SOUTH AMERICA AND THE SOVIET UNION: SLOWING EXPANDING TIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04T00794R000100300001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 28
• Document Creation Date: December 22, 2016
• Document Release Date: June 8, 2011
• Sequence Number: 1
• Publication Date: November 1, 1986
• Content Type: REPORT

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Directorate of
Intelligence
Slowly Expanding Ties
Secret
South America and the Soviet Union:
ALA 86-10047
November 1986
Copy - r 2
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Directorate of Secret
Intelligence
South America and The Soviet Union:
Slowly Expanding Ties
Operations.
Office of African and Latin American Analysis.
It was coordinated with the Directorate of
This paper was prepared by
Comments and queries are welcome and may be
directed to the Chief, South America Division, ALA,
Secret
ALA 86-10047
November 1986
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South America and the Soviet Union:
Slowly Expanding TiesF---] 25X1
Key Judgments We believe that over the next two years the Soviet Union will be able to
Information available build on the gradual expansion of its commercial, diplomatic, and cultural
as of 9 September 1986
was s used in this report. relations with South America that has occurred since the late 1970s.
Although still a second-order priority for Moscow, South America is
attracting more Soviet attention than ever-as evidenced by General
Secretary Gorbachev's proposed visit to the region next year. The most
important implications of these changes for the United States would result
from the Soviets' potential exploitation of developments in Chile and Peru.
The failure of the Pinochet regime in Chile to begin a credible transition to
civilian rule is enabling the Soviet Union to encourage the revolutionary
left's increasingly violent confrontation with the government and assist it in
efforts to dominate the opposition. The growing polarization of Chilean
society vastly complicates US efforts to promote a peaceful transition to a
democratically elected civilian government.
We believe that Moscow views Peru's President Alan Garcia as the
regional leader most in harmony with its interests and will probably
provide him with continued political backing while attempting to expand
the Soviet presence throughout the country. Garcia is a nationalist, but he
is developing closer economic and political ties to Nicaragua and the
USSR as his administration struggles to pay Lima's huge foreign debt and
outflank domestic leftist opponents. In order to keep the support of the
armed forces, Garcia will continue to purchase Soviet military equipment
on generous credit terms and to accept Soviet advisers.
Recent Soviet gains in the region have been modest and come largely as a
result of the careful cultivation of state-to-state relations. This patient
diplomacy has already bolstered Moscow's ties to Brazil and particularly
Argentina, the key regional powers, and is helping the Soviets make
inroads in Uruguay.
Moscow has kept most South American revolutionary groups at arm's
length. Having concluded that revolution is mostly a long-term prospect in
the region, the Soviets are urging leftists to exploit nonviolent opportunities
for change. With the exception of Chile, where Moscow provides direct aid
to leftist groups, the Soviets apparently prefer to protect their state-to-state
relations by allowing the Cubans and Nicaraguans to take the lead in
assisting groups with only a small chance of seizing power, such as
Colombia's M-19 and Ecuador's Alfaro Vive.
Secret
ALA 86-10047
November 1986
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We believe the basic Soviet objective in South America is to undermine US
influence and, in the long term, to promote conditions conducive to
revolutionary change. Moscow is positioning itself for the long haul by
making incremental advances in a variety of political, economic, and
cultural spheres. To this end, the Soviet Union can be expected to continue
to take advantage of the democratic environment to cultivate influential
leftist political parties and leaders, and other social groups such as unions,
students, and educators. Moscow is also stepping up the volume and
sophistication of its propaganda in South America, and urging Soviet front
groups to become more active on the continent. South American Commu-
nist parties enhance Moscow's influence in the region by joining and then
attempting to manipulate broad leftist opposition coalitions, most success-
fully in Peru and Uruguay.
Over the next two years, Moscow, in our view, will continue to use the in-
creased access it has gained to South American societies-a product of the
region's return to civilian rule-to encourage opposition to US policies and
to erode US influence in the region. South America's popularly elected
leaders, who are highly sensitive to domestic political opposition, may
become somewhat less willing to back the United States, and leftists will
increasingly use Washington's policies as pretexts to attack local US
interests. Soviet competition with the United States in public outreach
programs-such as binational centers, scholarships, and publications distri-
bution-will become more intense. Expanding access to South American
societies will also improve Moscow's opportunities for propaganda and
intelligence collection.
We believe that several important factors, however, will inhibit both Soviet
willingness and ability to penetrate South America. The continent's
distance from the USSR and generally low potential for revolutionary
change will keep it a second-order priority for Moscow. Moreover, the
USSR will not, in our view, make major resource commitments or risk
confrontation with Washington to advance its goals in the area, and will re-
main more concerned with developments in Central America, where
Moscow views its stakes as much higher. In addition, South American
military establishments are likely to remain militantly anti-Communist,
and factionalism within the left will undermine the effectiveness of the
opposition coalitions Moscow is backing. Except in Chile, and possibly
Brazil, Soviet-sponsored Communist parties will not gain much additional
popular support.
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We judge that South American governments will continue to have limited
objectives in their relations with the Soviet Union, and primarily will
remain concerned with minimizing superpower competition in the hemi-
sphere. Although some nations-especially Argentina, with its grain
relationship with the USSR-will look to trade with Moscow for help in al-
leviating debt and balance-of-payments problems, most governments rec-
ognize that Moscow lacks the economic wherewithal to affect the debt
issue significantly or provide new markets for South American exports.
Most area governments, in our view, will maintain good relations with the
United States to protect their access to Western credits.
Our projection for modest Soviet gains in influence in South America
presupposes that fundamental economic and political conditions in the
region remain fairly constant over the next two years. There are several
eventualities, however, that could give Moscow the opportunity to make
more dramatic gains in the region:
? The Communist-dominated revolutionary left in Chile could launch a
full-blown insurgency to topple the Pinochet regime. Increased military
assistance by the Soviets or surrogates such as Cuba to the insurgents
would be crucial to their chances, admittedly slim, of winning a military
struggle against the Chilean armed forces. Such a victory, while a long
shot, would, however, lead to the establishment in Santiago of a Moscow-
line revolutionary government, significantly altering the strategic equa-
tion in South America.
? Any significant victories by the Soviet-backed Nicaraguan regime or its
revolutionary allies in Central America would have a ripple effect in
South America. Although the removal of the current constraints on
Sandinista expansionism-and especially the creation of a new Soviet
client state in Central America-would raise South American fears of
Soviet influence in the region, most governments would also regard such
developments as a significant setback for Washington.
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? Severe economic reverses in key countries over the next two years could
provide new political openings for the broad leftist coalitions the Soviet
Union is supporting and could contribute to the spread of anti-
Americanism throughout the continent. Although Moscow would not
provide significant aid to financially strapped South American countries,
the South American left would nevertheless quickly blame the United
States for adverse economic developments and oppose cooperation with
the Western financial system. Centrist civilian governments now in
power would almost certainly lose considerable political support, compli-
cating the delicate process of strengthening South America's democratic
institutions.
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 Key Judgments
Introduction
1
Strategic Background
Factors Impelling a New Relationship
2
The Return to Democracy
2
Growing Guerrilla Activity and Political Violence
2
Slowly Expanding Ties
Growing Political Contacts
Penetrating South American Society
8
Terrorism and Insurgency
Trade and Economic Cooperation
Outlook and Implications for the United States
Sudden Political Change in Chile
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Figure 1
South America: The Soviet Presences
South
Atlantic
Ocean
Military advisers/
equipment
Joint development
project
Aid to insurgents
0( Fishing agreement
I Media presence
(TASS, Novosti)
0 Cultural center
Aeroflot service
Shore base
(fishing)
0 Country with Soviet embassy
aGuyana, Suriname, and French Guiana are
considered part of the Caribbean and are not
included in this assessment.
Boundary representation is
not necessarily authoritative.
' Ikland Islands
(Islas Malvinas)
(administered by U.K.,
claimed by Argentina)
South Georgia
(Falkland Islands)
708676 (545528) 10-86 25X1
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South America and the Soviet Union:
Slowly Expanding Ties
Over the past decade relations between South Ameri-
ca and the Soviet Union have undergone a slow, but
discernible expansion. With the exception of Chile-
where the Soviets have backed leftist revolutionaries
seeking to overthrow the Pinochet regime-this
broadening of ties is the product of patient, conven-
tional Soviet statecraft, as illustrated by the gradual
growth in trade and commercial ties, the increased
attention the Soviet media have paid to the region,
and the expansion of high-level political contacts,
including General Secretary Gorbachev's projected
visit to South America next year.
This paper takes stock of recent trends in Soviet-
South American relations. It briefly surveys the evo-
lution of relations and analyzes how changing condi-
tions in South America have been benefiting Moscow.
Special attention is given to Soviet policy toward
Chile and Peru, and to Moscow's use of surrogates to
further its policy aims in the region. A concluding
section assesses Moscow's prospects for building on its
gains to date,
Strategic Background
Academic studies show that, because of Latin Ameri-
ca's geographical remoteness, the USSR has tended
to relegate the region to the periphery of Soviet
security concerns, except when Moscow's involvement
with Cuba or Cuban activities has threatened to
provoke a serious crisis in Soviet-US relations. Ac-
cording to the US Embassy in Moscow, Soviet inter-
est in Latin America is opportunistic and has largely
been motivated by the USSR's global competition
with the United States. Moscow has tended to view
South America in terms of its impact on Central
America and the Caribbean, subregions with higher
priority. We believe the basic Soviet objective in the
hemisphere has been to undermine US influence by
expanding the USSR's ties to area governments,
selectively promoting radical change in countries
judged promising, and fomenting discord between the
United States and the Latin Americans, all in antici-
pation that such activities would divert Washington's
attention from areas and issues of more vital Soviet
concern, provided confrontation with the United
States can be avoided.
During the 1960s and 1970s, according to academic
and press sources, the higher priority the Kremlin
attached to developments in the Far East and Africa
significantly limited the attention the Soviets paid to
South America. Setting its sights low, Moscow con-
centrated on cultivating diplomatic and commercial
relations where it could, while competing behind the
scenes with China for the ideological loyalty of local
Communist and leftist groups. Moscow also attempt-
ed to avoid a strategic confrontation with the United
States, largely, in our view, out of a belief that
Washington would not hesitate to defend its strategic
interests in the area. This cautious approach was
reflected in Soviet reluctance to back Castro's plans to
export revolution to South America or to provide the
level of economic assistance that might have helped
Chilean President Salvador Allende's Marxist govern-
ment remain in power.
Moscow's slow start in South America, however, was
only partially a matter of its volition: Latin antipa-
thies toward the USSR also played a central role.
Soviet ideology and culture had little attraction for
South Americans, the USSR was seen as having little
to offer in the way of exports or economic assistance,
and the clumsy diplomacy of the Khrushchev era
subsequently created an image problem for the
Soviets. More important, in our view, were the suspi-
cions that Moscow's "revolutionary" rhetoric and
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support for leftist groups caused among South Ameri-
ca's conservative military and civilian leaders, and the
concern of these leaders about possible US reactions
to signs of expanding Soviet influence in the region.
Factors Impelling a New Relationship
We believe that developments in South America since
the mid-1970s, and particularly since the early 1980s,
have created-despite continuing constraints-a more
favorable environment for Soviet regional policy ob-
jectives and Moscow's relations with individual coun-
tries.
The Return to Democracy
Since 1980 five South American nations, including
the key powers of Argentina and Brazil, have re-
turned to democratic rule, and the new civilian
governments-in contrast to most of their military
predecessors-have been more open to relations with
the Soviet Union. Leaders from left-of-center parties,
such as Argentina's Alfonsin and Peru's Alan Garcia,
are heir to political traditions emphasizing indepen-
dent foreign policies. Others, such as Brazil's Sarney
and Sanguinetti of Uruguay, want to show that they
are independent of the United States in order to
diminish political pressure from domestic leftists.
Communist parties and other leftist groups aligned
ideologically with, or at least sympathetic to, Moscow
have been freer than they were under the military to
recruit members and engage in political activity. For
instance, the US Embassy in Brasilia reports that the
Brazilian Communist Party, operating legally for the
first time in decades, has doubled its membership
since early 1985. While the Marxist left controls no
South American government, its political influence, in
our view, is rising. US embassies
affirm, for example, that vocal domestic
leftists influenced Brazilian President Sarney and
Argentine President Alfonsin to mute their criticisms
of the Sandinistas' growing internal repression and of
Managua's manipulation of the Central American
peace process.
Deteriorating Economic Conditions
The huge foreign debts contracted in the late 1970s
are affecting the internal political climates and for-
eign relations of South American countries in several
ways that indirectly benefit Soviet interests. When the
United States embargoed grain sales to the USSR in
1979, the Soviets secured long-term, reliable supplies
from Argentina, Brazil, and Uruguay; these three
countries now have interest in expanding trade with
the Soviet Union to alleviate their debt and balance-
of-payments problems. At the same time, leftist and
nationalist groups in the region-some with open or
tacit Soviet backing-have attacked the austerity
programs area governments adopted to cope with the
foreign debt as a "Western imperialist plot" to trans-
fer wealth to the "north" and keep South America
mired in poverty. Soviet front organizations, such as
the World Peace Council, have added denunciations
of the debt to their standard propaganda, while in
Peru President Garcia has used confrontation with
Western financial institutions to outflank leftist oppo-
nents. Finally, declining living standards, according to
press and US Embassy reporting, are expanding the
pool of potential recruits for leftist revolutionary
groups.
Growing Guerrilla Activity and Political Violence
Most of South America's budding leftist guerrilla
groups-with the exception of Chile's-are not, in our
view, Soviet sponsored or instigated, yet Moscow
benefits indirectly from their violent activities. Revo-
lutionary movements in Peru, Ecuador, and Colombia
are virulently anti-American and frequently target
US interests. Their activity has at times inclined
governments to reduce their support for the United
States or to turn a blind eye to Soviet designs.
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The Nicaraguan Revolution
The victory of the Sandinistas in 1979 decisively
affected Moscow's strategy toward South America.
Most significant, in our view, Somoza's defeat con-
vinced Moscow the United States would not necessar-
ily use force to block leftist gains in the region.
Moscow has
since assigned priority to Central America, both
because it views revolutionary change there as more
imminent than in most South American countries and
because of the demonstration effect that successful
revolution in the area might have throughout Latin
America. Soviet publications reflect Moscow's view
that the protracted crisis in Central America contrib-
utes to anti-American sentiment throughout all of
Latin America, particularly as the risk of intervention
by Washington increases. Moreover, Moscow, in our
view, has used opposition within some South Ameri-
can governments to US policy in Nicaragua to draw
closer diplomatically to these nations by echoing their
concerns over the danger of "US imperialist" hegemo-
ny
Another result of the Sandinista victory, according to
academic studies, was to persuade Moscow that, while
most South American countries were not poised for
revolution, at least one-Chile-could follow the Nic-
araguan example. Since 1980 the Soviets have public-
ly supported the Moscow-line Chilean Communist
Party's terrorist campaign against the Pinochet re-
gime, in contrast to their admonitions to leftists
elsewhere in South America to concentrate on elector-
al politics. We believe Moscow has concluded that the
stakes in Chile are so high, and the international
reputation of the Pinochet regime so poor, that it can
advocate violence there without jeopardizing its diplo-
matic and economic equities elsewhere on the conti-
nent)
Limitations on Soviet Influence
Despite the more favorable circumstances governing
Soviet ties to South America, Moscow still operates
under significant constraints within the region, which
remains distant from the USSR and from Moscow's
principal interests. Soviet publications note that Mos-
cow has few resources available for new commitments
in the hemisphere. We believe, moreover, that the
USSR remains wary of head-on challenges to Wash-
ington's interests. Finally, many key interest groups in
South America oppose closer ties to the Soviets. Anti-
Communism is strong in area military establishments,
all of which-save Peru-have refused to buy Soviet
military equipment. With the exception of Peru or
Uruguay, organized labor in South America is nation- 25X1
alist, as in Argentina, or only slightly left of center, as
in Chile and Venezuela. Finally, South America's
current civilian leaders, in our view, are first and
foremost nationalists who view all foreign efforts at
influence building in the region with considerable
suspicion.
Slowly Expanding Ties
We concur with the judgment of the US Embassy in
Moscow that the USSR has a low-key, long-term
strategy in South America emphasizing conventional
statecraft and the careful cultivation of promising
domestic political groups. With the exception of
Chile, Moscow is relegating direct support for leftist
insurgencies to Nicaragua and Cuba,
The East Europeans are 25X1
playing minor supporting roles, mainly as trading
Substantial evidence demonstrates that the Soviets'
interest in South American matters has increased in
recent years.
for example, that since 1983 Moscow has launched
new overtures to Argentina, Brazil, Colombia, and
Peru for trade and economic cooperation. The fre-
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quency of high-level South American visitors to the
Soviet Union is unprecedented, including the former
Brazilian and Argentine Foreign Ministers in late 25X1
1985 and early 1986, respectively, and the Uruguayan
Foreign Minister in July of this year.
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The Soviet Surrogates in South America
Cuba a
The Soviet Union derives significant benefits from
Cuba's anti-US foreign policy in South America and
Havana's longstanding relations with most of the
region's radical leftist and insurgent groups.
tensions sometimes arise between Moscow an
Havana over differing foreign policy priorities, we
believe they generally coordinate their activities at
least loosely. Both countries are attempting to ease
their political isolation and garner new markets in
South America by developing correct bilateral rela-
tions with democratic governments and strengthening
ties to non-Communist domestic interest groups in
the area. Moscow and Havana apparently agree, in
particular, on supporting armed struggle in Chile and
on avoiding any actions that would damage the
USSR's important political and economic stakes in
Peru and Argentina.
the Cubans are
also providing at least minimal political support to
the radical left in almost all South American coun-
Moreover, Havana-like Moscow-is openly sup-
porting armed opposition to the Pinochet government
in Chile. the
Cubans are encouraging the left to step up terrorist
activity. Havana is providing financial aid, paramili-
tary training, and logistic support to the Movement
for the Revolutionary Left (MIR), and more limited
assistance to the Chilean Communist Party (PCCh)
and its ciliated Manuel Rodriguez Patriotic Front
(FPMR). he
Cubans are also providing limited training and fund-
ing to terrorist groups in Ecuador, Colombia, Argen-
tina, Uruguay, and Venezuela.
We believe that Havana will use its expanded pres-
ence in the region to build ties to South American
leftists, but will not jeopardize improved political and
economic relations with the area's civilian govern-
ments by prematurely promoting social unrest and
violent political tactics. Cuba will also follow the
Soviet lead on giving priority to Central America.
Although this cautious approach may not yield dra-
matic results in the short term, it enables Castro to
contribute to the long-term strengthening of the far
left's popular support and insurgent capabilities.
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Nicaragua's ties
to revolutionary and terrorist groups in South Ameri-
ca are growing. We believe that the Sandinistas'
involvement with the region's radicals is an integral
part of their foreign policy, stemming from an ideo-
logical commitment to foment Latin American revo-
lution. Managua
closely coordinates at least some of its activities-
varying from political propaganda to insurgent train-
ing-with Moscow and Havana.
Although Colombia is a member of the Contadora
group and maintains correct relations with Nicara-
gua, the Sandinistas have continued to aid Colombi-
an guerrillas. .
Weapons taken from guerrillas who
participated in the M-19 assault on the Palace of
Justice in Bogota last year represent the first con-
firmed evidence that Nicaraguan arms are reaching
Colombian insurgents.
The Sandinistas have also been active in providing
funding to the Ecuadorean left.
the Nicaraguans have provided
funding to the Ecuadorean Socialist Revolutionary
Party and training to the Alfaro Vive guerrilla group.
Some of the Ecuadoreans also received combat expe-
rience in fighting the anti-Sandinista insurgents.=
the Nicara-
guans are also supporting the Chilean left by
transshipping arms to Chile and providing combat
experience for Chilean guerrillas trained in Cuba and
the Soviet Union.
the Nicaraguans have
provided more limited assistance to leftists from
Argentina, Venezuela, Brazil, and Bolivia. In the
Argentine case, for example, officials of the Alfonsin
administration told the US Embassy that members of
the Montenero terrorist organization were in Mana-
gua, and that one member of the group was working
for the Nicaraguan Government.
Venezuelan and Brazilian radi-
cals planned to travel to Nicaragua in 1983 and 1985
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Sandinista insurgents.
Eastern Europe
The East European role in South America is minor.
Visiting East Bloc representatives have followed the 25X1
Soviet lead in establishing trade ties, promoting
cultural exchanges, and offering scholarships. From
the South American perspective, however, the Bloc
countries have little to offer in economic benefits, and
in the case of Poland and Romania-which have not
yet repaid South American credits extended in the 25X1
late 1970s-have proved unreliable partners.
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Historically, South American countries have had
little interest in close relations with the USSR.
Moscow's distance and the scant opportunities for
commerce kept the Soviet Union on the periphery of
South American concerns. Except among small
groups of Marxist intellectuals, Soviet culture and
ideology aroused little interest. Moscow's clumsy
entry into the continent's diplomatic arena in the
1960s and close identification with Castro's Cuba left
many South American governments with a strong
residue of suspicion. Moreover, the region is strongly,
if ambivalently, tied to the West by history, culture,
migration, and economic relationships.
Nevertheless, in recent years many South Americans
have become more interested in developing trade ties
to the Soviet Union. According to US embassies in
the area, some South American governments hope
that new markets in the East Bloc will help them
alleviate their debt and balance-of-payments prob-
lems and offset declining international commodity
prices. Most countries, however, are not eager to
purchase what they consider to be inferior Soviet
industrial goods, and only Argentina has carved out a
niche for itself as a politically reliable supplier of
grain to Moscow.
This economic rapprochement has not been paralleled
by political developments. In our view, the centrist
A review of the Soviet literature on South America
leads us to conclude that Moscow establishes priori-
ties within the region based on the strategic and
revolutionary potential of the different countries, and,
to a lesser degree, the perceived economic gain for the
USSR.' Soviet publications indicate developments in
Argentina and Brazil will be decisive for the region
because these are the largest and most developed
countries; one Soviet analysis published in 1984 stated
governments now in power in much of South America
want few substantive political dealings with the Sovi-
et Union, although they attempt to use cosmetically
close relations with Moscow for domestic political
purposes. Many leaders want to demonstrate their
independence of the United States to outflank local
leftists and affirm their credentials as nationalists.
Such gestures also reflect South America's historical
wariness of an overwhelmingly richer and more pow-
erful United States, and the more recent attraction of
many intellectuals and policymakers to identification
with the Third World and neo-Marxist theories.
In our view, South American governments also use
the spectre of closer ties to the Soviet Union to
pressure Washington for economic and political con-
cessions. For example,
since the Falklands war, Argentina has
repeatedly hinted that it is prepared to buy Soviet
military equipment if either the United States or
other Western countries fail to meet its needs. Simi-
larly, when Uruguayan President Sanguinetti encoun-
tered difficulties in scheduling his trip to Washington
this year, Montevideo floated rumors that he might
visit Moscow instead.
gy?
that both countries were developing industrial prole-
tariats, a signal that the classic Marxist revolutionary
process could begin to unfold. Soviet publications also
show a strong interest in Chile because of the Allende
experience and the revolutionary potential of the left,
and in Peru-largely due to the military assistance
relationship. Published Soviet analyses assign Vene-
zuela, Colombia, Bolivia, and Ecuador to a second
echelon of varying-but not critical-interest, de-
pending on the type, pace, and impact of political
change in each country on Moscow's regional strate-
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Growing Political Contacts
US Embassy reporting indicates that the Soviet
Union is building overt and covert links to influential
independent leftist South American political parties
and leaders. The Soviets have been most successful in
Peru and Uruguay, which have important leftist
opposition movements and almost no counterintelli-
gence capabilities. They have been least successful in
Brazil and Argentina, where the left is weak or
behaving cautiously because of the recent return to
democracy and continuing military sensitivities. =
Reporting from the US Embassy
indicates that the Soviets use a similar ap-
proach throughout-the region. Soviet Embassy offi-
cers-often KGB-engage key local figures in re-
strained, nonideological political discussions. They
frequently offer trips to the USSR or Cuba, opportu-
nities to meet with visiting Soviet delegations, and
financial or propaganda support.
In our view, the Soviets have developed their closest
ties to non-Communist political leaders in Peru, where
they are benefiting from President Alan Garcia's
nationalist policies and the dependence of the Peruvi-
an Army and Air Force on Soviet equipment.
the Soviets
have used the congruence between the Garcia party's
"anti-imperialist" and anti-US ideology and
Moscow's traditional propaganda themes, as well as
the willingness of APRA leaders to accept Soviet
financial support, to promote close working relation-
ships between Soviet Embassy officers and APRA
art officials.
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By contrast, Argentine and Brazilian political parties
and leaders have been less willing, for both pragmatic 25X1
and ideological reasons, to deepen their relationship
with the Soviets, according to US Embassy reporting.
the US
Embassy in Brasilia reports that, on the whole, the
Soviets have had few dealings with non-Communist
political figures, largely because the Brazilian politi-
cal elite is suspicious of the USSR and anxious not to
provoke the country's anti-Communist military that
only recently relinquished political power. Brazilian
leftists, including Marxists, have also preferred indig-
enous political parties, such as the Workers Party-
an offshoot of militant labor activism in Sao Paulo in
the late 1970s-to the orthodox, Moscow-line Brazil-
ian Communist Party.
In Argentina the Soviets have not made extensive
efforts to cultivate civilian politicians outside of for-
mal government-to-government channels because of a
lack of suitable targets and fear of jeopardizing
bilateral economic relations, according to the US
Embassy in Buenos Aires. Soviet publications did not
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criticize the Argentine military governments for deci-
mating the non-Communist left during the so-called
dirty war that preceded the return to democracy
In fact, the Argentine Communist Party
maintained a semilegal existence during that period.
The mainline Peronist and Radical Parties are, in our
judgment, too nationalist to respond favorably to
Soviet overtures. We believe that Moscow is also
avoiding any actions that would antagonize the still
potent Argentine armed forces or further diminish
such prospects as exist for sales of Soviet military
join and then attempt to manipulate broad leftist
opposition coalitions from within. Communist parties
in Ecuador, Uruguay, and Peru, for example, have
become influential members of leftist fronts. This
development is particularly important in Peru, where
we believe the United Left coalition is the major
electoral alternative to Garcia's APRA party.
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hardware to Buenos Aires.
Moscow uses South American Communist parties to
spread Soviet propaganda and recruit sympathizers,
thus supplementing the direct approaches that local
Soviet Embassy and KGB representatives make to
non-Communist political groups.
virtually every South American country,
groups, and the media, according to reporting from
US embassies in South America. Local Communist
parties are using Soviet funds to elect their members
and sympathizers to office in union confederations in
Penetrating South American Society
In addition to politicians, the Soviets are also wooing
union leaders, students, educators, professional
In Peru and Uruguay,
Except for Chile-where Moscow publicly is urging
violent opposition to Pinochet-the Soviets, in our
view, are most interested in using South American
Communist parties to exploit the political opening
created by the return to democracy. According to
Soviet publications,
Moscow generally urges local Communist parties to
however, the US Embassies note that the Communists
face stiff competition for control of the unions from
still more extreme leftist groups, and in the case of
Uruguay have been steadily losing ground to ultra-
leftists. We expect the Peronist leadership of Argen-
tina's powerful General Workers Confederation to
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resist successfully what I learlier
this year were the Communist Party's plans to infil-
trate organized labor.
The Soviets' education programs are also having
mixed results. Using data compiled from Embassy
reporting, we estimate that more than 4,500 South
American students-particularly from Colombia,
Peru, and Bolivia-attended Soviet universities in
1985, with the largest number enrolled in technical
programs at Patrice Lumumba University in Moscow.
The US Embassy in Lima notes that Soviet-educated
Peruvians are slowly acquiring sociopolitical influence
as they move into such positions as high school and
university teachers and middle-level government bu-
reaucrats. US embassies elsewhere on the continent
report, however, that graduates of Soviet schools do
not compete effectively with their US, West Europe-
an, or domestically educated countrymen, and, in the
case of Colombia, frequently return disillusioned with
Soviet life and universities. The refusal of Colombian
and Brazilian educational institutions and government
agencies to recognize Soviet academic degrees limits
the influence of such graduates in those countries.
The Soviets are investing heavily in cultural diploma-
cy. Except for Chile and Paraguay, all South Ameri-
can countries have Soviet friendship societies and
binational centers, feature visiting Soviet cultural
presentations, and permit the local distribution of
Soviet publications and books. Now that democratic
governments have curtailed many of the control and
surveillance activities put in place by previous military
regimes, these Soviet publications, according to US
embassies in the area, are reaching much wider
audiences. The United States Information Agency
found in 1985 that Soviet books are generally far
cheaper and more readily available in many South
American countries than local products or US books,
particularly on university campuses.
Only Brazil and Argentina participate with any regu-
larity in scientific and technical exchanges with the
Soviet Union, according to regional embassy report-
ing. The exchanges cover several scientific fields, but
both countries appear to limit transfer of technology
to nonsensitive industries, such as iron and steel.
the Soviets were attempting, thus far
unsuccessfully, to convince the Brazilians to include
fiber optics and advanced computer technology in the
bilateral scientific cooperation program,
the Soviet Union is stepping up the volume and
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sophistication of its propaganda in South America.
the number of TASS and 25X1
Novosti correspondents, who gather news and dissem-
inate propaganda locally, is increasing.
Soviet front organizations are becoming more active
in the region as well, according to US embassies
The World Peace Council,
a longstanding Soviet front group, has established a
new chapter in Uruguay, and is holding more frequent
meetings of its Argentine, Brazilian, and Ecuadorean
chapters. Such undertakings, however, often backfire.
In 1985, for example, after the Soviets invited large
South American delegations to the Moscow youth
festival, many Argentine and Uruguayan participants
told the US Embassy in Montevideo that they were
repelled by the Soviets' heavyhanded stage manage-
ment of the affair.
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Terrorism and Insurgency
Although leftist revolutionary violence in South 25X1
America has increased since 1979-when the Sandi-
nista victory in Nicaragua provided a powerful exam-
ple-the Soviet Union has given significant direct
assistance only to Chilean insurgents. 2.5X1
we believe that Moscow 25X1
may be the ultimate source of some of the assistance
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According to published Soviet analyses, Moscow
believes that "objective conditions "favor armed
struggle leading to revolution in Chile. Soviet studies
point to the narrowing political and social base of
support for the Pinochet regime, as well as increased
discontent among the armed forces; they advocate the
gradual escalation of revolutionary violence under a
vanguard leadership. Soviet interest in Chile is also
strong, in our view, because of Moscow's desire to
reverse the ideological and psychological setback it
suffered when the Allende regime fell in 1973. The
USSR's longstanding support for the Chilean Com-
munist Party-one of the strongest and best orga-
nized in Latin America-and the country's com-
manding strategic location on the South American
Pacific littoral made this setback particularly acute.
The Soviets also probably believe they have a freer
hand in Chile than elsewhere in South America
because they can exploit the Pinochet government's
status as an international pariah, and, concurrently,
undercut US influence in the region. In addition,
Moscow has no state-to-state relationship to protect
in Chile.
According to US Embassy reporting, the Chilean
Communist Party (PCCh) is the largest, most cohe-
sive, most influential far-left group in the country,
and among all political parties is second only to the
Christian Democrats in overall strength.
the party has about 50,000 members
in its regular organization and about 1,000 members
in the closely allied terrorist front, the Manuel
Rodriguez Patriotic Front (FPMR).
Moscow pro-
vides training and financial support to the PCCh and
the FPMR. We
concur with the US Embassy's conviction that Soviet
and Cuban assistance is increasing, as demonstrated
by the major arms caches-including large quantities
of Soviet and East Bloc weapons, along with Viet-
nam-era US M-16 rifles-Chilean security forces
found in August 1986.
The PCCh strategy closely parallels Soviet analyses
of how to exploit the Chilean turmoil,
the Soviets promised to assist PCCh
preparations for armed revolution, but that they also
heeded the arguments of PCCh leaders that the party
was not yet strong enough to launch an insurrection.
Pinochet in September.
Meanwhile the PCCh and the FPMR continue to
prepare for an eventual full-blown insurgency. We
have noticed an increased pace of bombings and
lethal terrorist activities in recent months, particular-
ly during the two-day general strike in July 1986
when armed terrorists directly confronted the securi-
ty forces, and in the assassination attempt against
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Cuba has provided to terrorist groups such as the
Colombian M-19 and Ecuador's Alfaro Vive. Accord-
ing to the US Embassy in Bogota, the Soviets have
also provided limited aid and training to the FARC,
the armed wing of the orthodox Colombian Commu-
nist Party, but Moscow, in our estimation, has kept its
role small to avoid disrupting official bilateral ties.
In our view, the Soviets have limited their role in
supporting insurgency for ideological and tactical
reasons:
terms, but so far only Peru has accepted. US embas-
sies report that most
South American militaries are strongly anti-Commu-
nist and prefer Western hardware:
? As of 1984, the Brazilian, Colombian, and Venezu-
elan high commands have refused to exchange
military attaches with the USSR because of the 25X1
possible security and intelligence ramifications.
? Having concluded that revolution is a long-term
prospect in South America, the Soviets urge revolu-
tionaries, except in Chile, to exploit nonviolent
opportunities presented by the return of democracy.
This approach also helps the Soviets avoid any
damage to their careful cultivation of state-to-state
relations in the area, particularly with Brazil and
Argentina.
ments, but these groups have,
? Colombia and Peru have active insurgent move-
preferred to accept Cuban, Nicara-
guan, or Libyan aid.
In fact, Soviet installations and person-
Soviet representatives in Peru have worked to
avoid any suggestion that they are supporting insur-
gency because they do not want to damage their
relationship with the Peruvian military or the
Garcia government. Moreover, Peruvian terrorists
attacked Soviet targets in summer 1986.
terrorist activities.
? Moscow is aware that elsewhere on the continent
insurgent movements are either nonexistent, as in
Brazil and Paraguay, or are very small or inactive,
as in Argentina, Uruguay, and Venezuela.
Military Relations
Moscow is trying to build relations with South Ameri-
can armed forces by offering military equipment,
training, and technical assistance on highly favorable
? Bolivia rejected a large Soviet aid package that
included military hardware in early 1986,
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confirming the Paz Estenssoro
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regime's reversal of its predecessor's tentative rap-
prochement with Moscow.
tary has consistently rebuffed Moscow's many sales
pitches, and has indicated that it would only turn to
Soviet supplies if it lost all access to Western
sources.
Except for the Navy, Peru's military services have
become highly dependent on Soviet military equip-
ment and advisers. A strongly nationalist military
government turned to Moscow in the early 1970s after
Western suppliers refused to fill its orders.
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Soviets have supplied nearly half of Army and Air
Force equipment, trained over 200 officers and 2,000 25X1
enlisted men, and stationed advisers with nearly every
Army and Air Force unit. Peru now owes the USSR
$1.2 billion for this assistance.
We believe that the potential for Soviet influence
within the Peruvian Armed Forces is slowly expand-
ing as younger, Moscow-trained officers assume more
senior positions. Older, higher ranking officers favor
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younger officers trained in the USSR have, in gener-
al, a positive impression of Soviet society, military
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Figure 2
South America: Trade With USSR,
Regional Export and Import Trends, 1980-85 a
Imports
7 I I I 1 1
50 1980 1981 1982 1983 1984 1985
capabilities, and assistance to Peru,
Peru's capability to service Soviet equipment in-
country has generated considerable resentment within
the officer corps.
Trade and Economic Cooperation
According to official data, South American countries
are earning collectively about $2 billion in hard
currency from sales to the Soviet Union, but this trade
as a share of total South American exports to the
world has been declining since 1981 in dollar terms.
Argentina, Brazil, and to a lesser extent Uruguay,
account for the lion's share, but other countries'
exports to the USSR are declining.The Soviets also
buy few of the industrial goods the South Americans
most want to promote. Meanwhile, press reports
indicate that Moscow is encountering stiff resistance
to efforts to redress its trade imbalance by encourag-
ing the South American countries to buy more Soviet
manufactured goods, which are generally perceived as
We believe that the USSR assigns a high priority to
its grain trade with South America. A reliable supply
of Argentine grain in particular has given the Soviets
some insurance against another US boycott and
greater leverage in their worldwide purchasing activi-
ties. In our view, the Soviets also believe that they will
eventually be able to offset their hard currency grain
purchases in South America with sales of manufac-
tured products and contracts for industrial develop-
ment projects.
The Soviets, however, are not willing to back their
South American policy with economic aid or signifi-
cant trade concessions.
the Soviet Union buys the lowest priced
grain available on world markets regardless of origin,
and, to the dismay of South American vendors, has
sometimes changed suppliers on short notice as they
have done this year with Argentina. Although the
Soviets will finance military equipment and industrial
inferior to Western or local equivalents.
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Figure 3
Exports to USSR: Country Trends, 1980-85
Uruguay
B ;I
raze
Colombia
Peru
I I I
-5 1980 1981 1982 1983 1984 1985
and infrastructure development projects, such as fac-
tories and hydroelectric dams, at highly concessionary
interest rates, we have had no indication that Moscow
is willing to offer the massive credits and loans that
would give the South Americans a significant alterna-
tive to their continued dependence on trade and
financial dealings with the West.
Argentina stands out as the Soviet Union's closest
economic partner in South America. According to US
Embassies in Moscow and Buenos Aires, the Alfonsin
government is continuing its military predecessors'
push for more trade with Moscow. Argentine Foreign
Minister Caputo signed a new, five-year, long-term
agreement for grain sales during his visit to the USSR
in January 1986, pledging the Soviets to 4 million
metric tons of corn and sorghum and 500,000 metric
tons of soybeans. Soviet purchases of only 700,000
metric tons by late 1986 lead us to doubt the depth of
their commitment, notwithstanding reaffirmation of
this agreement during Alfonsin's visit to Moscow in
October 1986.
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The Soviet Union is putting strong pressure on Argen-
tina to meet its pledge under the long-term agreement
to buy $500 million in Soviet goods over the next five
years, according to the US Embassy in Moscow.
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Argentine purchases will be tied to specific develop-
ment projects. According to press reports, the Soviet
Union and Argentina have agreed on Soviet participa-
tion in the modernization of the fire-damaged port of
Bahia Blanca; Moscow will dredge the port's access
channels and cover the $150 million cost with low-rate
financing. In late summer, the Argentine Government
awarded Moscow a $200 million contract for railroad
electrification.
Brazilian President
Sarney also wants to expand commerce with Moscow
and has stepped up negotiations for a new trade
agreement. The Soviet Union in turn has shown
interest in Brazil's high-technology and scientific
industries but has not been willing to expand its
imports of Brazilian manufactured products,
Press reports indicate that
Brazilian and Soviet state firms are discussing joint
development projects, including mining and pig iron
production for the Soviet market, which are similar to
cooperative ventures the two governments already
have in Brazil, Angola, and Mozambique in hydro-
electric power, chemicals, and steel.
Peru, the only country in South America to run a
trade deficit with the Soviet Union, has seen its
exports decline steadily since 1981, even as its pur-
chases of military equipment contributed to a growing
debt to Moscow. since
late 1985 the two countries have signed two debt
rescheduling agreements that permit Lima to pay
some of its obligations by deliveries of nontraditional
products. The US Embassy in Lima reported in early
1986 that Peru will pay off another portion of this
debt by delivering goods to Nicaragua under a trian-
gular trade arrangement.
earned them Lima's good will, but
Peruvian footdragging on the
rescheduling issue is frustrating Moscow.
Aside from bilateral trade and development deals, the
Soviet'Union is using a fisheries aid program to
expand its maritime presence in South America,
according to reporting from
US embassies. The USSR has signed fishing agree-
ments with Argentina and Peru, and has offered aid
to the Ecuadorean and Brazilian fishing industries.
Fishing agreements open new possibilities for joint
ventures with area governments and maximize the
profitability of Soviet fishing fleets on both coasts of
South America. Both Lima and Buenos Aires allow
Soviet vessels port rights for repairs and resupply, and
several thousand Soviet fishermen transit Argentina
and Peru yearly as part of the periodic rotation of
crews on Soviet trawlers and factory ships.
The recently signed Argentine-Soviet agreement rep-
resents a significant upgrading in Soviet access to
Argentine port facilities, but other nations have been
In 1983, Brazil rejected a joint shipbuilding
project that would have allowed Soviet technicians to
study the Brazilian coastline,
Outlook and Implications for the United States
We believe that relations between the USSR and
South American countries, particularly Argentina,
Brazil, Peru, and Uruguay, will tend to expand slowly
over the next two years-a pace that will not substan-
tially affect US interests. Because of its distance from
the Soviet Union and generally low potential for
revolutionary change, the continent will remain a
second-order priority for Moscow. The Soviets, in our
view, are still not capable or prepared to make major
resource commitments or risk confrontation with the
United States in the area. Furthermore, Soviet actions
will remain closely tied to developments in Central
America, where Moscow views its opportunity and its
investment as much larger.
Moscow will be ready, however, to exploit promising
political openings, particularly if the opportunity to
promote revolutionary change appears. Chile, in our
view, offers the Soviets the greatest opportunities. The
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Soviets will exploit continued failure by the Pinochet
regime to begin a credible transition to civilian rule by
encouraging the revolutionary left to intensify its
increasingly violent confrontation with the govern-
ment and push its efforts to dominate the opposition.
We believe the Soviets will continue to take advantage
of South America's new democratic political environ-
ment to build more direct contacts with key non-
Communist political figures and encourage more ac-
tivist leftist groups while-Chile aside-relegating
support for insurgencies and terrorism to Cuba and
Nicaragua. Moscow will use these contacts to contin-
ue to encourage South American opposition to US
policies, and to promote erosion of US influence in
South America. These activities could reduce the
willingness of South American leaders to back US
positions toward Central America and other Third
World countries and reinforce the growing propensity
of South American leftists to focus on Washington's
policies outside the continent as pretexts to attack
local US interests.
Moscow, viewing President Alan Garcia as the re-
gional leader most in harmony with its interests, will
probably continue to provide him with political back-
ing while attempting to expand the Soviet presence
throughout Peru. The Soviets almost certainly would
like an even friendlier, more ideologically promising
regime to succeed Garcia-either from the left wing
of APRA or from the United Left coalition. They are
aware, however, that the Armed Forces High
Command would probably prevent a Marxist govern-
ment from taking power.
Continuing constraints, however, will impede Mos-
cow's ability to penetrate South American societies.
Area military establishments will remain militantly
anti-Communist. Leftist groups willing to collaborate
with Soviet representatives or Communist parties are
likely to remain on the fringes of the political system
in Argentina, Brazil, Venezuela, and Colombia. In
Ecuador, Peru, and Uruguay, moreover, we judge that
Communist parties will continue to be outflanked by
extreme leftist groups and will probably find faction-
alism on the left a strong obstacle to effective coali-
tion-building. Except in Argentina, labor move-
ments-another favorite Soviet target-have limited
political clout. South American governments will also
likely limit their ties to the Soviet Union to trade in
order to avoid disturbing their generally satisfactory
relationships with Washington, or provoking opposi-
tion from their military establishments. Economic ties
between the Soviet Union and South American coun-
tries will at best grow slowly, relative to the contin-
ent's trade and financial dealings with the rest of the
Our projection for modest Soviet gains in South
America presupposes that fundamental political and
economic conditions in the region remain fairly con-
stant over the next two years. There are several
eventualities that could give Moscow the opportunity
to make dramatic gains in the region.
Sudden Political Change in Chile
The Communist-dominated revolutionary left may
judge it has sufficient strength to launch a full-blown
insurgency to topple the Pinochet regime. Although
the Communists have been too cautious to date to
embark on such a venture, we believe they might
change their strategy if excluded from a peaceful
transition to civilian rule or if their current campaign
of political violence exposes significant vulnerabilities
in the regime. The Soviets would sanction and provide
substantial support for an all-out assault on Pinochet
if they believed it would succeed. Such a commitment
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could lead to a Moscow-line revolutionary government
in Santiago-dramatically altering the strategic equa-
tion in South America and possibly prompting some
governments to move toward a greater accommoda-
tion with the Soviets. The Soviets and the Cubans
would take advantage of their new foothold to expand
their aid to selected revolutionary groups elsewhere on
the continent, while US influence would suffer a
severe blow.
US Setbacks in Central America
Dramatic victories for the Sandinistas or their revolu-
tionary allies in Central America would have a ripple
effect in South America. If Managua crushes the
anti-Sandinista insurgents, it would remove some of
the constraints on Sandinista expansionism and in-
crease the likelihood of a new infusion of Cuban or
Soviet military assistance to the Salvadoran or Guate-
malan guerrillas. In the worst case scenario, such
support-combined with a reduced US presence in
the region-could enable a revolutionary Marxist
regime to take power in El Salvador.
Even without the establishment of a new Soviet client
in Central America, the freer rein for Managua
inherent in the defeat of the anti-Sandinista insurgen-
cy would boost Moscow's prospects in South America.
Although the Sandinistas' entrenchment might
heighten South American concerns regarding Soviet
imperialism on the continent, regional governments
would regard a victory by Managua over the insur-
gents-and even more so the defeat of the Duarte
regime-as a setback for the United States and a
signal that East-West power politics would intensify
in the area. Success in Central America would like-
wise embolden the Soviets and their surrogates to
increase aid to selected South American revolutionary
groups, perhaps prompting many countries to make
peace with Moscow and Havana in the hope of
minimizing such support.
Dramatic Economic Decline
Key South American countries-particularly Argen-
tina and Brazil-could suffer dramatic economic
reverses over the next two years if discontent over
frozen salary levels, increased cost pressures on
import-dependent industries, and poor international
markets for agricultural exports reignite a cycle of
hyperinflation and recession. Also, soft international
petroleum prices and growing leftist political activism
may make the economy a critical issue in Ecuador,
while Peru could suffer a rapid economic collapse as a
consequence of its isolation from the international
financial system.
A deepening economic crisis in South America, in our
view, could provide new political openings for the
broad leftist opposition coalitions the Soviet Union
supports in the region. These groups include advocates
of statist and nationalist economic policies who oppose
cooperation with the Western financial system and
who would quickly blame the United States for
adverse economic developments. The centrist civilian
governments now in power in much of the continent
might lose considerable public support, complicating
the delicate process of strengthening South America's
democratic institutions. Finally, although resource
constraints would probably prevent the Soviet Union
from offering significant financial aid to win over area
governments, Moscow would benefit from the in-
creased political clout of radical leftists.
2.5X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2011/12/30: CIA-RDP04T00794R000100300001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/30: CIA-RDP04T00794R000100300001-5
Secret
Secret
Declassified in Part - Sanitized Copy Approved for Release 2011/12/30: CIA-RDP04T00794R000100300001-5