, is
relatively small, and�at least for the present�faces
an inhospitable operating environment given popular
satisfaction with the recent return to civilian rule.
Nevertheless, the trend toward increased domestic
terrorism and especially heightened concern about the
military threat from Nicaragua have caused a growing
sense of vulnerability among Honduran leaders. These
fears are being exacerbated by what the Hondurans
view as inadequate assistance from Washington, and,
in the absence of substantial US backing, Honduras
probably will begin in the months ahead to pursue
more cautious policies in the region in order to
appease its foreign adversaries.
34. The Suazo administration's solid performance
during its four months in office is enabling it to build
on the general public support that greeted the coun-
try's first civilian government in a decade. The Presi-
dent's no-nonsense emphasis on public probity, com-
petence in government, and fiscal responsibility has
struck a responsive public chord after years of official
corruption and ineptitude. By staffing government
ministries with a mixture of talented young people and
seasoned technical specialists�selected predominantly
from the mainstream of the Liberal Party�he has
significantly upgraded the caliber of government per-
25
sonnel. Much of Suazo's focus has been on Honduras's
serious economic problems, which include an unfi-
nanced budget deficit of $100 million and the likeli-
hood of a third consecutive year of nearly zero
economic growth. His first step in implementing an
austerity program has been to reduce the govern-
ment's overstaffed bureaucracy, but�conscious of the
need for reform�he is struggling to preserve the
agrarian reform and some other social programs.
35. Suazo has also won high marks for gaining the
confidence of the military, especially Commander in
Chief Alvarez. The two men share strong anti-Com-
munist sentiments, and the President has gone out of
his way to help Alvarez prevail against two senior
officers who�following a meeting with Castro last
November�began arguing for an accommodation
with Cuba and Nicaragua. When the officers put their
troops on alert in late April to block Alvarez's promo-
tion to general, they were removed from their posi-
tions and assigned to attache posts abroad. Despite
some lingering potential for troublemaking by these
and other dissidents, the military appears unified
behind Alvarez, who is widely regarded as the coun-
try's most able military commander in some time.
36. Persuaded that it was only a matter of time
before Cuba and Nicaragua would step up efforts to
subvert Honduras, Suazo and Alvarez have crafted
policies designed to thwart that challenge. The Hon-
durans have been partially successful in curbing over-
land arms shipments from Nicaragua to the Salva-
doran insurgents. Moreover, Alvarez has taken the lead
in developing closer ties to senior military leaders in El
Salvador and has demonstrated a growing willingness
to provide blocking forces to try to encircle Salvadoran
insurgents. On the diplomatic front, Honduras has
cooperated in the formation of the Central American
Democratic Community and in other US-endorsed
initiatives designed to unify Central American govern-
ments. Reflecting a growing fear of the Nicaraguan
military buildup, Honduras recently signed an agree-
ment that allows US military aircraft access to Hon-
duran airports.
37. These actions�and especially Tegucigalpa's de-
cision to permit greater activity in Honduras by anti-
Sandinista insurgent groups�have in turn prompted
Havana and Managua to reassess their strategy toward
Honduras. From Cuba and Nicaragua's perspective,
present circumstances have invalidated their "peace-
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ful corridor" approach, which posited that in the short
term the main priority was to funnel arms through
Honduras into El Salvador and Guatemala and that
efforts to destabilize the government in Tegucigalpa�
by provoking a backlash�would jeopardize more
pressing goals. Consequently, Cuba and Nicaragua
have set in motion plans to accelerate preparations for
insurgency in Honduras.
38. The Honduran Communist Party�probably
the country's largest extreme leftist group, with some
1,000 members and sympathizers�is taking the lead
in intensifying efforts to lay the groundwork for
insurgency. Following a trip to the USSR and Cuba in
early 1982, Secretary General Padilla Rush purged the
party of its remaining "sof tliners" and won an en-
dorsement for a "prolonged popular war" strategy.
The initial phase of his plan calls for increased terrorist
activities and an acceleration of paramilitary training
abroad. Subsequently, Fidel Castro reportedly has
emphasized the need for haste. This, together with a
report that Honduran radicals are being sent to Cuba
for a "crash" paramilitary course, underscores Ha-
vana's desire to shorten the timetable.
39. Soon after the Communist Party meeting a
disgruntled former senior party official told the US
Embassy that the party�with increased Cuban fund-
ing and more assertive leadership by young Cuban-
trained activists�was intensifying recruitment efforts
in urban slums. Other information indicates that the
party has moved to improve its paramilitary capability
by revamping the party's structure and by asserting
control over a small terrorist group that last year began
carrying out operations in San Pedro Sula. The party
has also created a second "action arm," which was
responsible for the hijacking of a Honduran aircraft to
Cuba in late April. Increased emphasis reportedly will
be given to targeting anti-Sandinista insurgents and
installations, and Communist terrorist squads may
have been involved in recent surveillance of US
military personnel.
40. Although the Honduran Communist Party re-
mains Havana's most responsive instrument, the Cu-
bans are also working with other Honduran radical
leftist groups and are trying to promote unity among
them. Early this year, after months of preparation, the
Communists joined with four other groups to form the
National Directorate for Unity. The five groups
agreed that because of their small membership�
26
which totals an estimated 2,000 members and sympa-
thizers�their priority over the near term would be to
mobilize popular support. Like the Communists, how-
ever, the other four parties reportedly have endorsed
the strategy of accelerated preparation for prolonged
popular war. To help implement this approach, at
least 50 Hondurans are said to be currently undergoing
training in Cuba, and other Honduran trainees have
been sent to Nicaragua and Libya in recent months.
41. While terrorist activity is almost certain to
escalate in coming months, the extreme left will face
serious obstacles as it attempts to gear up for insur-
gency. The lingering distrust and animosity among the
leftist movements was underscored by the failure of
three of the groups to send representatives to the
meeting of the National Directorate for Unity that had
been scheduled for late April. The lack of experience
of the Honduran terrorists has been reflected in recent
bungled bombings and in the failure of the perpetra-
tors of the April hijacking to achieve most of their
aims. The infusion of foreign-trained cadres will give
the radical left an important boost. But public reaction
to the hijacking and other indicators suggest that they
will face an unreceptive operating environment as
well as better trained and more proficient security
forces.
42. Nicaragua�whose strategy presumably is close-
ly coordinated with Havana's�is also using a variety
of tactics to try to get Honduras to curb its support for
anti-Sandinista insurgents and otherwise reverse its
pro-US policies. After anti-Sandinista forces blew up
two bridges in mid-March, Nicaragua recalled its
ambassador and threatened to break diplomatic rela-
tions. The Sandinistas significantly increased troop
strength and Cuban advisory presence in the border
region and coupled these actions with stepped up
diplomatic pressure. Counting on its significant mili-
tary edge to give it leverage, Nicaragua has pushed for
bilateral talks with Honduras to be held at the level of
commander in chief and has emphasized the need to
dismantle "counterrevolutionary" camps in Honduras
and establish joint border patrols.
43. Concerned that it was being placed on the
defensive diplomatically, Honduras countered with its
own peace proposals, which stress the need for inter-
national involvement in monitoring any settlement
with Nicaragua. On 23 March, Foreign Minister Paz
Barnica announced a Honduran plan whose key ele-
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ments include international supervision and vigilance
at the border and other sites in both countries, reduc-
tion in foreign military advisers, agreed-upon limits
regarding the acquisition of modern weaponry, and a
halt to regional arms trafficking. Honduras launched a
diplomatic campaign to obtain support for its plan and
has gained endorsement from a broad range of Latin
American governments, including Mexico.
44. Having failed to intimidate the Hondurans,
Nicaragua has recently shifted tactics and is now
adopting a more accommodating demeanor. Less than
a week after Nicaragua's Defense Minister Humberto
Ortega reiterated his government's insistence on face-
to-face talks with Alvarez in Managua, the chief of
staff of the Sandinista Army arrived in Honduras for
talks with his Honduran counterpart. Sandinista repre-
sentatives went out of their way to appear cordial and,
while offering no important concessions, succeeded in
persuading the Hondurans to agree to attend followup
discussions that would prepare the way for a meeting
between Commanders in Chief. As an additional
gesture, the Sandinistas released 38 Honduran fisher-
men whose arrest in March helped to sour relations.
45. The new flexibility demonstrated by the San-
dinistas underscores the fact that increasingly effective
border raids are taking a toll�one Nicaraguan official
reportedly claimed that the Sandinistas have suffered
some 300 casualties in recent months. The Nicara-
guans presumably are also motivated by a desire to
strike a deal with Honduras that would prevent
former Sandinista leader Eden Pastora from using that
country as his base of operations. Although the Hon-
durans have demonstrated no willingness so far to alter
their negotiating position, some evidence indicates that
frustration with the United States is causing key
Honduran leaders to talk about reassessing their policy
toward Nicaragua.
46. Honduran disgruntlement with the United
States has its origins in what is widely perceived in
Tegucigalpa to be a lack of US responsiveness to the
pressing needs of a country that increased its own
vulnerability to support US interests. Against this
background, General Alvarez in particular has been
incensed by the US role in the Falklands crisis�a
response that is colored in part by his lengthy training
in Argentina. He has stated privately that his growing
doubts about the reliability of the United States as an
ally are causing him to reconsider Honduras's hardline
policy against Nicaragua, especially in light of his
concern that the United States might opt for its own
accommodation with Nicaragua and Cuba.
47. Alvarez's attitude appears also to indicate that
the Cubans�through their contacts with the two
recently ousted Honduran officers�made some head-
way in undercutting US credibility
27
48. Honduras has asked the United States to pro-
vide either F-4 or F-5E fighters free of charge and has
requested US aid in financing the purchase of new
Canadian-built transport aircraft. The Hondurans also
need artillery and antitank missiles to offset Nicara-
gua's growing armor and artillery inventories. The
Suazo government's prospects seem bleak for finding
other governments�particularly in Latin America�
that would provide substantial help in these areas.
Nevertheless, there appears to be more than posturing
behind Tegucigalpa's disillusionment with the United
States, and in the absence of concrete reassurances the
Hondurans probably will soon begin to back away
from their pro-US stance on regional issues.
Costa Rica
49. The Monge government will return Costa Rica
to policies more consistently in line with US interests
in Central America and less given to the fiscal and
political eccentricities that characterized the Carazo
administration. Nevertheless, Costa Rica faces unprec-
edented economic problems that will defy quick solu-
tions, the strong likelihood that leftist extremists will
attempt to exploit the economic situation, and the
probability that the woefully inadequate security
forces will be unable to stem the country's use as an
important link in the guerrillas' regional arms supply
network. Additional challenges involve an increasingly
volatile situation along the northwestern border with
Nicaragua, as well as the possibility of Cuban and
Nicaraguan clandestine operations calculated to desta-
bilize the Monge government. Although its strong
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democratic institutions should enable Costa Rica to
withstand these challenges, the tranquillity that has
previously distinguished the country from much of the
rest of Central America will be seriously threatened in
the future.
50. Costa Rica's virtual bankruptcy constitutes the
broadest and longest term threat to social peace.
Economic activity will drop some 6 percent in 1982,
and imports will decline because of poor export
performance, scarcity of foreign exchange, and lim-
ited access to credit. Unemployment will soon reach
14 percent�extremely high by Costa Rican stand-
ards�and consumers are facing triple-digit inflation.
Despite Monge's willingness to test public resolve and
that of his own party through strict austerity, complete
economic recovery probably is years away.
51. The economic situation carries with it opportu-
nities for Costa Rica's small Communist coalition.
Although tactically and ideologically divided, the co-
alition was stung by its poor showing in the February
election and may be ready to abandon its generally
nonviolent policies. The likelihood that the austerity
measures will spark some strikes could play into the
coalition's hands, particularly as its largest component,
the Costa Rican Communist Party (6,000 to 7,000
members) effectively controls more than 50,000 labor-
ers. Communist-inspired violent strikes by banana
workers before the election could be a harbinger, and
coalition representatives have been quick to challenge
Monge's initial austerity package.
52. The regional character of Central America's
insurgencies is also increasingly apparent in Costa
Rica. Over the past year, the country has been the
scene of numerous terrorist incidents, at least some of
which apparently were undertaken in support of the
Salvadoran and possibly Guatemalan guerrillas. The
recent seizure in San Jose of a large cache of arms
probably intended for El Salvador and the arrest of
nine suspected terrorists�including four Salvadorans
and two Nicaraguans�underscore Costa Rica's con-
tinuing role in the regional arms link. Moreover, the
sophistication of the operation�which included pass-
ports, blank travel papers, immigration seals from
more than 30 countries, and some 13 vehicles specially
fitted to conceal weapons and which apparently tran-
sited Nicaragua with impunity�points to an extreme-
ly well financed organization directed from outside
the country. Some security officials have indicated
28
that as many as 15 other support cells may be
operating in Costa Rica.
53. The discovery of the arms cache has also in-
creased fears in Costa Rica that at least some of the
arms were intended for domestic use. This has
prompted the new government to announce the cre-
ation of a special antiterrorism squad�a clear signal
that Monge expects subversive activity to increase and
a tacit admission that the security forces are inad-
equately prepared for such an eventuality.
54. This fear is well founded. Lacking a standing
army, Costa Rica relies on the 7,000-man Civil Guard
as its first line of defense. The Guard, however, is
poorly trained and generally armed only with pistols
and carbines. Few of its crew-served weapons are in
working condition, almost all ordnance is unservice-
able, and cannibalization of weapons parts is wide-
spread. The Guard's ability to provide national de-
fense has been further weakened by Cuban
penetration and by the economic situation. The im-
pact that the economic crisis is having on defense was
recently highlighted by reports that only 65 of the
Guard's 360 patrol cars purchased three years ago are
now operational.
55. Costa Rica's security inadequacies have been
underscored by increased leftist subversion in Guana-
caste Province, which abuts Nicaragua. Over the last
eight months, weapons shipments by air and, to a
lesser extent, by sea have been noted transiting this
area. Most of the weapons reportedly are bound for
the Salvadoran insurgents, although some apparently
are being cached for later use in Costa Rica or
elsewhere. The Sandinistas are also said to be recruit-
ing land squatters in the area for eventual deployment
to El Salvador, and encouraging the takeover of
ranches both near the border and along the inter-
American highway. Strong pro-Sandinista sentiment in
Guanacaste, meanwhile, allows Nicaragua to maintain
plausible denial and to use squatters to monitor Costa
Rican security force movements.
56. Guanacaste also shelters many of the approxi-
mately 10,000 Salvadoran refugees in Costa Rica.
Since September 1981 we have had indications of
Sandinista or Salvadoran guerrilla attempts to gain
control of the refugee camps in the area, long sus-
pected by Costa Rican security officials as being
support bases for the Salvadoran insurgency. One of
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the Salvadorans arrested in the arms cache discovery
in San Jose has been identified as previously being
resident in a refugee camp.
57. The arrival in Costa Rica in April of Nicara-
guan war hero Eden Pastora and his assertion that he
will unseat the Sandinista hierarchy have heightened
tensions between San Jose and Managua. Monge's
decision to expel Pastora reflects Costa Rica's desire
not to repeat its involvement in the kind of counter-
revolutionary activity that led to the overthrow of
Anastasio Somoza and its fear that Nicaragua would
use the Pastora threat to justify an invasion of Costa
Rica. At the same time, Monge realizes that attacks
staged from Costa Rica could ultimately jeopardize the
centerpiece of his regional defense policy: the plan to
request an OAS peace force to protect Costa Rica's
borders in any war in Central America�a pointed
reference to potential Sandinista aggression.
58. Nicaragua and Cuba are concerned by Monge's
reliance on the Rio Treaty, which comes amid other
signals of Monge's strong opposition to Communist
subversion in Central America. These have included
Monge's refusal to rule out US military assistance for
Costa Rica, his willingness to counter Communist
propaganda in regional forums, and his decision not to
renew relations with Havana. Nevertheless, Castro's
operatives have the necessary infrastructure in Costa
Rica to support clandestine operations designed to
destabilize the Monge government.
59. An additional problem for Monge involves the
political ambitions of former Costa Rican Security
Minister Johnny Echeverria, who has extensive ties
with both Cuba and Nicaragua.
29
Nicaragua
60. Since coming to power in July 1979, the Sandi-
nistas have followed a gradualist strategy for the
establishment of a Marxist-Leninist state in Nicaragua,
closely patterned after the Cuban model. While con-
centrating on the buildup of the military, the militia,
the security services, and the Sandinista mass organiza-
tions, the regime has gradually restricted the activities
of the private business sector, the independent media,
and the opposition political parties. In recent months,
however, the Sandinistas' siege mentality�developed
during the long struggle against Somoza�has been
reinforced by their perception of renewed US effort to
check leftist forces in Central America. Consequently,
the regime has accelerated efforts to consolidate its
control.
61. The Sandinistas regard recent diplomatic pres-
sures against Nicaragua, their deteriorating economy,
increasing activity by foreign-based opponents, the
failure of the left to gain power in El Salvador, and US
military aid to Honduras as evidence of Washington's
conspiracy to destroy their revolution. Although the
regime would prefer to avoid a premature crackdown
on moderate groups that would jeopardize access to
Western financial sources, the recent increase in inter-
nal and external pressures has propelled it toward
greater repression of opposition elements and mass
mobilization of the population.
62. Since the declaration of a state of emergency in
March suspending most civil liberties, the regime has
halted virtually all opposition political activity. The
imposition of prior censorship and the banning of
nonofficial radio newscasts have given the Sandinistas
almost total control over the media, effectively deny-
ing the moderates the means to take their case to the
public. Editors of the prestigious independent newspa-
per La Prensa have been so intimidated by numerous
government-ordered shutdowns that they frequently
anticipate�and refrain from publishing�those press
items likely to anger the regime. Several opposition
party and labor union activists have been arrested on
unspecified security grounds, and some moderate
leaders have been denied permission to leave the
country.
63. Businessmen, meanwhile, have been hit with
recent economic decrees that allow the regime to
control commerce and production and impose "war
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taxes." Although business leaders fear the decrees
threaten the existence of the private sector, they also
are aware of the risks that a confrontational approach
toward the regime would entail. Rather than resisting
the government's measures, many businessmen prob-
ably will opt for quietly leaving the country.
64. Relations between the Sandinistas and local
Catholic Church leaders also have deteriorated in the
past few months as the bishops have continued to resist
the regime's authoritarian methods. In February the
bishops issued their strongest public attack yet on the
regime's human rights record in a letter denouncing
Sandinista actions against the Miskito Indians. The
Sandinistas in turn have increased their pressure by
temporarily closing a Church-owned radio station,
taking steps to control the curriculum in the country's
large Catholic school system, and imposing Cuban
textbooks on some of the schools. The regime also
continued its efforts to sow dissension by backing the
Church's radical wing and to discredit Archbishop
Obando y Bravo by linking him to Washington and
exiled opposition elements. The Church, however,
recently demonstrated its deep support in Nicaraguan
society by successfully resisting Sandinista attempts to
prevent public attendance at traditional Holy Week
religious ceremonies.
65. The Sandinistas have used the crisis atmosphere
during the state of emergency to stir up popular
antagonism toward the United States and strengthen
their network of neighborhood defense committees
and the militia as instruments of social control and
regimentation. Neighborhood committees�patterned
after the Cuban model�have been instructed to
increase their vigilance over the population and report
counterrevolutionary" activities to the security
forces. Militia recruitment drives were accelerated
during the first two months of the emergency, and
harsh measures have been used to coerce or punish
those who resist recruitment. In early April, 105
peasants fled to Honduras after being threatened with
imprisonment and confiscation of their property for
refusing to join the militia.
66. Through a combination of pressure and patri-
otic appeals, the Sandinistas have succeeded in in-
creasing discipline in the labor force�a major accom-
plishment after strikes, absenteeism, and work
stoppages became almost endemic last year. Appeals to
revolutionary fervor and nationalism apparently have
30
strengthened the dedication and discipline of the
Sandinista rank and file in the government, armed
forces, and mass organizations.
67. Increased repression and revolutionary mobili-
zation during the state of emergency have led several
opposition leaders to conclude that a mixed economy
and even the remaining vestiges of pluralism will not
survive under the Sandinistas. Moreover, Eden Pas-
tora's denunciation of the Sandinista leadership has
provoked fears among moderate leaders that�given
their vulnerability to Sandinista anger�a serious chal-
lenge from Pastora would lead to an even stronger
repression of independent groups. Former junta mem-
ber Alfonso Robelo and several other key moderates
have given up trying to stop the Sandinistas' move
toward totalitarianism from inside Nicaragua, and
with some of their followers they have gone into exile
to carry out their opposition to the regime. Other
moderates are making preparations to flee the country
or go into hiding. Many of those who will not or
cannot leave have been intimidated by arbitrary ar-
rests and bullying by Sandinista thugs. They probably
will try to disassociate themselves from Pastora,
Robelo, and other exiles.
68. Although Pastora represents no immediate
threat to the regime, his denunciation of the Sandinista
leadership has had an unsettling political and psycho-
logical effect in Nicaragua. Wall paintings reportedly
have begun to appear in Managua and other areas
suggesting popular support for Pastora, and his call for
the overthrow of the regime has provoked several low-
ranking defections from the Sandinista Army, Never-
theless, Pastora's recent expulsion from Costa Rica and
the willingness of former colleagues in the Army to
repudiate his action suggest he faces an uphill struggle.
69. The recent defection of Central Bank President
Alfredo Cesar has damaged confidence in the Sandi-
nistas within international financial circles, thus add-
ing to the economic costs of increased political con-
trols. Cesar has been personally credited by many
foreign bankers with keeping Nicaragua financially
solvent. The mobilization of reservists during the state
of emergency and the maintenance of military forces
on an alert status have been costly in terms of
processing and distributing fuel, foodstuffs, and other
resources. The diversion of resources to the military
will mean more cuts in government spending for social
services and productive investment, thereby lowering
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"'SteRiz__
(b)(3)
the standard of living. The recent economic decrees
and stepped-up confiscations under the agrarian re-
form program have further undermined business con-
fidence and are likely to accelerate the flight of
capital, entrepreneurs, and qualified technical and
managerial personnel.
70. By emphasizing the foreign threat, the Sandinis-
tas have tried to offset growing uneasiness about their
intentions among Western financial supporters. West-
ern aid, however, probably will fall short of the level
needed to support increases in real imports and real
GNP this year, particularly since Managua is not likely
to alter its accelerated drive toward a Marxist-Leninist
state. The regime may give ground temporarily on
individual issues, but the forces behind radicalization
are likely to grow. Safeguarding the revolution re-
mains the Sandinistas' top priority, and portraying the
United States as the cause of Nicaragua's problems
permits them to rally domestic support, suppress the
opposition, and explain away their economic failures.
Moreover, the more serious the armed challenge be-
comes�from Pastora or others�the more swiftly and
brutally the Sandinistas will try to suppress opposition
elements nationwide.
7E The Sandinistas' resolve to step up internal
repression has been strengthened by mounting govern-
ment casualties in clashes with antiregime bands.
Managua's growing concern about unrest in the Atlan-
tic Coast region and about the activities of foreign-
supported guerrilla groups based in Honduras and
Costa Rica has led it during the past several months to
remove by force the Miskito Indian population along
the northern border, to retaliate against Tegucigalpa
by stepping up covert support of violent Honduran
leftists, and to increase diplomatic pressures against
San Jose. The regime also is counting on the intimidat-
ing effect that its continuing military buildup has on
governments in the region. So far, the Sandinistas have
refrained from carrying out retaliatory strikes against
insurgent camps in Honduras for fear that such action
would provoke a major US military move against
Nicaragua. As their military strength grows, however,
and if the border provocations continue, the Sandinis-
tas will tend to become more belligerent, and the
danger of a major conflict is likely to grow.
72. The military buildup continues to upset the
regional military balance. The Sandinistas are building
an army and militia force that is intended to defend
31
against any regional military threat. Even now the
Sandinistas could probably beat back an attack by any
one potential adversary in the region. Managua al-
ready outstrips each of its neighbors in military man-
power, armor, and artillery capabilities. Over the next
year Nicaragua will widen its margin, although its
principal manpower effort will be the professionaliza-
tion of its regular forces. Regular army strength has
stabilized at about 15,000 to 20,000, but the expansion
of reserve and militia units continues. The regular
reserve force now numbers some 20,000, and the new
drive to recruit more members for the irregular militia
has pushed the total reserve figure to more than
50,000. Thus the armed strength available to the
Sandinistas, not including the national police, is some
70,000 personnel. By comparison, the Honduran Army
numbers 13,400 men plus an undertrained reserve
force of 5,000.
73. In April, Managua received twelve 122-mm
multiple rocket launchers and four heavy ferries for its
T-55 tanks. The rocket launchers give Nicaragua a
mass firepower capability unmatched in the region,
and the tank ferries provide an offensive water-
crossing capability for the armor force.
74. Preparations for the delivery of MIG-21 fighter
aircraft to Nicaragua continue. Their receipt would
enable it at least to match the Honduran Air Force,
whose 14 aged Super Mysteres make it the best in the
region. Aircraft revetments have been completed at
Sandino Airfield outside Managua, and runway exten-
sions and improvements continue at Puerto Cabezas
and Montelimar. The Nicaraguans also are forming a
new airborne commando unit at Montelimar, and
several AN-26 transport aircraft are on order from the
Soviet Union for the force.
75. The Cubans continue to play a key role in
Nicaragua's military buildup. There are approxi-
mately 6,000 Cubans in Nicaragua of whom some
2,000 are military/security advisers. In addition to
providing technical and training assistance, they have
participated in a number of key construction projects
such as building a strategic road to connect Puerto
Cabezas with the rest of the country and improving
various airfields to support jet fighter aircraft. More-
over, Cuban special troops are helping in counterinsur-
gency operations and in providing personal security
for Sandinista leaders.
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76. We judge that during the period of this Esti-
mate the Sandinistas will accelerate efforts to build the
institutional bases for a totalitarian Marxist state by
strengthening the mass organizations and their capac-
ity for popular mobilization in support of regime
policies. They also will continue to emasculate the
already weakened democratic forces, but will try to
avoid a total crackdown that would jeopardize West-
ern aid. Nevertheless, a serious armed challenge to the
regime would provoke a swift suppression of opposi-
tion elements and possibly lead to the declaration of a
"socialist state" intended to elicit Soviet support and
protection. The deteriorating economy will remain the
Sandinistas' major vulnerability, but economic woes
will encourage radicalization and the search for scape-
goats. Although Moscow seems intent on limiting its
share of the Nicaraguan financial burden, the USSR
already shows signs of agreeing to a gradual increase of
economic assistance in order to maintain the stability
of the Sandinista regime.
77. Despite a history of factionalism going back to
the mid-1970s, the Sandinista leadership has displayed
remarkable unity during its almost three years in
power, reflecting to a large extent the commonality of
Marxist-Leninist views within its nine-man National
Directorate. Although tensions over tactical disagree-
ments and personality conflicts among Sandinista lead-
ers have not been completely resolved�making a
leadership shakeup almost inevitable in the long run�
cohesion is now being reinforced by their growing
concern about Nicaragua's economic problems and by
their perception that increasing foreign challenges
could threaten their control. We believe that over the
next several months the Sandinista leaders' shared
interests in maintaining unity in the face of foreign
threats�real and imagined�will continue to
outweigh individual desires for primacy and foster a
convergence of views about the need to step up the
establishment of a one-party state. Moreover, the
Directorate is dominated by hardliners who control
the armed forces, the security services, the mass
organizations, and the government bureaucracy. Even
if unforeseen circumstances were to result in a power
struggle, this would prompt further radicalization and
an immediate move against opponents to forestall any
attempt to exploit the Directorate's internal divisions.
32
--5EE�REL,.
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