CENTRAL AMERICAN MONTHLY REPORT #37

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T01017R000707390001-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 20
• Document Creation Date: December 22, 2016
• Document Release Date: April 26, 2011
• Sequence Number: 1
• Publication Date: August 1, 1986
• Content Type: MEMO

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DIRECTORATE OF INTELLIGENCE
AUGUST 1986
CENTRAL AMERICAN MONTHLY REPORT #37
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 2 September 1986. Questions and comments are welcome
and should be addressed to Chief, Middle America-Caribbean Division, ALA,
Copy - of
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August 1986
CENTRAL AMERICAN MONTHLY REPORT #37
TABLE OF CONTENTS
Nicaragua
El Salvador
Honduras
Guatemala
Costa Rica
Panama
Nicaraguan Military Buildup
Significant Nicaraguan Political Events
Nicaraguan Travels/Visits
Chronology of Arms Flow into El Salvador
Coming Events in Central America During September
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NICARAGUA
During July, the Sandinistas masked continuing pressure against rank-and-file
opposition members by taking a more conciliatory public posture toward major opposition
figures. They renewed calls for a dialogue with the Catholic Church and allowed Cardinal
Obando y Bravo to reenter the country after a brief visit to El Salvador, despite hints he
might be barred. President Ortega also publicly promised not to take action against the
opposition as a result of the vote in the US Senate on increased aid to the insurgents.
Simultaneously, however, security officials arrested numerous independent unionists and the
vice-president of the Nicaraguan Chamber of Commerce. Several business executives
accused of working for US intelligence also were jailed. In addition,
the Army is harassing landowners in Chontales
Department, an area of strong insurgent support, and
security officials arrested all the inhabitants of a village in the area, allegedly for helping the
rebels. The Sandinistas probably calculate that such moves pose little risk and do not add
appreciably to the backlash caused by the recent expulsion of several prominent clerics and
closure of the country's only independent newspaper.
Internationally, Nicaragua stepped up efforts to win the chairmanship of the
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Meanwhile, a severe drought has destroyed much of the cotton crop and all unirrigated
corn crops in the northwest, according to the US Embassy. Already reduced by manpower
and machinery shortages, the next cotton harvest probably will be the worst since the
revolution, and lost revenues are likely to equal one third of this year's hard currency
earnings. The lost corn also will deepen the food shortage crisis and may lead to another
Soviet emergency grain shipment.
Managua demobilized more than 2,000
conscripts completing their two-year service obligation and drafted an additional 2,000 to
send to training. According to press accounts and nine
counterinsurgency battalions each lost an average of 235 veterans in the demobilization, and
their replacements have only about one month of operational experience. The loss of so
many experienced fighters from the regime's best fighting units is certain to diminish
effectiveness and lead to increased casualties during the next few months.
Representatives of the Salvadoran Government and the guerrilla alliance agreed at
secret meetings in Mexico City in late August to renew formal peace talks on 19 September
in the small town of Sesori in eastern El Salvador. US Embassy reporting indicates that
further preliminary talks are scheduled for early September in Costa Rica to discuss security
arrangements and possibly the agenda for the Sesori meeting. The government team
insisted at Mexico City that the formal dialogue session be limited to one day and again
rejected the longstanding insurgent demand that student, labor, and other civilian observers
be present at the peace talks. Neither side is likely to offer concessions, making a major
agreement unlikely.
While the warring sides talked in Mexico, the Salvadoran armed forces continued to
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maintain pressure on the insurgents with sweep operations in seven departments.
rebel forces in central El Salvador remained on the
defensive because of government operations and were experiencing severe shortages of
food and money. Guerrilla units in some parts of the country have shortages of ammunition
and other military supplies and are increasingly forced to rely on dilapidated weapons
because Salvadoran and Honduran interdiction efforts have impeded the arms flow from
Nicaragua, Nonetheless, the insurgents have not been
decisively beaten in combat, continue to be costly to the government, and are still capable
of occasional large-scale attacks against major economic and military targets.
Although the Hondurans welcomed the resumption of US military aid to the Nicaraguan
insurgents, Tegucigalpa in August appeared increasingly uneasy about its role in the
escalating war effort. The US Embassy reports that President Azcona and military chief
Regalado pointed out that publicity about the US assistance has negative domestic political
repercussions and urged Washington to maintain as much secrecy as possible about the
program. The Foreign Minister publicly disavowed any connection with the insurgents more
insistently than in the past, according to US Embassy and press reporting, and he forcefully
denied US press reports that Washington will funnel the aid through Honduras and train the
rebels there. Although a Foreign Ministry official assured the US Embassy that such
statements do not represent a change in policy, we believe that they indicate a growing
concern among Honduran civilian and military leaders that popular support for the war is
limited.
GUATEMALA
Land reform continued to be the dominant domestic issue in Guatemala during August.
the military leadership met with field-grade officers to
allay their concerns about the civilian government--especially their feeling that President
Cerezo was moving too quickly on land reform. Although Cerezo has yet to articulate a
definitive policy, he has been accused both publicly and privately of encouraging peasant
protests, The officers reportedly were told that their
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military leaders fully support the return to democratic rule and were instructed to be patient
with the new government. The private sector also is maneuvering on the issue, with one
group planning to head off more radical steps by the government by establishing five
cooperatives for poor farmers,
Although US Embassy reporting indicates that efforts at accommodation on land
reform continue in a variety of public forums, the government's inconsistent approach
appears to be falling short of satisfying either advocates or foes. In our view, Cerezo's
inability to define a coherent policy--and reassure landowners--on this highly charged issue
continues to impact negatively on general business confidence, but there is no indication
that he is ready to take a stand.
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COSTA RICA
San Jose's relations with Managua took center-stage once more after Nicaragua filed
suit in the International Court of Justice against Costa Rica, accusing it of collaborating with
the Nicaraguan insurgents. The Sandinistas, hoped 25X1
the suit would make San Jose more receptive to bilateral negotiations to monitor their
common border. Thus far, however, US Embassy reporting indicates that Managua's action
has stiffened San Jose's resistance to any rapprochement. President Arias has taken an 25X1
increasingly hard line against the Sandinistas, holding them responsible for the turmoil in
Central America, and publicly predicting their eventual downfall should they invade Costa
Rica. Foreign Minister Madrigal also has publicly expressed Costa Rica's reluctance to confer 25X1
with Nicaraguan officials while the suit is pending. Moreover, Arias has decided not to name
an Ambassador to Managua for the present, and his government is preparing to file a
countersuit in the ICJ, accusing the Sandinistas of aggression. Nevertheless,
Arias--to avoid appearing intransigent---may be keeping
private channels open to Managua, as did his predecessor. 25X1
Meanwhile,) I all members of the Communist
Mora-Canas Brigade, which had been serving with the Sandinistas in Nicaragua for the last
four years, have returned to Costa Rica and are assuming a low profile.
A national holiday on 12 August marked the third anniversary of General Noriega's
command of the Panamanian Defense Forces and provided him with an opportunity to rally
support for the regime. Speeches by Noriega and President Delvalle before a crowd
estimated at over 100,000 climaxed the regime's campaign against recent US press attacks
against the General, according to the US Embassy. Nonetheless, the US Embassy believes
the crowd's response to the speeches was lackluster,
that military coercion was instrumental in mustering the large turnout.
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the crowd--although substantial--was only one third the number
expected to attend, and the low level of enthusiasm exhibited has made Noriega reconsider
running for President in 1989, probably at least for now.
High-level military retirements were not announced during the celebration, dispelling
widely circulating rumors of a major reshuffling. Indeed,
and influential ruling party leaders may be considering a move to extend the
maximum length of military service. This would allow Noriega--due to retire next year--to
serve six more years as commander and temporarily relieve him of responsibility for
replacing key loyalists on the General Staff who have already passed mandatory retirement
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7 August
NICARAGUAN MILITARY BUILDUP
Convoy of 17 or 18 heavy-lift transporters observed travelling
west along Rama road,
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22 August
being assembled in Cuba.
fourth AN-26 medium transport
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Late July
SIGNIFICANT NICARAGUAN POLITICAL EVENTS
United Nations Security Council issues resolution calling for
compliance with International Court of Justice's ruling against US
aid to anti-Sandinista insurgents.
1 August Some 2,300 Nicaraguan conscripts complete two-year military
obligation and are demobilized. F__1 25X1
6 August
Opposition rallies in front of La Prensa, holding first demonstration
since imposition of state of emergency. Regime supporters
subsequently demonstrate and deface front of La Prensa building.
13 August Central American Parliament meeting held in Guatemala.
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24-31 July
NICARAGUAN TRAVELS/VISITS
Sandinista National Directorate member Henry Ruiz visits Vietnam,
Laos, and Kampuchea to meet with high-level national leaders.
28-30 July
15 August
27 August
Late August
Vice Foreign Minister Chamorro attends Organization of African
Unity meeting in Ethiopia as an observer. F7
President Ortega heads Nicaraguan delegation to inauguration of
Dominican Republic's President Balaguer. F7 25X1
Delegation of European Parliament of Christian Democrats visits
Nicaragua.
National Directorate member Bayardo Arcs heads Nicaraguan
delegation to Social Democratic conference in East Germany.
President Ortega meets with Yugoslavian President Hasani and
discusses Nicaraguan candidacy for NAM chairmanship in 1989.
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CHRONOLOGY OF ARMS FLOW INTO EL SALVADOR
22 August
interdiction efforts by the Salvadoran and Honduran
military supplies and are forced to rely on deteriorating weapons.
militaries have apparently impeded the logistics flow from
Nicaragua. The rebels have abandoned the use of large
concealment chambers in tractor-trailer rigs and ended maritime
delivery because of the risk of interception. As a result, the
guerrillas are experiencing shortages of ammunition and other
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COMING EVENTS IN CENTRAL AMERICA DURING SEPTEMBER
Early September
Early September
19 September
28 September
President Ortega to travel extensively in September, including the
NAM summit in Zimbabwe and subsequent stops in Ethiopia, India,
and China.
Salvadoran Government officials to meet in Costa Rica with
guerrilla representatives to discuss security agenda for formal
peace talks. F--]
Peace talks scheduled to begin between the Salvadoran
Government and insurgents in Sesori, El Salvador.
Guatemalan President Cerezo to address the UN General Assembly
and travel to Western Europe. 25X1
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NICARAGUAN CLASHES
01 AUGUST-31 AUGUST
CLASHES 179
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Government Sweep Operations, August 1986
Boundary rnprmwnbtlon is
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Distribution
Copy #
37 - C/DDO/LAS - 3B44
38 - C/LA/CATF - 3B44
39 & 40 - ALA/PS - 4F21
41 - ALA Research Director - 3F44
42 - 45 - CPAS/IMC/CB - 7G07
46 - DDI/CPAS/ISS - 7G40
47 - CPAS/CDPB/CC - GH25
48 - DC/RIG/SOVA - 5E25
49 -F ~ - C/LA/LDA - 1 H39
29 - Legislative Liaison - 7B04
30 - DDI Rep CINCLANT
31 - PDB Staff - 7F30
32 & 33 - D/ALA - 3F45
34 - C/DDO/LA - 3C3203
35 - DDO/LAO- 305309
36 - C/DDO/LAS- 3C3203
25 - Comptroller - 7C21
26 - C/DDI/PES - 7F24
27 - D/OIA - Rm. 3N100, Bldg. 213
28 - Director, Legislative Liaison - 7D43
19 - Executive Registry
20-DDI-7E44
21 - DDO - 7E26
22 - PINS/SOG/GB - 1E4846
23 - NIO/LA - 7E62
24 - NIC/AG - 7E47
18 - SA/DCI/IA - 7E12
14 - CAJIT
15 - DCI - 7060
16 - DDCI - 706011
17 - Executive Secretary - 7D60
1 - Vice Admiral John Poindexter
2 - The Honorable Elliot Abrams/William
Walker/Philip Habib
3 - Mr. Donald Gregg
4 - HPSCI
5 - SSCI
6 - Lt. Gen. Leonard H. Perroots, USAF
7 - Mr. Nestor D. Sanchez, DOD
8 - Mr. Raymond Burghardt, NSC
9 - Lt. Gen. William E. Odom, USA
10 - LTG John H. Moellering, USA
11 - Ambassador Morton I. Abramowitz, INR
12 - Mr. Doug Mulholland, Treasury
13 - The Honorable Fred C. Ikle, DOD
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C/MCD
DC/MCD
C/MX
C/CAR
C/CU
C/CAS
C/CAN
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MCD Files
CAN Files
CAS Files
DDI/ALA/MCD/CAS/CAN/
- PPS/PO/RPB - 3D02
24
(1 September 1986)
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