LATIN AMERICA REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00289R000201010001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 30
• Document Creation Date: December 22, 2016
• Document Release Date: July 5, 2011
• Sequence Number: 1
• Publication Date: January 31, 1986
• Content Type: REPORT

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Directorate of
Intelligence
Review
MASTER FILE CUPY
CO NOT GIVE OUT
Oil MARK Oil
Latin America
31 January 1986
)61
ALA LAR 86-004
31 January 1986
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Latin America
Review)
San Jose is displaying an ambivalent attitude toward Managua by
trying to safeguard national security interests while looking for a
way to defuse tensions with its powerful neighbor.
President Alfonsin's centrist Radical Civic Union has become the
major force in Argentine politics since the country returned to
democracy two years ago, but its continued success will depend on
Alfonsin's progress against pressing economic and political
challenges and the party's ability to overcome internal strife.
Buenos Aires's relations with Moscow center on trade ties, while
political and military contacts are carried out on a low-key basis.
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Guyana: Hoyte Strengthens His Position) 13
President Hoyte emerged from recent national elections firmly in
control of the ruling party, and he has appointed a Cabinet that may
be more moderate and more amenable to the United States than the
previous administration.
Colombia's Rogue Group: The Ricardo Franco Front) 15
The Ricardo Franco Front has emerged as one of the most violent
and strongly anti-US guerrilla groups in Colombia, but it has been
weakened by attacks from other guerrilla factions.
Secret
ALA LAR 86-004
31 January 1986
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Bolivia: Cabinet Changes
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government.
President Paz Estenssoro's first Cabinet shakeup, designed to
strengthen his economic advisory team and give the Foreign
Ministry a more active role, is likely to bolster confidence in his
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Mexico: Attorney General for Capital Resigns
Suriname-Libya: Cooling Relations
Costa Rica: Departure of US Firms
Development Portfolio Changes Hands
Nicaragua: Opposition Unity FaltersF-~
Insurgent Human Rights Activities
Venezuela: Expediting Foreign Oil Ventures
Production Staff, Office of African and Latin American Analysis,
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Articles have been coordinated as appropriate with other offices within CIA.
Comments and queries regarding this publication may be directed to the Chief,
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Costa Rica: Coping
With Nicaragua
Over the past year, San Jose has vacillated between
confrontation and accommodation with Managua.
Repeated Nicaraguan cross-border incursions have
fanned anti-Sandinista sentiment in Costa Rica and
prompted sharp protests from President Monge,
according to press and US Embassy reporting. At the
same time, however, San Jose sees its foreign policy
options to be narrowing, feeling pressured by the
United States to take a tough stance toward
Nicaragua but doubting the military prospects of the
anti-Sandinista rebels. Consequently, San Jose has
periodically sought an agreement with
Managua. Monge's successor, due to take office in
May, probably will display the same ambivalence as
he tries to safeguard national security interests while
looking for a way to defuse tensions with his powerful
neighbor.
Border Problems
The operations of Nicaraguan troops against the
rebels in the border area have led to frequent
incidents,
Managua, for example, has sent patrols and spies into
Costa Rica and kidnaped insurgent sympathizers
there. In the most dramatic incident, Nicaraguan
soldiers last May killed two Costa Rican civil
guardsmen, touching off a diplomatic crisis and
fanning anti-Sandinista sentiment. Press reports
indicate that some 90 percent of Costa Rican
respondents in recent polls believe Nicaragua
represents a threat to national security.
Costa Rica's small, ill-equipped, and poorly trained
security forces have left President Monge hard
pressed to establish control over the border region. In
response to repeated Sandinista incursions
culminating in the deaths of the two civil guardsmen,
he demanded an apology from Managua and referred
international public opinion and
sought reassurances that
Venezuela and Panama would honor prior promises to
defend Costa Rica in the event of an invasion. US
Embassy reporting indicates the President also
restricted insurgent activities and expanded US
training of the Civil Guard, and the US defense
attache reports that the national intelligence service
opened two new offices in the north. Nonetheless, the
Minister of Public Security in July said San Jose
would be unable to police its vast border adequately
even by tripling its forces, according to US Embassy
reporting.
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Narrowing Policy Options
US Embassy reporting indicates the Monge
administration was dismayed by the failure of the
OAS to acknowledge Sandinista responsibility for the
border incursion and killings last May. Moreover, 25X1
Latin American press charges that San Jose was
being unreasonable in demanding a Nicaraguan
apology prior to any bilateral discussions on border
issues added to a Costa Rican feeling of isolation,
according to the US Embassy.
The Costa Ricans, in our opinion, feel trapped 25X1
between the Sandinista threat and perceived US
pressure to stand up to Managua.
Costa Rican
officials believe the Sandinista regime is too well
entrenched to be ousted by the rebels alone and that a
US invasion is unlikely. Moreover, San Jose fears
most of the insurgents will retreat to Costa Rica when
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ALA LAR 86-004
31 January 1986
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they are defeated,) . The
US Embassy reports that the Monge administration's
tolerance for the anti-Sandinistas has been further
eroded by allegations of their involvement in arms
smuggling and various abuses.
As a consequence, Monge-his tough rhetoric
notwithstanding-has tried to reach an
accommodation with the Nicaraguans.
San Jose and Managua
worked intermittently last fall on a mutually
acceptable formula to ease border tensions, although
Nicaragua's refusal to admit responsibility for the
incident last May apparently frustrated the effort.
Monge's bid for an accommodation, in our view,
reflects public sentiment against becoming embroiled
directly in the Central American conflict. Despite
strong anti-Sandinista feelings, opinion polls indicate
most Costa Ricans favor neutrality. Both major
presidential candidates in the elections in February
moderated their earlier diatribes against Managua
and sought to outdo each other as devotees of peace,
according to press reports.
Outlook
In our opinion, San Jose will continue to vacillate
between standing up to the Sandinistas and quietly
seeking a face-saving way to reduce tensions. Both
Monge and his successor are likely to respond to
border incidents with strong words and both probably
will request additional US training and outfitting for
the security forces. At the same time, both will be
quick to seize on any opportunity that allows easier
relations with Managua without appearing to give in
to the Sandinistas.
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Argentina: Prospects for
the Radical Party
President Alfonsin's centrist Radical Civic Union
(UCR), traditionally the weaker of Argentina's two
main political parties, has become the major force'in
Argentine politics since the country returned to
democracy two years ago. The party's success in
congressional elections last November and Alfonsin'!.
enduring popularity have made the UCR a
counterweight to the long-dominant Peronist Party
and could bring Argentina closer to a strong, two-
party democratic system. The UCR's continued
success, however, will depend on Alfonsin's efforts tc
address pressing political and economic challenges
and on the party's ability to overcome internal strife.
Origins of the UCR
The UCR was formed in the 1890s as an alternative
to the parties of Argentina's ruling conservative elite.
The party grew rapidly in the first quarter of this
century by drawing on a burgeoning immigrant
middle class that identified with the UCR's
progressive and democratic ideology. With the rise of
Peronism, however, the UCR lost some of its middle-
class support and atrophied in many interior
provinces. Moreover, the Peronists were able to create
a new and powerful base by mobilizing the previously
passive working class, a development that, coupled
with the Peronists' appeal to other social sectors,
seemed to relegate the Radicals permanently to a
second-class status. For 30 years following Juan
Peron's accession to power, the UCR never won more
than 25 percent of the vote, and gained power only for
two brief interludes when the military had proscribed
the Peronists from participating in elections.
The UCR Under Alfonsin
In the elections in December 1983-the first after
seven years of military rule-UCR presidential
candidate Alfonsin upset his Peronist opponent by
winning an overwhelming 52 percent of the total vote.
According to the US Embassy, the massive pro-UCR
turnout was partly a response to the poor performance
of the Peronists in the last civilian government of
1973-76 and to their ties to the discredited military
regime, but it also reflected Alfonsin's deliberate
attempts to court working-class and left-of-center
voters traditionally linked to Peronism. In addition,
the UCR's aggressively antimilitary platform and
Capitalizing on the momentum gained in the election,
Alfonsin and other UCR leaders continued to
strengthen the party by expanding its geographical
base into the interior provinces and enhancing its
standing among its new voters. For example, Alfonsin
began a food stamp program catering to the poor,
which was often administered as much by the UCR
party apparatus as by the governmental bureaucracy.
The US Embassy reports that the President's
subsequent moves to reduce inflation under an
austerity plan reinforced his image as a strong leader.
The trials of former military junta members for
human rights abuses also served to increase both
Alfonsin's popularity and that of his party.
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ALA LAR 86-004
31 January 1986
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Table 1
Election Results: 1973-85
Percent of
Seats in
Percent of
Seats in
Percent of
Seats in
Votes
Congress
Votes
Congress
Votes
Congress
Statistics represent results of March election. A second election
was called in September to allow Juan Peron, who returned to
Argentina from exile, to run for president. The Peronists won 67
percent of the total vote in the September election.
b Total number of seats in Congress were expanded in 1983.
The UCR's efforts paid off in off year congressional
elections last November, when the party won 43
percent of the vote, as opposed to the Peronists' 35
percent. Although the Radicals' share of the vote
declined from their 1983 total, the party increased its
support in several key interior provinces formerly
dominated by the Peronists and gained one seat-
compared to the Peronist loss of 10-in the Chamber
of Deputies.' As a result of its second electoral
drubbing in two years, the Peronist Party splintered
into additional quarreling factions and is only now
beginning the arduous task of reconciliation and
reorganization, according to Embassy and press
reports.
Party Factionalism
The UCR has suffered from factionalism almost since
its inception. In the 1950s and 1960s, personal and
ideological disputes split the party in two, seriously
' The results were partly because of the less highly polarized
atmosphere of the 1985 election, which allowed numerous small
parties on the left and the right to cut into both the Peronist and
Radical electorate. Also, the UCR's drop from 1983 to 1985 was
not as precipitous as these figures suggest, since the party's total in
the 1983 congressional contest-held concurrently with the
reducing the UCR's ability to compete with
Argentina's traditional powerbrokers, the Peronists
and the military. The UCR has also been plagued by
differences between the party machine in Buenos
Aires and UCR leaders in the more remote provinces,
who often act independently of party leadership,
according to the US Embassy. The most serious focus
of dissent, however, is within the country's industrial
and agricultural heartland of Cordoba and Santa Fe
provinces.
The President's Renovation and Change faction-
strong in Buenos Aires Province and the Federal
Capital-is presently the most important group in the
UCR. Alfonsin founded this faction as an alternative
to the conservatism of the UCR under its former
leader, the late Ricardo Balbin. Although the
faction's roots were left-of-center, the US Embassy
and the press report that it has become more
moderate over time. Alfonsin, despite having been
elected on a populist platform, has begun to follow
more pragmatic policies, embodied primarily in his
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Table 2
Radical Party Factions
Raul Alfonsin Leading faction in UCR; power centers on
Juan Manuel Casella Alfonsin.
Ricardo Barrios Arrechea
Cordoba Line Victor Martinez
Eduardo Angeloz
Luis Caceres
Federico Storani
Enrique Nosiglia
National Integration Movement (MIN) Juan Carlos Pugliese
Antonio Troccoli
Linea Nacional (LN) Fernando de la Rua
Cesar Garcia Puente
Associated with Renovation and Change; cen-
tered in Cordoba Province; may gain status if
Angeloz becomes UCR candidate for presi-
dent in 1989.
Part of Renovation and Change, but more
leftist; some elements within distancing them-
selves from Alfonsin; members represent
younger generation of Radicals.
Minor, conservative faction; tied to old UCR
party under Balbin.
Most conservative faction in UCR, loosely
aligned with MIN.
Minor conservative faction, strongest in Cha-
co Province.
economic austerity program. More doctrinaire
members of the faction-who favor the UCR's
traditionally statist economics-are still influential
and have lent only tepid support to Alfonsin's new
moderation. This has prompted the President to refer
to his supporters as the Historical Renovation and
Change faction, distinguishing them from his critics
within the faction. We believe that the leftists in
Renovation and Change have little chance of gaining
control while Alfonsin's popularity remains high, but
will continue to hinder efforts to build factional and
party unity.
Rivaling Renovation and Change is the National
Coordinating Committee faction, known as the
Coordinadora. Athough formally part of Renovation
and Change, the US Embassy reports some
Coordinadora members are becoming increasingly
critical of Alfonsin and his faction and are trying to
distance themselves from the President. The
Coordinadora represents the younger, up-and-coming
politicians in the UCR and is generally more leftist
than Renovation and Change. However, Embassy and
press reports indicate that the most pointed criticism
of Alfonsin stems from a subfaction within the
Coordinadora led by congressmen Luis Caceres and
Federico Storani. Other, more moderate
Coordinadora members, such as party leader Enrique
Nosiglia and congressman Marcelo Stubrin, continue
to support Alfonsin strongly, and have effectively
mobilized the UCR's rank and file behind the
austerity plan. Coordinadora and Renovation and
Change leaders are trying to iron out their
differences, but we believe that the talks may founder
because of the Coordinadora hardliners' opposition to
Alfonsin's moderate policies. This could spur some
leftist Coordinadora members to formally sever their
ties to the President's faction over the next year.
A smaller group of growing importance is the center-
right Cordoba faction, which dominates local politics
in populous Cordoba Province and is loosely aligned
with Renovation and Change. This faction gained
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Luis "Changui " Caceres ... about 44 ...
congressional deputy from Santa Fe Province and the
Coordinadora member most critical of President
Alfonsin ... recognizes Alfonsin's leadership but
urges the President to make greater use of the art
apparatus, reports the US Embassy .
candid .
~. relishes political battles
... wishes to transform the UCR into Argentina's
third great populist movement ... may be positioning
himself to run for the Santa Fe governorship in 1987,
according to Argentine press reports.
prominence by providing Alfonsin's running mate in
1983, Vice President Victor Martinez. The faction
may become even more prominent in the future; the
press frequently mentions Eduardo Angeloz, the
popular Governor of Cordoba Province, as one of the
UCR's most likely candidates in the 1989 presidential
election.
The remaining factions in the party play minor roles,
although their leaders are nationally prominent
politicians. According to press reports, the three
rightist factions-offshoots of the old, conservative
UCR of Ricardo Balbin-are attempting to build a
united front as a counterweight to Renovation and
Change and the Coordinadora. The US Embassy
reports these factions have little chance of success in
the near term, but could become prominent again if
Eduardo Angeloz ... 54 ... Governor of Cordoba
Province and leader of the UCR's Cordoba faction
... nationally recognized as an important force in the
party and the UCR's most influential governor ...
dynamic. and charismatic politician widely regarded
as a potential UCR contender for president after
Alfonsin completes his term ... enjoys good
relationship with Alfonsin ... seen as an independent
thinker within the Radical movement ....firm
believer in closer ties to the United States ... former
national senator ... has held numerous provincial
party posts.
For or Against Alfonsin
Although dissent between and within UCR factions is
serious, we believe that, from the US perspective, the
most important schism in the party is that between
Alfonsin and his critics. Most militants in Renovation
and Change and the Coordinadora, aligned with the
minor conservative factions, generally back the i
President, while the leftist and doctrinaire statist
minorities in both Renovation and Change and the
Coordinadora have frequently questioned Alfonsin's
Alfonsin loses control of the party.
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The pro-Alfonsin group within the UCR favors
continued inflation-control measures and seek close
cooperation with the IMF and creditor banks in
managing Argentina's $50 billion debt. The group
also generally supports ending the human rights issue
with the sentencing of the junta members and a
handful of other offenders, while issuing some sort of
amnesty for junior and midlevel officers. Party
leftists, however, clamor for more expansionary
economic policies and a moratorium or repudiation of
foreign debt payments, while urging trials of all
military officers accused of human rights violations.
Alfonsin's supporters are currently in firm control of
the party and enjoy broad popular support for their
policies. While the President's opponents are not
vigorously challenging the government, they are
quietly promoting leftist alternatives should Alfonsin's
expanded by 10 to allow participation by leaders from
interior provinces in which UCR has recently gained
substantial support.
The UCR, in our view, will remain a basically
nonideological, centrist party under the firm control
of Alfonsin. Although the Coordinadora may continue
to be a significant force, the power of its more leftist
leaders appears to be diminishing. For example, the
press reports repeated, successful efforts by
Renovation and Change militants to exclude most
leftist Coordinadora leaders from government jobs.
Moreover, the US Embassy reports that in the recent
congressional elections, many of the Coordinadora's
leftist members-as well as some of the non-Alfonsin
supporters within Renovation and Change-did
poorly, indicating the public's preference for more
moderate approach fail.
Outlook
We believe that Alfonsin has a good chance of
successfully resolving the sensitive issues of human
rights abuses and government relations with the
military, thereby fortifying Argentina's young
democracy. Alfonsin will also probably keep the
economy on an even keel over the next year, avoiding
the hyperinflationary chaos prevelant before the
imposition of the austerity plan last June. Under such
conditions, the Radical party will remain an
important counterforce to Peronism, strengthening
the prospects for the development of a strong, two-
party constitutional system in Argentina.
We believe that the UCR will continue to expand its
support modestly over the coming year. The party has
targeted the interior provinces, the labor movement
and youth for growth-all areas where the Peronists'
control is slipping. Moreover,
Alfonsin hopes to broaden his base by working with
individual leaders of the opposition. In a speech to the
UCR annual Governing Board meeting in November,
the President called for a "democratic pact,"
emph'asizing the importance of continued party unity
and the need to cooperate with moderate opposition
leaders. Alfonsin will also cultivate ties to UCR
politicians at the provincial level and in factions other
than Renovation and Change. For example, the
number of seats on the Governing Board has been
moderate and pragmatic politicians.
This outlook, however, could shift abruptly in the face
of a severe economic crisis or, less likely, an
unsatisfactory resolution of the human rights
controversy. A return to hyperinflation or a drawn-out
series of tension-generating military trials could lower
the popularity of the President and his party and give
the Peronists and the military ammunition to use
against the government. More important, a weakened
Alfonsin might permit party dissidents-many of
whom are touting economic nostrums that the
President himself once supported-to exert greater
power, moving the UCR significantly to the left. Such
a move would mean that both major political parties
in Argentina would be leftist or populist, enhancing
the chances of major confrontations with foreign
creditors and the return of ultraconservative armed
forces to an active role in politics.
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Argentina-USSR:
Relations Under Alfonsin
Argentine-Soviet Bloc relations revolve around the
exchange of Argentine agricultural exports for hard
currency. Buenos Aires' suspicions concerning
Moscow's political motives have tempered other
connections, while the Argentine military's staunch
anti-Communism has thwarted Soviet arms sales. A
visit to Moscow by Foreign Minister Caputo this
month and a planned trip there by President Alfonsin
this October are intended to underline the trade
relationship. We do not expect the visits to lead to any
significant change in the low-key political and
military ties between the two countries.
Table I
Argentina: Trade With the USSR, 1984
Lopsided Trading Relationship
The USSR is the single largest buyer of Argentine
exports. During 1984 Moscow purchased $1.27 billion
of agricultural goods from Buenos Aires-15 percent
of Argentina's total exports,
Soviet exports to Argentina (mostly industrial items)
totaled only $36 million. This severe trade imbalance
in Argentina's favor is the principal irritant in
bilateral relations. Moscow has been pressing Buenos
Aires for redress for several years, and we believe this
dissatisfaction may have contributed to the 22-percent
reduction in Soviet purchases of Argentine grain
during 1984.
Buenos Aires has made modest gestures to reduce the
imbalance over the past year. It awarded $80 million
in contracts for the purchase of Soviet highway
construction equipment and accepted Moscow's bid to
electrify a railroad branch line. In addition, a Soviet
trade official announced in September the sale of 670
jeeps and trucks to Argentine state energy
corporations, and the press reports that Argentina will
purchase Soviet crude oil this year for resale to
Scandinavian countries. According to other press
reports, Buenos Aires will purchase $500 million in
machinery from the USSR during the next five years.
Such efforts have smoothed the way for a new long-
term agreement on grain that renews the Soviets'
a Total: $1.27 billion.
b Total: $36 million.
annual commitment to buy 4 million metric tons of
corn and sorghum and 500,000 metric tons of
soybeans through 1990.
Nevertheless, we believe that Alfonsin, concerned
over the political implications of the expanded Soviet
role in the Argentine economy, has been reluctant to
award Moscow large transportation and
infrastructure development contracts that it has been
seeking. Moreover, the Argentines have been
unimpressed with the quality of Soviet goods and the
technical level of their engineering proposals. The US
Embassy reports, for example, that both political
factors and technical flaws caused Buenos Aires to
reject Soviet participation in a major project to
expand and modernize the port of Bahia Blanca-
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despite advantageous financing terms and the option
of payment in grain-in favor of a World Bank
proposal. We judge that these problems will also
hamper Moscow's efforts to participate in the
construction of a gas pipeline to Sao Paulo that Brazil
and Argentina are considering.
Financial ties between the two countries are not very
extensive. Neither the Soviet Government nor Soviet
banks in the West have participated in funding
Argentina's $50 billion foreign debt, and Buenos
Aires's demands that Moscow pay for its imports on
delivery in hard currency. There is a longstanding
trade credit program to promote Argentine purchases
of Soviet equipment, but it has only been used once
since 1980, to finance the purchase of Soviet
hydroelectric turbines.
Argentina allows Soviet fishing vessels to use the port
of Buenos Aires as a base for crew changes, repairs,
and general maintenance. As provided in a 1984
agreement between the two countries, a state-owned
Argentine firm performs technical maintenance on
these ships in conjunction with a Soviet firm that
employs its own 70-man service crew in port.
According to Soviet standard
operating procedure, Moscow uses fish-processing
factory ships permanently stationed in the port for
electronic eavesdropping.
Minimal Political Ties
Political relations between Moscow and Buenos Aires
are correct but not particularly close. Moscow has
largely limited its activities to supporting any moves
by Alfonsin that might eventually steer Argentine
foreign policy in an anti-American direction, such as
the President's involvement in the New Delhi/Group
of Six disarmament initiative. For its part, Argentina
tries not to antagonize Moscow while pursuing a
basically pro-Western foreign policy. Buenos Aires
has responded to most Soviet political overtures-
such as the visit by a Supreme Soviet delegation last
June-in a cordial but evasive fashion. The US
Embassy reports that the government wants to keep
political ties at the lowest level required to safeguard
the lucrative commercial relationship.
Moscow has generally kept its distance from leftist
subversives such as the Montoneros or the People's
Revolutionary Army (ERP), even when these groups
were at their strongest during the mid-1970s. The
Soviets, in our view, probably believe that any
advantage they might gain by helping Argentina's
miniscule leftwing terrorist groups to reorganize
would pale compared to the damage such activity
could inflict on official relations. The Kremlin's
chosen vehicle of influence inside Argentina remains
the slavishly pro-Moscow Communist Party (PCA)-
an isolated and ineffectual group lacking significant
influence in either political or labor circles.
Moscow funds the party's
consistently lackluster election campaigns, channels
money to the PCA newspaper, and sponsors visits by
Argentine Communists to events such as last
summer's Moscow Youth Festival.
Wooing the Argentine Military
Over the years, Moscow has made numerous
unsuccessful attempts to expand its military
equipment sales in South America, where Peru has
been the only Soviet customer. We believe that the
Soviets view Argentina as a penetrable market
because of the difficulties Buenos Aires has had in
securing Western materiel since the Falklands
conflict. Moscow, in our view, is also anxious to sell
military equipment-including fighter and transport
aircraft-to increase its export earnings.
One of the more recent overtures occurred last
November when,
e USSR offered
attractive credit terms and guaranteed to underbid
the price of any comparable fighter on the
international market.
land that
Buenos Aires permit a large Soviet support mission in
Argentina. Buenos Aires was unresponsive, and Soviet
officials have since adopted a more low-key approach,
including promotional demonstrations of at least two
types of transport aircraft in Argentina.
Most Argentine officers are intensely anti-
Communist and have expressed their strong
preference for US and European equipment and
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Table 2
Argentina: Trade With Eastern Europe
trainin There is some
evidence, however, that elements within the Air Force
and Army are at least beginning to show mild interest
in Soviet technology.
may have taken advantage of his visit to Lima
for President Garcia's inauguration to inspect the
Peruvian Army's Soviet-made materiel.
Relations With Eastern Europe
East European countries compete vigorously with one
another and the USSR to export to Argentina.
Because of the relatively small value of their imports
from Argentina, however, these countries lack
Moscow's leverage in trade negotiations with Buenos
Aires. The Soviets, for example, obtained a railroad
electrification project at the expense of Yugoslavia-
the original leading candidate for the deal-and won
contracts for highway construction equipment sought
by East Germany.
East Bloc trade with Argentina follows the Soviet
pattern, although the imbalance in Buenos Aires'
favor is not so pronounced. Warsaw Pact countries
manufacture little that Argentina vitally needs or
could not obtain elsewhere on better terms, and the 25X1
Bloc's push for credit or barter purchases further
inhibits commercial relations. Nevertheless, a few
modest trade initiatives have prospered over the past
year. In October, Bulgaria secured the right to
distribute Argentine meat in the Middle East and to
establish a tannery in Chaco Province; in return Sofia
plans to purchase $150 million in corn, wheat, and soy
pellets. Czechoslovakia agreed to purchase at least
150,000 to 200,000 metric tons of soy pellets,
according to press reports, without requiring
Argentine purchases of Czechoslovak goods in return.
The Polish Steamship Company recently
commissioned eight modern bulk carrier ships to be
built in Argentina. Meanwhile, the Argentine-East
German trade commission failed to meet during the
past year because of the lack of trade opportunities.
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Outlook
Buenos Aires's continued need for hard currency to
finance its foreign debt will, in our view, spur
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relationship with Moscow. We believe that Argentina
will modestly increase its purchases from the USSR
over the next few years to address Soviet concerns
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over the trade imbalance. Moscow, however, will
readily decrease purchases whenever it has a good
harvest or when it is dissatisfied with Argentine grain
quality, shipping ability, or price, and alternative
supplies are available. For example,
the Soviets recently discontinued talks
Argentina's current, water-damaged crop.
The Argentine military remains, in our view, strongly
suspicious of Soviet political motives, and any arms
sales over the near term are likely to be restricted to
dual-use or low-technology items that would not
require Soviet training or maintenance. In the longer
run, however, if Argentine military equipment and
capabilities continue to deteriorate at the current rate
and financial strictures endure, Buenos Aires is likely
to consider Soviet offers more favorably. In addition,
Argentina may, at any point, use the threat of
purchasing Soviet combat weapons to pressure the
United States to act on stalled arms transfer issues.
In our view, Moscow's prospects for greater political
influence in Argentina are bleak. We believe Alfonsin
will continue to maintain correct political ties to the
Soviets to further Buenos Aires's economic interests,
but more substantial cooperation is unlikely. Moscow,
however, would almost certainly seek to exploit a
dramatic loss of support for Alfonsin or other signs of
realizes, however, that such a turn of events would
likely lead to a military or civilian government even
less sympathetic to expanding ties to the USSR. F
The Soviet Union is making its greatest economic
headway in Argentina at the provincial level. The
austerity measures undertaken by Alfonsin have
reduced revenue transfers from federal to provincial
coffers, thereby aggravating the provinces' chronic
budget deficits. Some provincial governments-
unencumbered by the foreign policy constraints faced
at the national level-have sought to alleviate
financial strictures by courting Soviet trade and
investment. To the best of our knowledge, the federal
government has not attempted to limit this activity.
Examples of recent provincial dealings with the
USSR include:
Mendoza-The provincial government purchased
antihail rockets and trolleys from the Soviet Union,
and sold 15,500 tons of wine to Moscow.
Formosa-Local authorities will receive a
$30 million credit from the USSR to implement the
Laguna Yema irrigation project. Terms include
10-year financing with a two-year grace period and an
interest rate of 6 percent, according to press reports.
Buenos Aires-The provincial governor traveled to
Moscow in December, where he discussed the
delivery of turbines for the Bahia Blanca
thermoelectric plant. He is considering a Soviet offer
to equip the plant's substations, and expressed
interest in purchasing goods for petrochemical plants
to be constructed in Bahia Blanca and Ensenada,
according to the press.
Entre Rios-The governor met with the president of
the Argentine-Soviet Chamber of Commerce last
December to discuss the possibility of establishing an
agreement to exchange goods between his province
and the Soviet Union.
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Guyana:
Hoyte Strengthens
His Position
President Hoyte-despite domestic criticism of
fraudulent electoral procedures-emerged from
national elections on 9 December in a strengthened
position. Domestic opposition-while still vocal-
appears to be losing momentum. Remaining firmly in
control of the ruling party, the President has recently
appointed a Cabinet that the US Embassy in
Georgetown says appears more moderate and
potentially more amenable to US interests.
The elections, which produced a landslide win for
Hoyte's People's National Congress (PNC), have
drawn strong criticism from opposition elements
within the country. Prior to the balloting, Hoyte
restricted overseas and proxy voting and abolished
postal voting, avenues which opposition parties
contended had facilitated fraud in the past.
Nevertheless, on election day People's Progressive
Party (PPP) leader Cheddi Jagan-after charging
that the ruling party had barred authorized opposition
agents from polling stations, disenfranchised voters,
and promoted multiple voting-withdrew from the
electoral process.
The election was conducted peacefully and the
Embassy says that fraudulent practices were far less
in evidence than in past elections.
Opposition Alliance Fraying
A five-party alliance of opposition leaders formed on
9 January already is weakening. The Patriotic
Coalition for Democracy comprises the pro-Soviet
Marxist PPP, the People's Democratic Movement,
and the pro-West Democratic Labor Movement, and
the National Democratic Front. In our view, the lack
Results of 9 December
1985 Election
People's National
Congress (PNC)
228,718
78.5
42
People's Progressive
Party (PPP)
45.926
15.8
8
United Force (UF)
9,810
3.4
2
Working People's
Alliance (WPA)
4,176
1.3
1
Democratic Labor
Movement (DLM)
2.157
People's Democratic
Movement (PDM)
232
National Democratic
Front (NDF)
156
of ideological common ground makes it unlikely that
the alliance will be able to hold together long enough
to mount effective opposition to Hoyte's government.
Attendance at the coalition's second protest rally was
only about half that of the initial one and the
Embassy speculates that the election issue-the glue
holding the alliance parties together-already is
losing its effectiveness. Moreover, the PPP-the
largest opposition group in Guyana and key element
in the alliance-continues to lose ground and most
observers believe that unless it is able to strengthen its
leadership and attract younger voters, its effectiveness
will continue to diminish. Party leader Jagan's call for
a general strike following the PPP's defeat at the polls
drew little public reaction. Members of the Guyana
Agricultural and General Workers Union-also
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headed by Jagan-struck the country's sugar estates
briefly but with little effect because most of the sugar
crop had been harvested. Further urgings by Jagan
for mass actions aimed at overthrowing the
government have been ignored.
Other independent and opposition union leaders
reportedly are abandoning efforts to organize
opposition in the labor sector.
morale among the six independent and
opposition trade unions is extremely low. This is in
part a reflection of being outnumbered three to one by
the pro-PNC unions in the Trade Union Congress-
the umbrella organization to which all Guyanese
unions belong.
Church-state relations-after a brief easing of
tensions when Hoyte first took office last August-
began to deteriorate again after church officials
openly criticized the PNC's handling of the election.
The government responded by expelling an outspoken
British Jesuit priest and ordering security forces to
search the homes of leading churchmen for arms and
ammunition. Efforts by regional church officials to
investigate the situation enabled Hoyte to dismiss the
matter as outside intervention in Guyana's domestic
affairs. As a result, relations appear to be returning to
a state of quiet animosity such as characterized the
church's relations with the predecessor Burnham
regime
Some Signs of Moderation
Government policies in some areas, however, reflect
signs of greater balance. The Embassy sees some
warming of relations with the United States and
reports that the local press has taken a more
evenhanded approach to reporting on the United
States and the Soviet Union. In recent speeches,
Hoyte has urged improved relations with Washington.
He also recently fired a news editor from the
government-run radio station for allowing the
broadcast of an anti-US editorial by an opposition
group. Hoyte's newly appointed Cabinet members
seem to have been chosen for their technical
competence rather than their political convictions,
although most ministers have strong PNC roots. The
pro-Cuba and pro-Soviet elements, led by Richard
Van West-Charles and Elvin McDavid-both of
whom have been demoted and reportedly are
scheduled to depart Guyana soon-appear to have
lost their influence. Ruling party moderates have the
upper hand in decisionmaking, and we expect that
under Hoyte's leadership the government will pursue
more pragmatic domestic economic policies and a
more balanced foreign policy.
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Colombia's Rogue Group:
The Ricardo Franco Front
The Ricardo Franco Front (RFF)-an offshoot of the
Revolutionary Armed Forces of Colombia (FARC)-
emerged as one of the most violent guerrilla groups in
Colombia during the past year. The RFF engaged in
numerous urban terrorist operations-including
bombings, assassination attempts, and kidnapings-
after it began activities in May 1984. The RFF has
also been one of the most violently anti-US guerrilla
groups in Colombia, claiming responsibility for three
separate coordinated bombings against US diplomatic
and business facilities.
The group probably has peaked, however, as it
appears to be the target of attacks by other guerrillas.
Last December more than 130 men, women, and
children-many wearing RFF uniforms-were
discovered in several mass grave sites in the
Department of Cauca. RFF leader Javier Delgado
took responsibility for the massacre, claiming it was
an attempt to purge presumed Army infiltrators-a
claim quickly denied by the military. The impact of
the purge on the RFF has apparently been
devastating. Although Delgado reportedly still claims
leadership, dissident RFF leaders in Medellin recently
released a communique announcing that the group
had split and that a new national directorate had been
formed. Moreover, the M-19 guerrilla group has
publicly denounced Delgado and called for the group's
expulsion from the fledgling National Guerrilla
Committee.
Origin and Organization
The RFF was created by dissident FARC members
who broke away after the group signed a cease-fire
agreement with the government in March 1984.
Delgado, a
former FARC commander, founded the RFF with a
large sum of money-reportedly at least $500,000-
stolen from FARC coffers. Tension between the two
groups has since led to violence. The FARC
reportedly killed at least 16 RFF members in two
separate attacks on RFF camps last summer. The
RFF responded by declaring war against the FARC
Whether the recent massacre was the result of an
internal purge or a FARC-RFF feud may never be
fully determined.
leaders apparently participated in the planning to
eliminate M-19 dissidents who had joined the RFF.
If true, this scenario could be an ominous sign that
the FARC and the M-19 are trying to clean their own
houses before embarking on a united guerrilla
campaign against the government.
and attempting to assassinate three leaders of its
political parent group, the Communist Party of
Colombia.
RFF membership was estimated at 450 before the
purge, but the desertions and recruiting problems
likely to be caused by the massacre probably will
continue to reduce its numbers. Its members are
probably not strongly ideological:
the RFF pays its members
approximately $115 a month in a country where the
minimum wage is only $77 a month. The group uses
kidnaping and extortion to finance itself.
The RFF has been most active in Bogota, where the
group has conducted eight of its 13 terrorist
operations to date. RFF cells reportedly also exist in
10 departmental capitals; and there is a rural RFF
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ALA LAR 86-004
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front, called the Western Front, in the area of
Santander de Quilichao and Tima in Cauca
Department. This rural front conducts training
courses that last approximately a month.
The section or cell is the smallest organizational unit
in the RFF. Each cell consists of four persons under
the command of the cell leader. Three cells comprise
one squad, and two squads form a guerrilla band. The
next largest unit, the company, is composed of two
guerrilla bands, totaling 48 persons. Three companies
make up a front, led by a member of the national
directorate, based in Cali, which manages cells,
squads, and companies at the regional level.
The M-19 Connection
The RFF evidently has had close links to the M-19,
but the exact relationship between the two groups is
difficult to determine.
the groups were originally connected
through the Pizarro brothers-Hernando, the first
RFF leader, and Carlos, a top M-19 leader.
Hernando Pizarro
planned most of the early RFF operations, against
targets that were selected by the M-19. The fraternal
link was severed when the RFF Central Committee
elected new leaders a year ago and Hernando Pizarro
opted to join his brother in the M-19.
The two groups continued to work together after
Hernando left and conducted coordinated attacks in
five cities in late March.
this cooperation was expanded in September when the
RFF joined a newly formed national guerrilla alliance
led by the M-19. Moreover, in October these two
groups and the Quintin Lame guerrilla group
reportedly integrated their forces in several insurgent
operations.
Ties between the two groups, however, have been
weakened by the RFF purge. M-19 leaders recently
demanded that the RFF be expelled from the national
guerrilla alliance, despite an announcement by RFF
dissidents that new leaders have been selected.
Capability
A series of bold attacks conducted in Bogota last May
marked the emergence of the RFF as a serious threat.
An estimated 30 to 50 guerrillas attacked four police
installations with rockets, dynamite bombs, grenades,
and small arms, while diversionary bombings
occurred simultaneously at other locations around the
capital. Police repelled the attacks and killed four
guerrillas, but were surprised by the extent of
coordination, the number of guerrillas involved, and
the weapons they used.
Colombian police made two discoveries during the
past eight months that also demonstrate the
sophisticated capabilities of the RFF:
? In May, police confiscated M-1 and M-2 carbines,
shotguns, ammunition, boobytraps, and dynamite at
an RFF operations base in Dosquerbradas,
Risaralada.
? In October, a police raid in Bucaramanga uncovered
four M-1 carbines, a .45-caliber Ingram
submachinegun, a 9-mm Uzi, two unidentified
9-mm submachineguns, five fragmentation
grenades, detonating cord, ammunition, and a
pickup truck rigged as a car bomb.
Most activity by the RFF, however, has consisted of
small-scale operations with high propaganda impact.
Moreover, the group still exhibits a lack of
professionalism in some of its terrorist operations. For
example, it has made three unsuccessful attempts to
assassinate PCC leaders, and in the most recent
attempt, a machinegun attack, the target received
only a leg wound. In January, the group released a
hostage without receiving a ransom payment after it
learned it had kidnaped the wrong person.
Prospects
In an attempt to recover from the massacre, dissident
RFF leaders are trying to turn those responsible over
to "revolutionary justice" and to regroup the
organization. Without new recruits or support from
other Colombian guerrilla groups, the RFF is unlikely
to return to the previous levels of its armed campaign
soon. It may, however, try to demonstrate its viability
by engaging in a spectacular terrorist operation.
Although no recent reporting suggests that the RFF
intends to target US interests, terrorist attacks
against US property and personnel cannot be ruled
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out. The RFF is much more likely to concentrate on
Colombian political targets-including the PCC and
the FARC's political party, the Patriotic Union-
during the forthcoming elections.
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Bolivia: Cabinet Changes
President Paz Estenssoro's first Cabinet reshuffle, on
22 January, is likely to bolster confidence in his
government at a time when the nation faces
unpopular austerity measures. The President's key
appointments and his restructuring of some ministries
are designed primarily to strengthen his economic
advisory team and to give the Foreign Ministry a
more active role in managing Bolivia's foreign
economic relations.
Former Senate president Sanchez de Lozada, who has
been an outspoken critic of policies he considers
inflationary, is the new Planning Minister. Juan
Cariaga, a prominent banker, has pledged as the new
Finance Minister to end hyperinflation and sign an
IMF agreement. The new Foreign Minister,
Guillermo Bedregal, was one of the architects of the
administration's current austerity measures in his
previous assignment as Planning Minister. He
reportedly now intends to expand Bolivia's
commercial presence in key countries and to solicit
foreign credits. To achieve this, he intends to create
the new position of under secretary for economic
affairs.
According to the US Embassy, Paz Estenssoro
intends to make other structural changes in the
Cabinet to streamline it and to place more emphasis
on under secretary positions. This includes folding the
Ministry of Integration into the Ministry of Planning
and placing the Ministry of Aeronautics under the
Ministry of Transportation.
The only weak appointment, according to a
preliminary review by the Embassy, is that of the new
Agriculture and Campesino Affairs Minister, Edil
Sandoval Moron, who reportedly knows nothing about
agriculture or peasants and has been linked to the
narcotics trade. The choice, which has not been
explained, may indicate that Paz Estenssoro intends
to take a more direct hand in dealing with the
campesinos. It could also mean that the President
plans to direct antinarcotics efforts through his
Interior Minister, Fernando Barthelemy, given the
political importance of rural support for Paz
Estenssoro's own party and the emphasis he has
placed on antinarcotics policies.
Paz Estenssoro was careful to clear his Cabinet
changes in advance with Hugo Banzer, leader of the
major opposition party, who in turn notified the US
Embassy. The opposition's tactical alliance with Paz
Estenssoro's minority government apparently remains
Secret
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Latin America
Briefs
Venezuela Expediting Foreign Oil Ventures
The Venezuelan state oil company (PDVSA) has accelerated its plans to acquire
refining and distribution facilities abroad to protect its share of international
petroleum markets, according to US Embassy reports. PDVSA is said to be
concerned that Saudi Arabia's attempt to force oil exporters to accept production
limits by engineering a temporary decline in prices may backfire. Venezuela fears
that, instead, the result could be an extended period of cutthroat competition and
sharply reduced prices. As a precautionary measure, PDVSA has expedited
pending agreements on joint venture deals with two refiners-one in Sweden and
one on the US Gulf Coast-and with a Washington area oil products distributor.
Reportedly, these investments will give PDVSA an assured outlet for about
200,000 barrels per day (b/d) of exports-in addition to exports of 150,000 b/d to
Veba Oel, PDVSA's West German partner. According to the Embassy, additional
deals are under consideration, with PDVSA's ultimate objective being 600,000
b/d of assured exports to joint ventures abroad. Neither the acquisition costs nor
the sources of financing for these deals have been reported, but the required
foreign exchange outlays are likely to be formidable, further straining dollar
reserves as oil revenues fall.
Development Portfolio Changes Hands
In a move apparently intended to quiet critics of the administration's economic
adjustment program, President Lusinchi replaced Hector Hurtado as Development
Minister and gave the powerful post to party insider Jose Angel Ciliberto. The
President reassigned Hurtado, a skilled technocrat widely viewed as the chief
architect of the adjustment measures, to head the less influential Venezuelan
Investment Fund. Although the program has achieved notable successes in
correcting the nation's external payments accounts-a key factor in persuading
Venezuela's bank steering committee to agree to a multiyear debt rescheduling-it
has not yet been able to brake a seven-year recession that has seen per capita
income plummet by 20 percent and unemployment grow to a worrisome 12.5
percent. Labor and the executive committee of the ruling party have subjected the
Lusinchi administration to intense criticism because of these shortcomings.
In replacing Hurtado, who had become closely identified with austerity, the
President apparently acceded to the advice of ruling party chieftains, who are
already looking toward the 1988 elections. They probably argued that a
development minister more in sympathy with the recently adopted three-year
investment program is essential to reviving the stalled economy. Hurtado had
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opposed a similar proposal early last year on the grounds that it was inconsistent
with austerity. For the "orthodox" faction that now controls the ruling party,
economic recovery is a political imperative, if the bid of populist former President
Carlos Andres Perez for the 1988 presidential nomination is to be forestalled.
Nicaragua
Opposition Unity Falters
as inactive and want to see it restructured.
Divisions between member parties of the opposition coalition over strategies for
dealing with the Sandinistas came to a head recently when the coalition leadership
publicly criticized the Social Christian Party for engaging in Spanish-mediated
talks with the regime late last year, according to US Embassy reporting. In
response, the Social Christians-who have frequently pursued an independent
course-threatened to suspend participation in the coalition until its leadership
apologizes publicly. Party leaders recently told US officials they view the coalition
effectiveness.
Although we believe both sides will work to avoid a permanent split, this incident
is symptomatic of larger problems. For example, the US Embassy reports that
elections for new coalition leaders-postponed until March to allow for a
resolution of the dispute-are unlikely to produce more dynamic leadership
because political rivalries will eliminate effective candidates. In our view, the lack
of strong leadership has been a key obstacle to the formulation of a unified
strategy and has fostered internal bickering. Sandinista controls and the narrow
avenues available for political initiatives also have weakened coalition
little domestic support.
The coalition's inactivity probably is costing it credibility and potential recruits,
while leaving the Sandinistas free to focus on the Catholic Church and private
sector. Moreover, Managua can use the coalition's internal problems to drive
wedges deeper between the member parties. If weak leadership and infighting
eventually cause the coalition to break up, the regime may be able to persuade
some foreign observers that the co-opted parties in the National Assembly are the
true domestic opposition and that the democratic parties are malcontents with
Insurgent Human Rights Activities
points to increased efforts by the anti-
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Sandinista guerrillas to improve their human rights image, both to undercut the
regime's international propaganda campaign against them an to broaden support
among Nicaraguans. the military and
political wings of the main rebel coalition maintain separate human rights offices
in Honduras. The military office focuses on violations within the guerrilla ranks.
During the last half of 1985, 21 rebel troops were tried and 19 sentenced to terms
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up to four years for abuses
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; prisons are located at guerrilla bases in Honduras. The political office
sl- developed publications and courses of instruction to sensitize commanders and
troops to the importance of the issue. To improve their image and cope with the
numbers of Nicaraguans fleeing northern war zones, the rebels reportedly opened
a clinic in Honduras to assist refugees and locals. The guerrillas also have offered
to exchange prisoners with the Sandinistas through the International Red Cross.
to open another office in San Jose, Costa Rica.
the insurgents planned
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At the same time, the rebels are publicizing Sandinista abuses. Insurgent civilian
leaders opened a human rights office in Geneva several months ago, according to
press reports, to keep UN organizations informed of the regime's rights violations.
performance as well as continuing Sandinista abuses.
Abuses by rebel troops probably will decrease as a result of the new policy. To
overcome Managua's well-orchestrated propaganda campaign, however, the
insurgents will need to devote even more resources to publicizing their improved
bilateral commitments and Surinamese sensitivity to Western pressure.
Relations between Suriname and Libya are weakening as a result of unfulfilled
US Embassy reporting indicate that Suriname is
foreign exchange shortage.
dissatisfied with the course of relations since Head of Government Bouterse visited
Tripoli last March. The Libyans reportedly have not provided the substantial
economic aid Bouterse had hoped would help to relieve Suriname's desperate
Tripoli may use Suriname as a base to
conduct terrorist actions against US facilities in the Caribbean. According to US
officials in Paramaribo, however, any terrorist action traceable to the Libyan
Embassy in Suriname would probably result in the expulsion of all Libyans there.
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We doubt that the Surinamese attitude toward Libya will improve much, if any, in
the near term. The impending transfer to the United Nations of Libya's main
advocate in the Surinamese Government, Bouterse's civilian cabinet chief Henk
Herrenberg, is perhaps-the clearest indication yet that Paramaribo is unlikely to
expand relations with Tripoli. Herrenberg's dismissal follows the unsuccessful visit
of a Libyan economic delegation to Suriname last November and Tripoli's
cancellation in December of two proposed conferences that were to be held there.
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Moreover, because Bouterse is anxious to attract Western economic aid and wary
of provoking the United States since the Grenada intervention, he is likely to
restrict Libyan efforts to court regional radicals from its Embassy in Paramaribo.
Costa Rica Departure of US Firms
Although the announced departure of three well-known US companies from Costa
Rica is unlikely to have a major immediate impact on the economy, it reflects San
Jose's increasing difficulty in attracting and retaining foreign investment.
According to the US Embassy in San Jose, spokesmen for the Bank of America
and Firestone said corporate policies rather than local business conditions
prompted their decisions to sell out. Union Carbide, which also intends to close
operations, blames poor business on the contraction of regional trade and losses
caused by customers defaulting on payments. Some of the 100 remaining US-
owned firms in Costa Rica-many of which arrived between 15 and 20 years ago
to benefit from the now moribund Central America Common Market-are
rethinking their choice of location, according to the US Embassy. With short-term
prospects for the recovery of regional trade bleak, additional foreign firms are
likely to withdraw over the next few years.
Mexico Attorney General for Capital Resigns
Federal District Attorney General Victoria Adato de Ibarra recently resigned her
post to assume a seat on the Supreme Court amid public charges of inefficiency
and complicity with police torture. Already under fire for her inability to control
the police, Adato became the subject of increasingly intense criticism following the
earthquake last September, when the bodies of several Colombian and Mexican
prisoners bearing signs of torture were discovered in the rubble of her office
building. After initial denials, Adato finally admitted to some police excesses and
pledged to investigate all charges of torture. Nonetheless, media and public
attention had already highlighted the issue and embarrassed the de la Madrid
administration.
Pressure from above, probably from the President himself, to stem public criticism
over the scandal no doubt resulted in Adato's resignation and subsequent Supreme
Court appointment. Our judgment is that postearthquake disarray within the
government, as well as de la Madrid's expectation that the furor would eventually
die down, delayed this action by more than three months, contributing to the
worsening public relations fallout. In appointing Adato to the Supreme Court-a
largely ceremonial post-we believe de la Madrid seeks to remove her from the
limelight, thereby alleviating adverse publicity. The move also limits damage to
Adato's political career by avoiding any explicit admission of guilt on her part, or,
indeed, on the part of the administration.
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