LETTER TO THE HONORABLE ALEXANDER M. HAIG, JR. FROM WILLIAM J. CASEY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84B00049R000701780017-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 20, 2016
• Document Release Date: April 10, 2006
• Sequence Number: 17
• Publication Date: April 2, 1982
• Content Type: LETTER

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The Director of Central Intelligence
Washington. D. C. 20505
2 April 1982
The Honorable Alexander M. Haig, Jr.
Secretary of State
Washington, D. C. 20520
Dear Al ,
Here is a quick assessment on possible military
aspects of the Falkland affair, the forces in or
available in the area, and possible British, Soviet
and Cuban reactions.
Yours,
Liam J. Casey
Attachments
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Quick Intelligence Assessment on Falkland Affairs (April 2, 1982)
I. Brief History of the Dispute
The controversy dates to 1833 when the British occupied
the island claimed by the Argentines as part of their
colonial heritage. The dispute was only a minor irritant
in otherwise good bilateral relations until Buenos Aires,
anxious to recover the islands, took the dispute to the
UN in 1965. The General Assembly declared sovereignty in
dispute and established what turned out to be an
ineffective mechanism for negotiations. Growing economic
potential in Falkland territorial waters heightened
tensions during the mid and late 1970s. The latest round
of talks, which began in February, failed in mid-March
when the British refused to bow to Argentine public
demands that negotiations be speeded up. The South
Georgia incident began on March 19, escalating into
confrontation and the Argentine invasion Friday.
Did Argentina plan the Escalation?
Although there is no direct evidence that the Argentines
manufactured the original incident at South Georgia on 19
March, they were looking for a chance to put pressure on
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the British and, at the least, quickly seized upon a
tactical opportunity to confront the British
militarily. The civilian group that went to South
Georgia had compliecl with all immigration procedures
known to Argentine and British authorities in Buenos
Aires and whether Argentine officials encouraged the flag
raising itself is unknown. Nonetheless, President
Galtieri has pursued a generally aggressive foreign
policy,
The Argentines relatively quickly came to see
the issue as a military rather than diplomatic problem
and the decision to implement long held contingency plans
for the invasion was probably made last weekend.
The Argentines successfully invaded the Falkland Islands
this morning; some 200-350 Argentine Marines with armored
vehicles evidently went ashore near Port Stanley and
airborne units reportedly secured the local airfield.
There is also information that three Argentine ships are
in the harbor at nearby Port Williams. The Argentines
may be debarking as many as 500-1000 well-armed troops
from the task force,
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111 ;1, ~
There evidently was sporadic resistance
by the small force of Royal Marines and irregulars on the
main Falkland Islands, and the ice patrol ship Endurance
was able to depart South Georgia Island and is now
somewhere between South Georgia and the main islands.
The Argentines appear to be securing the islands and plan
to name the general officer in charge of Army operations
as military governor.
III. UK Options
A. Diplomatic
The British have broken diplomatic relations with
Argentina, but they could continue to make use of the UN
Security Council as a means of keeping open a channel of
communications and as a forum to put Argentina in the
dock as an "aggressor." They probably do not expect the
UN debate to resolve the crisis, but they hope it will at
least show that Britain had attempted to find a
diplomatic solution before resorting to military
countermeasures. The British could also ask their
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European partners to join in a demarche to the Argentines
demanding they withdraw their troops and seek a peaceful
settlement or even to condemn Argentina openly. London
is likely to ask the, US to continue to exert pressure on
Argentina to "see reason," and to mobilize other Latin
American states to intervene with the Argentines. While
the British hope that the US will maintain contact with
Buenos Aires and perhaps continue to serve as a conduit,
they probably prefer public US support for the British
position to jolt the Argentines and convince them that
the US will not push London to accept a fait accompli.
London undoubtedly expects US support at the UN as
well. London could in principle offer at the UN or in
another forum to discuss the ultimate sovereignty of the
Falklands, but only after a cooling off period, and only
after Argentine withdrawal from the islands.
British economic options are limited. Trade between
Argentina and the UK is not significant for either
country. In 1980, the UK exported goods totaling $402
million to Argentina while imports reached $265 million--
representing 0.4 percent and 0.2 percent of total UK
exports and imports, respectively. Manufactured goods of
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all kinds accounted for nearly 90 percent of British
sales; purchases from Argentina consist mainly of meat
and other foodstuffs. UK banks hold about-10 percent of
Argentina's total commercial bank debt of $23 billion,
but,this provides no practical leverage. London's best
hope would be for general US and EC economic restrictions
on Argentina--something that would be hard to enforce.
The British have never shown much faith in economic
sanctions, however, and in any case, the length of time
it would take to have any effect would make them
politically unacceptable.
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IV. Argentine Responses - Military, Diplomatic, Implications tor
Beagle Dispute
The Argentines probably soon will begin reprovisioning
and reinforcing their forces on the islands betore any
British units arrive. Air Force units in southern
Argentina reportedly were being strengthened yesterday;
the airbase at Rio Gallegos in the far south would be a
particularly good candidate for receiving fighters and
has had Mirage aircraft there in the past. It is also
possible that combat aircraft could be sent to the
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airfield at Port Stanley. The field is capable of
handling jets and has a fuel storage capacity of 50,000
liters. The Argentines, however, probably.will try to
increase the fuel storage capacity at the field, to
establish command and control communications, and to
provide maintenance and logistic support, as well as
protection, for aircraft and crews.
While we have no evidence, we believe that Argentine
ground force units, particularly those in the south,
probably are on a heightened alert status.
Reinforcements for the islands likely will come at first
from the 9th Infantry Brigade which, with a strength of
about 4500, is the largest ground unit in the south.
Other units could be alerted and readied for transport to
the south, but this probably would take several days to
accomplish. Transports and other naval craft could be
sent to ports along the South Atlantic to ferry troops
and equipment to the islands.
Virtually the entire Argentine fleet is involved in the
Falkland operations. Given the age of many of the units
--some are almost 40 years old--and their sustained
operations at sea, it appears sensible for the Argentines
to begin withdrawing some of their more vulnerable naval
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craft once the reinforcement and reprovisioning of the
islands has been accomplished. We also do not believe
that the Argentines would fare well in a full-scale naval
engagement with the j3ritish, particularly in view of the
nature of the forces the British are preparing to send to
the Falklands. If Argentine ships are attacked, however,
they will respond in kind.
The invasion has probably strengthened Galtieri's
standing within the military, especially the Navy and
among predominantly nationalist political opponents who
have long advocated invading the Falklands. We expect
this support to continue, even among hardline Peronist
labor union leaders who, despite repression of their
recent demonstration, will have little choice but to back
Galtieri. Like Thatcher, Galtieri probably calculates
that he will have to avoid appearing to waver or risk
serious domestic and international political costs. The
Argentines see a direct correlation between a tough--and
successful--effort on the Falklands and success in their
Beagle dispute with Chile. Similarly, they believe a
defeat on the Falklands would be an enormous setback in
the Chile dispute, thus doubling their stake in the
current confrontation.
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Diplomatically, Argentina will probably utilize its ties
to the the Non-Aligned Movement and to developing nations
in the United Nations to try to block British efforts in
international fora to condemn the invasion. Buenos Aires
may anticipate US opposition in the OAS but had
calculated earlier that they could defeat the British in
a showdown in the UN over the issue.
V. Potential for Soviet and/or Cuban exploitation
Cuba, which traditionally has supported Argentina's claim
to the Falkland Islands, will probably be initially
cautious in providing political backing for the Argentine
move--Havana will want to be sure to avoid embarrassment
in the event Buenos Aires' military adventure fails.
Nevertheless, the incident gives Havana the opportunity
to renew its criticism of the Thatcher government, which
it views with obvious distaste.
The Soviets will seek to exploit the crisis by giving
political support to Argentina; but will not become
directly involved militarily. The Soviets have been
trying to establish close relations with Argentina, in
large part because it provides more than 10 percent of
Soviet grain imports and helped offset the US grain
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embargo in 1980-81. In contrast, relations with the UK
are already poor. Now that Argentina has already
occupied the islands, Moscow could call for a ceasefire
and subsequent talks,, Moscow will work to avoid UN
Security Council condemnation of Argentina, threatening
to veto it. It is likely to use the situation to
intensify longstanding, but so far, unproductive efforts
to sell Argentina military equipment. To ingratiate
themselves with the Argentines, the Soviets may provide
Buenos Aires with surveillance information of British
military moves.
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