LATIN AMERICA REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00289R000200900001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 30
• Document Creation Date: December 22, 2016
• Document Release Date: June 10, 2011
• Sequence Number: 1
• Publication Date: September 27, 1985
• Content Type: REPORT

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Latin America
Review
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ALA LAR 85-021
27 September 1985
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Review
27 September 1985
The military has resisted calls to postpone or cancel national
elections, now set for 3 November, and apparently is committed to
handing power to a popularly elected government in January.
The prospect of little or no economic growth and severe financial
difficulties over the coming months could spark renewed unrest
similar to sporadic food riots last year.
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Since the restoration of democratic government, leftists have
remained influential in the trade union movement and apparently
hope to use the movement to regain social and political acceptance.
Briefs Cuba: Preparing for the NAM Summit
Caribbean: Trade Squabbles in CARICOM
Trinidad and Tobago: Opposition Gaining Strength
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Mexico-Israel: Friction Over Trade
Argentina: Construction of Nuclear Power Plant Suspended
Articles have been coordinated as appropriate with other offices within CIA.
Comments and queries regarding this publication may be directed to the Chief.
Production Staff, Office of African and Latin American Analysis,
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ALA LAR 85-021
27 September 1985
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Guatemala:
Election Procedures Set
Procedures are set for Guatemala's national elections
scheduled for 3 November. The military thus far has
resisted calls to postpone or cancel the elections and
now appears committed to handing power to a
popularly elected government next January. In our
judgment, frustrated losers are likely to use the
inevitable logistic difficulties associated with the
balloting to question the honesty of the elections and
the credibility of the outcome. Overall, however, we
believe that any irregularities will be within tolerable
bounds that do not seriously undermine the legitimacy
of the electoral process.
Laying the Foundation
Guatemala's military historically has shown a
reluctance to cede political power to civilian
politicians. In March 1982, however, a group of junior
officers carried out a coup against the regime of
General Lucas Garcia and installed retired General
Rios Montt.with a mandate to end human rights
abuses, curb corruption, and set Guatemala on the
road to democratic rule. F__1
General Mejia Victores overthrew Rios Montt, whose
reform efforts provoked opposition and undermined
military unity, in August 1983 and quickly reaffirmed
the military's commitment to civilian rule. As a first
step, in July 1984 Mejia sanctioned elections for an
88-member Constituent Assembly charged with
drafting a new constitution.
marked by a turnout of 72 percent of the eligible
voters-were free and open. The Assembly was
inaugurated in August 1984, and completed its draft
of a new constitution and election laws in May 1985.
Chief of State Mejia then enacted specific general
election laws in June and set 3 November as the date
for national balloting. F_~
The Election Stakes
A president and vice president, 100 members of
Congress, and local municipal figures are scheduled
to be elected in November. Eight presidential
candidates, along with their running mates, are
registered. To win the presidency on the first ballot, a
candidate must get an absolute majority of the vote.
If-as now appears likely-no candidate wins a
majority, the two top votegetters will face a runoff on
8 December. The newly elected president, as well as
members of Congress, will serve five-year terms
scheduled to begin when power is formally transferred
on 14 January 1986.
In the case of the congressional races, 75 of the new
Congressmen will be elected from geographical
departments, while 25 will be elected on an at-large
basis. Congressional as well as city council races are
to be chosen on the basis of proportional
representation while mayors will be selected by a
simple plurality. Fourteen parties-either standing
alone or in coalition-are now registered
Voting Procedures
All Guatemalans between the ages of 18 and 70, with
the exception of active-duty military personnel and
the police. who are barred from voting, are required to
vote. The US Embassy reports, however, that this
requirement, violation of which is subject to a small
fine, is rarely enforced. According to Guatemalan
statistics, nearly 70 percent of the country's estimated
3.95 million eligible voters are registered.
The voting is to be conducted at some 5,000 polling
tables set up throughout urban and rural
municipalities. Voters are required to present an
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ALA LAR 85-021
27 September 1985
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identification card, and sign their name or stamp their
fingerprint in the electoral registry. Paper ballots are
used, with separate ballots of different colors for
presidential, congressional, and municipal races. In
the case of the presidential ballot, candidates are
listed by name, party affiliation, party symbol, and a
picture of each candidate.
Counting the Ballots
Responsibility for supervising the elections and
counting the ballots falls on four independent groups:
? The Supreme Electoral Tribunal has ultimate
authority regarding the entire electoral process.
? The Citizen Registry is charged with administrative
responsibility for organizing the election, including
voter and party registration.
? Departmental Electoral Boards are charged with
coordinating local municipal boards in the various
departments. Each board is composed of three
officials appointed by the Supreme Electoral
Tribunal.
? Municipal Election Boards are charged with
determining the number of local polling places and
for naming the three-person committee to oversee
each polling station. There is one committee-
appointed by the Departmental Electoral Boards-
for each of the 329 municipalities.
After the polls close, local polling officials-overseen
by official party observers-are responsible for
handcounting the ballots and resealing ballot boxes.
Tallies are then forwarded to Departmental Electoral
Boards, which must-within five days and again
under the eye of party representatives-review the
results and recount ballots that have been challenged.
All results are then forwarded to the Supreme
Electoral Tribunal for certification.
The Role of the Military
Guatemala's military,
particularly the senior ranks, is committed to carrying
through on the election process. The US defense
attache reports that the military is prepared to
provide security during the campaign and at the polls,
and is planning a major counterinsurgency operation
to preempt any plans by leftist insurgents to disrupt
the elections. Although various reports indicate that
the military remains the ultimate arbiter of disputes,
it thus far has refused to become enmeshed in the
political infighting among various candidates. For his
part, Mejia has shown a willingness to punish officers
for becoming too closely tied to particular candidates
and has refused to endorse a civilian candidate.
Potential Troublespots
Although the Mejia government has pledged to carry
out honest elections, we believe Guatemala's lack of
democratic traditions, the shortage of personnel
trained and experienced in election procedures, and
the government's overall lack of financial resources
will produce logistic difficulties that critics on the left
or right could use to attempt to discredit the elections.
In particular, we believe frustrated losers may claim
that illiterate voters were confused by the three-ballot
system, or that voters-particularly in rural areas-
have been intimidated by representatives of various
parties or the military. In addition, we anticipate that
there are likely to be charges of rigging and
manipulation in counting the ballots. A high number
of blank or null ballots-20 percent of the returns in
the July 1984 Constitutent Assembly elections were
declared invalid-could be cited as evidence that the
elections do not reflect true voter sentiment. Overall,
however, we believe that irregularities are likely to
remain within tolerable bounds that will not seriously
undermine the credibility of the election process.
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Haiti:
Recent Economic Reverses
Haiti's inability to remain in compliance with its IMF
program threatens to undo progress begun under the
previous accord and push the economy back into a
prolonged recession. Haiti faces little or no economic
growth, at best, this year, and expected severe
financial difficulties could spark renewed unrest
similar to last year's sporadic food riots. International
donors-increasingly impatient with the government's
unwillingness to curtail expenditures apart from the
regular budget-are unlikely to respond to Haitian
pleas for help as quickly as in the past. Unless the
Duvalier regime overcomes its myopic economic
policies, even benefits offered under the US-sponsored
Caribbean Basin Initiative (CBI) are unlikely to entice
much new investment. In these circumstances, Port-
au-Prince is likely to look increasingly to the United
States for a bailout as a quid pro quo for
implementing political reforms sought by
Washington.
Hard Times
Haiti's economy-desperate in the best of times-hit
particularly difficult straits in 1981. According to US
Embassy reporting, real GDP shrank nearly 3 percent
largely because a hurricane destroyed one-third of the
coffee crop-Haiti's primary export. This had
followed a reduction in world demand for coffee that
caused prices to decline nearly 60 percent between
1977 and 1981. The consequent slump in coffee
earnings on top of unbridled public spending and
skyrocketing oil prices caused Haiti's financial picture
to dim appreciably. A parallel exchange market
sprang up where the Haitian gourde traded at a
discount of as much as 15 percent, according to
Embassy reporting.
This dismal economic performance caused Haiti's
standard of living-traditionally the lowest in the
Western Hemisphere-to deteriorate further; World
Bank data suggest per capita income fell below $250.
Embassy reports indicate the rate of inflation hit
nearly 20 percent in 1981-following an 18-percent
increase the previous year-as the government tried
to cover unbudgeted spending through hefty
borrowing from the central bank. According to
Embassy reporting, the unemployment rate-at least
20 percent-and underemployment that ranged
between 50 and 60 percent were eased only by large-
scale legal and illegal migration. As many as 20,000
Haitians departed annually in the early 1980s to
neighboring Caribbean countries and the United
States, according to an academic study.
Some Promising Signs
Policy Reforms. Having exhausted other viable
options, the Haitian Government grudgingly turned to
the IMF for help. The new program-a $65 million
standby that ran from August 1982 to September
1983-required President Duvalier to take an
unprecedented step in sticking to a realistic budget to
make government spending more open and
accountable. The Fund's main objective was to reduce
pressure on the country's balance of payments by
cutting total government spending 25 percent during
the period.
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Haiti carefully followed Fund prescriptions.
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taxes were introduced and food subsidies reduced to
increase government revenues. The Duvalier regime
also severely restricted money supply growth and
imposed a moratorium on commercial borrowing for
new public projects to curb spending. Perhaps the
government's most important reform, however, was
the dismantling of the Regie du Tabac-the powerful
tobacco and other tax collection agency-which in the
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Initial Results. Haiti's efforts produced a small
balance-of-payments surplus by yearend 1983,
although foreign reserves were reduced to barely one
week's import cover in the process. According to
Embassy reporting, reduced central bank borrowing
and slower money supply growth led to reduced
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27 September 1985
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demand for imports, slashed inflation to only 6.5
percent, and held the debt service ratio to a
manageable 10 percent. Moreover, foreign payments
arrears-which had totaled nearly $20 million in
1981-were virtually eliminated and pressure was
reduced on the gourde by the end of 1983.
Economic output began to recover in 1983, as
concessional flows from official donors-largely from
the United States, France, and West Germany-
nearly doubled in response to Haiti's adherence to
IMF stipulations. Foreign investment also rose
sharply in response to the improving economic
climate. Although intractable problems kept
agricultural production weak, Haiti's light
manufacturing sector-particularly its assembly
industries-became more active due to renewed
financial inflows. Investors and lenders alike were
attracted by Haiti's low wage rates, an industrious
work force, and weak labor unions.
Still, living conditions improved little. Unemployment
and underemployment, especially in the countryside,
worsened as the financial injections failed to offset
fully lower government expenditures. With fewer job
opportunities and many Haitians living outside the
monetary economy altogether, even the greatly
reduced inflation rate provided little benefit to the
poor.
Recent Setbacks
Haiti's strict compliance under the one-year
adjustment program facilitated conclusion of a $63
million standby in July 1983.
the new agreement-slated to run until September
1985-was designed to consolidate previous gains,
boost lagging international reserves, attract foreign
investment, and sustain growth. The government
missed its first spending targets in October 1983, but
achieved compliance in January 1984.
In May 1984, the outbreak of a number of civil
disturbances in several provincial capitals-
particularly Cap Haitien, which has a long tradition
of opposing central government authority-and the
Duvalier regime's response, in effect terminated the
standby program. According to Embassy
reports, eroded living standards caused by reduced
government spending-especially food subsidy cuts-
Haiti: A Snapshot of Socioeconomic Disparities
rural destitution.
Academics have characterized Haiti as a land of
startling contrasts; jetsetters, a millionaire elite, and
luxury tourist resorts coexist with urban squalor and
24,000 Haitians out of a total population of 6 million
own half the country's wealth. As a result, the per
capita income of over 95 percent of the populace is
actually less than $120 a year. In Petionville, just
outside of the capital, the wealthy escape the object
poverty of the urban population. They live on hill-
sides overlooking Port-au-Prince in luxury homes
complete with tennis courts, swimming pools, and
formal gardens. Most are absentee landowners who
control Haiti's coffee industry. By contrast, the vast
majority of Port-au-Prince's 850,000 residents live
without potable water, bathe in open sewers, and
man scaven a the city's garbage dumps for food.
Despite the grinding poverty of urban life,
30,000 Haitians emigrate to the
capital each year to escape the even more wretched
conditions in the countryside.
per capita income in the capital is 10
times higher than in rural areas, where many Hai-
tians live outside the money economy altogether.
Moreover, less than 5 percent of the rural population
has access to safe water, compared with nearly 45
percent in urban areas. Similar rural-urban dispari-
ties exist in the availability of education, health care,
and other social services.
were largely responsible for the riots. The
government, claiming the need for emergency
spending to quell the disturbances and prevent further
trouble, instituted temporary job and food programs
in the affected areas that exceeded IMF guidelines on
spending.
Because of Haiti's failure to maintain compliance,
IMF funding was suspended. Port-au-Prince adopted
a "shadow" IMF program-an informal adjustment
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scheme requiring adherence to less stringent targets
but providing no financial disbursements. The Fund
views such programs as an intermediate stage leading
to the resumption of a formal program. Nevertheless,
with financial discipline broken, Haiti has failed to
comply with any IMF targets.
Despite the loss of IMF funding, increased
government spending and generous aid disbursements
from patient benefactors helped the economy to grow
2 percent last year and kept the country's balance of
payments in the black. Increased exports to the
United States also boosted Haiti's foreign payments
position.
The positive growth figures, however, mask serious
problems. Short-term borrowing abroad to support
unchecked government spending caused the country's
debt service ratio to edge toward 15 percent last year.
The spurt in public-sector spending also caused the
rate of inflation to jump to 15 percent, nearly
doubling the black-market discount rate for the
gourde to as much as 16 percent. Living standards
also suffered from the fiscal indiscipline. Even with
limited government subsidies to selected areas, food
prices escalated 15 to 25 percent in the last half of
1984 alone. Embassy reports indicate unemployment
failed to decline, despite costly make-work projects.
Moreover, per capita
income stood at only $235, 9 percent below the 1980
level in current dollars.
Worrisome Outlook
The turn of events in Haiti already has caused
considerable alarm within the international financial
community. Indeed, unless
Haiti improves fiscal discipline, the country's
economy will collapse into another economic tailspin.
Despite recent talks between the IMF and the
government, Haiti has made no real progress toward a
new IMF agreement so far this year. In our judgment,
the regime's unwillingness to come to grips with
excessive government spending and central bank
credits, in particular, will prevent a new agreement
with the Fund. Moreover, the IMF has declared that
negotiations cannot begin in earnest until Haiti repays
arrears owed it-currently $16 million-and shows
several months of significant progress under the
shadow program. The longer Haiti remains out of
Table 1
Socioeconomic Indicators:
A Comparison
Haiti Dominican
Republic
Population, 1984 5.8 6.4
(millions)
Per capita income, 1984 235 1,091
(US $)
Adult literacy, 1984 23
(percent)
Urbanization, 1980
(percent)
Infant mortality 118a 28 b
(deaths per 1,000
live births)
Life expectancy
(years at birth)
Birth rate
(births per 1,000
inhabitants)
Population growth rate, 1970-83 1.7 2.7
(average annual percent)
Labor force in agriculture, 1984 79 47
(percent)
Population with access to 13
safe water, 1980
(percent)
a 1980-85.
b 1983.
compliance with the Fund program, however, the
more difficult it will be to negotiate a new accord
because even more draconian adjustment measures
will be needed.
Haiti is
having difficulty meeting IMF spending guidelines
because Duvalier continues to interfere with the
budgetary process. He reportedly has authorized
government purchases of residences, overseas
properties, and military aircraft totaling several
million US dollars. The US Embassy speculates that
Duvalier may also be diverting funds to finance a
recently formed progovernment political party. 0
the President believes
that, as long as the government keeps unemployment
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Table 2
Haiti: Balance of Payments
Current account balance
-93.7
-57.5
-78.3
-65.5
-63.5
Trade balance
-191.2
-127.8
-136.6
-128.0
-128.4
Exports
176.1
206.1
222.0
256.6
278.8
Coffee
33.8
40.0
51.2
49.6
56.0
Light manufactures
54.3
66.3
73.5
88.9
95.4'
Other
88.0
99.8
97.3
118.1
127.4
Imports
-368.3
-333.9
-358.6
-384.6
-407.2
Oil
-59.7
-51.5
-55.3
-59.0
-61.6
Other
-308.6
-282.4
=303.3
-325'.6
-345.6
Net services and transfers
98.5
70.3
58.3
62:5
64.9
Capital account balance
101.5
37.7
83.1
69.5
59.5
Official capital
83.9
41.2
60.2
59.0
55.9
Direct investment
42.4
45.6
63.9
62.0
67.8
Medium- and long-term loans
41.5
-4.4
-3.7
-3.0
-11.9
Net short-term capital
50.4
-8.7
25.3
5.9
6.6
Private capital, errors, and omissions
-32.8
5.2
-2.4
4.6
-3.0
Change in gross reserves
7.8
-19.8
4.8
4.0
-4.0
from rising and the supply of basic foodstuffs from
falling, public resentment can be contained even if
support from international organizations ceases. F
We believe Duvalier will be hard pressed to
accomplish these twin objectives because Haiti's
domestic and foreign financial positions are likely to
worsen dramatically by the end of 1985. Haiti almost
certainly will tap its depleted foreign reserves further
and build arrears to meet day-to-day expenses.
Unchecked public spending will increase inflation,
further weaken the gourde, and hurt the country's
already poor international creditworthiness.
Moreover, Duvalier's frivolous, unbudgeted
expenditures will do little to generate jobs or spur
growth.
Moreover, there is a good chance that the country will
experience shortages of foodstuffs and other imported
staples, a situation that could easily prompt unrest
similar to that experienced last year. According to the,
Fund, international reserves in mid-1985 were
sufficient to cover less than two weeks' worth of
imports. Worried foreign creditors already are
demanding prompt payment for such key imports as
petroleum and flour. a Shell
tanker recently delayed offloading its oil until the
government fully paid the bill.
Haiti can only
sustain growth in the future by reallocating resources,
to maximize foreign exchange earnings. Haiti's
brightest prospects are in light manufacturing-
especially the assembly industries. Unless the country
resumes a valid IMF program, however, potential
investors will be deterred, even with encouragement.
from the CBI. Significant help from other sectors is
unlikely. For example, the near-term prospects for
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agriculture are poor due to the weak world outlook for
coffee as well as Haiti's badly eroded soil and
primitive farming methods. In addition,
adverse international
publicity from Haiti's AIDS outbreak will hurt the
small tourist sector.
US Interests
Haiti's inability to reach agreement and comply with
an IMF program is likely to present several problems
for the United States. Without the regime's
commitment to put the country on a more solid
economic footing, the decline in private capital and
multilateral inflows almost certainly will prompt
Haiti to look to Washington for larger sums of aid.
Reacting to international pressure, largely from the
US Government, Duvalier agreed last spring to
legalize political parties and create a prime-
ministerial system. As a result, we believe Port-au-
Prince will expect especially generous aid in order to
implement planned political reforms. Should the
United States-and other key donors-not meet
Haiti's expectations, Duvalier might well use the
country's economic plight to justify a political
crackdown on his domestic opponents. Some
influential hardliners in the regime, who oppose even
limited reforms, probably already are pushing for
such action.
Washington also is likely to face increased illegal
migration over the near term.
between 1979 and 1984 as many as
40,000 Haitians illegally entered the United States.
Prolonged economic difficulties will encourage
growing numbers of Haitians to seek jobs elsewhere.
Many probably will head for the United States
because other traditional havens-The Bahamas and
the Dominican Republic-have cracked down on
illegal entrants in recent years. The lure of high US
wages will remain especially strong.
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Grenada: Trade Unions and
Democratic Development
Grenada's trade union movement, which had been
dominated by Maurice Bishop's People's
Revolutionary Government before October 1983, has
been slow to exert its independence since democratic
government was restored. The hope among many
observers that the trade unions would assume broader
economic, social, and political functions has yet to
materialize. No democratic union leader who can
command widespread worker support has emerged to
challenge the established trade union left. As a result,
members worked full-time on labor matters,
drumming up support for the Bishop government,
according to US Embassy reporting. The regime
subsidized salaries as well as domestic and overseas
travel by union leaders. In October 1983, however, the
union movement was left virtually leaderless after the
assassinations of Bishop, the president of TUC, and
the leader of the Agricultural and General Workers'
Union by the Bernard Coard faction of the NJM.
Several other labor leaders were imprisoned or sought
refuge in Eastern Europe.
and that Cuba and the USSR continue to provide
assistance. Meanwhile, the autocratic former Prime
Minister Eric Gairy is having some success recruiting
agricultural workers into his union and party.
For their part, the Blaize government and
international entities have had only limited success in
revitalizing the once moribund trade union movement.
Beset by cabinet infighting and strapped by economic
realities of 35 to 40 percent unemployment and 20-
percent inflation, the government has concentrated
more on creating a favorable investment climate than
on rebuilding the labor movement. Union leaders
endorsed by the American Institute for Free Labor
Development (AIFLD) have failed to win key
positions in the leftist-dominated Grenada Trade
Union Council (TUC), with which the country's
unions are affiliated. Unless leftist influence in the
trade unions is more effectively challenged, we believe
the left will use the union movement as a means to
regain social and political acceptance.
Background
During the Bishop years (1979-83), the ruling New
Jewel Movement (NJM) infiltrated and dominated
the TUC and five of its eight affiliates. These unions
served as a major base of grassroots support for the
revolutionary government.
the
Bishop regime gave a high priority to gaining control
of all the unions. Reflecting this, a number of NJM
AIFLD established a presence in Grenada after the
US-led intervention and found that some union
leaders, who had remained independent under
Bishop's regime, were eager to assist in developing a
democratic trade union movement. Eric Pierre,
president of the Seamen and Waterfront Workers'
Union, and Stanley Roberts, secretary general of the
Taxi Owners' and Drivers' Association, were regarded
as the most promising independent union chiefs,
according to US Embassy reporting. Pierre had kept
his union free from government control by avoiding
criticism of the Bishop regime. Roberts resisted the
government's attempts to infiltrate his union more
openly and was imprisoned for two years.
Elections to the revived TUC were held in March
1984, but Pierre, AIFLD's candidate for president,
failed to win support outside of his own and Robert's
unions. Pierre's defeat and the election of leftist Basil
Harford, president of the Public Workers' Union,
demonstrated the left's lingering clout in the labor
movement. Furthermore, trade union leaders had
become wary of the political process after being
exploited by Bishop and Gairy before him, according
to the Embassy. The Embassy reports that Pierre was
closely identified by unionists with Prime Minister
Herbert Blaize, then leader of the Grenada National
Party. Most union leaders, however, did not share
Secret
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Leadership
Estimated
Membership, 1985
Trade Union Council (TUC)
Basil Harford, president;
Anselm Debourg, first vice
president
9,000
Agricultural and General
Workers' Union (AGWU)
Gordon Thomas
Bank and General Workers'
Union (BGWU)
Derek Allard
Commercial and Industrial
Workers' Union (CIWU)
Anselm Debourg, president;
Winston Ledlow, vice
president
600
Grenada Teachers' Union
(GTU)
John Forsyth, president; Dennis
Thomas, secretary general
900
Public Workers' Union
(PWU)
Basil Harford
2,000
Seamen and Waterfront
Workers' Union (SWWU)
Eric Pierre, president;
Stanley Roberts, first vice
president
500
Taxi Owners' and Drivers'
Association (TODA)
Stanley Roberts
Technical and Allied Workers'
Union (TAWU)
Wilfred Hayes
1,400
Agricultural and Allied
Workers' Union (AAWU)
Manual, Mental, and Intellec-
tual Workers' Union
(MMIWU)
Eric Gairy
a Includes members of Gairy's Grenada United Labor Party; about
half are regular, dues-paying members.
Comments
Affiliated with Caribbean Congress of
Labor; allowed readmission of leftist
AGWU; Secretary General Charles at-
tended Cuban-sponsored meeting in
Martinique.
AIFLD-sponsored union has failed to un-
seat this holdover from Bishop's govern-
ment. BGWU pays its officers to keep
union alive.
Allard has ties to NJM-Coardites. Union
has lost membership due to anti-NJM
backlash.
GTU's leftist leaders are holdovers from
Bishop's rule.
Harford and George Brizan founded
National Democratic Part
Roberts in line to succeed Pierre as lead-
ing democratic trade union leader. TODA
has no official political allegiance.
Hayes lost position as TUC first vice
president to leftist Anselm Debourg; his
position in TAWU is threatened by leftist
elements.
AIFLD-sponsored union has reportedly
made inroads into AGWU's and Gairy's
domains. Has failed to gain recognition by
TUC; denounced by left as "CIA" union.
Gairy's union/party has a middle-aged
following among agricultural workers; not
recognized by TUC.
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Pierre's enthusiasm for Blaize or the 1984 national
elections. Consequently, TUC did not endorse any
candidates in the campaign.
Leftist Influence
Despite the NJM's demise in 1983 and the current
unpopularity of its remnants, leftist leaders retain
influential union positions and are following long-
term strategies to increase their support through the
labor movement, which represents approximately 40
percent of the work force. Maurice Bishop Patriotic
Movement (MBPM) leader Kenrick Radix reportedly
has targeted trade unions for increased penetration by
party members.'
Pierre and Roberts to become council officers. At the
same time, the leftist leader of the Commercial and
Industrial Workers' Union, Anselm Debourg,
replaced democrat Wilfred Hayes as first vice
president. Debourg is an NJM activist who was
placed in the trade union movement by Maurice
General Workers' Union maintains close ties to the
NJM remnant led by the imprisoned Bernard Coard.
TUC remains the most visible forum of leftist
influence in the trade union movement-five of its
eight affiliates are still controlled by leftists. Because
TUC is the only technically affiliated labor
organization in Grenada, it is the sole Grenadian
recipient of direct funds from AIFLD and the
Caribbean Congress of Labor. Last March, leftist
labor delegations voted as a block to reelect Basil
Harford as president and to again reject the bids of
' Following the death of Bishop and the imprisonment of Coard and
several of his followers, the NJM split into two factions. The 100 or
so hardcore supporters of Coard are considered hardline Marxist-
Leninists, whereas the somewhat larger MBPM offshoot consists
believe the election represented a significant advance
for the left in the labor movement against more
moderate elements.
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Harford has strongly criticized the Blaize
government, echoing the opposition political parties in
condemning the government's budget for not
providing sufficient relief to the poor. Moreover,
according to Embassy reporting, Harford, Debourg,
and Allard sought to sabotage the recent Caribbean
Congress of Labor anniversary conference in Grenada
by not attending until the final day. In addition,
Harford invited MBPM leader Radix to the
conference, a move that created friction and anxiety
among Congress members. Frustrated with Harford
and TUC's leftist bent, Pierre and Roberts have
publicly threatened to pull their unions out of the
organization.
Leftists also have actively sought to discredit efforts
to help democratize the trade union movement. TUC,
for example, has rejected the AIFLD-sponsored
Agricultural and Allied Workers' Union as a
replacement for the discredited Agricultural and
General Workers' Union. MBPM and NJM followers
also have publicly accused the AIFLD representative
and the union as being funded by the CIA. Moreover,
according to Embassy reporting, leftist labor leaders
have capitalized on the difficulty that some unions
have experienced in trying to achieve recognition as
legitimate bargaining agents with foreign investors in
Grenada. The Labor Ministry's inability to persuade
some foreign firms to recognize the unions has
provided the leftists with additional propaganda
opportunities.
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In addition to the challenge from the left, democratic
labor faces a more traditional one from the right.
Gairy has echoed the left in attacking the AIFLD for
attempting to attract workers away from the
traditional unions.
he has taken his argument
to the countryside and has had some success in luring
workers back to his Manual, Mental, and Intellectual
Workers' Union.' Agricultural Minister George
Brizan found it necessary to publicly warn Gairy to
refrain from inciting demands among estate workers
for higher wages. Gairy's authoritarian manner and
lack of appeal among the country's youth, however,
probably will blunt his effort in the future.
Cuban and Soviet Activities
Although the level of support has drastically lessened
from pre-1983 levels, the leftist union leaders
apparently have continued to receive aid from the
Union recently had to raise membership fees and
reduce the number of meetings. Concern over adverse
publicity also may have caused the leftist unions to
heed Caribbean Congress of Labor advice against
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Outlook
We believe the left faces many obstacles in its quest to
regain domestic influence. Recognizing this, leftists
are emphasizing long-term strategy rather than short-
term gains. Most Grenadians are wary of the left
since the events of October 1983. Another constraint
is the split between the MBPM and the Coard faction; 25X1
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near term despite recent Cuban prodding.) 25X1
Nevertheless, we believe the entrenched leftist
presence in key sectors of Grenada's trade union
movement, and the government's hesitancy in
supporting labor demands in order to entice foreign 25X1
investors, will facilitate the left's efforts over time to 25X1
expand its influence.
For the present at least, the Soviet Bloc and leftist
union leaders appear cautious in pursuing mutual
relations, in order to avoid provoking a backlash
among the predominantly conservative population.
Despite their continuing contacts, we believe the level
of Communist funding remains small, given signs that
some of the leftist unions appear to be in trouble
financially. In fact, the Bank and General Workers'
' Gairy rose to power in the early 1950s by skillfully exploiting the
class divisions in Grenadian society. By capitalizing on the
animosity of the peasant and labor classes toward the wealthy and
politically dominant elite, Gairy's union was a key component of a
substantial power base that allowed him to remain in power for over
doubt that the left's success in controlling TUC will
be reversed as long as leftist union leaders remain
united in opposing candidates perceived to be backed
by the government or the United States. As long as
TUC is dominated by former supporters of Bishop's
government, it can be expected to remain at
loggerheads with the present government. Moreover,
because Grenada's ability to sustain economic growth
over the long run depends on its ability to attract
foreign investment, the government-although it is
supportive of trade unions in general-is likely to be
reluctant to push labor demands with the few foreign
investors who have located in Grenada thus far.
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Both Cuba and the USSR, recognizing organized
labor's strong clout in the English-speaking
Caribbean, are likely to maintain contacts with
Grenada's leftist trade unions. We believe Havana
and Moscow will remain parsimonious, however,
partly because they appear to be concentrating their
assistance on leftist groups elsewhere-particularly in
Jamaica and the Dominican Republic-where they
perceive the best chances of making electoral gains in
the next few years. Continued leftist success in
thwarting AIFLD and democratic union leaders or
growing discontent with the Blaize government,
nonetheless, could encourage the Cubans and the
Soviets to step up their support.
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Latin America
Briefs
Cuba Preparing for the NAM Summit
Cuba's intensive backstage maneuvers at the Luanda ministerial meeting of the
Nonaligned Movement (NAM) resulted in the appointment of Zimbabwe to the
chairmanship of the NAM. As a result, Havana will have ample opportunities for
manipulating the agenda and influencing the outcome of the summit scheduled for
next year. Apparently concerned that the favored contender, Yugoslavia, would
frustrate Havana's more radical objectives, the Cubans initiated a lobbying blitz of
13 Third World countries to make Zimbabwe the next NAM summit host.
Havana was aided in its efforts by. the fact that traditionally the summit location is
rotated among geographic regions, and it is an African country's turn to host.
Cuba probably also Toned to keep the NAM focused on events in southern Africa
by such a maneuver.)
Despite indications that Zimbabwe was not interested in the NAM chairmanship,
Cuban Foreign Minister Malmierca reportedly. organized a meeting to gain a
consensus for Harare before its foreign minister arrived at the Luanda meeting.
Havana apparently led the other delegations to believe that Zimbabwe was seeking
the position, rather than it being a Cuban-inspired move. Moreover, Malmierca
met with President Mugabe more than a week prior to the ministerial meeting to
press him to host the summit.
Havana was behind the proposal to have Luanda as the site of the ministerial
conference, and therefore able to direct much of the proceedings to secure a
radical, anti-US declaration. Having skillfully maneuvered to assure Harare the
chairmanship of the NAM conference; Havana.is now in a good position to push
its pet issues such as South Africa, international debt, and US "imperialism" to
the-forefront of the NAM agenda. Moreover, Zimbabwe, because of its
inexperience with hosting an-international summit.and the cost, may be receptive
to Cuban assistance.
Caribbean Trade Squabbles in CARICOM
Trinidad and Tobago's failure to implement the 14-month-old Caribbean
Community (CARICOM) trade accord is prompting sharp criticism from
neighboring countries and threatening to jeopardize the organization's viability.
The accord would lower trade barriers among CARICOM members and raise
tariffs on. imports from non-CARICOM countries. Four of CARICOM's 13
15 Secret
ALA LAR 85-021
27 September 1985
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members have yet to implement the agreement-despite three deadline
postponements-but Trinidad has drawn the most criticism because it is the
largest market in the English-speaking Caribbean. In an attempt to conserve its
declining foreign reserves, Trinidad has slashed imports from CARICOM
countries about 30 percent so far this year, after a decline of 18 percent in 1984.
Grenada and Barbados have expressed the sharpest disapproval of Trinidad's trade
policies. Barbadian Prime Minister St. John recently even suggested that
Caribbean governments restrict purchases of Trinidadian products until Port-of-
Spain relaxes its import restraints. Given its worsening economic problems,
Trinidad is likely to make only token efforts to soften its import policies.
Trinidad and Tobago Opposition Gaining Strength
The formal consolidation of the moderate opposition into a single party-the
National Alliance for Reconstruction (NAR) led by A.N.R. Robinson-suggests
that the ruling People's National Movement faces its toughest electoral challenge
in 30 years. According to the US Embassy, at the September inaugural conference
of the NAR-comprising four parties with a broad base of support-a constitution
was passed unanimously and all party officers were elected unopposed. Even the
allocation of parliamentary seats, a contentious issue during unity negotiations
earlier this year, was settled amicably. The Embassy expects national elections,
which are due by early 1987, to be held in the fall of 1986. With popular
dissatisfaction with the ruling party increasing-largely due to the country's
deteriorating economy-the Chambers government probably recognizes it will be
Friction Over Trade
Mexico City and Tel Aviv are involved in a modest dispute over bilateral trade. At
issue is whether the Mexicans are living up to an agreement negotiated earlier this
year whereby Mexico City pledged to increase its purchases of Israeli products and
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services in 1985 to over $100 million in return for Israel's continued purchase of
Mexican oil. So far, however, Israeli exports to Mexico have barely exceeded $25
million. In contrast, Tel Aviv purchased nearly $250 million worth of Mexican
crude oil during the first seven months of 1985. The Mexican press, speculating on
the rift in September after Israel's Energy Minister canceled a visit to Mexico
City, reported that Tel Aviv would not buy any Mexican petroleum in 1986.F_
substantial boost in imports of Israeli products at this time.
Both sides are publicly minimizing their differences and have agreed to meet in
January to attempt to resolve the impasse. In our judgment, the two almost
certainly will reach a compromise providing for continued Israeli purchases of
Mexican oil. Despite their concern over the trade imbalance, the Israelis value
Mexico as a politically reliable oil supplier. In recent years, Mexico has furnished
40 to 50 percent of Israel's petroleum imports. Although such purchases have
amounted to less than 4 percent of Mexico's total oil sales, the Mexicans almost
certainly want to maintain Israel as a customer at a time when the international oil
market is soft. Nonetheless, Mexico City probably believes its tight financial
situation, together with its limited need for most Israeli exports, preclude a
the country's third nuclear power plant. Argentina attempted to salvage the
project by seeking additional funding from Kraftwerk Union (KWU), the West
Budget cuts in Argentina's nuclear energy program are jeopardizing completion of
German firm that has been helping with construction of the facility.
The plant was originally scheduled for completion in 1987, but technical and
contractual difficulties pushed the target date beyond 1990.
Argentina's pronuclear lobby-which includes business,
Alfonsin's administration to resume construction on its own, but the government's
budgetary problems will make it difficult. The mounting financial difficulties
facing the nuclear program probably will lead the Argentines to increase their
efforts to expand revenue-generating exports of nuclear technology and equipment.
government, military, and political groups-probably will press President
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Cuba Chronology
A Colombian delegation attending the conference on foreign debt in Havana
speaks to Fidel Castro of the possibility of renewing relations. Walking away, Fidel
responds, "we will talk about that."
The Habana del Este thermoelectric plant in Santa Cruz de Norte, the largest
such plant ever built in Cuba, is scheduled to be completed by December.
Fidel Castro meets with members of the Chilean delegation attending the meeting
on foreign debt to discuss unity of the Chilean opposition to President Pinochet
and a summit meeting on debt.
4 August At the conference on foreign debt, Fidel Castro says Latin America's huge foreign
debt is unpayable and describes it as a "cancer that must be rooted out."
Granma reports on a note sent by Fidel Castro to Peruvian President Alan Garcia
in which he offers anti-imperialism support to the Garcia regime.
Fidel Castro states that he has absolutely no links with the Shining Path
organization, but that the existence of this organization is indicative of a deep
economic crisis in Peru.
Notimex reports that Fidel Castro denied reports that Costa Rican financier
Robert Vesco is imprisoned in Cuba-he said Vesco decided on his own to live
there.
Notimex reports that Fidel Castro said he could not assure that he will attend a
parliamentary meeting in Uruguay because he must take precautions against a
probable assassination attempt.
The Medical Committee for the Prevention of Nuclear War sends letters to
Gorbachev and Reagan in observance of the recent unilateral Soviet decision to
suspend nuclear testing until January 1986.
TASS reports that Fidel Castro, in a press conference, described the Soviet
Union's decision as important in strengthening peace.
Syrian President Hafiz al-Asad and Fidel Castro exchange congratulatory cables
on the 20th anniversary of the establishment of.diplomatic relations.
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Juan Almeida meets with Guyana's Prime Minister Hamilton Green in
Georgetown to discuss themes of mutual interest and issues related to the
international and regional situations.
13 August At a welcoming ceremony for Ramon Castro, North Korea's Vice Premier Chong
Chun-ki reaffirms his country's close ties of friendship and solidarity with Cuba.
Politburo member Jorge Risquet arrives in Addis Ababa to discuss cooperation
between the two countries' political organizations and governments.
Water rationing measures are announced at a meeting in Havana due to the
intense drought. If there is no substantial rainfall soon, Havana will run out of
water by October or November.
Bahamian Minister of External Affairs and Tourism Clement Maynard is
presented to the members of the diplomatic corps in Cuba. Foreign Minister
Malmierca introduces the chiefs of mission to Maynard.
At a press conference in Montevideo, Brazilian President Jose Sarney confirms
that Brazil is considering reestablishing diplomatic relations with Cuba.
Fiseha Desta, member of the Workers Party of Ethiopia, Politburo, and
Secretariat, meets with Risquet to discuss Central America, Africa, and the
Nonaligned Movement.
The UN Committee on Decolonization approves a resolution reaffirming the
inalienable right of the Puerto Rican people to independence. The resolution was
submitted by Cuba and Venezuela.
16 August Raul Castro speaks at the ceremony commemorating the 60th anniversary of the
first Cuban Marxist-Leninist party, founded by Emilio Rodriguez Lara.
Raul Castro presents awards to Emilio Rodriguez Lara and Fabio Grobart at the
ceremony.
17 August Isidoro Malmierca receives Iraqi Under Secretary for Foreign Affairs Wisam
al-Zahawi to discuss bilateral relations and the international situation.
Isidoro Malmierca receives Budimir Loncar, Deputy Federal Secretary for
Foreign Affairs of Yugoslavia, to exchange views on bilateral cooperation and
international issues.
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Kim 11-song expresses support to Ramon Castro for Fidel's proposals on the
cancellation of the foreign debt and the simultaneous holdings of the coming
Olympic games in North and South Korea.
The 25th anniversary of the establishment of diplomatic relations between Cuba
and Poland is celebrated by the Cuban Institute of Friendship With the Peoples.
During a visit with Minister of External Economic Affairs Chong Song-nam,
Ramon Castro exchanges viewpoints on the future development of economic,
scientific, and technical cooperation.
Ramon Castro departs P'yongyang. Chong Chun-ki underscores the fact that
Castro's visit will contribute to the development of bilateral relations.
Pascal Allende, Secretary General of the Movement of the Revolutionary Left,
attends a ceremony in Havana for the 20th anniversary of that organization and
urges Chileans to unite against Pinochet.
22 August Chairman of the Provisional Military Administrative Council of Ethiopia
Mengistu Haile Mariam receives Risquet to discuss current international issues.
Risquet inspects the rehabilitation activities being carried out, the establishment of
new settlements, and other development activities during his visit to Ethiopia.
Prensa Latina reports that Cuba's oil output is growing and the country is
planning to pump' 2 million tons of oil in 1990, according to Basic Industry
Ministry estimates.
Guyana's 1st Vice President Desmond Hoyte receives a Cuban delegation headed
by Ursinio Rojas to discuss the need to continue strengthening bilateral ties
between the two countries.
Isidoro Malmierca meets with Mitsuro Donawaki, General Director of the Latin
America-Caribbean Division of the Japanese Foreign Affairs Ministry, to discuss
bilateral relations and foreign issues.
23 August Isidoro Malmierca arrives in Harare, Zimbabwe. In a press conference he says
Cuban forces will remain in Angola as long as South African aggression continues.
Malmierca meets with his counterpart, Witness Mangwende, and conveys a
message from Fidel Castro to Zimbabwean Prime Minister Robert Mugabe.
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24 August During a visit to Argentina, Vice Foreign Minister Raul Roa Kouri says that it is
Sub-Saharan Africa's turn to host the next Nonaligned Movement meeting.
India's Prime Minister Rajiv Gandhi says during an interview that relations
between India and.Cuba are characterized by cordiality and understanding.
25 August Angolan President dos Santos and Minister of External Relations Afonso Van
Dunem meet in Luanda with Jorge Risquet and Isidoro Malmierca.
Commander of the Revolution Ramiro Valdes and his delegation arrive in
Vientiane and meet with Gen. Sisavat Keobounphan, Secretary of the Lao
People's Revolutionary Party.
26 August Risquet also meets with SWAPO leader Sam Nujoma in Luanda. Nujoma tells
Risquet of SWAPO's recent military actions against South Africa.
The Central Organization of Cuban Trade Unions supports the Namibian people,
who are waging a battle under the SWAPO leadership to achieve their
independence.
Havana press announces that about 15,000 students (an increase over previous
years) from African nations and Nicaragua will receive their education on the Isle
of Youth this year.
27 August Valdes decorates Gen. Sisavat Keoboundphan with the Republic of Cuba
Friendship Medal and holds talks with Lao officials on security.
Fidel Castro presides over the graduation ceremony of over 1,300 new doctors.
Minister of Public Health Sergio del Valle and Politburo members Jose Ramon
Machado Ventura and Jaime Crombet attend.
President Reagan tells a Miami radio station that he has discarded the possibility
that the United States can improve relations with Cuba, reiterating his disapproval
of Cuban relations .with the USSR.
The Ministry of the Sugar Industry is investing almost 190 million pesos this year
to achieve greater efficiency, in sugar production.
In Caracas, Flavio Bravo says that Cuba has abandoned its proposal that Latin
American countries not pay their foreign debt because this stance is dividing
instead of uniting the nations.
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Kim 11-song, General Secretary of the Korean Workers' Party sends a
congratulatory message to Fidel Castro on the occasion of the 25th anniversary of
the estabishment of diplomatic relations.
Commander of the Revolution Ramiro Valdes arrives in Hanoi to attend the
activities commemorating Vietnam's independence, obtained in 1945.
Foreign Minister Malmierca visits Algeria to discuss topics to be tabled at the
nonaligned ministerial conference in Luanda, as well as bilateral relations with
Deputy Foreign Minister Noureddine Harbi.
Jorge Risquet conveys a message from Fidel Castro to Ghana's chairman of the
Provisional National Defense Council Jerry Rawlings. They discuss the
underdeveloped world's debt problem.
Havana press announces that Central Committee member Severo Aguirre will
head a delegation to the Inter-Parliamentary Union conference in Canada,
2-7 September.
President of Burkina Thomas Sankara meets with Jorge Risquet to discuss the
Third World external debt and the situation in Africa.
31 August President of Benin Mathieu Kerekou meets with Jorge Risquet, who delivers a
message from Fidel Castro.
At a press conference in Lima, Peruvian Foreign Minister Allan Wagner says his
government is confident that diplomatic relations with Cuba will be normalized
soon.
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