LATIN AMERICA -- WARNING OF IMPENDING DEVELOPMENTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B01027R000300130012-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 20, 2016
• Document Release Date: April 13, 2007
• Sequence Number: 12
• Publication Date: October 24, 1978
• Content Type: MEMO

THE DIRECTOR OF CENTRAL INTELLIGENCE
National Intelligence Officers
0013oo12- IQ/W
NFAC-4685-78
24 October 1978
MEMORANDUM FOR: Director of Central Intelligence
THROUGH . Director, National Foreign Assessment Center
National Intelligence Officer for Warning
FROM Acting National Intelligence Officer for Latin America
SUBJECT . Latin America -- Warning of Impending Developments
2. Background: The convergence of severe economic, social, and
1.. Action Requested: None; for your information only.
political problems suggest that political turmoil will characterize
the nations of Central America over the next 60 to 90 days. Challenges
to government stability will be particularly strong in Nicaragua, where
the FSLN plans to launch another guerrilla attack from Honduras and
Costa Rica with logistic support from Venezuela and Panama. In preparation
for this attack, President Somoza is doubling his National Guard, but the
loyalty of new. recruits and their military capacity is questionable.
. We should anticipate that Somoza might call on the OAS to protect his
country from military incursions from his neighbors -- a step which
could place the US in the awkward position of voting in the OAS to
protect Somoza.
3. The Nicaraguan situation is causing consternation in El. Salvador,
where the stability of the government is precarious. This tiny, over-
populated country is next to the poorest in Latin America. Demographic
problems create pressures difficult to contain. There are currently -
205 persons per square kilometer in El Salvador compared to 25 elsewhere
in Central America, and 12 elsewhere in Latin America. With its current
birthrate of 2.9% per annum, the population density will increase to
297 by 1990. Terrorism has been on the upswing for the last two to three
years with political Wires and the prominent families which control
the economy the prime targets. There are indications that some of the 25X1
prominent families are preparing to abandon the country with as much.of'
their wealth as they can muster unless outside help can be obtained to
control terrorism. .
 ? Approved For Rel~~se 2007/0411. q1 DP83B01027R 0300130012-1
4. Elsewhere in Latin America there is a potential for conflict
between Argentina and Chile over the Beagle Channel despite the
negotiations in train. Intelligence has revealed Argentine military
movements in the vicinity of the Chilean border. While this may be
an Argentine tactic to intimidate Chile, it could result in frontier
clashes and possibly in Argentine occupation of the contested islands
in the Beagle Channel. -While these islands are of no strategic
importance to the US and US national interests are not directly affected,
the US could become. involved in restoring peace to the area.
5. Finally, the economic situation continues to deteriorate in
Peru, and there is some possibility Peru will default on its IMF
commitments. Peru is not quite poor enough to benefit from low-interest
loans available to the poorest nations, but its per capita income is -
rapidly descending to that point. In 1976 the per capita income was
$800.? A year later it was $740. By this year it dropped to $680.
At this rate it will cross the poverty line of $580 by August 1979,
or possibly even before because of the drought. Only at this point will
Peru be able to apply for low-interest loans. Peru's grave economic
condition will prevent that country from embarking on a military
adventure in Chile, should there-be a conflict between Chile and
Argentina.
6. The above judgements are made as a result of consultations
on 19 October 1978 with the "Latinos", the senior intelligence analysts
and collectors in the intelligence community who specialize in Latin
 Approved For Release 2007/04/13: CIA-RDP83B01027R000300130012-1
Approved For Release 2007/04/13: CIA-RDP83B01027R000300130012-1