LATIN AMERICAN TRENDS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A002100250001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 16
• Document Creation Date: December 12, 2016
• Document Release Date: June 1, 2001
• Sequence Number: 1
• Publication Date: November 12, 1975
• Content Type: NOTES

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NOFORN
guITT ROUEN
Latin American Trends
Secret
November 12, 1915
25X1A d.,?::. No. 0535/75
1?xGENCY ARCIAVES
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Warning Notice
Sensitive Intelligence Sources and Methods Involved
(WNINTEL)
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
DISSEMINATION CONTROL ABBREVIATIONS
NOFORN- Not Releasable to Foreign Nationals
NOCONTRACT- Not Releasable to Contractors or
Contractor/Consultants
PROPIN- Caution-Proprietary Information Involved
USIBONLY- USIB Departments Only
ORCON- Dissemination and Extraction of Information
Controlled by Originator
REL.. . - This Information has been Authorized for
Release to ...
Classified by 010725
Exempt from general declassification schedule
of E.O. 11652. exemption category:
458(1). (2), and (3)
Automatically declassified on:
Date Impossible to Determine
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This publication is prepared for regional specialists in the Washington com-
munity by the Western Hemisphere Division, Office of Current Intelligence,
with occasional contributions from other offices within the Directorate of
Intelligence. Comments and queries are welcome. They should be directed to
the authors of the individual articles.
CONTENTS
November 12, 1975
Panama: Other Problems with the US . . . . . 1
Argentina's Deteriorating Relations
with China . . . . . . . . . . . . . . . . 3
Peru: Political Activity on the
Upswing . . . . . . . . . . . . . . . . . . 5
Venezuela and Ecuador Weigh Regional
Oil Alignment . . . . . . . . . . . . . . . 7
Haiti Experiments with Reform . . . . . . . . 9
Nicaragua: State of Siege Rolls On . . . . . 11
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Panama: Other Problems with the US
Several bilateral US - Panamanian problems not
directly related to the canal talks could sour the
atmosphere surrounding the negotiations and complicate
the negotiators' tasks. One problem is an injunction
issued by a US court against further construction on
the Inter-American Highway through the Darien Gap
between Panama and Colombia. The injunction, issued
on October 17 by a District of Columbia court, resulted
from a suit brought by the Sierra Club and other environ-
mental groups which fear that opening a road through
the now impenetrable Colombian-Panamanian border area
would lead to environmental damage and the spread of
aftosa, hoof-and-mouth disease. The injunction comes
just as the dry season is approaching in Panama, when
construction was expected to move into high gear and
help alleviate economic problems. The Panamanians
have been astounded to find that a domestic court
could halt implementation of an international agreement
signed in 1971 and reportedly are considering filing a
protest.
The Panamanians, like several other Latin American
countries, are also chafing under their 1975 voluntary
agreement to limit meat exports to the US to 2.5 mil-
lion pounds. Panamanian officials want a 40-percent
increase this year through reallocation of shortfalls
from other countries and a doubling of the limit for
1976. To circumvent present limitations, Panama has
arranged to import five million pounds of Australian
beef in the :belief that this will not fall under the
restraint program and can be reexported to the US.
Panamanian expectations, however, may be unduly opti-
mistic.
The Panama Canal Company has meanwhile decided to
raise the rates charged Panama City for water from the
Canal Zone distribution system. The US ambassador
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expects the Torrijos government to turn the increase
into a political issue unless some offsetting benefits
are offered.
Finally, US action on a half-million-dollar FMS
credit now under consideration could be interpreted in
Panama as indicative of how the US views Panama's
future role in canal defense.
The Panamanians are not likely to pass up the op-
portunity to tie bilateral issues to the canal talks
if they believe this could force a more forthcoming US
position. Machiavellism aside, the Panamanians do not
appreciate the lack of complete US executive control
over the many issues affecting bilateral relations,
and they might read a series of decisions disappointing
to Panama as a US response to Panamanian treaty aspira-
tions. Having recognized that any real breakthrough
in the canal negotiations will have to wait until after
the 1976 elections in the US, the Torrijos government
is looking for US moves in the interim which will demon-
strate the success of its "wait it out" tactics. In
this situation, negative actions would be doubly dis-
appointing. (CONFIDENTIAL/NOFORN)
November 12, 1975
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Argentina's Deteriorating Relations With China
The departure of New China News Agency repre-
sentatives from Argentina on October 29 marks a sig-
nificant decline in the already strained diplomatic
relations between President Peron's government and
the Peoples Republic of China.
The action occurred when the Argentine foreign
ministry failed to respond to complaints that the
Chinese and representatives of other Communist coun-
tries were being harassed by special regulations re-
quiring them to renew their visas every three months
and to request 48-hour advance approval for travel
outside the capital. According to one report the
government not only intends to continue these require-
ments, but now plans to prohibit Communist Chinese
publications from entering the country.
The relationship has been anomalous from the be-
ginning. Although Argentina closed its embassy in
Taipei soon after relations were established with
China in February 1972, it has allowed the Republic
of China to retain a commercial mission in Buenos
Aires. Then-President Lanusse reportedly did not
want to offend high-ranking army officers who were
sympathetic to the Republic of China.
Meanwhile, efforts to develop closer economic
ties with the Peoples Republic have not been very suc-
cessful. Although the Chinese agreed last year to
purchase Argentine corn and wheat, they have been dis-
satisfied both with the quality of the grain and with
Argentina's inability to supply as much as it had pro-
mised.
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Other problems will probably cause relations to
deteriorate further--Army Commander General Videla,
who is heading the campaign against internal subversion,
recently said publicly that local terrorism is receiving
external support from Communist sympathizers, including
Peking. The government that succeeds President Peron's
administration promises to be at least as conservative
in outlook and may well be more susceptible to manipula-
tion by anti-Peking military leaders. (SECRET/NOFORN)
November 12, 1975
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Peru: Political Activity on the Upswing
For the first time since the armed forces took
over the government in 1968, an organized political
challenge to government policies may be developing
as leftist peasant and labor groups rally behind two
radical generals ousted by President Morales Bermudez
earlier this month. Although one of the cashiered
generals apparently has little civilian political sup-
port, the other, General Rodriguez, has maintained
relatively strong ties to a number of leftist groups
and he may very well become involved politically with
them. Rodriguez is an ambitious general, and his
early retirement, while forcing him to alter his plans,
almost certainly has not diminished his desire to be-
come president.
Under former president Velasco, who headed the
military government from 1968 until his ouster by
Morales Bermudez last August, the armed forces were
unable to develop any significant base of civilian
support for their socialistic policies. At the same
time, government censorship and intimidation of civilian
critics prevented the growth of any coherent opposition
movement. Since assuming power, Morales Bermudez has
loosened press restraints significantly, eased restric-
tions on political parties, and repeatedly alluded to
still-vague plans for popular "participation" in the
revolutionary process. All this has tended to raise
the level of political activity and to increase specu-
lation that significant civilian involvement in the
governing process is in the offing.
:Leftist groups, which supported many of Velasco's
policies, are still circumspect in criticizing Presi-
dent Morales Bermudez, but they are becoming bolder in
questioning whether his government backs some of the
more radical reform programs. These groups apparently
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view the fate of the radical generals as confirma-
tion that Morales Bermudez intends to pursue a more
moderate political course than his predecessor.
General Rodriguez, as a high-ranking former official
associated with radical causes, is an attractive and
logical leader for this sector.
The traditional political parties are also be-
ginning to stir in response to the government's hints
at popular participation and to defend themselves
against charges by leftists that they are subverting
the revolutionary process. Both the widely popular
American Popular Revolutionary Alliance and the Popular
Alliance party of former civilian President Belaunde
will become more active in the coming weeks, to sup-
port at least some of Morales Bermudez'policies, and
to strengthen their own constituencies. Belaunde him-
self may return to Peru early in December to take over
the reins of the organization that elected him Peru's
last civilian leader over twelve years ago. (CONFIDEN-
TIAL)
November 12, 1975
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Venezuela and Ecuador Weigh Regional Oil Alignment
Venezuela and Ecuador have discussed the possible
formation of an organization of Latin American petro-
leum exporters to coordinate policies within the region.
Prospects appear bleak, however, because Mexico--whose
participation would be essential--is unlikely to enter
into any arrangement that would limit its freedom of
action.
Caracas, increasingly cool toward the Latin
American Energy Organization (OLADE), may be casting
about for another regional organization more responsive
to its leadership aspirations. Dissension evident in
the establishment of OLADE had highlighted the diffi-
culties in forming a consensus in a group of countries
comprising both oil exporters and importers, despite
general lip service to the ideal of regional solidarity.
President Perez of Venezuela reportedly suggested
the idea of a new organization to President Rodriguez
of Ecuador as a means of gaining control of markets in
Latin America. Rodriguez is interested in anything
that he thinks would strengthen the position of his
government vis-a-vis the oil companies in Ecuador.
Venezuelan interest stems at least partly from concern
over the emergence of Mexico as a serious potential
competitor. Mexico, with crude production already up
to 750,000 barrels per day, could export 1.3 million
barrels per day by 1980. It is thus in Caracas'
interest to form a close alignment as quickly as pos-
sible.
The present Mexican government has chosen not to
join OPEC, preferring to retain its independence in
setting oil policy. The same reasoning would militate
against participation in a regional organization. The
next president may seek closer cooperation with Venezuela
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in some aspects of oil policy but is unlikely to forgo
any options with regard to marketing of Mexican oil.
Even if Venezuela and Ecuador should succeed in
forming an organization with Mexico, the new group
would not substantially further Venezuela's interests.
In a wider context, such a group would not appreciably
increase Latin American influence in OPEC, as their
total crude production amounts to only about eleven
percent of the OPEC total. As Mexican production in-
creased, it would little more than offset Venezuela's
declining position.(SECRET/NOFORN)
November 12, 1975
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Haiti Experiments with Reform
The outcome of the postage stamp fraud trial
which has been a major focus of public attention in
Haiti for the past eight months, is both a sign of
cautious movement toward reform and a reminder that
Haiti remains a personalist dictatorship with the
palace determining when and for what purposes the
legal. process will be used.
Last spring the Haitian government uncovered a
scheme to sell several million dollars worth of un-
authorized Haitian stamps. The most important figure
charged was Secretary of Commerce and Industry Serge
Fourcand, leader of a new breed of young technocrats.
President Jean Claude Duvalier felt personally betray-
ed by Fourcand since the minister had been his trusted
adviser and confidant.
As the trial began the old-guard Duvalierists
seemed ready to take advantage of the situation to dis-
credit the technocrats who had begun to challenge them.
The trial took on another coloration, however, when the
culprits instead turned out to be officials of the pre-
ceding regime of Francois Duvalier.
In some respects the outcome of the trial substan-
tiates the view that President Duvalier is cautiously
adopting a more reformist approach. Confronted with
convincing evidence of Fourcand's innocence of anything
but. administrative negligence, the prosecution did not
press its case and accepted his acquittal without pro--
test. The televised trial resulted in a public airing
of the climate of official corruption and lack of public
ethics that prevailed during the presidency of Papa Doc.
The young president's willingness to permit these reve-
lations despite the smudging of his father's reputation
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and the embarrassment caused to still-active old-line
Duvalierists demonstrated his apparent confidence in
the strength of his own government and underlined his
desire to improve the standards of public administration.
The government also proved willing to allow a de-
gree of freedom of the press in the coverage of the trial.
The iconoclastic editor of a leftist weekly repeatedly
criticized the moral climate under Papa Doc, the past
administration of Haitian justice, and the absence of
civic responsibility. He was cautioned by the interior
minister several times and was perilously close to
having his journal shut down, but the fact remains that
a certain independence of expression was tolerated.
Duvalier's purported actions regarding the trial
reflect his own uncertainties and the clear limits to
the amount of liberalization he will allow.
the minister
of justice reportedly claimed that at one point he was
instructed by the president to have the presiding judge
deliver a guilty verdict against Fourcand. Duvalier
later countermanded this order when he learned of his
mother's apparent involvement in the scandal and some
testimony threatened to make it public. Duvalier re-
portedly ordered the commander of the presidential
guard to end the trial rapidly. This was done, and
the verdict rendered several weeks later. The President
then rewarded the judge and prosecutor by giving them
new automobiles.
After long years of unrelieved tyranny under Papa
Doc, the stamp fraud trial--even with its obvious limit-
ations--is a Positive step and a sign that the regime
is willing to experiment with reform. How the govern-
ment deals with other recently incarcerated individuals
--including businessmen arrested in a customs scandal,
aircraft hijackers, and plotters against a prominent
member of the Duvalier entourage--will give more con-
clusive indications of the regime's commitment to open
court trials and even-handed justice. (SECRET/NOFORN)
November 12, 1975
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Nicaragua: State of Siege Rolls On
President Somoza appears to have found a con-
venient political tool in the state of siege he in-
voked following the terrorist attack last December
by the Sandinist National Liberation Front (FSLN).
The censorship permitted under the statute has been
especially useful, and it could become a permanent
part of the political scene. Somewhat paradoxically,
the resulting popular frustration heightens the appeal
of the guerrilla FSLN in contrast to the apparently
impotent political opposition.
The state of siege has two principal benefits for
Somoza. First, it enables him to muzzle principal op-
position leader Pedro Joaquin Chamorro, owner of the
major daily La Prensa. By shutting off this opposition
outlet, he prevents dissemination of any criticism by
the congress--infrequent though it has been given the
timid character of the legislative bloc. The state of
siege also allows Somoza to submit suspected terrorists
and supporters to military rather than civilian courts.
According to an announcement on October 25, some 80
suspected FSLLN adherents are to appear before the mili-
tary courts. With Somoza and other high Nicaraguan of-
ficials admitting that snuffing out the recurrent FSLN
threat this time may require years, the prospects of a
long-term state of siege and continuing censorship is
real.
The FSLN's fortunes have been cyclical, and the
guerrilla group is presently more active than at any
time since 1967-68, when it was probably at its apogee.
The guerrillas probably have about 80 activists in the
country, and a support network twice that large.
They have also latent support in rural areas, owing in
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part to the legend of the Sandino guerrillas of the
1930s, and a flow of recruits from university students
convinced that there can be no effective legitimate
opposition to Somoza. The FSLN can and does engage
the National Guard in sporadic firefights and could
attempt an occasional spectacular--such as the kidnap-
ing last December of prominent Nicaraguans and the
subsequent flight to Cuba as part of the ransom settle-
ment. The FSLN's compartmentalization--making wide
scale coordination difficult--and lack of a political
front, however, make it more an irritant than a real
threat at present. Some of the current increase in
FSLN activity is a response to more aggressive
National Guard pursuit.
Censorship and the political muzzling have left
the rumor mill free to exaggerate FSLN successes and
the US embassy detects a greater restiveness in several
sectors than has heretofore been the case. Except for
the heightened appeal of the FSLN, however, this has not
yet been channeled into effective opposition. After
four decades of rule, moreover, the Somozas have proven
to be astute observers and manipulators of Nicaraguan
political life. Should the restiveness build to serious
proportions, Somoza will probably make some sort of con-
cessions--not necessarily meaningful--as a safety valve.
(SECRET)
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Secret
Secret
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