CENTRAL AMERICAN MONTHLY REPORT #18
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CIA-RDP85T01058R000100070001-8
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Document Creation Date:
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Publication Date:
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tr o
DIRECTORATE OF INTELLIGENCE
JANUARY 1985*
CENTRAL AMERICAN MONTHLY REPORT #18
PERSPECTIVE
Managua last month launched a major campaign against the
guerrillas and intends to step up the pressure in the next few
months. Indications include public and private statements by
Sandinista officials, troop and weapons deployments, and
increased patrolling
President Ortega stated early in the month that national
defense has top priority for 1985 and will consume 40 percent of
the budget-
r-compared with 25 percent last year.
Central American Monthly Report #17, which covered events of
December 1984, was inadvertently dated January 1985. There is no
#16.
This memorandum was prepared by the Central America North
and South Branches, ALA. It was coordinated with the Directorate
of Operations. It contains information available as of
1 February 1985. Questions and comments are welcome and should
be addressed to Chief, Middle America-Caribbean Division, ALA,
Copy of 81
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The regime is building up troop strength to meet the
insurgent threat.
total active duty Army
strength has increased by more than 10,000 over the past several
months to some 70,000 men, in part due to forced recruitment.F
The Sandinistas have established overwhelming superiority in
firepower--including long-range heavy artillery, multiple rocket
launchers, light amphibious tanks, and close air support--in the
areas of greatest insurgent concentration. A key militar
commander in the north recent
~ The remainder of
the aircraft are likely to be combat ready within the next
month.
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o s
Sandinista shortcomings will continue to hamper the
counterinsurgency campaign. Government forces suffer from
inadequate command and control
and their inefficient logistics system results in
frequent shortages of food, munitions, and medicine. The armed
forces, moreover, show poor leadership and performance, and
desertions from frontline units continue to be a serious
problem.
For their part, the insurgents have been suffering from
supply problems and eroding morale. Ammunition stocks ran
precariously low last month, forcing almost half of the 11,000-
12,500 combatants in the north to withdraw into Honduras.
3
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Photography of mid-January confirmed that two BM-21s were located
in a garrison some 12 miles south of the Honduran border, but
none have been detected in forward areas where they would pose a
threat to the camp.
Rebel forces also have stepped up
ambushes of Sandinista patrols and attacks on transportation,
communications, and electrical power targets. In addition, the
insurgents continue their sabotage of government economic
installations and their efforts to disrupt the current
agricultural harvest.
Arms Buildup
The Sandinistas continue to improve their air defense
network despite recurring problems. Photography of mid-January
shows two early warning radars newly emplaced at Los Mercados,
near San Juan del Sur, providing coverage-of almost all of Costa
Photography of late January revealed the presence of two new
electronic facilities near Corinto. A coastal surveillance site
with a Soviet-made radar will permit the Sandinista Navy to
locate ships some 35-40 nm off the coast. This site, coupled
with the six 37-mm naval antiaircraft artillery guns delivered
aboard the Bakuriani last November and subsequently emplaced at
Corinto, provide a significant increase in security for the
port .
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The other installation is a new high frequency/directional
finding site (HF/DF), which brings the total of HF/DF sites to
four countrywide. This new site will further enhance Nicaragua's
ability to monitor and locate rebel radios as well as to
intercept both civil and military communications in Honduras and
Political
President Ortega announced no new policy initiatives in his
inaugural address on 10 January, and the moderate tone was
pitched to appeal to foreigners. Some West European observers
interpreted the renewal of the amnesty program as a sign of
flexibility, but Ortega did not announce any relaxation of
political restrictions. He made few changes in the cabinet, and
the relative balance among leadership factions appears the
same. Fidel Castro was the only chief of state to attend the
inauguration,,reflectina foreign disillusionment with the
Practically all non-Sandinista political parties signed a
document on 11 January, calling for renewal of a "national
dialogue," but the Sandinistas sought to deflect the initiative
by focusing attention on the National Assembly. The Independent
Liberals and a few dissident Conservatives provided the only
opposition to the regime in the Assembly's first sessions, but
both groups have told the US Embassy that they eventually will
walk out. Meanwhile, former presidential candidate Arturo-Cruz
and insurgent leaders were discussing drawing up a statement of
political principles that both internal and external opposition
Catholic Church leaders held another round of talks with the
Sandinistas, but Church-state relations remain fragile and could
easily be strained further.- In late January, the Church
announced slightly tougher sanctions against priests serving in
government positions but stopped short of permanently defrocking
Meanwhile, Miskito insurgent leader Brooklyn Rivera refused
to attend scheduled talks with the government after he was
injured in an Army attack while visiting Indian villages in
southeastern Nicaragua. Rivera has faced opposition within hi
own ranks to the talks,
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?
Economic
Nicaragua took advantage of Castro's visit early in the
month to dedicate a new, Cuban-built sugar refinery. The plant,
Havana's largest economic aid project ever undertaken, is not
scheduled to begin production until mid-year at the earliest and
will not be fully operational until 1987. Over the past two
years, Cuba has provided 600
workers and $100 million in grants and credits for the project,
which also has received assistance from Libya, East Germany,
Sweden, France, the Netherlands, and Canada.
Nicaraguan exports are down
markedly. The largest export crops--coffee and cotton--will be
at least 25 percent below the Sandinistas' target this year.
Insurgents have hit government plantations, and private growers
have been affected by inadequate official prices, labor scarcity.
fertilizer and pesticide shortages, and equipment problems.
gold production also is
o by more than halt trom 1980-1983 levels. The decline
reportedly is due to insurgent destruction of,ecuivment and the
government's failure to develop new fields.
On the financial front, Nicaragua has new trade and aid
deals with Algeria and Libya. Algiers reportedly is giving the
Sandinistas $23 million worth of crude oil for resale--a near
doubling in aid levels from all of last year. Libya signed a $15
million barter agreement accepting Nicaraguan coffee, cotton,
sesame. anas for a crude oil delivery last November.
After six months of delays, Nicaraguan officials finally
discussed debt arrearages with international bankers at the end
of the month. The bankers agreed to give the Nicaraguans more
time to work out arrangements to restart token payments on past
due interest, possibly usin a repayment formula tied to
Nicaraguan export 1 is
EL SALVADOR
Military
The Salvadoran military intensified its already aggressive
efforts against guerrilla strongholds in January, launching
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gunships.
operations in northern Morazan, San Miguel, and the Guazapa area,
as well as in northern Chalatenango. Key actions included sweeps
by five elite US-trained battalions, supported by air and
artil River and in the Guazapa Volcano
area, In addition, the 4th
Brigade in Chalatenango, e by Colonel igfredo Ochoa, moved
into guerrilla-controlled areas and established civilian defense
teams to deny the insurgents free movement after the troops
leave. Meanwhile, the effectiveness of the two C-47 gunships
recently supplied by the US was illustrated at San Bartolo
Ichanmico in mid-month, as the military repelled a large rebel
force. Air Force Chief Bustillo claimed he was unaware of US
Congressional restrictions against simultaneous use of both
Insurgent activity remains focused largely on economic
warfare. The guerrillas sabotaged the power grid, continued
attacks on the coffee industry, and attempted a nationwide
transportation stoppage in January. Although the rebels publicly
laimed to have ended the traffic disruption by month's end, we
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expect renewed strikes against transport in February.
Despite these plans, the guerrillas apparently continue to
experience significant logistical and other problems.
growing insurgent i icu ties,
including breakdowns in leadership and morale.
the Salvadoran armed forces were increasingly
avert further erosion of their credibility in Western Europe.
US Embassy, the guerrillas apparently hoped these talks would
effective and could exploit guerrilla problems, thus precluding
any chance of a short-term guerrilla victory. These indications
of guerrilla weakness were reinforced by insurgent efforts
through Salvadoran Church and Mexican intermediaries to secure
secret discussions with government emissaries. According to the
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Economic
The US Embassy in El Salvador reports that guerrilla damage
to the infrastructure increased in 1984 to more than $21 million,
up from $19 million in 1983. If indirect costs are added, such
as loss of property of other public and private sector
institutions, the toll is said to climb rapidly. Moreover,
according to US Embassy analysis, budget outlays in 1984 for
defense and public security--23 percent of the total expenditures
as compared with 14.4 percent in 1980--have strained the
Salvadoran budget and squeezed out spending for education,
health, and public works. Direct cumulative damage to the
economy as a result of the internal fighting since 1979 is
estimated at over $1 billion.
Political
January saw a reduction of tensions between President Duarte
and the military, aided, we believe, by a postponement of the
third round of peace talks with the guerrillas until after the
March elections. As a result, the political parties began
concentrating on the campaign, highlighted by the announcement of
a coalition between the moderate rightist National Conciliation
Party and Roberto D'Aubuisson's extremist National Republican
Alliance. The two parties have done little active campaigning
thus far, according to the US Embassy, because the legality of
their coalition remains in doubt until the Supreme Court rules on
the electoral law. Consequently, the rightist-dominated
Elections Council voted to move the balloting from 17 March to 31
March, thus allowing the parties ample time to campaign after the
court decision.
In spite of the recent legislative collaboration between
moderate rightists and extremists in passing bills undermining
Christian Democratic programs, various reporting suggests that
some moderates are opposed to the coalition and remain amenable
to counteroffers by Duarte. The Christian Democrats have the
funds and ministerial positions the Conciliation party wants, but
their traditional short-sightedness has been reflected in an
unwillingness to make concessions, thereby helping solidify the
Nevertheless, we believe most moderate rightists are
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uncomfortable with D'Aubuisson, whom they view as irrational and
The moderates' longstanding reservations over D'Aubuisson's
radical tactics are being echoed by some of his own party
members.
This image is hampering efforts to broaden
his party's base of support. A high party official also recently
confided to US Embassy officials that contributions are drying up
because of D'Aubuisson's failure to intensify organizational and
fundraising efforts.
The most serious indication of the increasing unease with
D'Aubuisson within the party
pro a y re ec s a growing belle
among key party players that D'Aubuisson's liabilities are
rapidly outwei hin his assets as a charismatic campaigner.
Nevertheless, the likelihood that the Christian Democrats
will be able to capitalize on such dissension remains
questionable. Their traditional tendency to see themselves as
being under siege has been reinforced by rightist cooperation
during the past few weeks. As a result, Christian Democratic
leaders--as evidenced by Duarte's recent public statements
chastising the moderate right--appear increasingly inclined
toward a strategy of confrontation.
Political/Economic
Tensions continued to grow in January as the three-month-old
fiscal and liquidity crisis lingered with no resolution in
sight. President Barletta has displayed none of the political
skills necessary to build public consensus on the need for
increasing taxes while reducing government expenditures. By
submitting an unbalanced budget--in violation of the
Constitution--the President is trying to put the onus for fiscal
measures on the legislature, but the Assembly is demanding that
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he bring projected revenues and expenditures into line. Military
corruption and excessive spending have provided a rallying cry
for opponents of Barletta's proposals, and opposition and leftist
groups seized the current US-Panamanian joint exercises to decry
the ongoing expansion of the Defense Forces.
Political
Political infighting and financial difficulties contributed
to the mid-January breakup of the rightist coalition led by the
National Liberation Movement and may have set the scene for
violent reprisals.
According to US Embassy officials, Sandoval also is
convinced that the Mejia government is providing covert support
to the frontrunning National Centrist Union,
Sandoval claims the government is
pushing the party to violence by supporting its enemies. The
charges made by Sandoval, who has a history of alleged death
squad involvement, appear unfounded, and at this point the
military seems to be maintaining its neutrality.
Rightist dissension is likely to strengthen the electoral
prospects of the centrist parties, particularly the National
showed Union leader Jorge Carpio as a heavy favorite to win the
presidency. The Union's recent alliance with two parties,
meanwhile, will add rural support to its established strength in
urban areas. Nevertheless, the coalition's momentum could be
slowed if dissidents follow through on threats to form separate
independent polling data taken late last ye
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Military
For the first time in months, the guerrillas stopped the
Army's momentum in January with concerted attacks against
military units and the economic infrastructure, including the
temporary seizure of a town important to the tourist trade. Of
particular significance were four simultaneous insurgent strikes
at mid-month in Peten, San Marcos, Izabal, and Quiche
Departments.
We believe a recent attack against the town of Santiago
Atitlan in Solola Department was of potentially great economic
significance. The US Embassy reports some 100 guerrillas
attacked the local police station and government building and
stole all municipal funds. This was the first major insurgent
action in the Lake Atitlan vicinity in almost two years, and--if
repeated--it could begin to affect the area's tourist industry,
which is only beginning to recover from the aftereffects of
guerrilla activity between 1979 and 1982.
The heavy casualties sustained by the Army in January--
nearly 4-to-l in favor of the insurgents--will further erode its
morale. We believe delays in reacting to insurgent challenges,
together with the recent heavy losses, could cause unrest among
junior officers, who recently have complained of inadequate
helicopter support for medical evacuation and resupply.
Meanwhile, the senior staff apparently hopes it can assuage
frontline officers by committing additional resources to kev
problem areas.
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Political
Senior military officers appear relieved that President
Suazo seems to have abandoned, at least temporarily, his
flirtation with seeking an unconstitutional extension of his
term. concern about Suazo's
maneuvering--including his manipulation of the opposition
National Party--peaked in December, when the high command
considered forcing him to resign. Subsequently, Armed Forces
Chief Lopez asserted publicly that the military would not
tolerate politicians seeking "immoderate power" and "causing
divisions within the Honduran people." In January, however,
Lopez publicly praised the President as a supporter of democracy,
suggesting he believes Suazo has heeded the military's veiled
threats. Meanwhile, the US Embassy reports that Suazo forcefully
declared his commitment to elections at two key public
appearances late in the month. Nevertheless, we believe that
Suazo, seeking to maintain his central role in Honduran politics
by ensuring the victory of his Liberal Party successor in
November, probably will continue manipulating his political
opponents, an action that invites a renewal of tensions with the
armed forces.
Economic
The largest banana firm in Honduras may divest its
unprofitable operations, thereby generating labor unrest arhong
its 13,000 union workers. Officials of Standard Fruit Company
claimed in January that high production costs could lead its
financially troubled US parent company to close local operations.
According to the US Embassy, government and union officials
underestimate the possibility of a pullout and have ignored
numerous attempts by Standard Fruit to obtain relief. The
government, according to US Embassy reporting, continues to
oppose exchange rate reforms and fears special tax concessions to
Standard Fruit would worsen the fiscal. deficit and bring demands
for similar treatment by other firms. A decision to abandon the
Honduran operation would harm export earnings--bananas account
for 30 percent-- and probably spark additional union protests as
the new owners tried restoring profitability through wage cuts.
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Political
The victory of Oscar Arias in the ruling National Liberation
Party's presidential primary late in the month represents a
generational shift in leadership. Arias, who represents the "new
generation" of party leaders, won the nomination despite the
support given to his rival by ex-Presidents Oduber and
Figueres. While each of these Old Guard leaders has indicated
his intention to support the Party's candidate, we believe
Arias's chances in the 1986 election will depend on whether
divisions generated during the primary campaign can be healed
quickly.
Economic
According to a US Embassy report, a tentative agreement
between the Monge Administration and United Brands provides for
the disposition of United's banana production facility on the
Pacific coast. The government is to purchase and maintain
production on 3,000 acres, and some 2,250 acres will be sold to
private buyers in small lots. United Brands has agreed to
purchase bananas produced on these lands for the next five years,
a period the government believes necessary to facilitate crop
diversification.
Political
The mid-January resignation of some conservative leaders
from the former ruling party has strengthened its pro-Cuban
elements and may entice them to challenge the party's heretofore
largely centrist course. The US Embassy reports that party
chairman Sylvestre's plans to form the new conservative People's
Popular Party were prompted by ex-Prime Minister Price's alleged
failure to curb the growing influence of party leftists.
The Contadora Group last month decided to prepare a new
draft of the treaty to present to the five Central American
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countries on 14-15 February. San Jose, however, has threatened
to boycott the talks because of strained relations with Managua
over a complicated asylum case and recent Sandinista incursions
into Costa Rica's Caribbean coastal region. President Monge,
criticized by the opposition and the press for not responding
more firmly, now is taking a hard line. El Salvador has
announced it also will not attend the Contadora meeting unless
Nicaragua satisfies Costa Rica's demands on the asylum case.
According to press reports, the Contadora Vice Foreign Ministers
discussed the issue in Panama on 1 February but apparently failed
to resolve the dispute.
Managua's tough attitude toward San Jose at this delicate
stage of the Contadora process probably reflects the Sandinistas'
belief that the recent Nicaraguan elections have strengthened
their position and that Mexico will continue protecting
Nicaragua's interests in the negotiations. The regime, however,
may be willing to take a more moderate stance on contentious
issues if Mexico so urges, in order to avoid a Costa Rican
boycott of the negotiations. If the treaty differs little from
the 7 September draft, Nicaragua may offer to sign it to score
propaganda points while blaming the impasse on the US.
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KEY NICARAGUAN TRAVELS/VISITS
30 Aug-21 Sep Recent visa applications to the US Embassy in
Managua indicate that Interior Minister and
National Directorate member Borge visited the
USSR 2-5 September during his trip to Libya,
Ethiopia, Bulgaria, Poland, East Germany and
Cuba. The Nicaraguan press did not report the
trip, and Borge's unusual itinerary suggests
he met with high-level Soviet leaders.
10 Jan
15 January
Contadora matters.
Nicaraguan Vice Foreign Minister Tinoco met
Venezuelan President Lusinchi and Foreign
Minister Morales Paul in Caracas to discuss
Fidel Castro was the only foreign head of
the inauguration and a three-hour speech
dedicating a Cuban-built sugar refinery.
state to attend the Ortega inauguration, along
with the foreign ministers from the Contadora
states. Castro kept a moderate profile during
his three-day visit--his second to Nicaragua
since 1979--limiting his public appearances to
agricultural products.
Visiting Libyan Minister of Economy, Industry,
and Commerce signed a $15-million trade,
agreement in Managua, bartering oil for
insurgent leader Rivera, despite Rivera's
announced refusal to attend the meeting.
Nicaraguan Vice-Minister of the Interior and
Sandinista Directorate member Carrion traveled
to Bogota to demonstrate Sandinista
willingness to continue dialogue with Miskito
Nicaraguan Vice-Foreign Minister Talavera
visited Honduras to explain provisions of
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propose a bilateral mixed commission.
amnesty law, discuss Contadora issues,
23-25 Jan Iranian Prime Minister Mousari concluded a
trade and aid agreement during his three-da
he opposes US aid to the insurgents.
Managua in three years--reportedly stressed
the need for democratization but told Ortega
West German Deputy Foreign Minister
Moellemann--the highest FRG official to visit
30 Jan - 1 Feb Mexican and Panamanian Vice Foreign Ministers
traveled to Managua on 30 January in attempt
to resolve the Nicaragua-Costa Rica dispute
over asylum case. A second meeting in Panama
on 1 February of the Vice-Ministry of
Nicaragua, Costa Rica, and the Contadora group
apparently was unsuccessful.
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COMING EVENTS IN CENTRAL AMERICA DURING FEBRUARY
6-12 February Vice President Sergio Ramirez visits the UK,
Ireland, France, and Italy.
12-13 February
21 February
held in New York.
Tripartite talks on Guatemala-Belize border
involving Guatemala, Belize, and the UK to be
Guatemalan Chief of State Mejia begins three-
day visit to Colombia, reciprocating President
Betancur's stop in Guatemala last December.
23 February Guatemala Chief of State Mejia departs
Colombia for Uruguay to attend President-elect
Sanguinetti's inauguration on 6 March.
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29 January According to the Embassy, a Brazilian
guerrilla who defected in El Salvador has said
the FDR/FMLN had contacted him in Brazil,
trained him for five months in Nicaragua--
where he also fought against the Contras--and
then arranged for his legal entry into El
Salvador. The Brazilian served with an ERP
unit as an instructor to Salvadoran
guerrillas, but defected because most of the
trainees were 12-14 years old. Most of his
story was publicized at a 29 January press
conference in San Salvador.
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op
CENTRAL AMERICA MONTHLY REPORT #18
Copy #1 & 2 - Mr. Robert C. McFarlane
3 - Mr. Donald Gregg
4 - Ambassador Shlaudeman
5 - General Paul Gorman
6 - HPSCI
7 - SSCI
8 - Lt. Gen. James A. Williams
9 - Mr. Nestor D. Sanchez
10 - Mr. Constantine Menges
11 - Lt. Gen. Lincoln D. Faurer, USAF
12 - Vice Admiral. Arthur S. Moreau
13 - Mr. Hugh Montgomery
14 - Ambassador Langhorne A. Motley
15 - Doug Mulholland
16 - Dr. Darnell Whitt
17 - DCI - 7D60
18 - DDCI - 7D6011
19 - Executive Director - 7D44
20 - SA/DCI/IC - 7D60
21 - Executive Registry - 7E12
22 - DDI - 7E44
23 - DDO - 7E26
24 - IA
25 - NIO/LA - 7E62
26 - NIC/AG - 2G40
27 - Daniel Childs, Controller - 7C21
28 - C/DDI/PES - 7F24
29 - D/OIA -
30 - Director, Legislative Liaison - 7D43
31 - Legislative Liaison - 7B04
32 - DDI Rep CINCLANT
33 - PDB Staff - 7F30
34 & 35 - D/ALA - 3F45
36 - C/DDO/LA - 3C3203
37 - DDO/LA/ - 3D5309
38 - C/DDO/LA 3C3203
39 - C/DDO LA - 3B44
4 0 - C/LA - 3B
41 - - 3D00
42 - 7E47
43 & - - 3F38
45 - ALA Research Director - 3F44
46 - 49 - CPAS/IMC/CB - 7G07
20
2.5X1
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25X1
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Declassified in Part - Sanitized Copy Approved for Release 2012/02/17: CIA-RDP85T01058R000100070001-8
Declassified in Part - Sanitized Copy Approved for Release 2012/02/17: CIA-RDP85T01058R000100070001-8 25X1
50 -
51 -
52 -
53 -
54 -
55 -
56 -
57 -
58 -
DDI/CPAS/ISS
CPAS/CDPB/CC
C/MCD
- 7G40
- GH25
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59 -
60 -
61 -
62 -
63 -
64 -
65 -
66 -
67 -
68 -
69 -
70 -
71 -
72 -
73 -
74 -
75 -
76 -
77 -
78 -
C/CAN
C/CAS
C MX
C/CAR
C/CU
79 - MCD Files
80-81 - CA Files
DDI/ALA/MC/CA/
C/LA/OCR, 1H39
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(1 February 1985) 25X1
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25X1
Declassified in Part - Sanitized Copy Approved for Release 2012/02/17: CIA-RDP85T01058R000100070001-8
Declassified in Part - Sanitized Copy Approved for Release 2012/02/17: CIA-RDP85T01058R000100070001-8
Declassified in Part - Sanitized Copy Approved for Release 2012/02/17: CIA-RDP85T01058R000100070001-8
Declassified in Part - Sanitized Copy Approved for Release 2012/02/17: CIA-RDP85T01058R000100070001-8
Top Secret
Military Activity and Facilities
Honduras
El
TEGU7LPA
Rockat barrage
aJainstinsurgents
c mp
BM-21 multip7e'
Ocotal. rocketlaunchefs Jinotega /
ueva Q' b o~ ~)
)viwili % `
e9Ovl9uilaln
Mari
d
Maw
Estel mujtitions,`elivery
~,Esteli"
V
.
YMatagatpa
Mat g~lpa~ ?
New HF/DF
site a r
asts
New co
surveilance site
\,-*MANAGUA;
,JJCI'il
L.ago de
Nirar,7gua
Honduran boats
seized by
Nicaraguan navy
IIL~
vi(1 J c.i7
Costa Rica
25X1
25X1
Brooklyn Rivera wounded
in Sandinista attack
Declassified in Part - Sanitized Copy Approved for Release 2012/02/17: CIA-RDP85T01058R000100070001-8
Declassified in Part - Sanitized Copy Approved for Release 2012/02/17: CIA-RDP85T01058R000100070001-8
b 0
'.,: Sonsonate
~La Libertad {S~a' 1 v _.6 r, f r l
i -,La P_az-S. (? Ichanmico i M19ue! La Union
Usulut3n
~? fr' r w r~ ~! tamer!
Ana 1'-
Ahuachanan Volcano
7 50
Kilometers
Boundary representation is
not necessarily authoritative.
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2012/02/17: CIA-RDP85T01058R000100070001-8