STAFF NOTES: LATIN AMERICAN TRENDS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000300120048-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 19, 2016
• Document Release Date: June 21, 2005
• Sequence Number: 48
• Publication Date: December 3, 1975
• Content Type: REPORT

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gu&~~ HOUE
SP-P>rpt
Latin American Trends
Secret
I i-, r,
December 3, 1975
No. 0538/75
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LATGN AMERICAN TRENDS
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December 3, 1975
Uruguay: They Love Us, They Love Us Not . . 1
ANNEX
Jamaica: Man1cy Visits US 3
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Uruguay: They Love Us, They Love Us Not
Uruguay is closely allied to the U,aited States in
its devotion to democratic principles, l-ut at times has
some doubts about its large northern ne:_ghbor. A recent
trade development, however, may signal 3n upturn in rela-
tions.
The ccrdial relationship between the two countries
began to show strains in the mid-1960s when the Uruguayans
expressed strong opposition to the US-OAS intervention in
the Dominican Republic. More recently, Uruguayan army
chief General Vadora expressed strong displeasure over the
US vote last July for the OAS resolution giving each nation
freedom of action to determine its relations with Cuba.
He said it was not a position to be expected of a long-time
ally and defender of democracy.
During a visit to Uruguay this month, OAS Secretary
General Orfila mirrored the feelings of many Latin Americans,
Uruguayans among them, when he expressed disappointment over
the cancellation of an expected visit to Latin America by
Secretary of State Kissinger. Uruguayans feel the US does
not have a coherent policy toward Latin America and, in
particular, that at times it neg1.c.:::ts Uruguay.
The fall of Cambodia and S-uth Vietnam caused shock
and bewilderment as well as conc(:rn that the United States
may indeed abandon a small ally. Uruguayans want to believe
the US will defend the values they hold dear but are con-
cerned about actions the US Congress may take. They are
aware that Congress has assumed a more active role in US
foreign policy and are apprehensive about the possible
effects on their security resulting from shifting attitudes
in that legislat_ve body.
Bilateral problems often focus on what Uruguay, along
with the rest of Latin America, sees as a protectionist
trade bias in Washington. US health standards on meat
processing, for example, are sometimes viewed as a pro-
tectionist threat to Uruguay's major export.
December 3, 1975
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Washington's approval of the generalized system of
preferences product list late in November may signal a
new upturn in the seesawing relationship. Had this system
been in effect in 1974, 62 percent of Uruguay's exports
to the US would have entered duty-free, instead of the
actual 17 percent. Uruguay should profit particularly
by the inclusion on the list of leather clothing (a non-
traditional export) and woolen items. Other listed items
provide significant opportunities for expansion and
diversification of Uruguayan exports to the United States.
December 3, 1975
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Jamaica: Manley Visits US
Jamaican Prime Minister Michael Manley, who is in
New York this week on a private visit, has been the major
figure in altering Jamaica's western-oriented foreign
policy in favor of closer identification with the Third
World. At home, he has initiated changes aimed at bring-
ing about fundamental reforms in the country's social
structure, but concern over what kind of society he is
attempting to create has generated a climate of turmoil.
When he first took office over three and a half
years ago, Manley was widely viewed as a liberal reformer
who, in the Rooseveltian tradition, would correct gross
imbalances in income and power. His government, however,
has proven more radical than expected. The gravity of
Jamaica's social ills is the principal factor causing
him to move to the left. Foremost among these problems
are:
-Rampant and chronic unemployment--which was 20
percent in 1974--affecting the 14-24 age bracket most
drastically and creating a large pool of alienated youth
susceptible to the appeals of the various radical move-
ments that had sprung up in the late 1960s.
-A severe crime problem reflecting lack of jobs
and also a general resentment, with racial overtones,
of the wide gap between rich and poor.
-A housing shortage most dramatically evident in
West Kingston, where shanty towns abound.
Manley has taken seriously his campaign promise
to improve the lot of Jamaica's urban poor. He has
given high priority to bringing back into the main-
stream of Jamaican political life the economically
marginal groups who had been drifting away from con-
ventional politics. Using his considerable skills as
an orator and his magnetic popular appeal, along with
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promises of public sector employment, Manley has
apparently succeeded in convincing the more urbanized
low-income groups of the government's concern.
Manley began a year ago to create something called
"democratic socialism." What he means by this phrase
remains vague, since his government has tended to express
its commitment to change as much by its rhetoric as by
specific programs. The prime minister's ideas about the
kind of society he wants to build are influenced by his
studies at the London School of Economics and more directly
by his experience as a trade union organizer where he came
to believe in a kind of shop-floor democracy. Manley wants
to give Jamaicans increased grassroots participation in
their institutions through the development of such organiza-
tions as worker councils in the factories, worker coopera-
tives on the sugar estates, and joint teacher-pupil
committees in the schools.
A second element of "democratic socialism" is the
government's effort to develop a mixed economy. Manley's
distaste for capitalism as it has evolved historically in
Jamaica and his desire to have a greater voice in the
development of Jamaica's natural resources have led him
in the direction of nationalizing the "commanding heights"
of the economy. After taking over the country's most
important public utilities, the government began the pro-
cess of acquiring majority ownership in the foreign-
dominated bauxite industry that constitutes the backbone
of the Jamaican economy.
Despite his harsh criticism of capitalism's role
in the country's development, Manley insists that there
is a place for private enterprise in Jamaica. He has
tried to reassure businessmen and the middle class, who
have long been apprehensive over his ultimate intentions.
The crisis of confidence in the business community combined
with Jamaica's economic stagnation--due mainly to cutbacks
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in bauxite production and stunted growth in tourism--has
deprived Manley of the economic- base from which to carry
out programs of social reform. His recent conciliatory
approach to the business community reflects his increasing
awareness that "democratic socialism" will be able to deliver
the better life only if the economy is running smoothly.
This fall the Manley government instituted reforms
aimed at reducing income differentials while holding
inflation in check. While minimum-wage legislation was
introduced, Manley attempted a voluntary freeze on the
wages of some of the more affluent until guidelines can
be agreed upon with unions and employers. A compulsory
savings scheme was announced to finance a newly created
National Housing Trust charged with building low-cost
housing.
Foreign Policy
Manley has gained considerable prominence as a
Third World figure as he has moved Jamaica away from its
traditional role of unquestioned ally of the US and the
United Kingdom. He has become an important spokesman
for the creation of a new economic order more favorable
to the Third World, a leading advocate of producer as-
sociations, and a sharp critic of the dominant position
of multinational corporations in developing countries.
The respect Manley has gained for his sponsorship of
economic unity among the developing countries was re-
flected by the selection of Jamaica as one of the four
representatives of the Third World for the Conference
of International Economic Cooperation scheduled this
month in Paris.
Manley's most controversial foreign policy initia-
tive has been the rapprochement he has entered into with
Cuba. Following a trip to Cuba in July, Manley returned
home full of praise for Castro and determined to adapt
aspects of the Cuban experience to the Jamaican environ-
ment.
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Since July this relationship has been moving forward
on a number of fronts. A joint economic commission met
in Kingston in mid-November, and developed programs for
continued cooperation in sugar production, fisheries
development, tourism, agriculture, communication, and
construction. Frequent exchanges of ministerial-level
social and economic missions have taken place, including
that headed by Manley's brother Douglas soon after he
was named minister of youth and community development.
The strength of the political ties between Castro and
Manley was symbolized by the fact that a top Cuban foreign
policy official sat beside Manley during the 37th congress
of his Peoples National Party in late October.
The Reaction
Close relations with Cuba and Manley?s espousal of
"democratic socialism" have aroused fears that he in-
tends to establish a one-party socialism akin to the
Castro version. Despite Manley's efforts to distinguish
between his brand of socialism and Castro's, skepticism
persists and the government's opponents have done their
best to spread alarm. The leader of the major opposi-
tion party, Harvard-educated Edward Seaga, has accused
the government of subtly transforming the society into
a communist state and warns that the next election will
be the last if Manley's Peoples National Party is vic-
torious.
Manley's commitment to competitive democracy is
probably genuine, but the intentions o:: others in his
party are more suspect. A small but .ocal wing, including
much of the local leadership, is clearly to the left of
Manley. Minister of Housing Anthony Spaulding, on wham
the prime minister relies for strong-arm tactics, has
publicly called for the creation of a one-party state,
and the secretary general of the party, D. K. Duncan,
favors a
communist form o government. The radical wing is
gradually building up a base of support by expanding
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the party's youth arm, and many observers, including
the old guard of the party, fear that the youth arm will
get out of control if it cannot pressure him to move
further to the left.
The increasing polarization of the political climate
is reflected in the press and in the violence and thug-
gery--excessive even by Jamaican standards--that have
accompanied recent local elections. Efforts to ease
tensions are complicated by the likelihood that national
elections will be held next year and by Manley's almost
paranoid fear of Seaga.
Jamaica's considerable importance to the US derives
from the fact that it is this country's most important
source of bauxite and the second most important source
for alumina. In June 1974, Jamaica increased the export
tax on bauxite by 500 percent and linked future increases
to the US aluminum prices. Four months later the Manley
government began acquiring majority ownership in the
Canadian and US aluminum companies by opening negotiations
for the purchase of 51 percent of the bauxite operation
of the Jamaican subsidiary of Kaiser. The government is
proceeding with complicated contract renegotiations with
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their operations and reversion to the government of
bauxite reserves and surface rights held by the foreign
companies. Kaiser is closest to a settlement.
December 3, 1975
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