BELIZE: PROSPECTS FOR THE NEXT GOVERNMENT

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85S00317R000300010003-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 20
• Document Creation Date: December 22, 2016
• Document Release Date: May 4, 2010
• Sequence Number: 3
• Publication Date: October 1, 1984
• Content Type: REPORT

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Belize: Prospects for
the Next Government
ALA 84-10098
October 1984
Copy 3 0 6
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Directorate of Secret
Intelligence
Belize: Prospects for
the Next Government
coordinated with the Directorate of Operations
This paper was prepared b Office
of African and Latin American Anal, sis. t was
Division, ALA,
Comments and queries are welcome and may be
directed to the Chief, Middle America-Caribbean
Secret
ALA 84-10098
October 1984
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Secret
Belize: Prospects for
the Next Government) 25X1
Key Judgments Belize is preparing for its first national election-which must be held by
Information available February 1985 but which we expect before year's end-amid mounting
as of 20 September 1984 economic, political, and social problems.
was used in this report.
? The severe dropoff of world market sugar prices has left the economy
stagnant and has almost completely eroded government reserves. It has
compelled the government to approach the IMF for support that
probably will require the imposition of strong and politically sensitive
austerity measures.
? The better-than-even probability that Great Britain will withdraw its
forces in Belize during the next several years would leave the government
virtually defenseless should Guatemala threaten to enforce its territorial
claim militarily, regional insurgents increase their use of Belizean
territory, or substantial domestic social unrest arise.
? The government faces increasing demands from refugees fleeing political
turmoil elsewhere in Central America and must contend with the
potentially debilitating impact of proliferating drug production.
On balance, we do not expect Belize-an essentially conservative and
staunchly democratic society-to suffer during the next three years the
kind of political instability and violence found elsewhere in Central
America. Nonetheless, we believe that over time Belize's difficulties will
generate increased leftist influence and, more seriously, could allow it to
become another staging ground for Cuba to meddle in Central America.
The domestic left-an influential minority faction in the ruling People's
United Party (PUP) and thus far working within the democratic system-is
growing in strength, has established and is expanding ties to Havana and
regional revolutionary forces, and is positioning itself to try to take over the
PUP once Prime Minister Price steps down. No matter which of the two
major parties-PUP or the United Democratic Party (UDP)-wins the
coming election, we believe the leftists in the PUP will benefit from the
voting results. We expect the leftists to maintain or increase their
representation in the National Assembly while PUP party moderates and
conservatives lose some of their seats to the opposition UDP~
Cuba, in our opinion, will step up its efforts-in the wake of losing
Grenada-both to improve relations with Belize and to expand its covert
links. We expect Havana, supported by the Belizean left, to continue to
iii Secret
ALA 84-10098
October 1984
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probe the receptivity of the Belizean Government regarding commercial,
cultural, and technical relations. We doubt that Havana will score any
major success, such as the opening of diplomatic or trade relations, with
the next Belizean administration, since leaders of both parties see Belize's
near-term fortunes hinging on improved relations with the United States.
We believe that Belize will continue to traverse difficult economic ground
as world sugar prices seem unlikely to climb substantially any time soon. In
our view, the government can over the longer haul forestall politically
destabilizing import and budget cuts, civil service layoffs, and a devalua-
tion if it can adhere to a prospective accord with the IMF. Economic
recovery and sustained growth, however, probably require increased
amounts of foreign assistance directed at economic diversification and vast
improvements in Belize's infrastructure. We expect both the domestic left
and Havana to seek to exploit the short-term impact of any austerity
measures and economic hardships on the population to strengthen their
positions.
In our opinion, whichever party wins the election, the United States will be
approached for increased economic and military assistance, possibly in-
cluding requests for a mutual defense pact. Despite opposition from the
left, leaders of both parties apparently view the United States as their only
realistic source of help to ensure continued stability, to lay the foundation
for economic recovery, and to deter potential Guatemalan military aggres-
sion. While greater US support for Belize would better enable the country
to contend with leftist and Cuban efforts, such aid flows, particularly
military aid, would be likely to affect adversely Washington's relations
with Guatemala. Unless US economic and military aid for Guatemala is
concurrently increased or sharp leftist gains in Belize threaten stability
there, we believe that Guatemalan leaders would view expanding assistance
to Belize as a tilt in Belize's favor with respect to the longstanding
territorial dispute with Guatemala and as a political affront.
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Deepening Economic Crisis
2
Imposing Austerity Measures
3
Election Campaign Strategies
5
United Democratic Party
5
People's United Party
6
Leftists Looking for Election Gains
6
Threats to Political Stability
Cuban Efforts and the Domestic Left
8
Spillover of Regional Unrest
9
Swelling Drug Production
9
An Impending Security Vacuum
10
Outlook and Implications for the United States
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Belize: Prospects for
the Next Government
As Belize moves toward its first national election since
attaining independence in 1981,' it faces serious secu-
rity and economic problems that could threaten its
political institutions and stability. Prime Minister
Price has been unable to stem an economic slide
generated by the drastic fall in world sugar prices
since 1981, to settle the potentially volatile territorial
dispute with Guatemala, or to gain an alternative
security commitment in the face of British determina-
tion to withdraw its garrison. These campaign issues
underscore challenges and security risks with no ready
solutions, and suggest that the new Belizean Govern-
ment will have to guide the young nation through an
especially difficult period.
The next government also will be challenged by a
strong and growing minority leftist faction within the
ruling party that is poised to capitalize on the election
and to exploit Belize's problems to build its political
strength. Thus far, Price has successfully resisted
leftist efforts-backed by Havana-to dominate the
party and to move Belize closer to the Cuban orbit.
Increasing drug trafficking and refugee flows from
neighboring Central American states, as well as indig-
enous economic woes, however, provide the leftists
with targets and political ammunition to boost their
popular standing and recruiting efforts. We believe
that economic and social problems also present oppor-
tunities for Havana to expand its role-official and
covert-in Belize]
In our opinion, the long-ruling, centrist, People's
United Party (PUP) may face its stiffest challenge yet
in the coming general elections. Worsening economic
The Roots of Stability
Belize, the least populous (158,000) nation in Central
America, has rivaled Costa Rica as the region's most
stable, pluralistic democracy both before and after
independence in 1981. Having held regular elections
since self-governance was attained in 1964, Belizean
leaders have had a long apprenticeship in party
politics and parliamentary democracy under British
colonial rule. English-speaking, conservative, and
staunchly democratic, Belize is not inherently fertile
ground for extremists particularly Marxist-
Leninists espousing revolution. Although Belize is
poor, it does not suffer from the population density 25X1
pressures or gross income disparities that fuel discon-
tent in its Latin neighbors. With only some six people
per square kilometer, an annual population growth
rate of only 2.1 percent, and ample arable land,
Belize is not generally characterized by the kind of
subsistence agriculture that is dominant among its
neighbors. Indeed, the country's highly literate popu-
lation (92 percent of the adults) has a relatively
evenly distributed income of about $1,000 per capita,
placing it among the middle-income LDCs. Cultural-
ly distinct from adjacent Central American countries
and traditionally oriented toward the Caribbean,
Belize is only now beginning to participate in-and be
affected by-Central American developments. F__1 25X1
conditions, when coupled with a reinvigorated opposi-
tion and factionalism among ruling party leaders, are
likely to lead to the closest contest for control of the
18-member House of Representatives since Belize
attained self-governance some 20 years ago. We
believe the moderate United Democratic Party
(UDP), expected by many to win the last election in
1979, now has an excellent chance to dethrone Prime
'As in any parliamentary system, Prime Minister Price has the
option of calling for a national election at any time. The next
general election in Belize could be held legally as late as February
1985. We believe, however, that Price will see little advantage in
waiting until the last opportunity, and we expect the balloting to
occur in November or December of this year. US Embassy officials
believe that Price may wait for a US Congressional decision on aid
to Belize before calling the election, hoping an approval will boost
Minister Price and the PUP.
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Figure 2
Belize: Selected Economic Indicators, 1979-84
Real Gross Domestic Consumer Price Growth
Product Growth Percent change
Annual percent change
f II
Production
1,000 tons
95 1979 80 81 82 83 84 5
Balance of Payments GDP by Sector, 1983
Million US $ Percent
Commerce,
Finance, and
Services-41.8-
Construction and
Utilities-6.0-
Fishing, Forestry,
and Mining-6.8
Government-10.6
Manufacturing-13.7-
Agriculture-21.1-
-60 1979 80 81 82 83 84a
a Estimated.
b Belize exports sugar to the EEC and US at preferential rates above world
market prices. In 1983, about 25 percent of its production was sold at the
world market rate of approximately 8.5 cents per pound.
Deepening Economic Crisis
Belize's economy is overwhelmingly tied to sugar and
related products and the country's economic fortunes
have risen and fallen with the world sugar market. In
contrast to the rapid expansion of sugar production
and high world prices in the 1970s, Belize's flat
economy of the 1980s reflects a precipitous decline in
sugar prices from 28.6 cents per pound in 1980 to
about 8.5 cents in 1983. The low price, Belize's
limited refining capacity, and the reduction of the US
sugar quota in 1982, have combined to dampen
expansion of the industry. As a result, preindepend-
ence economic growth rates that averaged 4 to 5
percent from 1972-80 fell to a 6-percent decline in
1982 and only a 2-percent gain last year. Despite a
record 1983 sugar crop, buoyed by near-perfect
weather conditions, all other sectors of the economy
remained stagnant.
l984 sugar production will fall below that of
The recession in the sugar industry, which accounts
for some 20 percent of GDP and for almost 60 percent
of Belize's domestic exports,' has weakened the coun-
try's balance-of-payments position and strained gov-
ernment revenues. Traditionally registering a trade
deficit, Belize has financed the imbalance in the past
from a variety of foreign sources. These include
remittances, estimated at $16 million last year, from
Belizeans living abroad; the $12 million spent annual-
ly by the British troops in Belize; and foreign develop-
ment assistance. In recent years, however, these have
only partially offset the trade deficit, and public
debt-increasingly at commercial rates-has risen
sharply. The US Embassy reports that the economic
malaise has deepened substantially during the last few
months, with foreign reserves declining to under $5
million. This leaves the government, already overdue
on payments to several lenders, with few options other
than international financial institutions for additional
borrowing.
' Domestic export figures do not include Belize's reexports to
Mexico, which dropped from $44.3 million in 1981 to $12.7 million
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Priceh
Cents per pound
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Value of Major Exports Percent of domestic exports
Citrus
7.4
7.8
8.7
11.7
10.5
Fish
7.2
5.0
9.6
10.5
11.1
Bananas
5.6
4.3
2.9
3.5
3.7
Garments
17.8
17.6
14.9
10.7
12.6
All other
7.0
4.5
5.3
7.3
8.1
1984/85 will exceed projected consumption are likely
to mean continuin difficult times for
sugar
exporters. pro-
ducers with large stocks could dump their excess
sugar on the world market later this year or early next
year. Such a development could push prices even
lower than the current price of 6 cents a pound,
perhaps to as low as 4 cents. Although Belize is
somewhat sheltered by the preferential rates paid by
European countries and the United States, it sells
some 25 percent of its sugar on the world market.
Another drop in world sugar prices would deliver a
serious blow to Belize's prospects for even modest
Source: Central Statistical Office, Belize Ministry of Economic
Development; and IMF staff estimates.
The drain on government revenues has been severe.
The decline in sugar prices and the Mexican peso
devaluation in 1982, which drastically curtailed
Belize's reexport trade to Mexico, have sharply re-
duced income tax and customs duties receipts. Ac-
cording to US Embassy reporting, Central Bank
advances to the government reached their statutory
limit in 1983, and since then Prime Minister Price
increasingly has had to rely on commercial borrowing
even as overdue payments have accumulated to ap-
proximately $17.5 million. The practical impact of the
government's revenue woes has been a serious deterio-
ration in public services, obvious to this analyst on two
recent trips when power blackouts occurred daily,
washed out roads went unrepaired, and garbage pick-
up was sporadic. Several inefficient publicly owned
and subsidized enterprises, such as the Belize Elec-
tricity Board and the Banana Control Board, are
compounding the government's revenue shortages as
they continue to lose money, drain the treasury, and
incur external debt. The government's purchase of a
75-percent share of the sugar refining industry in
June will strap public finances even further: the
former owner projects that the enterprise will lose
money over the next two years.
Looking ahead, there seems to be little relief on the
horizon. Record world sugar stock levels, depressed
international prices, increased competition from sugar
substitutes, and prospects that the world sugar crop in
economic recovery.
Imposing Austerity Measures
Price has tried to ride out the slump in sugar prices by
cutting government expenditures on development pro-
jects, by spending foreign development assistance on
more immediate needs, such as the government pay-
roll, and by increasing government borrowing. Recog-
nizing that the world market price of sugar may not
recover for several years, however, Price recently took
the politically difficult steps of implementing utility
rate hikes, imposing limited tax increases on consum-
er goods such as alcoholic beverages, and most impor-
tantly, approaching the IMF for vital short-term
financing. He probably hopes that the voters will
perceive the government as having done all it can,
offsetting the most likely negative reaction to the
austerity measures that almost certainly will be called
for by the IMF. According to US Embassy economic
experts, the belt tightening required by the Fund
probably will include new taxes and improved collec-
tion, higher utility rates, dismantlement of govern-
ment subsidies, and reorganization of inefficient pub-
lic enterprises. Although measures such as utility rate
hikes will cause some economic hardships across the
entire population, the expected IMF program, if the
new government can adhere to it, will probably
forestall the need to undertake even more drastic
measures-such as devaluing the currency, substan-
tially slashing imports, laying off civil servants and
cutting the government payroll, and reducing public 25X1
services-that could engender substantial popular dis-
content.
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George Cadle Price, People's United Party
Prime Minister George Price and the People's United
Party (PUP) have won every national election since
Belize attained self-governance from the British in
1964. Price-a political moderate and strong demo-
crat-remains Belize's only political leader of truly
national stature. The Prime Minister is a skilled
politican and orator fluent in both English and
Spanish-who has built a countrywide power base
among the rural masses, many of whom have an
unshakable personal loyalty to him. Founder of the
PUP in 1950 and leader of the nonviolent opposition
to British colonial rule, Price, now 64, fought for 30
years to gain independence for Belize-his crowning
political achievement.
George Price's appeal to the electorate has been
matched over the years by his authoritative control
over the party apparatus. Indeed, many party col-
leagues have chafed under his dominating presence
and involvement in all areas of policymaking. The
Prime Minister, for example, currently also holds the
vital defense and finance ministerial portfolios, as
well as control over social security. According to US
Embassy officials, Price continues to handle foreign
affairs issues and maintains a veto power over any
ministerial decision. He shows no sign of slowing
down and apparently is still driven by his goal of
resolving the territorial dispute with Guatemala and
ensuring Belizean sovereignty.
Historically, the leader of a reformist, socially con-
scious party and champion of the dispossessed, Price
oversaw the breakup of foreign-owned sugar planta-
tions during the 1960s and early 1970s by providing
government loans enabling some 4,000 cane farmers
to purchase land. The Prime Minister remains wary
of large multinational corporations, according to
Embassy reporting, but welcomes foreign capital in
small-scale projects or joint ventures. In foreign
policy, Price sympathizes with many Third World
causes and avoids entanglements in East-West dis-
putes. While Belize is a member of the Nonaligned
Movement, the PUP has followed a centrist, pro-West
orientation and has not opened relations with any
Communist government. Price singled out the United
States as Belize's "natural ally" in a speech last year
and has made several recent initiatives to strengthen
bilateral ties.
Manuel Esquivel, United Democratic Party
Although the UDP has yet to produce a leader of
stature and experience commensurate to Price's, the
new opposition leader, Manuel Esquivel, is widely
viewed-even by political opponents-as honest, hard
working, and an effective organizer and campaigner.
Esquivel, a 44-year-old Hispanic, typifies a genera-
tional and, to a lesser extent, racial shift occurring in
the opposition's leadership ranks that the party hopes
will enable it to extend its base of support from its
Creole, urban, middle-class foundation into rural,
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Hispanic areas. Esquivel speaks both Spanish and
English, and, although he is not regarded as a
polished public speaker, he does not have the elitist
bearing of past UDP leaders that alienated potential
supporters.
Esquivel's experience in government is limited to
service on the Belize City municipal council in the
late 1970s and a subsequent five-year stint in the
Senate-an appointed upper house with no legislative
role. Nonetheless, he ran a surprisingly strong cam-
paign in 1979, losing to Price by only 140 votes. US
Embassy officials believe Esquivel lacks depth in his
understanding of national and international issues.
We believe this is partly due to Price's refusal to
inform opposition leaders of many of the details of
government negotiations on a variety of issues. In two
lengthy interviews with Esquivel, the author found
him intelligent, realistic, and well spoken
Esquivel is pro- United States, and we believe he
would cooperate with Washington on a wide range of
issues, probably including drug eradication and re-
gional policy. Domestically, we believe he would
pursue foreign investment particularly in tourism-
more aggressively than has Price. In foreign policy,
Esquivel could be expected to drop the PUP's more
neutral posture on East-West issues, although he is
not uncritical of US policy. Esquivel has expressed
apprehension about strong military relations with the
United States, fearing that a US troop presence would
infringe on Belizean sovereignty. Nonetheless, he says
he would accept such a presence if it were required to
ensure the country's territorial integrity. He favors a
negotiated accommodation with Guatemala on the
territorial dispute, but Esquivel is likely to be as
resistant as Price to making a land concession.
Election Campaign Strategies
United Democratic Party. The perennial opposition
United Democratic Party (UDP) is now more unified
and confident than in the past. According to US
Embassy reporting and press accounts, the UDP is
running largely a negative campaign, trying to focus
voter attention on the failures of the ruling party-
particularly its inability to stem the economic slide- 25X1
rather than on any new agenda it offers to solve
Belize's problems. Party leaders assailed the govern-
ment, for example, for imposing utility rate hikes and
tax increases on a population already battered by the
economic recession. Their campaign rhetoric accuses
the Price government of mortgaging Belize's sover-
eignty and control over economic decision making to
the IMF. Embassy officials point out, however, that
the UDP has few concrete proposals to offer in its
platform and, in our opinion, UDP policy-if the
party wins the election-would be very similar to the
PUP's
In preparing for the election, the moderate pro-West, 25X1
business-oriented UDP is trying to broaden its appeal
beyond its traditional base among the middle-class
the image of privilege that hampered the
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UDP in past elections has been overcome with the
departure of the party's founding elite. Indeed, in our
opinion, the polarization between the right and left in
the ruling party is helping the opposition UDP to
establish itself as Belize's moderate party of the
center, a characterization traditionally conferred on
the PUP. Moreover, Embassy reporting supports
Esquivel's contention that the UDP strategy of mak-
ing inroads into the PUP's rural electoral preserve is
working, particularly with small farmers, who are not
only affected by the downturn in the sugar industry
but also are upset over the government's marijuana
eradication efforts by spraying of the herbicide para- 25X1
quat last fall. 25X1
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People's United Party. The ruling PUP is parrying
the opposition's attacks by trying to contrast its more
than two decades of experience in government to the
political immaturity of its rival. The Prime Minister
probably hopes, for example, that his move to the
IMF for economic assistance and recent tax increases
will impress voters with his ability to make the tough
decisions necessary to tackle the country's economic
problems. In doing this, he apparently is gambling on
being able to shift the voters' attention away from the
failures of the past three years to his current action-
oriented crisis management. The Prime Minister also
took initial steps over the summer to expand rela-
tions-particularly economic ties-to Taiwan, South
Korea, and Israel. In addition, Price's high-visibility
trip to Honduras earlier this year, and his official
state visit to Washington last year, boosted his person-
al prestige and highlighted his efforts to undermine
Guatemala's territorial claim by establishing Belize's
role in regional affairs. We believe the Prime Minis-
ter's next tactic could be to call for elections shortly
after signing a $14 million aid agreement that the US
Embassy reports he expects to receive from the
United States this fall.
The PUP's image of a socially conscious, populist
party has been tarnished in recent years, however, by
the political infighting between conservative and left-
ist factions. Price has been forced to use his consider-
able coercive powers, including a Cabinet shuffle
earlier this year, simply to hold the party together and
attain a facade of unity during the campaign. The
Prime Minister apparently has decided to stick with
longtime party veterans and proven votegetters, even
those tainted by allegations of corruption. We see no
firm signs that Price will substantially alter either the
party image, the platform, or its slate of candidates in
the coming months. Embassy reporting indicates,
however, that the Prime Minister will direct the PUP-
controlled redistricting commission to gerrymander
electoral district lines to shore up vulnerable candi-
dates and add several new seats to the National
Assembly. Price is likely to call the election soon
thereafter so that the UDP has minimal time to select
candidates for the new seats.
Leftists Looking for Election Gains
The coming election is more than a contest to deter-
this
election is critical to the future of the left in Belize,
Recogniz-
ing that the Belizean people are largely pro-US and
staunchly democratic, the leftist leaders' strategy over
the last decade has been to work within the political
party structure and reach power through the electoral
process. Because their efforts appear to be directed at
gaining control of the party once Price steps down and
winning the next election later in this decade, they
appear content for the present to recruit allies within
the party and to build a popular base of support.
Toward that end, both Musa and Shoman are involv-
ing young Belizeans in social and civic action projects
under the control of their respective ministries.
Although their gains in an essentially conservative
country have been hard fought, the leftists' tactic of
undermining party conservatives by attacking them
for corruption and mismanagement, as well as leftist
recruiting of young political activists are paying divi-
dends. In the last few years they have established a
sizable power base in the party. An internal party vote
last year showed that the two leftist leaders have the
support of about one-third of rank-and-file activists,
according to US Embassy officials. Recognizing that
the majority of Belizeans are generally not receptive
to radical solutions, Musa and Shoman maintain an
image of moderation and rarely display the strength
of their leftist political beliefs in their rhetoric.
In our opinion, this election is likely to boost the
leftists standing in the party as well as their long-term
goal of gaining the party leadership. Although we
assign both parties an equal chance to win the election
at this point, we believe the leftists stand to gain no
matter which party wins. Embassy reporting indicates
that Shoman has a strong grip on his Assembly seat,
and that Musa, although facing a tough contest, will
probably be hel ed by the expected electoral redis-
tricting.
From a broad range of plausible voting
results, we believe the following two scenarios are the
most likely:
mine which of the two parties comes out on top
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Said Musa
Leftist Minister of Education, Culture, and Sports,
Said Musa may have become in recent years Prime
Minister Price's closest adviser. At age 40, Musa is
widely experienced in both domestic and foreign
affairs, and US Embassy reporting indicates that he
is closely involved in a broad range of government
decisionmaking. He may be the leading candidate to
become leader of the People's United Party when
Prime Minister Price steps down. Musa, a British-
educated lawyer, has served in both the Senate and
the House of Representatives and has also been
Attorney General. Musa maintains a moderate public
posture and tempers his leftist rhetoric, stating that
he supports constructive relations with the United
States and a mixed economy for Belize. Nonetheless,
Musa is pro-Cuban, advocates the establishment of
diplomatic and trade relations with Havana, and
would clearly move Belize to the left should he ever
head the government.
Assad Shoman
Minister of Health Assad Shoman, an avowed Marx-
ist-Leninist, also has substantial influence with
Prime Minister Price. Articulate and capable,
Shoman-like Musa-is a British-educated lawyer
who has functioned as Belizean Attorney General and
also has served in both sides of the National Assem-
bly. Shoman is not personally popular outside of his
redistricting. From a broad range of plausible voting
results, we believe the following two scenarios are the
most likely:
? Price's ruling People's United Party narrowly wins
the election, but the leftist faction does better than
the party as a whole. Such a scenario would weaken
Price's authority and dilute the strength of party
moderates and conservatives since such a result
would mean a loss of several seats to the UDP.
Leftist leaders, perhaps in a position to pull out of
the party and topple the government, could increase
their pressure on Price to move to the left on both
domestic and foreign policy. A good show in the
balloting probably would boost the leftists' recruit-
ing momentum and their prospect of taking over
party leadership when Price steps down.
Said Musa Assad Shoma,E=:= 25X1
electoral district, but he would be certain to play a
major policy role if the leftist faction ever attained
power, especially ifformer business-associate Musa
headed the government. Although only 41, he is
especially experienced in foreign affairs, having been 25X1
deeply involved in Belize's preparations for independ-
ence and in negotiations with Guatemala on the
territorial dispute. Shoman is more open than Musa
about his leftist views and sympathies for Cuba and
regional insurgent movements.
? The opposition United Democratic Party narrowly
wins the election, but the leftists in the ruling party
retain their Assembly seats. This scenario could
result in Price's election defeat or retirement from
politics and the subsequent takeover of the party by
the leftists. As the major opposition in the National
Assembly, the leftist bloc-no longer a decided
minority in its own party nor constrained by being
members of a sitting government-could step up
criticism of government policy and more effectively
exploit continuing economic and social problems.
Even if Price stayed on to lead the opposition in the
Assembly, he would have less authority to restrain
the leftists and maintain party policy on a centrist
course
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Regardless which party carries the election, the new
government will confront a number of potentially
destabilizing forces. These include Havana's attempts
to gain a foothold in Belize, the widening impact of
turmoil elsewhere in the region, a dramatic rise in
drug production, and a security vacuum surrounding
the impending departure of British forces from the
country.
Cuban Efforts and the Domestic Left
Price's refusal thus far to open official diplomatic
relations with Cuba has hindered Havana's attempts
to strengthen its influence in Belize. Castro has tried
over recent years to gain a foothold in Belize by such
standard means as sports and cultural exchanges,
educational opportunities, and tempting commercial
and technical deals. Havana, for example, offered to
market 10 percent of Belize's sugar production last
year, trying to take advantage of an opening created
by the decrease in the US sugar quota. An earlier
attempt, in 1982, to introduce a trade mission into
Belize met with widespread public protest.
The Cubans, in our opinion, have decided for the
present to tie their efforts to establish formal relations
with Belize to the long-term electoral fortunes of the
domestic leftists with whom they maintain close con-
' Price knows of the activities of Shoman and Musa but, according
to US Embassy reporting, he needs their experience and talent in
his government. He uses them to maintain unofficial liaison with
Castro and the Sandinistas through international forums, where
their ministerial duties provide ample opportunity for keeping
Belize on good terms with regional leftists. Price also probably
sticks with the leftists because he may believe he can exercise
greater control over their activities if they remain in the party and
More recently, a three-man Cuban delegation made a
secret visit to Belize last spring to discuss with
Shoman the opening of a Cuban commercial office,
according to a reliable source of the US defense
While such Cuban initiatives may be directed at
creating a network in Belize to serve Cuban trade and
financial objectives, we believe they also are intended
to facilitate arms smuggling to Guatemalan and
Salvadoran insurgents
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Spillover of Regional Unrest
Belize has been relatively isolated from the political
instability and violence elsewhere in Central America,
but the country appears increasingly affected by
regional turmoil. Last year Belizean authorities un-
covered a Guatemalan guerrilla support network in
Price's government is concerned about an influx of
Salvadorans and Guatemalans fleeing violence or
seeking land. Although data are sparse, the US
Embassy estimates the numbers of refugees may have
grown to 8,000, more than 5 percent of the total
population. In announcing new restrictions in April
governing resident aliens and refugees, the govern-
ment expressed concern that foreign nationals were
aggravating unemployment, spreading disease, dilut-
ing Belizean cultural values, and committing violent
crimes. The refugees also are placing an increasing
burden on social and security services, and Belizean
officials are concerned that some are involved in
marijuana cultivation and trafficking. Guatemalan
and Salvadoran refugee populations in both Mexico
and Honduras have served as conduits for guerrilla
group
More-
over, we believe that the refugees, often in need of
housing and health care when they arrive, are primary
targets for recruitment by Musa and Shoman, who
control the relevant social services ministries. For
example, the leftists protested to Prime Minister Price
about the rough police handling of resident aliens in
Shoman's district earlier this year, saying they intend- 25X1
ed to register them as voters for the coming election.'
States after Colombia
Swelling Drug Production
The dramatic rise in marijuana cultivation over the
past two years also is destabilizing and opens yet
another potential avenue for foreign leftist penetration
of Belize. According to the US Drug Enforcement
Agency, the harvest jumped from an estimated 225
metric tons in 1982 to approximately 2,600 metric
tons a year later, 90 percent of which is destined for 25X1
the US market. 25X'25X1
indicated that the spring crop would grow to almost
3,000 metric tons, which could move Belize ahead of
Jamaica as the second-largest supplier to the United
The Belizean Police Commissioner admits that up to
one-third of his force may be accepting bribes to
protect narcotics dealers. In our view, rampant drug
trafficking and official corruption present opportuni-
ties for Havana to step up its movement of arms and
supplies through Belize to Salvadoran and Guatema-
lan insurgents. Such Cuban activity would not be
unprecedented
The growth of the drug problem stems in part from
depressed prices for farm products.
the average price paid to local
growers for marijuana is around $25 per pound,
compared to well under $1 for food crops such as
beans, corn, and rice. Prime Minister Price has told
US Embassy officials that the reduction of the US
quota for Belizean sugar also has prompted small-
scale cane farmers to enter the more lucrative mari-
juana market. In part, Price probably is making a
pitch for a quota increase, but economic realities
suggest that in any event the next government will
encounter strong opposition to a renewal of eradica-
tion efforts.
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The Guatemalan territorial claim to all of Belize has
been the principal foreign policy and domestic issue
facing successive British and Belizean administra-
tions since the mid-19th century. Although Guatema-
la has slowly scaled back its demands over the last
two decades, Guatemalan Chief of State Mejia has
not fundamentally altered Guatemala's bargaining
position. Despite his public call for the recently
elected constituent assembly to include a claim to all
Belizean territory in a new draft constitution, Mejia
introduced a proposal last September and again in
May calling for only a limited transfer of territory.
Foreign Minister Andrade-Guatemala's primary
negotiator-told US Embassy officials that Guate-
mala requires at a minimum a 2.5-mile-wide strip of
coastline running approximately 18 miles north from
the border, along with the southernmost offshore
cays. Mejia apparently believes that this would en-
sure that Guatemala's access to the Caribbean is not
dependent on the terms of any treaty with a potential-
ly unstable Belize. Andrade noted that an acceptable
alternative would be the cession of all Belizean
territory south of the Mojo River, a proposition
previously rejected by Belize.
The Guatemalans believe their proposal-which they
view as a major concession most likely to cause
substantial political controversy at home places the
onus of resolving the dispute on the British and the
Belizeans. The military representative on the Guate-
malan negotiating team recently indicated to State
Department officials that the Mejia government
might accept a land transfer of just some cays, but
the Guatemalan military is unlikely to support any
accord that does not include a territorial concession.
Mejia and Andrade are trying to make the proposal
more attractive to Belize by asserting that the constit-
uent assembly will adopt a harder line and resort to
militaristic threats.
Prime Minister Price has never been receptive to a
territorial concession and, in our opinion, is unlikely
to seriously consider that alternative as long as
British troops remain in Belize. Price must weigh the
relative advantages of making concessions now in
order to guarantee Belize's long-term security or of
holding out in the hope of eventually reaching agree-
ment on Belizean terms. Price continues to try to
undermine Guatemala's position and wear down its
resolve by seeking expanded relations with govern-
ments friendly to Guatemala, most recently with
Taiwan and Israel. He is aware, however, that a
rightist civilian government in Guatemala could
adopt positions far tougher than those now proposed
by Mejia and the military. US Embassy reporting
shows that the Belizeansfear, on the other hand, that
an agreement reached with the present military gov-
ernment could be overturned by a civilian regime with
an electoral mandate. In our view, the cession of
southern uninhabited cays holds some promise for
eventual resolution of the dispute, but is unlikely in
the prevailing election climate in both countries.
An Impending Security Vacuum
The Belizean Government has an extremely limited
ability to check leftist organizational activity, Cuban
penetration, or the spillover of regional turmoil. At
present, only the British Forces Belize (BFB) have the
intelligence capability and paramilitary training to
counter radical leftist subversion. Their official role,
however, is strictly limited to defense against a possi-
ble conventional Guatemalan military attack. While
the presence of British soldiers has a psychologically
stabilizing impact on the Belizean population, they do
not have an internal police or paramilitary function.
Thus, the British contingent-some 1,650 troops and
a 250-man air arm supporting four Harrier jet fight-
ers-patrols only limited stretches of the border,
sufficient to assuage Guatemalan fears that Belize
will become a major guerrilla staging area, but proba-
bly not enough to hamper smuggling and cross-border
insurgent activity. Indeed, porous borders, a long
coastline dotted with islands, and sparsely populated,
dense jungle make Belize both ideal for smuggling
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and an insurgent safehaven because it is almost
impossible to patrol.
The next Belizean administration, moreover, may be
faced with a British withdrawal that would leave the
country virtually defenseless. Although the British
Government informed the United States in mid-1984
that the BFB will remain in Belize for at least two
more years
Ithe country's security will fall to a six-
year-old Belize Defense Force (BDF) that is neither
large enough nor professional enough, according to
British and US military officers, to handle substantial
domestic civil disorder, much less to deter Guatema-
lan military aggression. The 600-man BDF does not
have the equipment, training, or intelligence capabili-
ty to counter an expanded Cuban covert presence,
increasing insurgent use of Belizean territory, or
burgeoning arms and drug smuggling. Illustrating the
point, the US defense attache notes that the BDF has
only two boats and two reconnaissance aircraft to
patrol the entire country
Recognizing the security vacuum a British withdraw-
al would create, Price has sought outside support from
Belize's allies-primarily fellow Commonwealth
countries-for a multinational military presence in
Belize. He visited Trinidad and Tobago, Barbados,
Guyana, and Jamaica in 1982, for example, but failed
to develop serious interest for the idea. He also has
approached Canada for a military commitment, but
Ottawa thus far has been willing only to provide some
limited training. Although Belize's territorial sover-
eignty is strongly supported by Mexico in principle,
the Mexican Constitution prohibits sending troops
abroad. The dispute with Guatemala, moreover, pre-
vents Belize from joining the OAS 6 and acceding to
members engaged in territorial disputes with existing members.
the Rio Treaty-the hemispheric mutual defense
pact. Even if the next government obtains defense 25X1
commitments from abroad, however, they are likely to
focus far more on countering the Guatemalan threat
than on internal security needs.
Outlook and Implications for the United States
We doubt that Belize will suffer the kind of political
turmoil and violence found elsewhere in Central
America any time soon. Nonetheless, we believe that
the strategy of the leading leftists-building their
strength and operating within the political system-is
working, and that they will pose an increasing threat
in the future. Whatever the electoral outcome, we
expect that the balloting will strengthen the leftists'
position within Price's People's United Party and give
their efforts at building party and popular support a
strong impetus. We expect the move to the IMF and
the economic hardships of the recession to be themes
used by the left to build support. The leftists' ability
to sustain their progress, however, or even step up 25X1
their organizing efforts is likely to depend on how well
the next administration copes with mounting econom-
ic and social problems.
Guatemalan and Salvadoran insurgents.
We believe that Cuba will continue to see its near-
term fortunes in Belize tied to the success of the
domestic left. Havana is likely to continue to try to
initiate commercial, cultural, and technical relations,
expecting the leftists to be increasingly effective
lobbying in its behalf and hoping that economic and
social problems provide an opening. We doubt, howev-
er, that Castro will score any major success, such as
the opening of diplomatic or trade relations, with the
next Belizean government. Nonetheless, Cuba-proba-
bly will seek to increase its covert operations in Belize,
partly to improve its ability to move supplies to
In our view, the momentum of the domestic left and
the potential for Cuban inroads could be substantially
undercut if the next government succeeds in renewing
economic growth. We believe, however, that Belize
will need increased infusions of economic assistance
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over the next few years just to maintain modest
government services, to pay civil servants, and to
sustain essential imports-particularly food and
fuel-at current levels. Even more aid would be
required to begin the diversification of the economy
and development improvements that are needed to
restore sustained economic growth. Moreover, mili-
tary aid is critical, in our opinion, if Belize is to
upgrade its security forces enough to handle even
relatively minor civil disorders, much less prevent
regional insurgents from operating in its territory.
No matter which party wins the election, we believe
the next government will approach the United States
for increases in economic and security assistance.
During the last year, Price-despite objections from
the left-apparently settled on a strategy of gradually
strengthening ties to Washington. The Prime Minister
has agreed to a new Voice of America facility in
Belize and is seeking an increase in economic aid over
the $19 million received last year. Price has welcomed
a US International Military Education and Training
(IMET) program set for the Belize forces, as well as a
$500,000 military assistance grant program this year.
He recently indicated to the US Ambassador that he
will allow US combat engineers to undertake short-
term civic action projects, although none have been
initiated.
In our estimation, both Price and opposition UDP
leaders are inclined to seek stronger ties with the
United States, despite the probable challenge from
the left. Along with economic aid and security train-
ing, Belizean leaders may seek a mutual defense pact
with the United States without a large or permanent
presence of US ground forces in Belize. Embassy
reporting indicates that they view such an assurance,
combined with economic and military aid, as neces-
sary to deter Guatemalan aggression and strengthen
their domestic security forces without the attendant
problems they fear would come with a US troop
presence. They are apparently concerned, for exam-
ple, that Washington would use their territory as a
base of operations against leftist expansion in Central
America and that such activity could embroil Belize
in regional strife and inspire leftist activity at home.
Some Belizean officials have indicated their concern
in the press that the United States would pressure
them to make territorial concessions to Guatemala in
exchange for security guarantees.
Large-scale US support for Belize, however, could
adversely affect Washington's relations with Guate-
mala. Already resentful of the large sums of US
economic and military aid going to El Salvador and
Honduras, according to US defense attache reporting,
the Guatemalans are likely to view expanding assis-
tance to Belize as a tilt in Belize's favor with respect
to the territorial dispute. An actual US troop presence
in Belize, moreover, would be interpreted by Guate- 25X1
malan leaders as a replacement for British troops
designed to deter and oppose Guatemalan military
moves against Belize. Unless economic and military
aid were concurrently increased for Guatemala, Gua-
temalan leaders would be likely to view closer US ties
to Belize as a political affront
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