CENTRAL AMERICAN MONTHLY REPORT #8

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000901160001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 27, 2016
• Document Release Date: September 1, 2010
• Sequence Number: 1
• Publication Date: March 1, 1984
• Content Type: MEMO

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Overview
Political and military trends were favorable throughout much of
Central America in March. Regional attention focused on the 25 March
Salvadoran presidential election, which generated a turnout nearly as large
as the successful 1982 election. A runoff between the top finishers,
Christian Democrat Napoleon Duarte and extreme rightist Roberto
D'Aubuisson, will take place in late April or early May. We expect Duarte
to prevail, but the campaign is likely to be characterized by intense
political maneuvering and the possibility of increased violence by leftist
and rightist extremists.
The Salvadoran election process has again underscored the lack of
popular support for the guerrilla cause, despite the problems with
balloting. Furthermore, efforts by some guerrilla elements to disrupt the
voting undermined public assurances to the contrary by insurgent leaders
suggesting that insurgent unity remains elusive.
Despite the efforts of some insurgents to derail the balloting, this
election was characterized by significantly less nlpnce than was the a
during the 1982 Constituent Assembly election.
This memorandum was prepared by the Central America Branch, ALA. It was
coordinated with the Directorate of Operations. It contains information available as of
10 April 1984. Questions and comments are welcome and should be addressed to Chief,
Middle A merica-Caribbean Division, ALA
Copy `I'aof 67
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The regional ramifications of the Salvadoran election are especially
pronounced for the Sandinista regime in Nicaragua, which has stepped up
preparations for its own presidential election this November. Recent
changes in the electoral law, ostensibly designed to address the concerns of
political opposition elements, indicate the Sandinistas will not risk any
serious political challenge to their rule. Meanwhile, on the military front,
anti Sandinista insurgents disrupted merchant shipping in the country's two
major ports during March and sustained ground operations in both the North
and the South.
In Honduras, the forced resignation of Armed Forces Commander
General Alvarez initially raised concerns in the region about Honduran
military unity, but President Suazo's assertion of civilian authority
demonstrates the strength of the country's nascent democracy. In
Guatemala, the Melia regime continued to make progress toward
constituent assembly elections scheduled for July.
Military
Nearly continuous government military operations in March succeeded in keeping
the guerrillas off balance and prevented them from launching coordinated actions to
disrupt the election. The Army conducted sweep operations in several departments, and
in mid-month launched a major thrust into a guerrilla stronghold in northern Morazan.
Despite the guerrillas' claims that they controlled over 70 towns where voting would be
denied, the US Embassy reports that balloting was prevented in 44 municipalities.
Guerrilla activity was generally limited to sporadic attacks aimed at disrupting
the Army's tactical momentum.
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Arms Flow
Nicaragua continues to provide arms and supplies to the Salvadoran guerrillas.
Castro has increased deliveries of weapons to the Salvadoran insurgents since late
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As expected, none of the eight candidates won a majority of votes in the March
presidential election. The stage is therefore set for a runoff in late April or early May
between the top two finishers-Christian Democrat Napoleon Duarte, who garnered 43
percent of the vote, and extreme rightist Roberto D'Aubuisson, who received 29
percent. Third-place finisher Francisco Guerrero of the moderate rightist National
Conciliation Party received 20 percent, thus propelling him into the role of the
kingmaker. We believe that maneuvering for Guerrero's endorsement will be intense
between Duarte and D'Aubuisson, with the latter having little chance of winning a runoff
without it.
Insurgent attacks on election eve knocked out electricity in 80 percent of the
country, which caused problems opening many polling places on time. In addition, the
voting was marred by shortages of personnel, ballots, and ballot boxes as well as delays in
processing voters because of errors in the new national register. Nevertheless, the US
Embassy reports that more than 1.4 million people voted, comoared with approximately
1.5 million in the Constituent Assembly election in 1982.
Military
Attacks by anti-Sandinista insurgents escalated in March. Of particular
significance, insurgent special teams carried out several sea-air raids and mining
operations at the country's two main commercial ports, Corinto and Puerto Sandino.
Since the first mines exploded in early March, several merchant ships have been
damaged, including a Soviet tanker entering Puerto Sandino.
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The Nicaraguan Democratic Force, which now claims to have some 7,400 armed
troops inside Nicaragua, launched a major new offensive at the beginning of the month.
The heaviest fighting was concentrated in Nueva Segovia and Jinotega Departments.
Most of the combat has been in unpopulated areas or around main roads, but on 23 March,
FDN troops briefs entered man Norte, a town of some 10,000 in Jinotega
De artment. he insurgents killed 40 defenders.
guerrillas also sabotaged a dam at
Salto ran In central Zelaya Department and destroyed a bridge on the road between
Puerto Cabezas and La Tronquera. The Miskito insurgents claim the Sandinistas have
largely abandoned the corner of Nicaragua north of Puerto Cabezas except
border posts, which they resupply by air. At month's end,
another exodus of some 1,000 Indians was underway to Honduras.
During March, Eden Pastora's forces clashed intermittently with Sandinista troops,
mostly along the Costa Rican border. ARDE now claims a total of some 5,800 armed
fighters, and is expanding to 7,000.
The continued fighting evidently is damaging the morale of Sandinista troops in
the field, especially militiamen.
Arms Buildup
The Sandinista military buildup continued unabated with the fourth Bulgarian arms
delivery to El Bluff completed early in March. the
delivery included some 20 T54 or T55 medium , e u - light amphibious
tanks, 15 or more armored reconnaissance vehicles, at least three 152 mm howitzers, and
possibly some 81 mm antitank guns. The PT-76s, new to the Sandinista inventory, will be
useful in marshy coastal areas and during Nicaragua's rainy season, conditions that
hamper the movement of the heavier medium tanks. Nicaragua now has three battalions
of medium tanks-the other two were delivered in 1981 and 1982.
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Political
Preparations for the election scheduled for November dominated much of
Nicaragua's political activity in March. Embassy reporting indicates that the Sandinistas
made a number of changes in their draft electoral law proposal to assuage the objections
of non-FSLN parties and to permit nominally free elections. Nevertheless, we believe
the law heavily favors the Sandinistas: access to the media will be highly restricted, the
financing provisions discourage an opposition coalition, and lowered age limits will add
many thousands of votes to Sandinista totals. The opposition still has not been able to
devise an effective strategy. It continues to threaten an election boycott, but it could
lose its legal standing and some foreign and domestic support if it does.
On the diplomatic front, Sandinista activity increased significantly in response to
the mining incidents and the regime's growing economic difficulties. Although junta
leader Ramirez visited Iran and Libya and Directorate member Ruiz traveled to Moscow
seeking economic aid, public announcements suggested they gained little. Similarly,
junta Coordinator Daniel Ortega failed to obtain endorsement for his call for an
emergency meeting of the Contadora countries from Mexican President de la Madrid. At
month's end, Defense Minister Humberto Ortega left for the USSR and North Korea in
search of military aid.
The Sandinistas announced that 1,500 Cuban teachers returned to Nicaragua
recently for the start of the school year-a reduction of 500 from their previous
number. Press photos indicate that all are young males, and Cuban Vice President
Rodriguez publicly claimed that all Cuban civilian advisers have military training.
Sandinista statements have suggested that the Cubans will be replaced late this year
when some 1,500 Nicaraguan teachers complete a course of study in Cuba.
Economic
March was a dismal month for the economy. Several merchant ships that
cancelled their arrivals because of mining were to load coffee and cotton to earn
Nicaragua badly needed cash. Nicaragua's foreign currency holdings already were so low
by early March that foreign banks were requiring Managua to put up gold as collateral for
ordinary trade financing-a good indicator that the Sandinistas have virtually exhausted
their cash. Moreover, the US Embassy reports that the nearly-completed coffee and
cotton harvests-which provided about half Nicaragua's $400 million in hard currency
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earnings last year-were unusually bad. Cotton growers claim that workers are reluctant
to appear at the farms because they want to avoid military recruiters, while bad weather
proved the main blow to the coffee crop. The decline wo crops alone will slice
some $70 million off this year's export earnings.
Mexico has begun to curtail its oil support. In the first quarter of 1984, Nicaragua
was able to import just half a million barrels of Mexican oil-down from 1.4 million
barrels in the preceding three months. Stiffened Mexican demands for payment and the
Sandinistas' financial bind were largely responsible. Nonetheless, we estimate that the
Sandinistas had enough oil in hand at the end of March to last two to three months at
normal consumption rates, and another Soviet tanker will arrive in mid-April.
GUATEMALA
Political
The tense atmosphere caused by coup rumors and plotting abated in March and
local attention focused increasingly on the constituent assembly elections scheduled for
July. We believe the OAS decision to send observers will add credibility to the election.
Chief of State Mejia is taking steps to ensure a fraud-free election that will be perceived
as legitimate both at home and abroad. He has ordered, for example, that local
mayors-traditional mechanisms of election tampering-be removed from the municipal
election committees overseeing the voting. Embassy reporting indicates that Mejia also
says the Army will not transport the ballots on election day as originally planned.
We judge that this election poses little threat to the military's short-term control
over the government and imposes few costs on the armed forces institution. The
constituent assembly will have no legislative powers and its only function will be to write
a new constitution. Moreover, if current trends persist, the assembly is likely to be
dominated by centrist and rightist parties acceptable to the Mejia government. Thus we
see no reason at this time for the military to intervene in the process. In our opinion,
Mejia wants an honest election in order to help restore legitimacy to the Guatemalan
government. Embassy reports indicate that many officers also believe that the military's
overt control of the government has corrupted the armed forces as an institution and
that it should get out of politics.
Nevertheless, the legitimacy of the election is likely to be criticized if, as we
expect, the electoral field is largely restricted to rightist and centrist parties. Although
a US Embassy source says that several leftist parties have formed an alliance, none of
the left-of-center parties has as yet qualified to be placed on the ballot. Mejia recently
amended the electoral law to facilitate the registration of more parties. The leftist
parties' lack of financial support and organizational weaknesses, however, suggest they
will have difficulty competing effectively. The election's credibility will also be
damaged if Guatemala's Indians-about half the country's population-fail to
participate. According to the US Embassy, there is a lack of interest in the election in
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the countryside and none of the parties has developed strong organizations in rural
Military
The Army's recent successes against guerrilla safehouses in Guatemala City have
weakened the urban fronts of several insurgent groups.
the capture of two senior leaders of the Communist Party has prompted the party to
move its headquarters to Mexico City. The military also has forced one of the largest
guerrilla organizations to withdraw its urban units to the countryside, and
the Army believes it has destroyed the urban front of a
second major insurgent group. aids conducted
during the past three months also have decimated the leadership of three other small
terrorist groups. Moreover, the
government has seized substantial quantities of explosives and weapons, as well as a
The failure of the insurgents to carry out an offensive planned for March
reinforces our belief that military pressure is keeping them on the defensive and will
preclude sustained or widespread guerrilla attacks anytime soon. Two recent ambushes
of Army units in rural areas that killed some 20 troops, however, illustrate that the
guerrillas remain capable of inflicting substantial losses on Army units in engagements of
their choosing.
Mejia is holding to his commitment to strengthen the military.
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- ~ he has raised the troop strenLrt the Army by some 5,000 in
F
recent months. also expanding the civilian
defense forces, which currently may number close to 800 000.
Political
The forced resignation of Armed Forces Commander General Alvarez on 31 March
demonstrates the growing strength of Honduras' civilian government and is unlikely to
affect Tegucigalpa's support for US policy in the region. Alvarez' dismissal apparently
was prompted largely by growing signs that he had political ambitions that could
challenge President Suazo's authority. Both Suazo and new Armed Forces Commander
General Lopez told the US Ambassador that Honduras would continue its strong support
for US policy toward Nicaragua and El Salvador and its cooperation in joint exercises.
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Moreover, Lopez said that the government would endeavor to increase its backing for
anti-Sandinista forces, We believe the
well-respected Lopez will be welcome by most of the officer corps, which took exception
to Alvarez' autocratic style.
Military
The activities of anti-Sandinista insurgents have raised military tensions with
Nicaragua considerably. The mining of Nicaraguan ports and stepped up insurgent
attacks in the north prompted Managua to issue a series of diplomatic protests alleging
Honduran complicity. On the other hand Honduras has
been increasingly concerned by contacts between local radicals and Nicaraguan Embassy
officials in Tegucigalpa. According to press reports, the Suazo government expelled a
senior Nicaraguan diplomat for interfering in Honduras' internal affairs. Against this
backdrop of increased tension, the US Embassy cites claims by Honduran peasants that
they were recently harassed by Sandinista military elements in the border area.
Relations between Honduras and El Salvador-which were tense earlier this
year-improved as military leaders from both countries discussed possible combined
operations against Salvadoran guerrillas along the common border. Tegucigalpa appears
concerned over the recent discovery of a Salvadoran rebel safehouse in Honduran
territory, as well as bombings by local terrorists designed to express solidarity with the
Salvadoran Insurgents. The US Defense Attache reports that Honduran authorities
recently gave permission for Salvadoran troops to stage out of the airfield at Nueva
Ocotepeque. Nevertheless, conflicti border claims of both countries continue to
hamper broader cooperation. joint operation
in one of the disputed areas was recently postponed after San Salvador rejected
Tegucigalpa's request for a signed document authorizing entry into Salvadoran territory.
Political
Costa Rica's relations with Nicaragua deteriorated in March following attacks by
anti-Sandinista insurgents on Nicaraguan towns along the border. According to Embassy
reporting, Nieargua's claim that the attacks were launched from Costa Rica has
prompted Costa Rican public security officials to step up efforts to curtail insurgent
activity. President Monge remains sensitive to the strong local reaction to a border
incursion and attack by Sandinista troops on Costa Rican security forces in late
February. To counter growing domestic criticism that he has lost control over the
country's northern region, Monge, according to the Embassy, plans to renew requests for
US assistance in civic action projects for the northwest. Costa Rica's concern over
jeopardizing its neutrality and provoking Nicaragua previously forced Monge to suspend
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the projects, which would involve US military engineers.
Adding to pressures on the government was a threatened combined strike by the
Communist-controlled Public Sector Employees Union and the Teachers' Association,
Costa Rica's largest labor group. According to the Embassy, the Communists are looking
for excuses to agitate and probably will organize a walkout of public sector employees
soon if Monge reneges on his pledge to increase salaries. Press and Embassy reports also
show that local Communists were behind a recent land invasion by peasant squatters in
southern Costa Rica which resulted in a violent confrontation with police. Although
moderate Communist elements recaptured control of the party from the radicals at a
special congress in early March, we believe additional labor agitation is likely as the two
factions compete for followers and for resources from abroad.
Economic
Mexico has lent Costa Rica the $50 million that San Jose claimed was necessary
to bridge its foreign exchange gap until US and IMF disbursements begin later this spring,
according to the US Embassy. Mexico has insisted that its support not be publicized to
avoid problems with its own creditors. Central Bank President Castillo told the Embassy
that by the time the Mexican loan was made, one half of Costa Rica's gold reserves had
been sold. Costa Rica also secured a $5 million loan from an unidentified financial
institution in Panama We estimate this money
will be enough to allow San Jose to honor its foreign payment obligations for the next
few months. The Monge government has reached preliminary agreement with the IMF on
a standby loan for 1984 that requires exchange rate "flexibility"-in practical terms, a
devaluation. We believe San Jose's adherence to this condition will be crucial for
averting a new foreign exchange crisis this summer, but it will be strongly opposed by
some Communist-controlled public sector unions worried about inflation and also eager
to foment labor disruptions if wages are frozen.
Political
The campaign for the presidential election scheduled for 6 May began in earnest in
March with both the government and opposition camps claiming that their candidate is
leading. Recent ruling party polls indicate that it likely will be a close race, but we
believe progovernment nominee Nicolas Barletta currently has the edge over Arnulfo
Arias, a long time foe of the military.
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We judge that any effort to undermine the military's influence in Panamanian
decisionmaking would precipitate a coup against the thrice-elected, thrice-deposed
Arias. At this point, however, Noriega is unlikely to adopt drastic measures against
as or interrupt the electoral process so long as the race appears close.
Barletta is increasi his public recognition and is now slightly ahead
of Arias. Noriega believes that Arias' support has peaked,
that the five other opposition candidates will siphon votes away from him, and that the
government's civic action programs will enable Barletta to carry the rural vote. Noriega
apparently is using the extensive resources of the military to enhance Barletta's
chances. he military
already has provided some $2 million to the progovernment National Democratic Union
and that another $3 million probably will be distributed soon.
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SUBJECT: Central American Report #8
Copy # 1 - Mr. Robert C. McFarlane
2 - Mr. Donald Gregg
3 - Ambassador Shlaudeman
4 - General Paul Gorman
5-HPSCI
6 - SSCI
7 - Lt. Gen. James A. Williams
8 - Mr. Nestor D. Sanchez
9 - Mr. Constantine Menges
10 - Lt. Gen. Lincoln D. Faurer, USAF
11 - Vice Admiral Arthur S. Moreau
12 - Mr. Hugh Montgomery
13 - Ambassador Langhorne A. Motley
14 - Doug Mulholland
15 - DCI - 7D60
16 - DDCI - 7D6011
17 - Executive Director - 7D44
18 - SA/DCI/IC - 7D60
19 - Executive Registry - 7E12
20 - DDI - 7E44
21 - DDO - 7E26
22 - IAD E4846
23 - NIO/LA - 7E62
24 - NIC/AG - 2G40
25 - C/DDI/PES - 7F24
26 - D/OIA - Rm. 3N100, Bld. 213
27 - Director, Legislative Liaison - 7D43
28 - Legislative Liaison - 7B04
29 - DDI Rep CINCLANT
30 - PDB Staff - 7F30
31 & 32 - D/ALA - 3F45
33 - C/DDO/LA - 3C.1203
34 - DDO/LA
35 - C/DDO/LA
36 - C/DDO/LA
37 - C/LA
38
39 & 40 - ALA/PS - 3F38
41 - ALA Research Director - 3F44
42, 43, 44, & 45 - CPAS/IMC/CB - 7G07
46 - DDI/CPAS/ISS - 7G40
47 - CPAS/CDPB/CC - GH25
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48 - C/MCD
49 - DC/MCD
50 - C/CA
51 - DC/CA
52 - C/MX
53-C/R
54-C C/CC
55
56
57
58
59
60
61
62
63
64
65 - MCD Files
66 & 67 - CA Files
DDI/ALA/MCD/CA (4 April 1984)
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Nicaragua
V , I hoe!' A
*MANAGUA
Costa Rica
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