LATIN AMERICA REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00289R000301540001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 18
• Document Creation Date: December 22, 2016
• Document Release Date: April 4, 2011
• Sequence Number: 1
• Publication Date: May 23, 1986
• Content Type: REPORT

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Directorate of
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Latin America
Review I~
ALA LAR 86-012
23 May 1986
??y 4 2 8
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Latin America
Review ~~
High-level personnel shifts in the government are expected to
continue through the rest of the year as President Castro reacts to
mounting political and economic pressures. ~~
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Belize: Ruling Party on the Defensive 5
Prime Minister Esquivel and his ruling United Democratic Party
are facing morale problems and a loss of confidence as a result of
factional disputes in the party and opposition attacks on the
government's economic, drug eradication, and foreign policies.
Bolivia's Hugo Banzer: From Dictator to Democrat? 7
Former President Banzer, a rightwing military dictator during the
1970s, is supporting Bolivia's nascent democracy apparently as a
tactic to increase his chances of regaining the presidency.~~
Production Stgff; Office ctf'ATrican and Latin American Analysis,
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Articles have been coordinated as appropriate with other o.~ces within CIA.
Comments and queries regarding this publication may be directed to the Chief;
Secret
ALA LAR 86-012
23 May / 986
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Latin ~me~ica
Review
Cuba: In Search of
Managerial Talent
The quest that has been under way in Cuba since
early last year to discover and promote managerial
talent did not culminate with the Third Party
Congress in February. New personnel shifts in the
upper and middle levels of government have occurred
recently, and we expect the reshufliing process to
continue through the year as the Castro regime reacts
to mounting political and economic pressures. An
efficient management team is only part of the solution
to the regime's current problems, however, and unless
fundamental policy changes are made-changes that
President Castro has thus far staunchly resisted-we
believe current conditions will continue to deteriorate.
High-Level Shifts
Irma Sanchez, minister-president of the Cuban State
Committee for Technical and Material Supply, is the
latest cabinet-level official to get the ax. Havana
publicly announced on 21 April that she had been
replaced by Sonia Rodriguez Cardona, a member of
President Castro's personal Coordination and Support
Staff. Sanchez, whose new assignment was not
specified, almost certainly owes her downfall to the
defection in Madrid last December of one of her top
aides who Havana claims absconded with some
$500,000 in government funds.)
Sanchez was originally appointed in 1976, reportedly
as a result of the skills she displayed while working for
the Central Planning Board.
career took a downturn and she lost her alternate seat
on the Central Committee during the party congress
in February. According to a source of the US
Interests Section in Havana, Castro visited her in
early March after his return from Asia and had a long
talk with her-presumably to discuss her impending
ouster. This personal attention from Castro and the
delay in effecting her removal suggest she is not
politically tainted by the defection and may turn up
elsewhere in an advisory-rather than a
managerial-capacity.
In mid-April, Havana announced that Jose Luis
Padron had been dismissed as head of the National
Tourism Institute, a post just below ministerial rank.
His replacement is Rafael Sed Perez, another official
from Castro's Coordination and Support Staff. A
colonel in the Interior Ministry, Padron at one time
served as the key link between President Castro and
the US Interests Section. His departure was no
surprise. Padron also lost his position as head of
Secret
ALA LAR 86-0l2
23 May ! 986
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Jose Luis Padron. The "good
lUe"led to Padron's removal
Jrom the party's Central
Committee and the loss ojhis
positions as head ojthe
National Tourism Institute and
q/ C/MEX, Cuba's lar est front
company operation.~~
CIMEX, Cuba's largest front company operation, late
last year and was dropped from the Central
Committee-he had become an alternate member in
1980-in February.~~
Padron's downfall appears to be part of a general
campaign against officials whose corruption and
ostentatious display of wealth had reached the point
has continued to attend Cuban-hosted diplomatic
receptions, which indicates he is in retirement rather
than disgrace.~~
Cuba's foremost geographer, explorer, and
speleologist, 63-year-old Antonio Nunez Jimenez, has
apparently also been retired presumably to devote
more time to writing and overseeing the publication of
his multivolume work on Cuba's fauna and flora. The
US Interests Section found out in April that he had
been replaced as vice minister of culture by the
current Cuban Ambassador in London, who once
served as dean of Havana University. At the same
time, Nunez Jimenez's wife, Lupe Veliz, was removed
from her post as director for international relations at
the Culture Ministry, allegedly for health reasons.
Nunez Jimenez lost his alternate seat on the Central
Committee in February. ~~
Secondary Shakeups
Elsewhere in the governmental bureaucracy, shakeups
are occurring as a result of the top-level changes made
last year, with new chiefs reorganizing and puttin
their own management teams in place.
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His precipitate fall from grace
may also have contributed to a family tragedy; the US
Interests Section reported that, a month after his
dismissal from the Central Committee, his daughter
committed suicide.
Some officials apparently are simply being put out to
pasture. Vice Minister of Foreign Relations Pelegrin
Torras de la Luz, for example, was quietly dropped
from the Foreign Ministry's directory of officials in
January, according to the US Interests Section, and
his position presumably remains unfilled. He was
subsequently featured by a Havana publication as a
prominent Cuban historian, suggesting that
henceforth he will devote himself primarily to
academic pursuits. Since January, Torras de la Luz
Similarly, Jose Luis Padron's replacement in
CIMEX, Emilio Aragones, has begun a clean sweep
to improve the company's image and restore its
efficiency as a commercial enterprise.n
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Antonio Nunez Jimenez. Pic-
tured here in the garb he wore
during an expedition to the
Antarctic, Cuba's most noted
explorer, geographer, and spe-
leologist has quietly been re-
moved from his job as Vice
Minister oI Culture.)
place until the lengthy transition period is over.
Outlook
These changes illustrate the fluid character of the
Cuban bureaucracy at present, as the Castro regime
casts about for ways to combat mismanagement and
fend off mounting political and economic pressures.
They are typical of the remedial measures Castro has 25X1
adopted in the past when faced with similar crises.
One new element, however, is the tendency to turn a
bit more often to technocrats and younger officials
rather than to old guerilla veterans and experienced
prerevolutionary specialists when making promotions
and filling vacancies. We expect this process of
reshufliing and reorganization to continue through
the end of the year as recently promoted officials try
to consolidate their new empires and probe the limits
of their expanded influence. In this state of flux, it is
likely to be difficult for the regime to achieve
immediate benefits from the changes, and any
significant improvement in government efficiency-so
desperately needed at present-will probably not take
Changing faces and organizational structures will not
be enough, in our opinion, to equip the regime to meet
the current economic challenges successfully. We
believe fundamental policy changes are needed, and
Castro is showing little indication that he is willing to
make them. Some lipservice is being given to
decentralization of authority, but Castro seems
reluctant to take concrete steps in that direction. We
note that three appointees to high positions over the
past year all came from Castro's own Coordination
and Support Staff and until now have had no public
exposure or major managerial experience. As these
relative unknowns are vaulted into high positions as a
result of Castro's personal intervention, they are likely
to rely closely on the Cuban leader when making
decisions and exercising responsibility in their new
posts. ~~
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Belize: Ruling Pam
on the Defensive
Party factionalism and growing public discontent are
undermining the morale and confidence of Prime
Minister Manuel Esquivel and his United Democratic
Party (UDP) after 18 months in office. Esquivel and
the UDP are increasingly on the defensive in the face
of attacks from the opposition People's United Party
(PUP headed by former Prime Minister George
Price~n a wide range of issues, including economic
policies, the government's drug eradication program,
and foreign policy. In our view, despite public calls for
his resignation by the opposition and a possible move
by members of his own party to force him to step
down, Esquivel faces no immediate danger of being
forced out of office. He is, however, likely to
encounter increased difficulty implementing his
government corruption have undermined Esquivel's
administration.
programs.
Since winning its first national election in December
1984, the UDP has been unable to overcome the
inexperience of its leaders and maintain the
The government's inexperience in coordinating policy
and in public relations has caused considerable public
criticism on a wide range of issues. The UDP created
a sharp political controversy and lost support, for
example, with the hastily announced decision to break
up the Belize College of Arts, Science, and
Technology, reduce its budget, and cancel
construction of a new campus. The large-scale student
and teacher demonstrations that resulted probably
could have been avoided if the government had moved
quickly to deny rumors that the school would be
closed and made its intentions for the school's future
clear. Such public relations missteps have prevented
the UDP from building its support among the
country's largely conservative, but increasingly
demanding, young voters-50 percent of the country's
population is under 20-on whom the party relied
heavily in the 1984 election. According to the US
Embassy, this group is increasingly frustrated by
Esquivel's lack of strong leadership and his apparent
inability to provide new education and economic
Dissatisfaction From Several Fronts
Frustration with the Prime Minister's low-key
leadership style, the apparent inability of government
officials to organize a public relations campaign to
promote government policies, and charges of
opportunities.
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ALA LAR 86-012
23 May 1986
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The UDP administration has also been unable to
defend its policy of selling or transferring land and
granting development concessions to foreigners. The
US Embassy reported that the sale of 50,000 acres to
Coca Cola-for citrus cultivation-and the lease of a
Belize City park to a foreign hotel investor, have
become popular rallying points for UDP opponents.
Besides demanding the establishment of a factfinding
commission to examine the Coca Cola transaction, the
opposition PUP repeatedly has raised the issue at
public rallies and in the press. According to the US
Embassy, the UDP's efforts to justify these actions
have been disorganized and belated, allowing the PUP
tu?_sco~e propaganda points against the government.
Economy Also a Target
Despite some successes in the economic arena, the
government has come under increasing public attacks
for its failure to make substantial progress toward
easing unemployment. The UDP has made modest
gains in reversing the economic recession by
promoting foreign investment in agriculture and light
manufacturing to diversify away from Belize's
dependence on the sugar industry. Nevertheless, the
UDP is hard pressed to provide jobs for the more than
14 percent unemployed, many of whom are turning to
the lucrative drug trade, according to US Embassy
reporting. Meanwhile, to meet the
growing pu is errand for higher wages that earlier
this year resulted in widespread PUP-led street
demonstrations, Esquivel has already announced that
the 1986-87 budget will include a 12-percent salary
increase for teachers beginning next term.~~
Foreign Policy
The UDP has come under pressure from opponents
and ruling party members alike to display more
independence from the United States. The PUP and
other government opponents have taken advantage of
several controversial foreign policy issues-such as
the relatively large number of Peace Corp volunteers,
the recent construction of two Voice of America
stations, and Esquivel's decision to agree to two aerial
drug eradication campaigns under the auspices of the
United States to portray the government as a "tool"
of Washington. The US Embassy reports that the
PUP has been behind demonstrations against the
aerial spraying, accusing the government of bowing to
US pressure without providing economic alternatives
for Belizean workers.
Pressure to steer a more independent course has
prompted some Cabinet ministers, most notably
Foreign Minister Barrow, to express publicly
their disagreement with US policy in
Central America,
The US Embassy reports, for example, that after a
six-month debate, Barrow was instrumental in
convincing the Cabinet to reverse its earlier decision
not to include Nicaragua in the portfolio of the newly
appointed roving Ambassador to Central America.
Barrow argued convincingly that the inclusion of
Nicaragua would help diffuse criticism of Belize's
close ties to the United States.
Outlook
Unless Esquivel adopts a more assertive leadership
style, improves the government's public relations
efforts, and revives morale within the UDP, he will
have increasing difficulty maintaining his credibility
and implementing his initiatives. At a minimum, he
will be under pressure at least to assuage members of
his own party by agreeing to changes in the party
executive at the forthcoming UDP convention and by
reorganizing the Cabinet in the name of party unity.
Meanwhile, the PUP-which has demonstrated its
ability to make political capital out of the UDP's
weaknesses-is likely to keep the government on the
defensive. Unless Esquivel can weather the present
storm of criticism, his party may face significant
losses in local contests-the Belize City Council
election will take place in December-and suffer
damage to its position as it moves toward national
elections in 1989.1
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Bolivia's Hugo Banzer:
From Dictator to Democrat?
Former President (1971-78) Gen. (Ret.) Hugo Banzer
Suarez, who personified the Latin American military
dictator, has aligned his rightist National Democratic
Action (ADN) party with the current civilian
government in an apparent effort to support the
country's nascent democracy. We believe that Banzer,
no stranger to political intrigue but conscious of the
widespread sentiment for legitimate government, has
adopted the unaccustomed role of supporting the
party in power as the best way to assure his own
return to the presidency. His support of the
government may be the key to political and economic
stability in beleaguered Bolivia.
Banzer, the Military Autocrat
Banzer's new stance as self-professed democrat is a
marked change from his autocratic years as President.
Installed in a military coup, he initially headed a
coalition composed of the military and two political
parties, but he eventually purged the parties and ruled
with only military support. The last years of his
administration were marked by increasing charges of
corruption and human rights violations. In the face of
mounting domestic and foreign criticism, he held an
election in 1978. Before the electoral outcome could
be determined, however, he was overthrown by the
military, which had come to view him as a liability.
He was then called before Congress for alleged high
treason, misuse of funds, and human rights abuses,
but indictment attempts were unsuccessful. ~~
A Change of Tack
Apparently recognizing that he had lost his military
power base and that his countrymen were wearying of
coups, Banzer changed course. He began a campaign
to return to the presidency legitimately, running
Banzer continued his quest for the presidency through
the political process. Running in the election last year
on a platform emphasizing ways to improve the
economy and with the slogan "Order, Peace, and
Work," Banzer won a plurality of the popular vote but
lost in a later congressional runoff (constitutionally
mandated when no candidate receives a majority) to
Victor Paz Estenssoro.~~
The "Pact for Democracy"
Although the close loss might have tempted Banzer to
subvert the new government, he opted instead for a
more legal approach. In October he and President Paz
signed the "Pact for Democracy," an unprecedented
accord in which they and their parties agreed to put
aside partisan politics and work together on the
country's urgent political and economic problems.
pact. In late February, for example, the ADN and
Paz's Nationalist Revolutionary Movement joined
forces in Congress to block aleftist-sponsored
initiative to censure the government's economic
program. For his part, Banzer recently completed a
trip to several European countries, Israel, and the
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ALA LAR 86-012
23 May 1986
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United States, during which time he lobbied for
economic assistance and support for the democratic
process and the overnment's economic austerity
measures
By supporting the pact, Banzer has several
advantages:
? His party receives control over some key state
enterprises.
? He gains maneuvering room. Stressing that the
agreement signifies neither cogovernment nor
political alliance, he has called it a "Pact for
Bolivia." This allows the ADN, in the role of loyal
opposition, to criticize specific acts of the
administration while supporting its legitimacy as a
democratically elected government.
? He has a clear shot at the presidency. If, with his
help, the government succeeds in alleviating the
country's problems, Banzer will be the leading
presidential contender for 1989. (By law Paz cannot
succeed himself, and we see few other strong
contenders at this time.) If, on the other hand, the
government fails, Banzer can dissociate himself and
the ADN from it and probably still count on
receiving much of the~su ?port that he had during
the 1985 election.)
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Latin America
Briefs
President Castro's decision to abolish the so-called farmers' free markets this
month, in our opinion, represents a major defeat for those favoring pragmatism in
solving Cuba's mounting economic and political problems. Established in 1980 as a
means of boosting agricultural productivity through monetary incentives, the
markets provided peasants with an outlet to sell for profit the produce they had left
over after meeting government production quotas. While the system increased the
availability of farm produce, it also aroused ideological misgivings. In announcing
the abolition of the free markets, Castro accused the system of promoting
corruption, contributing to the recreation of the middleman class, and allowing
Secret
ALA LAR 86-0/2
13 May ! 986
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Castro's action bodes ill for any chance of genuine liberalization in economic
policy in the face of the country's worsening economic situation. In abolishing the
markets, Castro has removed what we believe is a critical incentive to private
farmers-the most efficient and productive sector of Cuban agriculture-and a
significant drop in productivity is almost certain to result. His singling out of one
sector of society for punishment has an ominous overtone; in the past, he has
created scapegoats-as in the "revolutionary offensive" of 1968 that eliminated
57,000 small businesses-to divert the attention of the masses away from serious
internal problems. While the abolition of the markets may please party hardliners,
it is not likely, in our opinion, to sit well with the population in general, which is
weary of continuing shortages and austerity.
Outgoing President Betancur approved a series of economic measures early this
month to be implemented during the last 100 days of his administration that are
designed to stimulate growth and employment and reduce the budget deficit and
inflation. The administration plans to open domestic interest rates to market
forces-as recommended by the IMF-and enforce government austerity and
severe monetary controls. At the same time, however, Betancur-with an eye to
improving the chances of his Conservative Party in the presidential election set for
25 May-plans to complete 104 development projects at a cost of approximately
$850 million and channel some $25 million in development credit to the private
sector. His economic package, already under fire from the opposition Liberal
Party, is overly ambitious, too late, and unlikely to meet its goals. We concur with
the US Embassy's view that, although some projects will be completed and others
accelerated, the next administration, which will take office in August, will
probably slow many projects until it establishes new priorities. ~~
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Cuba Chronology
Politburo member Juan Almeida speaks at the 17th Communist Party Congress in
Prague, praising the Soviets for their aid to Cuba and blasting the United States
for its foreign policy.
Carlos Rafael Rodriguez speaks at the 25th anniversary of the Foreign Trade
Ministry on improving the quality of export products to compete in the
international market.
Havana TV reports that cooperation between East Germany and Cuba in the
sugar industry will double during the current five-year plan. East Germany will
provide 10 agricultural-chemical centers.
Nassau press reports that, during Foreign Minister Malmierca's visit to The
Bahamas on 26 March, both countries agreed to maintain ambassadors at the non-
resident level, improve cooperation, and combat drug trafficking.
Jorge Alvarez Moreno, a Cuban doctor in charge of a team of 100 Cuban doctors
and nurses working for the Libyan military, seeks political asylum with his wife in
Spain.
Politburo member Jorge Risquet and Angolan President dos Santos meet in
Luanda. Risquet presents dos Santos with a verbal message from Fidel Castro.
They discuss bilateral cooperation.
4 April An official in the Interior Ministry in Spain reports that Madrid has refused
political asylum to former Cuban official Manuel Antonio Sanchez Perez.
Vice President of the National Assembly Severo Aguirre del Cristo and his
delegation depart for Mexico to attend the Interparliamentary Union's 75th
Conference.
Havana press reports that during the past five years a decisive boost has been given
to Cuban television transmission services, which now cover 90 percent of the
country.
The Ethiopian Herald reports that Chairman Mengistu received the credentials of
the new Cuban Ambassador to Ethiopia, Antonio Perez Herrero.
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ALA LAR 86-012
23 May l 986
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Ivan Arkhipov, First Deputy Chairman of the USSR Council of Ministers, arrives
in Havana to attend the 16th session of the Commission for Economic and
Scientific-Technical Cooperation.
Raul Roa Kouri, Vice Minister of Foreign A1Tairs, arrives in New Delhi to discuss
with Indian officials the international situation and the Nonaligned Movement
(NAM) ministerial meeting to be held there the following week.
President of the National Assembly Flavio Bravo says anti-imperialistic spirit
prevailed during the third special session of the Latin American Parliament in
Guatemala.
Granma warns that the training of Nicaraguan counterrevolutionary gangs by the
US Special Forces implies a new phase of US aggression against Nicaragua.
Foreign Minister Malmierca and Denmark's parliament President Svend Jakobsen
meet in Havana. Flavio Bravo tells Jakobsen of the results of the recent Latin
American Parliament meeting in Guatemala. Carlos Rafael Rodriguez also meets
with Jakobsen and explains Cuba's stand regarding international and regional
issues, and Cuban economic and social developments.
Ouagadougou Domestic Service reports that Cuba has granted Burkina 600 high
school scholarships and that a working meeting was held to discuss the utilization
of these scholarships.
Granma reports that Carlos Rafael Rodriguez and Ivan Arkhipov signed a series
of trade agreements that will substantially increase Soviet aid to Cuba over the
next five years. Rodriguez tells Prensa Latina that the trade agreements will
increase Soviet aid by $3 billion between 1986 and 1990.
Vice President of the National Assembly Severo Aguirre addresses the 75th IPU
Conference in Mexico and compares the US warmongering line with the USSR's
peace policy.
Carlos Rafael Rodriguez closes the first national exports meeting of the Ministry
of the Steelworking Industry, emphasizing in a critical sense the problem of
quality.
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At the NAM ministerial meeting in New Delhi, Isidoro Malmierca expresses
confidence that the NAM countries will reiterate their solidarity with Nicaragua,
which is facing US attacks.
1 S April Granma charges that the US attack on Libya "confirms that the center of state
terrorism against the emancipated peoples is in Washington."
Armando Hart attends the 17th Italian Communist Party Congress in Rome. He
says a Vietnamization process has begun in Central America that can be more
painful for the United States than for Nicaragua.
Raul Castro, on the occasion of the 25th anniversary of the Bay of Pigs victory and
Militia Day, sends congratulations and revolutionary greetings to participants in
the battle.
The UK's United Nations delegate rejects what he calls "an offensive and personal
attack" on Prime Minister Thatcher by a Cuban envoy who accused her of a role
in the "murder" of innocent Libyans.
Fidel Castro sends a cable to Tripoli condemning the barbaric US aggression
against the Libyan people and assuring Cuban solidarity against this aggression.
17 April Justice Minister Juan Escalona concludes athree-day visit to Laos. He meets with
his counterpart, Kou Souvannamethi, and signs a bilateral cooperation protocol.
Fidel Castro speaks at the 25th anniversary of the Playa Giron victory. He says
whoever tries to take over Cuba will only find the soil awash with his own blood, or
else die in the attempt.
Minister of Justice Juan Escalona returns to Cuba from Czechoslovakia, Vietnam,
Laos, and Cambodia. He signed cooperation agreements with the police
organizations in the countries he visited.
Deputy Sonia Rodriguez Cardona is appointed Minister President of the State
Committee for Material and Technical Supply. She replaces Irma Sanchez, who
will carry out other tasks.
The State Committee for Statistics of Cuba dedicates a new calculations center in
Havana equipped with two Soviet computers that will process statistics.
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Carlos Rafael Rodriguez receives Kenneth Datsy, Secretary General of
UNCTAD, to discuss the international economic situation and ways in which
developing countries are affected by the foreign debt.
Havana Radio Reloj announces that CEMA member countries will cooperate with
Cuba in the extraction and exportation of oil and gas and advanced technology for
exploitation of oilfields.
Cuba begins a new round of talks in Havana with Paris Club creditors on
refinancing its foreign debt of 3.5 billion at a time when Cuba's exports are
dropping.
The 49th CEMA meetings for maritime transportation cooperation concludes with
the signing of a multilateral agreement relating to the consumption of combustible
fuel and energy on ships.
25 April In Granma, the Cuban Government urges people to sell their jewelry and old coins
to the Central Bank to help boost the country's international reserves.
Havana press reports that a delegation from the Paris Club held four days of talks
last week with Central Bank President Hector Rodriguez Llompart on refinancing
the 1986 maturities on Cuba's debt.
Mexico City press reports that Cuba has told its foreign creditors it will suspend
debt payments for 90 days, beginning 5 May, while seeking favorable repayment
terms and $500 million in cash to make up a projected shortfall.
30 April Peruvian Prime Minister Luis Alva Castro arrives in Havana.
Raul Castro presides over the ninth plenum of the National Committee of the
Union of Young Communists, calling on Cuban youths to continue preparing with
quality for the defense of Cuba.
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Secret
Secret
Declassified in Part -Sanitized Copy Approved for Release 2011/12/08 :CIA-RDP87T00289R000301540001-6