LATIN AMERICA REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00289R000200870002-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 40
• Document Creation Date: December 22, 2016
• Document Release Date: May 13, 2011
• Sequence Number: 2
• Publication Date: August 16, 1985
• Content Type: REPORT

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Directorate of
Intelligence
MASTER FILE COSY C
CO NOT WE OUT
QTR MAR on
F7
Review
Latin America
16 August 1985
Seeret
ALA LAR 85-018
16 August 1985
COPY 3 9 1
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Latin America
Review
Nicaragua: Sensitivity to Terrorism Charges
Managua is likely to urge regional insurgents not to attack US
personnel in the short term for fear of aiding what the Sandinistas
see as a US campaign to pressure them with charges that they
support terrorism. F_-]
Nicaragua: Political Goals Through Agrarian Reform I
desire to consolidate political control.
The Sandinistas are converting private landholdings into collective
operations due to their radical ideological commitment and their
Nicaragua: Sandinistas Diverting Funds
High-level officials reportedly are diverting funds, possibly for their
personal enrichment, for controversial government operations, or for
contingency purposes in the event the government is overthrown.
Nicaragua: Chemical Warfare Capabilities)
capability.
Managua is importing Soviet-made chemical defense equipment,
but does not appear to be building an offensive chemical warfare
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ALA LAR 85-018
16 August 1985
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Brazil: Business's Political Plans) 23
Businessmen plan to provide funds for conservative and moderate
candidates in an effort to stem what they see as a leftist resurgence
since Brazil's recent return to civilian rule.)
The French Caribbean Departments: The Independence Movement 25
Separatists are demonstrating a broader approach that portends a
more active and militant independence movement in the three
French Caribbean departments. F_~
Venezuela: Perez's Precampaign Maneuvers) 33
Former President Perez, Venzuela's leading center-leftist politician,
is pursuing an unprecedented second presidential term beginning in
1989, but he faces determined opposition from incumbent President
Lusinchi and other leaders of the Democratic Action party's
Orthodox faction.)
Briefs Brazil-Argentina: Concern About Overflights
Argentina: Radical Party Old Guard Concern About
Technocrats
Antigua-Barbuda: Opposition Strategies
37
37
38
38
Articles have been coordinated as appropriate with other offices within CIA.
Comments and queries regarding this publication may be directed to the Chief
Production StcoF Office of African and Latin American Analysis
Secret ii
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Nicaragua: Sensitivit to
Terrorism Charges
Despite Managua's continued links to groups
employing terrorist tactics, recent US statements have
placed the Sandinistas on the defensive, and for
tactical reasons they are likely to urge regional
insurgents not to attack US personnel in the short
term. Regime leaders fear Washington's charges are
intended to sway US public and Congressional
opinion and allow the United States to sustain
pressure on Nicaragua. Moreover, the Sandinistas
probably believe the US accusations could further
complicate relations with other Western governments,
that in the past have shown concern over Nicaragua's
support for radical leftists. Managua is seeking to
blunt the charges by claiming that the United States
is responsible for state terrorism through its support
for the anti-Sandinista insurgents. F__1
foreknowledge of it, they clearly have supported the
Salvadoran insurgents' strategy of conducting urban
Nicaraguan support and influence on the PRTC is
well established. The PRTC still has its
communications headquarters in Nicaragua
In addition to the circumstantial evidence implicating
the Sandinistas in terrorist attacks in El Salvador,
before the US
The Sandinistas have escalated their rhetoric in the
wake of President Reagan's statements branding
Nicaragua a principal supporter of state terrorism
and the recent US warning that Managua would be
held accountable for attacks on US citizens in Central
America. The US demarche followed a terrorist
assault that killed four off-duty US Marines and nine
other persons in San Salvador on 19 June.
The Central American Revolutionary Workers Party
(PRTC), one of five groups in the Salvadoran
insurgent coalition, claimed responsibility for the
leadership eventually endorsed the attack
Nicaraguan Responsibility for Terrorism
Although we do not believe that the Sandinistas
directly ordered the 19 June attack or had
demarche the Nicaraguans were taking steps to
orchestrate new terrorist activities in Honduras:
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ALA LAR 85-018
16 August 1985
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Managua has long made known its position that US
military intervention in Nicaragua would result in a
series of attacks against US officials and installations
throughout the region.
Sandinista Disavowals
Over the last few weeks, Sandinista leaders have tried
to defend themselves from Washington's charges.
President Ortega, for example, made terrorism the
theme of his address during ceremonies
commemorating the sixth anniversary of the
Sandinista revolution, as well as during several press
conferences and a nationwide radiobroadcast.F-
The strongest Sandinista statement disavowing
terrorism was issued by the Nicaraguan Foreign
Ministry on 18 July. The communique asserted
Nicaragua's "vigorous, total condemnation of all
forms of terrorism," particularly state terrorism such
as that allegedly being sponsored by the United
States. The statement claimed that the Sandinista
Front had never used terrorist methods during the
struggle against the Somoza dictatorship. It rejected
any blame for "the events that occurred on 19 June in
San Salvador" or similar attacks, saying, "We do not
practice or encourage such actions."
Nonetheless, the Foreign Ministry neither condemned
the murders in El Salvador nor branded them a
terrorist act. Sandinista leadership statements on the
attack, moreover, have carefully avoided criticizing
the Salvadoran guerrillas and instead hold US policies
responsible for violence in Central America. During
his revolutionary anniversary press conference,
Ortega sidestepped questions about Sandinista
support for the Salvadoran rebel faction responsible
for the attack and its announcement that it would
continue to target US officials.
To disarm possible adverse reaction in Europe to the
US charges, the Sandinistas announced that they had
asked West European governments to supply
projecting an image of flexibility.
information on the presence in Managua of persons
accused of belonging to terrorist organizations so the
government could conduct an investigation. This
technique, employed many times in response to US
accusations of aiding the Salvadoran insurgents,
allows the regime to deflect accusations while
Propaganda Efforts
In its efforts to counter US charges, Nicaragua claims
Washington is trying to create a favorable climate in
international and US public opinion for a military
intervention. The regime also has attempted to focus
attention on US support for the anti-Sandinista
insurgents and what Managua calls the "terrorist
war" being conducted against Nicaragua.
Military Intervention. The Sandinistas are
attempting to alarm the international community by
suggesting that the United States is preparing a
provocation to justify an intervention. Interior
Minister Borge, for example, has said that
Washington may stage an attack against its own
Embassy, and he renewed charges that the United
States and the insurgents were plotting to assassinate
Nicaraguan Cardinal Obando y Bravo. Although the
Sandinistas probably do not believe an invasion is
imminent, they undoubtedly fear reprisals in the event
of additional terrorist acts against US citizens.
Moreover, they probably view the US warning-along
with the renewal of aid to anti-Sandinista insurgents
and the recent Congressional legislation authorizing
military action against Nicaragua for sponsoring
terrorist attacks-as an escalation in US pressures
that makes eventual intervention more likely. On
several recent occasions, Ortega has indicated his
concern that the US Congress is becoming less of a
barrier to hostile action by the executive branch.
US Sponsorship of Terror. The Sandinistas are
intensifying their accusations that the United States
backs aggression and terrorism through its moral and
material support for the Nicaraguan insurgents. The
government also appears to be employing the word
"terrorist" more frequently in its accounts of
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Chronology of Nicaraguan-Supported
Terrorist Incidents
Since 1979. the Sandinista regime has provided logistic and moral
support to a variety of Latin American leftist groups, many of
whom have been involved in terrorist incidents. El Salvador has
been the principal arena of Nicaraguan-sponsored subversion, with
Costa Rica and Honduras as secondary theaters. Nicaragua also
has given safehaven to individuals from such groups as the
Montoneros (Argentina), Tupamaros (Uruguay), MIR (Chile),
M-19 (Colombia), and the Red Brigades (Italy). In return, some of
these groups, as well as the PLO, have given training assistance to
the Sandinistas.
Early Years
Several times during the Sandinistas' struggle to overthrow So-
moza, the group resorted to terrorist tactics, including assassina-
tions of government officials, kidnaping foreign diplomatic person-
nel, and the celebrated incident in which current Vice Foreign
Minister Nora Astorga used the promise of sexual favors to lure a
Nicaraguan general to his death. These incidents contradict recent
statements by the Sandinista leadership that the FSLN has never
used terrorist tactics.
Following the Revolution
The Sandinistas have been directly or indirectly responsible for
numerous terrorist incidents since coming to power in July 1979.
These actions include assassinations of Sandinista opponents and
bombings and other terrorist acts to intimidate neighboring
governments.
October 1979
Sandinista-directed group murders former National Guard officer
Pablo Emilio Salazar in Honduras. Salazar had been an effective
field commander for Somoza during the revolution, and the new
regime feared his involvement with anti-Sandinista rebels.
April 1980
Sandinista-backed Honduran Communists kidnap the American
vice president of Texaco's Caribbean operation but are later
captured by Honduran authorities.
September 1980
Argentine and Chilean assassins kill former Nicaraguan President
Anastasio Somoza in Asuncion, Paraguay. The Nicaraguan Gov-
ernment is involved in the planning and financing of the murder.
March 1981
A Sandinista-backed Honduran terrorist group, the Cinchoneros,
hijacks a US-bound Honduran airlines flight and diverts it to
Managua.
March 1981
US Marine guards in San Jose, Costa Rica, are wounded in an
attack by a Costa Rican terrorist linked to Managua through the
Nicaraguan Embassy.
July 1981
Costa Rican authorities intercept six heavily armed men who had
entered the country from Nicaragua intending to seize the Guate-
malan Embassy and hold the Ambassador hostage. The team
included two Nicaraguans affiliated with the Sandinista Front.
February 1982
The Nicaraguan Consul in Liberia, Costa Rica, is the principal
suspect in an assassination attempt against anti-Sandinista leader
Fernando Chamorro, but his return to Managua shortly after the
attack ends the Costa Rican investigation.
March 1982
Costa Rican security forces raid a San Jose safehouse and capture
nine suspected subversives-including two Nicaraguans-and a
large supply of weapons and vehicles.
July 1982
The Honduran airlines office in San Jose, Costa Rica, is bombed
in what was to have been the first act in a Sandinista plan to
destabilize the Monge government. A Colombian M-19 member
responsible for the bombing is captured, however, and confesses
that he had been recruited by Nicaraguan Embassy officials in
Costa Rica. Costa Rica subsequently expels two Nicaraguan
diplomats after one is lured to a clandestine meeting with the M-19
member.
July-August 1982
Salvadoran and Honduran leftists sabotage the main power station
in Tegucigalpa on 4 July, and more bombs are planted at several
US businesses in August. A captured Salvadoran guerrilla who
participated in the attacks says he had obtained explosives in
Nicaragua and transported them in a truck modified there for
arms trafficking.
September 1982
The Cinchoneros seize 105 Honduran businessmen in San Pedro
Sula, demanding release of Honduran and Salvadoran radicals.
October 1982
Hector Frances, an Argentine citizen who reportedly was working
with anti-Sandinista guerrillas in Honduras, is kidnaped in Costa
Rica. Nicaragua later distributes afilmed confession in which
Frances-who shows signs of being beaten-reveals details of
Argentine and US aid to the insurgents. He has not been seen since
the television show and Managua denies knowledge of his
whereabouts.
June 1983
Two Nicaraguan officials pretending to be Sandinista defectors
mount an assassination attempt against anti-Sandinista leaders in
Costa Rica. One is killed and the other seriously injured when the
time bomb they are carrying detonates prematurely.
September 1983
Costa Rican police arrest a member of the Spanish Basque
separatist group ETA who had been instructed by Nicaraguan
officials to assassinate anti-Sandinista leader Eden Pastora at his
San Jose home.
May 1984
Approximately 28 people are wounded and at least four killed
when a bomb explodes at a news conference called by Eden Pastora
at his camp in southern Nicaragua. Although specific proof is
lacking, Nicaragua is the most likely sponsor of the attack. One
indicator of Sandinista complicity is a Nicaraguan radio an-
nouncement that the bomb was made of plastic-several hours
before Costa Rican authorities had determined the nature of the
explosive device.
March 1985
Anti-Sandinista insurgents announce that several guerrillas had
been wounded by a bomb concealed in a package mailed from
Nicaragua to Eden Pastora's son.
June 1985
A Salvadoran insurgent group with ties to Nicaragua claims
responsibility for the machinegun attack on a sidewalk cafe in San
Salvador that killed 13, including six Americans.
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insurgent activity and is particularly effective in
depicting the deaths of women and children as proof
of rebel barbarity. Ortega's anniversary speech, for
example, claimed that some 200 children under the
age of 12 and 134 women had been "murdered." The
regime also filed a protest note holding the United
States accountable for the deaths of nine women-
traveling with armed troops in Army trucks after
visiting relatives at a nearby military base-during an
insurgent ambush on 27 July. At the funeral service,
Ortega said Washington was following a policy of
extermination "worse than Hitler's."
In recent weeks, Managua also has renewed charges
of US-sponsored assassination plots against
government officials. State Security Chief Lenin
Cerna, for example, announced in mid-July that his
forces had confiscated a shipment of arms-including
"single-shot rifles commonly used for
assassinations"-that were to be used in a CIA-
backed terrorist campaign. The international press
frequently reports these charges without critical
comment.F----]
Other Tactics. The Sandinistas have attempted to
shift the burden of proof by challenging the United
States to substantiate its charges of Nicaraguan
involvement with terrorists at the World Court. In
addition, according to US Embassy reports, in late
July the Nicaraguan Foreign Ministry escorted a
select group of diplomats to Nicaragua's northwest
coast to prove that no terrorist training bases are
located there. Foreign Minister D'Escoto's fast from
7 July to 3 August in protest of US "state terrorism,"
given extensive publicity by the regime, also was
aimed at turning the issue to Managua's advantage.
Future Nicaraguan Support for Terrorist Attacks
Although the Sandinistas are likely to take the public
line that urban operations by the Salvadoran
insurgents are simply the fruit of US policies, =
with Honduran leftists, although they are almost
certain to continue training, arming, and infiltrating
the insurgents almost certainly will continue their
urban operations. Even if the mainstream insurgent
alliance was to accept Nicaraguan-and presumably
Cuban-advice and temporarily forgo targeting US
personnel in the capital, radical urban splinter groups
have the capacity to mount their own operations.
Moreover, the guerrillas probably will continue to
regard US military advisers in outlying garrisons and
in the field as prime targets.
Managua is likely to continue preparing contingency
plans to use Central American leftists to mount
terrorist attacks in the event of a US invasion. The
Sandinistas may view their public statements that
these attacks would take place not only as a means to
alarm the US public and deter an invasion, but also to
remind Washington that a military response against
Nicaragua for supporting terrorist attacks could
spawn additional terrorism in the region. Borge said
in late July, for example, that revolutionary
organizations had made "spontaneous offers" to
attack US targets if the United States invades
Nicaragua. Borge attempted to play down
Nicaragua's link to these groups, however, stating
that he personally opposed attacks on innocent
American civilians and that such operations would be
beyond Nicaragua's ability to control.
We expect the Sandinistas to continue their contacts
with West European, Latin American, and Middle
Eastern groups that have employed terrorist methods.
Despite the publicity that the terrorism charges have
generated, international disapproval has not been
sufficient to discourage the Sandinistas from
maintaining these ties. F__1
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Managua is now urging ocvi
the rebels not to target US citizens.
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Nicaragua: Political Goals
Through Agrarian Reform
During their six years in power, the Sandinistas have
substantially reorganized the pattern of Nicaraguan
land tenure as part of their effort to attain their goal
of a tightly controlled, socialized agricultural sector.
At the outset, large, privately owned operations were
converted into state farms, but increasingly private
holdings are being organized into collective
operations. Despite negative economic returns, mixed
results in retaining peasant support, and the
alienation of private growers, Nicaragua's leaders
probably will continue moving ahead out of
ideological commitment and a desire to consolidate
political control.
The Sandinistas' call for radical agrarian reform-
land for peasants and a socialist model-during their
struggle for power was toned down after the
revolution in favor of proclaiming a mixed economy.
Nonetheless, according to US Embassy reportingC
government officials have
remained committed to achieving ultimately an
agricultural sector composed of 50 percent
cooperatives and collectives, 25 percent state farms,
and 25 percent privately owned properties. The state
sector acquired better than 20 percent of agricultural
lands with formation of state farms from most of the
property confiscated from former President Somoza
and his associates in 1979. Expropriation of private
property and encouragement from the regime for
formation of collectives and cooperatives since then
have reduced large private holdings-once comprising
nearly half of all agricultural property-to about 10
percent, with the remaining 70 percent divided among
cooperatives, collectives, and small- and medium-
private owners, according to recent government
announcements.
Implementation
By their sixth anniversary,
the Sandinistas had obtained over 6 million
acres of agricultural land, or more than two-thirds of
the country's arable land-about 2 million to form
state farms and another 4 million for collective farms,
peasant cooperatives, and individual farms. The
regime phased in measures to attain its goals, focusing
first on boosting crop production through state farms
and existing large private properties. Only after
enactment of the 1981 law providing for expropriation
of private property did land distribution to peasants
gain momentum. According to US Embassy
reporting, most of the new agricultural units formed
since 1981 have been collectives, with land owned in
common. Two-thirds of the 822 cooperative or
collective units planned for 1984 were to be
collectives. Recent public announcements indicate
that the pace of collective formation is quickening.
This year 20 to 25 percent of the 1 million acres
scheduled for distribution will go directly to collective
farms, and much of the remainder-designated for
Indian communities, peasant resettlement camps, and
areas of high landless populations-most likely will
eventually be organized into collectives as well.
The US Embassy reports that private-sector growers
believe land expropriations increasingly are politically
motivated. For example, they charge that the
confiscation of productive coffee and cotton lands
belonging to Enrique Bolanos, the head of the most
important private-sector organization and a vocal
antiregime critic, was a reprisal. Similarly, they assert
that the government has taken property from persons
accused of collaborating with insurgents and from the
agricultural producers' president for failing to
condemn the cancellation of the US sugar quota, and
has enacted punitive bank foreclosures on private
farms in Chinandega and Leon.
During the past year, private owners have complained
of government bias favoring peasant claims following
occupations of fallow or noncrop land. The regime has
seized thousands of acres of productive cotton and
coffee land under false charges of abandonment,
according to area owners. The US Embassy reports
the Sandinistas have confiscated lands for distribution
to disaffected peasants-such as Miskito Indian
communities on the Atlantic coast-or to regain
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Collectives and Cooperatives
Most of the land distributed by the Sandinista regime
has gone to two new forms of agricultural units:
Collectives, officially called Sandinista Production
Cooperatives, are characterized by common
ownership, development of community services, and
profitsharing. They receive preferential treatment in
title awards, marketing, credit, extension services,
and distribution of fertilizer, seed, and farm
equipment. The regime consistently refers to
collectives as the most advanced form of agricultural
organization.
Cooperatives of Credit and Service feature individual
ownership, with-at least in theory-voluntary
collective association for obtaining credit, sales, and
services. US Embassy reporting indicates that many
peasants strongly prefer this form of cooperative
organization, which allows them to retain individual
ownership.
political support and strengthen military defense in
areas like the central highlands where the insurgency
has been growing.
Benefits and Costs
According to recent government announcements, land
redistribution ostensibly has benefited nearly 70,000
families-some 400,000 peasants-but the regime
makes no distinction between those who receive
individual titles and members of collectives. The
government also has provided greater access to
subsidized credit and some technical assistance. In
addition, the formation of collectives and cooperatives
has helped improve the provision of health and
education services to rural regions.
Despite increased access to land for many peasants,
many putative
beneficiaries are dissatisfied with the agrarian reform
program. Many peasants reject even credit
cooperatives as an unnecessary change in tradition
and a restriction of their independence, and they
particularly resent forced resettlement on collective
farms, according to press and US Embassy reporting.
Managua has relocated tens of thousands of peasants
away from the northern and southern borders to deny
their support to the insurgents. Many refugees say
they fled Nicaragua to escape resettlement.
Many peasants see themselves as no better off than
before the revolution, according to press and US
Embassy reports. Real farm income, for both rural
wage earners and landowners, has dropped
substantially as a result of triple-digit inflation and
low official crop prices. Pervasive government control
over all aspects of planting, harvesting, and marketing
gives farmers little means of bettering their economic
situation. They also resent new restrictions on their
right to sell their land or divide it among their heirs,
according to press reports.
According to the US Embassy, the loss of private-
sector confidence and investment has been another
major cost of agrarian reform. Private growers were
largely responsible for significant production gains
following the civil war. By 1983-84, however, with
land expropriations accelerating, private-sector
production of critically needed food and export crops
had fallen off. Continued declines risk further foreign
exchange losses and possible food shortages. The
Sandinistas also appear willing to incur the loss of
technical and managerial expertise that the
accelerated flight of the middle class protends.F__
Outlook
For both ideological and practical reasons, the
Sandinistas are likely to push ahead with the agrarian
reform program. On balance, the land reform efforts
undoubtedly are a success in their eyes. Government
control over all phases of agricultural production is
expanding rapidly, and the regime is extending its
political control over the countryside.
We believe the regime will continue to step up the
pace of expropriations over the next few months. In
our opinion, the Sandinistas' desire to retain state
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The Sandinistas have implemented the agrarian
reform in phases, shifting emphasis over the years in
response to changing political and economic
considerations.
First Steps, 1979-81. The confiscation of agricultural
estates belonging toformer President Somoza and his
associates-some 2 million acres, or more than 20
percent of the nation's cultivable area-gave the new
regime considerable land for redistribution without
antagonizing the private sector. Most was converted
to large state farms, retaining the existing technology
and work force and continuing to produce export
crops. Private owners were assured they would have a
vital role to play in Nicaragua's evolving "mixed
economy, " and peasant calls for land distribution
were deflected in the interests of maintaining
production. The government subsidized farm credit,
provided greater security to tenant farmers, and
created an elaborate bureaucracy to set agricultural
policy, prices, and production quotas, and to control
marketing and processing.
Formalizing Agrarian Reform, 1981-83. The
Agrarian Reform Law of July 1981 subjected the
right to own land to a state-defined test of
productivity. Although the law allowed for the
expropriation of large estates and underutilized
agricultural land for distribution to individuals,
cooperatives, and to Indian communities, the
government reassured the private sector by
guaranteeing land ownership to those who work it
productively. Newly distributed "titles" were
actually entitlements to use of the land that could not
be sold or subdivided but could be inherited. By May
1982, according to the US Embassy, the Sandinista
government had seized some 170,000 acres, with
most reportedly turned over to collectives.
Consolidation of Agrarian Reform, 1983-85. In the
past two-and-a-half years, Managua has
substantially stepped up confiscation of private lands
as well as redistribution. In 1984, the regime planned
to deliver titles to 1.2 million acres-as much as was
distributed in the previous three years combined.
Recent government announcements claim that over a
million more acres will be distributed this year.
Though some mostly nonproductive state-owned
lands have been distributed, this increase in land
distribution has been made possible mainly by
broader application of the Agrarian Reform Law to
private holdings, according to press reporting.
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CHANGE IN DAILY WAGES AND CONSUMER PRICES
FOR AGRICULTURAL SEASONS FROM 1977-1982
Percent (in cumulative percent change from 1977)
300 E
280
260
CONSUMER PRICES (base=1977/78) /
77/78
78/79
79/80 80/81
81/82
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farms, expand collectives and cooperatives, and
counter rebel inroads in rural areas outweighs, in their
policy calculus, any negative results of the agrarian
reform program.F--]
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Secret
Nicara ua? Sandinistas Diverting
Funds
High-level Sandinista officials are diverting funds
from kickbacks and various businesses to bank
accounts outside the country,
and rumors of such activity
are circulating more widely. While the extent and
25X1 purpose of this activity is unclear
we speculate that such funds may be
used for personal enrichment, for controversial
government operations, or for contingency purposes in
the event the government is overthrown. The
allegations of corruption are compounded by the
growing contrast between the lifestyles of some of the
Sandinista elite and the working class, which is
feeding discontent as economic conditions worsen.
profiting from various schemes involving H&M
Corporation, a holding company with more than 25
ostensibly private trading companies and domestic
businesses.
H&M Corporation
Several top Sandinista officials reportedly are
its profits to tax authoritie
the corporation receives its operating
capita outside the official budget and does not report
Using their preferential access to foreign exchange
and credit, H&M subsidiaries import a wide 25X1
assortment of products, including vehicles,
nonordnance military supplies, and goods sold in
The corporation runs factories
as well as many of the hotels and restaurants in
Managua, according to the US Embassy. These
businesses are provided hard currency at favorable
exchange rates and can obtain goods in short supply
elsewhere in Nicaragua. 25X1
Embassy source, all nine members of the Sandinista
National Directorate have Swiss bank accounts for
their shares of H&M profits. There is no information
available concerning the magnitude of these proceeds.
225X1
H&M profits are 25X1
used for personal enrichment. According to US
Embassy reporting, some high-level Sandinistas-
President Ortega, Defense Minister Ortega, and
Agriculture Minister Wheelock, for example-reside
in luxurious homes despite their modest official
salaries, and virtually all of the Directorate members
have expensive vehicles. In addition
party members frequent hard currency shops and
restaurants reserved for them. Others, however,
maintain more modest lifestyles. Borge, for example,
25X1
2.5X1
25X1
still lives in a lower middle-class neighborhood. 25X1
We speculate that some of the diverted funds may be
used for institutional ends, such as funding sensitive
or controversial government operations that the
regime does not want identified in the official budget.
Some may be destined for the Salvadoran insurgents
or other regional leftist groups. In addition, the Swiss
bank accounts may serve as a cache to finance a new
guerrilla effort in Nicaragua if the regime is ever
overthrown.
Public Perceptions
The comfortable and sometimes ostentatious lifestyles
and perquisites of many high-level government
officials contribute to public resentment, according to
Secret
ALA LAR 85-018
16 August 1985
25X1
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Secret
US Embassy and press reporting. The contrast
between the elite and the masses is even more marked
because of the diminishing living standards of the
working class. Some of the early advances of the
poor-increased educational opportunities, improved
access to health care and housing, and subsidies for
staples-have been offset by rationing, shortages,
unprecedented inflation, and high unemployment.
Moreover, the diversion of foreign exchange-an
extremely scarce commodity in Nicaragua-
exacerbates already severe economic problems. To the
extent that hard currency is used by H&M
subsidiaries to purchase luxury goods for party
members or stashed outside the country, it is
unavailable for productive purposes.
Even while reportedly diverting funds themselves, the
Sandinistas have come down hard on economic crime
and abuses among the working class. In early May,
for example, the regime created a National
Commission for Struggle Against Corruption after a
network of Health Ministry employees-including
electricians, maintenance workers, and at least one
manager-was found pilfering goods for sale on the
black market. Ironically, the Commission is staffed
with officials from the Interior Ministry and the
H&M Corporation, according to press reports.
Despite their own malfeasance, the Sandinistas are
likely to continue to make corruption a special target
in an effort, however unsuccessful, to deflect criticism
from their own economic mismanagement.
25X1
25X1
25X1
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Secret
Nicaragua: Chemical Warfare
Capabilities n
Managua has imported Soviet-manufactured
chemical defense equipment during the past year,
an has formed at
least one chemical reconnaissance platoon. The
equipment noted thus far is common to most Soviet
military clients in the Third World and suggests no
more than a desire by the Sandinistas to acquire a
rudimentary defensive capability against chemical
weapons. Although artillery rounds labeled "chemical
munitions" were displayed at a Sandinista Armed
Forces Day celebration last September, we have no
credible evidence that the Sandinistas are building an
offensive chemical warfare capability.
The extent of Nicaragua's chemical defense
capabilities was revealed last September during the
armed forces celebration. A static display of military
equipment at Montelimar Airfield included a gas
mask, part of an individual protective suit, a chemical
testing set, two BRDM-2/RKH CBR reconnaissance
vehicles, a water purifier and decontamination
vehicle, and a series of graphics depicting the effects
of various chemical agents. The artillery projectiles
that were displayed included white phosphorus (used
to mark targets) and tear gas rounds, which the
Soviets define as chemical weapons.
BRDM-2/RKH chemical reconnaissance vehicles.
Two of these vehicles had been seen at this facility,
which houses a Sandinista Army engineer unit in
March. Four BRDM-2/RKH vehicles match the
Table of Organization and Equipment for a Soviet 25X1
CBR Reconnaissance Platoon, which is designed to
reconnoiter and mark areas of chemical, biological, or
radiological contamination for ground force armored
units. The vehicles are equipped with various sensors
and yellow marking flags.
Nicaragua is probably in the process of forming a
chemical defense battalion-a unit found in the
Cuban Armed Forces as well as those of many other
Soviet military clients in the Third World. If the
Nicaraguans continue to follow the Soviet and Cuban
pattern, such a unit would include decontamination
vehicles to wash down tanks and other vehicles, a
separate company dedicated to decontaminating
personnel and their equipment, and a training and
supply element to instruct armed forces units on the
Secret
ALA LAR 85-018
16 August 1985
25X1 1X1
25X1
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Secret
effects of chemical weapons and the use of gas masks nonlethal toxic agents reportedly used by the
and protective suits. Sandinistas that caused throat irritation and coughing 25X1
for several days, but these appear to be no more than
standard smoke grenades. 25X1
LOA"I
25X1
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Iq
Next 6 Page(s) In Document Denied
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Secret
Political Plan
Brazilian business leaders plan to provide financial
backing to conservative and moderate candidates
from at least four political parties in upcoming
municipal, gubernatorial, and congressional elections.
According to the US Embassy, businessmen are
convinced they must involve themselves extensively in
politics to stem what they regard as a leftist
resurgence since Brazil's recent return to civilian rule.
Some business people also claim that President
Sarney's administration is not sufficiently defending
private enterprise. They are particularly uneasy over
the government's land reform program, its
nationalizations of some troubled banks, and its
proposed changes in the country's new labor laws.
Brazilian parties currently are undergoing major
changes in strength and alignment, and the outcome
probably will remain unclear for some time.
Businessmen appear reluctant to concentrate their
resources behind any single party.
conservative business
interests in Sao Paulo, Brazil's main industrial center,
are backing candidates from several different parties
in mayoral elections scheduled for November and
gubernatorial and congressional contests due to be
held a year later. These candidates include former
Brazilian President Quadros of the basically
nonideological Brazilian Labor Party, who is running
for mayor of Sao Paulo; Foreign Minister Setubal,
who is likely to run for governor of Sao Paulo state as
the candidate of Sarney's centrist Liberal Front
Party; and former Planning Minister Delfim Netto,
who expects to run for Congress on the conservative
Social Democratic Party ticket. Elsewhere in the
country, according to the US Embassy, business
leaders have indicated plans to support moderates in
these parties and in the center-left Brazilian
Democratic Movement Party-the senior partner in
Sarney's governing coalition.
Businessmen have voiced fears that, unless they make
a strong effort to elect moderates and conservatives,
leftists may dominate the 1987 constituent assembly,
which will be comprised of the Congress elected in
1986. The assembly will make constitutional changes
that could have a major impact on private enterprise.
For example, the assembly could alter constitutional
provisions dealing with the tax system, resolution of
labor disputes, and guarantees of private property.
We judge business's concerns about the Sarney
administration to be somewhat exaggerated. The
government thus far has pursued generally moderate
policies. Nevertheless, politicians with leftist 25X1
connections do hold some cabinet-level and other
posts. Moreover, leftwingers outside the government
such as Rio de Janeiro state Governor Brizola-a
likely presidential contender in the future-and the
country's Communist parties have increased their
political activity in the more open climate since the 25X1
end of military rule. With the party structure in a 25X1
state of flux, it will be difficult for business leaders to
determine where they can place their money most
effectively to combat the left.F_~ 25X1
Secret
ALA LAR 85-018
16 August 1985
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Secret
French Overseas Departments in the Caribbean
Puerto
Rico
(U.S.)
British Virgin
Islands
(U.K.)
Virgin Islands
(U.S.)
Anguilla
(U. K.)
and Nevis
Montserrat
(U.K.)
Guadeloupe
(France)
Martinique
(France)
T patterns ~
St Christopher
and Nevis
Dominica
SL L,-
St. Vincent and Barbados
the Grenadines
Trinidad
and Tobago
Venezuela
French
Suriname \. Guiana
(France)
Grenada
L Trinidad and Tabago
Boundary representation is
not necessarily authoritative.
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Secret
The French Caribbean
Departments: The Independence
Movement
After 20 years of unsuccessful proindependence
activities, French Caribbean separatists are
demonstrating a broader approach that portends a
more active and militant independence movement.
Separatist violence in New Caledonia last fall appears
to have been a catalyst for separatists in Martinique,
Guadeloupe, and French Guiana, who-according to
the US Consul General-were encouraged by
France's willingness to support independence for the
Pacific territory. Since then, French Caribbean
separatists have increased their use of violence and
tried to strengthen their organizations and popular
support to increase pressure on the Mitterrand
government. Their more sophisticated approach was
underscored by the success of recent protests in
Guadeloupe, where separatists exploited the island's
racial tensions and high unemployment rate to
mobilize proindependence sentiment. Moreover, the
separatists may improve their militant capabilities
through closer ties with Libya. Nevertheless, senior
French officials have said publicly that France will
not compromise with the Caribbean independence
groups.
The Political Setting
Attitudes toward independence and relations with
"the metropole" vary among the three Caribbean
departments and generally divide along ideological
lines. The US Consul General in Martinique reports
that 80 percent of French Caribbeanists oppose
independence, although many favor increased local
autonomy. The political right supports the status quo
and is represented by local branches of such French
parties as the Union of Democrats for the Republic
(UDR). The UDR has the largest following in
Martinique, where support for continued association
with France is the strongest of the three departments.
about 70 percent of national income. A second group
advocates immediate independence, but generally
opposes violence as a tactic. A number of minuscule
splinter factions, however, believe that terrorist
measures are necessary to achieve independence.
The Communist Party of Guadeloupe and the
Guianese Socialist Party-the strongest parties in
their respective departments-want greater domestic
autonomy, but recognize that economic stability
depends on continued French aid. Like their French
counterparts, local Communists and Socialists share
broad popular support and maintain relatively
moderate domestic policies. Combined, the
Communists and Socialists usually win about half the
popular vote in local General Council elections,
according to the US Consul General.
The refusal of Communist and Socialist leaders to
support independence publicly, despite growing
pressures within their parties, has spawned the
formation of a number of proindependence parties
and splinter groups. In Martinique, for example, the
Revolutionary Group of Socialists and the Communist
Party for Independence and Socialism were organized
in the early 1970s and 1980s as offshoots of the
Martinique Communist Party. These groups have
attracted little support, even among Communist and
Socialist constituents, according to the US Consul
General. Only two proindependence candidates won
seats in the Guadeloupe and Martinique General
Council elections last March. In French Guiana, the
proindependence Union of Guianese Workers also
won several seats on the local General Council but
lacks the popular support to challenge the stronger
Socialist Party.
For the left, however, the independence issue has been
divisive. Most leftists, represented by local
Communist and Socialist parties, support greater
local autonomy, but want to retain the economic
benefits of association with France, which amount to
Secret
ALA LAR 85-018
16 August 1985
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Secret
Table 1
French Caribbean Departments:
Major Leftist Political Groups
Party/Year Formed Leadership Estimated Membership Comments
Progressive Party of Aime Cesaire, Deputy- Polled over 27 percent of Broke with the PCM in the mid-1950s;
Martinique (PPM), 1956 Mayor of Fort-de-France; votes in February 1983 Re- favors greater local autonomy but
member of French gional Council election. within the departmental framework;
National Assembly supported by middle and lower classes,
but ineffectively organized beyond the
capital.
Communist Party of Armand Nicholas 1,000 Favors autonomy, not independence;
Martinique (PCM), 1921 plagued by disunity and weak leader-
Martinique Independence
Movement (MIM)
Alfred Marie-Jeanne
Communist Party for Indepen-
dence and Socialism (PCIS),
1984
Alex Marimoutou
Danny Emmanuel
Socialist Revolutionary Group-
Martinique (GRS), 1972
Phillipe Pierre-Charles
200
National Council of Popular
Committees in Martinique
(CNCP)
Edmond Mondesir
Communist Party of
Guadeloupe (PCG),
1944
Guy Daninthe, Secretary
General; Youth Arm:
Jean Claude Lombion,
Claude Chipotle
3,000
Popular Union for the Libera-
tion of Guadeloupe (UPLG),
1978
Claude Makouke
Fewer than 100 active
members; can organize
2,000 to 3,000
demonstrators.
Movement for the Indepen-
dence of Guadeloupe (MPGI),
Luc Reinette
Several hundred supporters.
1982 Reinette also member of Revolution-
ary Caribbean Alliance; imprisoned in
late 1984, Reinette recently escaped
and is believed to be hiding in
Guadeloupe.
Secret 26
ship; usually outpolled by the PPM;
large following among civil servants;
affiliated with the General Confedera-
tion of Martinique Labor and several
other trade unions.
Only proindependence party in Marti-
nique that has won legislative seats;
limited support, mostly among
intellectuals.
Made up of young Martiniquais Com-
munists who live in France and split
from the PCM in 1983 and 1984; favor
independence now; reportedly follow a
pro-Moscow line.
Trotskyite party formed by PCM
members; far left; seeks independence
and a socialist state; has negligible
public support.
Small independence group; follows
social democratic philosophy; trying to
broaden support and form united front
with the MIM.
Supports greater autonomy but not
independence; received 20 percent of
popular vote in March election; strong
labor support; associated with the Gen-
eral Confederation of Labor; Youth
Arm favors independence and privately
supports violent tactics.
Best organized and most active inde-
pendence group; disclaims violence but
sympathizes with violent action; part of
Movement for the Unification of the
Forces for National Liberation, which
also includes several trade unions.
Marxist, extremist umbrella group;
seeks independence through violence;
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Secret
Table I (continued)
Revolutionary Caribbean
Alliance (ARC), 1983
Martinique-
Marcel Manville
Guadeloupe-
FNU Bernard
French Guiana-
FNU Marcel
12
25-30
Less than 12
Guianese Socialist Party (PSG)
Leopold Heder, Mayor of
Cayenne and General
Council President
Won 48 percent of popular
vote in March 1985
election.
Union of Guianese Workers
(UTG)
Alain Michel
Robert Aron
Anti-Colonial and Anti- Michelle Kapel
Imperialist Guianese Louis Bieze
Nationalists
Party (PANGA)
Clandestine terrorist group with wings
in three departments; advocates armed
struggle for liberation; extremely vio-
lent, may have attempted assassina-
tions; has claimed responsibility for
most bombings in the French depart-
ments since May 1983; inactive since
arrest and conviction of several
members in 1984-85.
Advocates greater local autonomy but
not independence; with no organized
Communist party in French Guiana,
the PSG has consolidated leftist
support.
Labor union entered politics to allow
proindependence choice; recently with-
drew to resume labor activities, but
plans to form a political party; publicly
condemns terrorism but says violence
may become necessary for liberation.
Because Guadeloupe-unlike Martinique and French
Guiana-has no official proindependence parties, it
has had more extraconstitutional separatist activity.
In recent years, the Popular Union for the Liberation
of Guadeloupe (UPLG) has emerged as the most
active independence group in the Caribbean
departments, . Unlike its
predecessors, UPLG leaders so far have publicly
rejected violence and instead relied on such tactics as
demonstrations to gain popular support. Recent public
statements and actions of the UPLG Youth Wing,
however, suggest that the leadership has not ruled out
violent methods to achieve independence. F_~
independence. UPLG leaders recently appear more
concerned about trying to build popular support at
home and abroad.
25X1
25X1
General reports that local officials believe some recent
labor strikes in Guadeloupe and Martinique were 25X1
instigated by the UPLG and other separatists. But the
New Strategy and Tactics
Reacting to the vigorous prosecution of Revolutionary
Caribbean Alliance terrorists in the past year, the
UPLG has broadened its approach to achieve
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The inability of French Caribbean separatists to
achieve independence through the political process
since the 1960s has fostered the establishment of
numerous clandestine terrorist groups. The US
Consul General reports that less than 50 separatists
have used violent tactics and the Guadeloupian
groups tend to have overlapping memberships. Since
the bombings were sporadic and the number of
activists small, proindependence activities in the
Caribbean departments until recently posed little
threat to security.F___1
In 1983, however, a series of 17 coordinated
bombings in all three departments and Paris by the
newly formed Revolutionary Caribbean Alliance
(ARC) suggested the development of a more
sophisticated organizational network of radical
separatists. Since then, the
ARC has been responsiblejor over 60 bombings that
have left seven dead, numerous injured, and extensive
property damage, mainly in Guadeloupe. The ARC
has used more spectacular actions than earlier
separatist groups and over the past two years has
shifted from bombing unoccupied government
property to targeting tourist spots.
Paris responded last year by substantially increasing
counterterrorist forces in the Caribbean departments,
outlawing the ARC, and arresting nearly 20 ARC
activists. Although the group has been inactive since
the crackdown, isolated terrorist incidents have
continued. According to the US Consul General, local
officials believe that other separatist group
increasingly are adopting violent tactics.
with ARC in disarray,
the youth wing of the UPLG has emerged as the main
subversive group in the area. Meanwhile, although
the Guadeloupe Communist Party publicly opposes
independence, the US Consul General reports that
members of that party's Youth Arm support terrorist
tactics. In the past year, two Martinique
independence groups, the Martinique Independence
Movement and the Socialist Revolutionary Group
have been linked to separatist violence. In French
Guiana a small extremist group, the Anti-Colonial
and Anti-Imperialist Guianese Nationalists Party,
espouses militancy, and an elected local official from
the Union of Guianese Workers recently commented
publicly that "violence could not be excluded from
the struggle to end French rule. "
most successful tactic may prove to be the exploitation
of racial tensions. Economic disparities between local
blacks and the small white French middle class have
built up a tradition of racial animosity in the
Caribbean departments since the 1950s. For example,
the four-day, violent protests by about 600 separatists
and strike in Guadeloupe last month-supporting a
black separatist leader imprisoned for attacking a
white teacher-succeeded in forcing the release of the
prisoner.
At the same time,) the
UPLG is working to unify the various separatist
factions. In an effort to unify all groups seeking
independence from France, the UPLG in April hosted
a conference on the "Liberation of Remaining French
Colonial Territories." UPLG officials recently
announced the formation of a secretariat in Paris to
disseminate information and coordinate the activities
25X1
25X1
25X1
L~A I
25X1
25X1
25X1
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Table 2
A Chronology of Terrorist Activity in the French
Caribbean Departments, January 1983 to Present
18-19 February Two bombs damage the Public Treasury and No one claimed responsibility, but 0.5 metric ton of
Maritime Affairs buildings in Pointe-a-Pitre, explosives were stolen from the Central Deposit for
Guadeloupe; no casualties. Explosives on the same date.
Seventeen bombs extensively damage several gov- ARC, a previously unknown group, claims responsi-
ernmental and private properties in all three bility. Represents the first coordinated attack in all
departments and Paris; one person killed. three departments.
Four bombs damage Air France offices and a ARC claims responsibility and demands Paris release
monument in Paris; no casualties. Guadeloupe political prisoners.
Bomb damages supermarket in Basse-Terre, and ARC claims responsibility.
another is defused in Gosier, Guadeloupe. Arson-
ists damage supermarket in Pointe-a-Pitre; no
casualties.
Four bombs damage the Department of Public From Paris, ARC claims responsibility.
Works in Schoelcher, Martinique; no casualties.
Bomb damages the Chase Manhattan Bank and ARC states that US Consul General was targeted
US Consul General's office in Martinique; no and denounces US intervention in Grenada.
casualties.
Six bombs damage governmental and private ARC does not claim responsibility but announces a
properties in Pointe-a-Pitre and Basse-Terre, beginning of armed struggle against France and its
Guadeloupe; 23 people hurt. local supporters. Represents first bombings carried
out without regard for public safety.
Car bomb in Marie Galante, Guadeloupe; no ARC claims responsibility.
casualties.
Two bombs disarmed near car of the sub-Prefect
of Pointe-a-Pitre, Guadeloupe, and a military
vehicle.
23-24 December Bomb damages government building in Fort-de-
France while another destroys television relay
station in Grand Riviere, Martinique; no
casualties.
20 January Bomb dismantled at the Telecommunications
Center in Guadeloupe.
Two bombs explode and three disarmed at com- ARC claims responsibility and abandons policy of
mercial buildings in St. Francois, Gosier, and avoiding attacks that endanger lives; the first attacks
Pointe-a-Pitre, Guadeloupe; five people injured, on tourist and local economy.
including two tourists.
Bomb destroys a police car in Riviere-Salee, while
another destroys a garage at a golf course in Les
Trois Islets, Martinique. Third bomb damages
supermarket in Fort-de-France; no casualties.
Fifteen bombs damage government offices and
three businesses in Basse-Terre and Grande-
Terre, Guadeloupe; no casualties.
Five bombs destroy a police car, two private Bombings occur on anniversary of 1848 uprising that
yachts, retail shop, and tennis club in Guade- led to the abolition of slavery in Martinique.
loupe; no casualties.
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Table 2
A Chronology of Terrorist Activity in the French
Caribbean Departments, January 1983 to Present (continued)
Four bombs in Basse-Terre and Pointe-a-Pitre At least three of those killed were UPLG members.
explode prematurely and kill four terrorists.
26 September ARC letter threatens lives of Aime Cesaire, Letter concerns PPM camp because Cesaire is pro-
Deputy-Mayor of Fort-de-France and PPM lead- autonomy; PPM official identifies Marcel Manville
er; Camille Darsieres, PPM member; and Emile as leader of ARC-Martinique.
Maurice, President of the General Council.
Three bombs damage several businesses, and a Bec is the prosecutor in the case against Luc
fourth destroys car of acting Procurerer General Reinette, reputed ARC leader, arrested in connection
Bec in Pointe-a-Pitre, Guadeloupe; one person with bombing of radio station in November 1983.
injured.
Bomb destroys police motorcycle in Gosier, while On 11 January Justice Nouvelle, a previously un-
another is disarmed at a retail store in Pointe-a- known group, claims responsibility for recent bomb-
Pitre, Guadeloupe; no casualties. ings in response to police use of tear gas and armored
cars in December 1984 to disperse 3,000 to 4,000
demonstrators in support of seven ARC terrorists on
trial.
Firebomb destroys boat in Gosier harbor, while
two others burn autos in Abymes and St. Anne,
Guadeloupe; no casualties.
5 February Arson destroys home of French comedian
Coluche on Guadeloupe; no casualties.
23 February Firebomb damages discotheque in Gosier, Guade-
loupe; no casualties.
Six firebombs reported, one directed at France- Riposte Populaire, a previously unknown group,
Antilles newspaper office in Pointe-a-Pitre, claims responsibility.
Guadeloupe; no casualties.
Firebombs destroy six cars while a time bomb
near police headquarters is defused in Moule,
Guadeloupe; no casualties.
Lucette Michaux-Chevry, President of Guade-
loupe General Council, survives assassination at-
tempt from single gunshot.
Bomb damages police station in Gosier; five
people injured. Bomb damages restaurant in
Pointe-a-Pitre, Guadeloupe.
Bomb at restaurant in Pointe-a-Pitre, Guade- Bomb left by a black Antillean couple, but no group
loupe injures nine (including three US citizens) claims responsibility.
and kills three (including one US citizen).
ARC leader Luc Reinette and three others escape Officials claim inside complicity led to escape.
from prison in Guadeloupe.
Gunman fires at but misses local magistrate First incident, terrorist or criminal, directed against a
investigating Reinette's escape from prison. local magistrate.
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Foreign Meddling
Cuba has long maintained active and open relations
with the Communist parties and their affiliated trade
unions in Martinique and Guadeloupe. According to
the US Consul General, local Communist parties
coordinate Cuba's extensive program of cultural,
education, and sports exchanges. The Consul General
also reports that, besides these overt activities, French
officials believe that many alleged commercial visits
to the departments by Cubans are for the purpose of
contacting proindependence leftists. In addition,
Guadeloupian separatists increasingly are
participating in Cuban-sponsored regional labor
We believe that the increasing propensity of the
separatists to use violence has fueled Libyan leader
Qadhafi's determination in recent months to contact
proindependence radicals in the French Caribbean
departments.
Tripoli, with the help of leftists from
Dominica and St. Lucia, has focused on developing
ties to the UPLG. In our judgment, Qadhafi hopes to
exploit the willingness of French separatists to use
violence in order to further his objectives of
undermining US and French interests worldwide.'
French Attitudes and Policies
French authorities both in Paris and in the Caribbean
have been quick to counter separatist violence,
especially by bolstering local gendarme forces with
troops schooled in counterterrorism. France's Socialist
government is generally sympathetic to the idea of
eventual independence for the overseas territories, but
it disparages percipitous action in favor of a period of
preparation that includes the growth and
demonstration of broad public support for separation
from France. French opposition parties, however, are
widely expected to win a governing majority in next
year's legislative elections and have promised to take
a hard line against both independence and terrorism
in the overseas territories. Senior French officials
have publicly rejected any accommodation with the
separatist movement in the French Antilles, and have
defended their policy by pointing to the insignificance
of proindependence sentiment in the islands.
Outlook
The growth of ties between Libya and French
Caribbean separatists and the comprehensive strategy
initiated by the UPLG portend the development of a
more active and sophisticated independence
movement. We believe that the UPLG's recent efforts
to broaden support and promote proindependence
unity may encourage Tripoli to increase its assistance.
Libyan funding and training would improve the
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separatists' organization and amplify their
capabilities for violence.
Although we believe the radical minority among the
separatists will attempt more terrorism, UPLG and
other separatist leaders will remain cautious about
being associated with such incidents to avoid
jeopardizing their public relations effort. We believe
the separatists will increase activities that allow more
public visibility, such as international and regional
political and labor conferences. Much of this activity,
in our view, will be aimed at influencing public
opinion in France, where polls have shown that 80
percent of the population want Paris to cut ties with
the Caribbean departments, according to the US
Consul General. Because the separatists probably will
increasingly adopt such confrontational tactics as
demonstrations, further labor unrest seems likely in
the coming months.
Prospects for the independence movement,
nonetheless, vary among the Caribbean departments.
We believe separatists in Guadeloupe, with the
longest history of proindependence activism, have the
best potential for success. Despite frictions between
the UPLG and the more radical Movement for the
Independence of Guadeloupe, their ability to jointly
mobilize protests last month portends greater
cooperation. Libyan funding would provide an
additional incentive for accommodation. In
Martinique, the development of a viable independence
movement will continue to be undercut by the
political conservativism of the populace and the
weakness and disunity of proindependence leftist
groups. In French Guiana, although the Union of
Guianese Workers is trying to unite separatist groups,
the number of proindependence activists there also is
small. Even if the separatists unite, they would be
hard pressed to muster proindependence activity or
compete with the stronger, pro-French Socialist party.
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Venezuela: Perez's Precampaign
Maneuvers
Note: This article appeared in the 2 August issue of
the Latin America Review. Due to a printing error in
that issue, it must be reprinted here.)
Former President Carlos Andres Perez, Venezuela's
leading center-leftist politician, is pursuing an
unprecedented second presidential term beginning in
1989, but he faces determined opposition from
incumbent President Lusinchi and other leaders of the
Democratic Action (AD) party's Orthodox faction.' In
a bid to broaden his base in the party, Perez has
moderated his stand on some foreign policy issues. On
the domestic front, he has avoided attacking
Lusinchi's economic austerity program but is now
publicly intimating that the time has come for strong
expansionary measures. Perez's prospects have been
enhanced by a recent domestic scandal that the US
Embassy believes probably has eliminated his leading
rival as a viable candidate. Most party leaders are
unconvinced by Perez's tactical shifts, however, and
are casting about for another candidate capable of
defeating the former president's bid for the party's
nomination.)
Tactical Maneuvering on Foreign Policy
The Venezuelan Constitution stipulates that past
presidents must wait at least 10 years before running
for a second term. This rule has kept Perez, who left
office in 1979, out of the presidential palace but not
out of the public eye. Carefully avoiding
confrontations with Lusinchi, he has thus far
concentrated on public relations gambits. Earlier this
summer he completed a multicontinental road show
that took him to Algeria, China, and Japan. The trip
served the dual purpose of providing Perez with a
foreign policy platform outside of Venezuela and
reminding the electorate that, even out of office, he is
a widely respected international figure.
As president, Perez played an important role in
helping the Sandinistas come to power, but he has
increasingly distanced himself from the Ortega
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In January, he declined to attend Daniel Ortega's
inauguration and instead dispatched a letter to
Managua that sharply criticized the Nicaraguan
elections. In April, Perez publicly supported President
Reagan's Central America peace initiative as the only
way to end the conflict. in Nicaragua and return the
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Nevertheless, Perez remains considerably to the left
of Lusinchi on most major international issues. For
example, he advocates the normalization of
Venezuelan-Cuban relations and the creation of a
Latin American debtors' cartel, and is a strong
supporter of Guillermo Ungo, a leader of the
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meeting with Japanese Prime Minister Nakasone in
June, he asserted that US-Soviet confrontation over
Nicaragua, along with Latin America's accumulating
external debts, could endanger democracy in the
region, according to the US Embassy. This statement
is characteristic of Perez's present posture: blaming
both superpowers for Central America's problems but
implying that Latin America's creditors-above all,
the United States-are the main culprits.
A senior AD official has told the US Embassy that
leaders of the party's Orthodox wing are concerned
over cooperation between Perez and Peruvian
President-elect Alan Garcia on a variety of issues,
' The Democratic Action party is made up of three factions of
relatively equal strength-the Orthodox faction associated with
President Lusinchi, the labor faction led by party Secretary
General Manuel Penalver, and the populist faction identified with
Carlos Andres Perez. The alliance between Orthodox and labor
leaders within the party's National Executive Committee (CEN)
frequently places the populist faction in a minority position on
important policy issues.F__-]
Secret
ALA LAR 85-018
16 August 1985
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Perez has also been mentioned as the key figure in a
proposed new Contadora-type group for Chile. In
addition to Venezuela, the group reportedly would
include Argentina, Brazil, Colombia, and Uruguay.
In the unlikely event that such a group were to be
formed, Perez would not only have a limelight-
stealing diplomatic coup to his credit, but would also
enhance his image as a major Latin American
statesman. F__1
Pushing Domestic Populism
On domestic matters, Perez appears through his
public pronouncements to be trying to nudge the
austerity-minded Lusinchi toward an expansionary
economic program and setting the stage for a populist
campaign that will focus on pocketbook issues. In
May, Perez publicly urged the government to show
"audacity" in its economic policies. He blamed the
previous Social Christian (COPEI) government of
Herrera Campins for the "monstrous" foreign debt
Lusinchi inherited, but said the country is ripe for an
economic resurgence.
Perez probably calculates that he is well positioned to
capitalize on the politics of optimism and progress. In
contrast to the recessionary gloom of recent years,
many Venezuelans probably remember the Perez
years from 1974 to 1979 as an era of unparalleled
prosperity. The US Embassy reports that Lusinchi,
meanwhile, seems determined to stick to his economic
game plan for a gradual recovery that will not
jeopardize Venezuela's international debt-
restructuring agreement, risk runaway inflation, or
discourage new investment. Given the likelihood that
Venezuela's economy will remain sluggish in 1986
and Perez's penchant for political expediency, he
probably will increase his populist rhetoric. Whether
he will directly criticize Lusinchi's economic policies
is unclear, but such a move almost certainly would
stiffen the President's resolve to prevent Perez's
nomination.
Opposition to Perez
Until recently Interior Minister Octavio Lepage, a
member of AD's Orthodox faction, appeared likely to
be Perez's strongest challenger for the party's
nomination. Lepage is a Lusinchi confidant, but party
leftists strongly distrust him and he lacks broad
popular appeal. In June Lepage was accused by a
leader of the major opposition party of illegally
accepting funds from Juan Vincente Perez Sandoval,
the former president of the Banco de Comercio, which
the Lusinchi government has recently placed in
receivership amid allegations of banking irregularities
and kickback payments to public officials. The US
Embassy believes that this episode has effectively
killed Lepage's presidential ambitions and that the
Orthodox faction will use the scandal to justify
seeking another candidate.
Outlook
Perez's anti-US orientation is well established and is
unlikely to change. His public remonstrations with the
Sandinistas-whether sincere or not-may bolster his
credibility among some party members. With internal
party elections scheduled for the end of the year, we
believe Perez will continue to strike moderate poses on
most foreign policy issues.
For their part, Lusinchi and his supporters-mindful
of Perez's popular appeal-probably will prepare for
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party elections by maneuvering to retain key positions
in the party machine and its labor and peasant
affiliates. Down the road, however, they may face a
quandary, particularly if another
moderate candidate fails to gain electoral momentum.
If the moderates insist on trying to block Perez's
nomination, we believe they risk splitting the party,
losing leverage over the left, and ultimately
jeopardizing AD's chances of retaining control of the
government in the next election. By acquiescing in
Perez's candidacy, however, they probably ensure
losing effective control of the party. In this context,
moderate ruling party stalwarts probably fear that, as
a second-term president, Perez might be able to
accomplish in a second term what he failed to do in
the first-remold the party in his own image.
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Latin America
Briefs
Brazil-Argentina Concern About Overflights
The Brazilian Air Force is concerned that Argentina may be conducting electronic
intelligence (ELINT) collection flights over Brazilian territorv.
raze has approved the frequent overflights, but is
worried that the flightpaths seem irregular for the route to Africa. These
suspicions were heightened when the Argentine aircraft landed in Recife for
refueling and Brazilian ground personnel-although unable to photograph or
closely examine the plane-observed antennae and airframe modifications suitable
for ELINT collection.)
I want to end the flights, but have hesitated
to protest publicly until they can prove the aircraft's ELINT capabilities. The Air
Force plans to intercept and photograph the aircraft. Although it has considered
stronger measures-such as forcing the plane to land-these might damage
Argentine-Brazilian relations and almost certainly would require President
Sarney's approval.
Argentina: Radical Party Old Guard Concern About Technocrats
Members of the governing Radical Party are concerned about the rising influence
of "technocrats"-advisers with needed expertise but little or no party
background-in President Alfonsin's administration
Old guard politicians reportedly feel
that the technocrats' expanding role is causing Alfonsin to neglect the left-leaning
platform on which he was elected in 1983. The President's new economic policy,
for example, is becoming a key area of contention. Some of the old guard argue
that the government's dramatic austerity plan, conceived and implemented by the
technocrats, marks a break with the party's tradition of populism and heavy
government spending.
Alfonsin's continuing personal popularity has enabled him to keep criticism within
the party in check thus far, according to the US Embassy and the press. The
Embassy reports, however, that some Argentine analysts believe the struggle
between the technocrats and left-leaning Radical Party members may be
Argentina's "next big political battle." If Alfonsin's austerity program begins to
falter and his popularity slips, party members may become increasingly willing to
criticize him openly. Under such circumstances, we believe he could revert to the
more left-leaning domestic and foreign policies with which he has been associated
in the past.
37 Secret
ALA LAR 85-018
16 August 1985
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unity in the long run.
Continued Libyan assistance probably will help keep the opposition Labor Party of
Dominica intact in the coming months, but ideological differences threaten party
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The Labor Party, an uncomfortable alliance of leftwing and rightwing
oppositionists, has suffered from factionalism since its formation earlier this year.
Douglas apparently expects former Prime Minister Patrick John, who dominates
the party's moderate faction, to use his influence to keep peace in the party. John is
to stand trial on charges of conspiracy later this year and is unlikely to precipitate
a break with Douglas before then
. Nevertheless, in our view, strong political differences between the two
Antigua-Barbuda
factions eventually will undermine the coalition. Should Libya fail to come
through with promised funding, the alliance probably would break up even sooner.
of the two defunct parties.
The recently formed New Democratic Party (NDP) has begun an aggressive effort
to enhance its ability to challenge to the ruling Antigua Labor Party. Composed of
businessmen and professionals, the New Democratic Party was launched last
March to fill the vacuum created by the virtual disappearance of the Progressive
Labor Movement and the United People's Movement after their defeat in the 1984
election. The new party is actively courting allies from both ends of the political
spectrum but its primary audience is Antigua's conservative middle class, and
most of the party's recruiting efforts so far have been directed at former members
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