LATIN AMERICA REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00289R000301560001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 45
• Document Creation Date: December 27, 2016
• Document Release Date: August 5, 2011
• Sequence Number: 1
• Publication Date: June 20, 1986
• Content Type: REPORT

Review
Latin America
Declassified in Part - Sanitized Copy Approved for Release 2012/03/07: CIA-RDP87T00289R000301560001-4
Directorate of
Intelligence
NICASTER FILE CIOPY
9 T IV 1.] 05 U! T
M .fii E, Lh
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I56
ALA LAR 86-014
20 June 1986
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Latin America
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President Sarney has demonstrated considerable political skill in
guiding Brazil through a smooth transition to civilian government,
but he faces new tests over his ability to administer successfully an
economic stabilization package and retain support for his governing
coalition in gubernatorial and congressional elections this fall.
Havana is trying to reduce its dependence on Soviet oil through
heavy investment in the development of nuclear power, but questions
remain about measures to prevent a nuclear accident, and the
program will face obstacles in integrating nuclear plants into the
existing power grid.
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Vice President Rodriguez's recent trip to Peru, Uruguay, Argentina,
and Mexico will help consolidate political support for Cuba from
sympathizers in the region and lend legitimacy to Cuban views on
regional affairs.
A recent speech by President Castro suggests a continuing concern
over the high crime rate and widespread official corruption.
The regime is trying to control the use of video cassette recorders
out of concern over the potential adverse impact of Western video
media on the Cuban population.
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ALA LAR 86-014
20 June 1986
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The Army's aggressive counterinsurgency campaign is increasingly
isolating the guerrillas and forcing them to emphasize low-risk
attacks in remote areas and to focus on political rather than military
action to challenge the government, with little likelihood of success.
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Tegucigalpa and San Salvador have agreed to submit their
longstanding border dispute to the International Court of Justice.
They still have almost three years to reach a bilateral settlement
during which time the expense of the judicial process and the
prospect that Nicaragua may become involved may lead to
concessions by both sides.
The West German Social Democratic Party has begun publicly to
take note of human rights abuses in Nicaragua but is still focusing
its criticism on US policy toward the Sandinistas.
President Lusinchi and his allies in the ruling party are facing a
strong challenge from populist former President Perez, who is
actively seeking the party's presidential nomination for the election
in 1988.
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Brazil: Dynamic Army Minister Leonidas
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Uruguay: Wrestling With Human Rights
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South America: Andean Pact Liberalizes
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Colombia: Coffee Situatio
n L
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Articles have been coordi
within CIA. Comments an
be directed to the Chief, P
nated as appropriate wit
d queries regarding this
roduction Staff, Office o
h other offices
publication may
f African and
Latin American Analysis,
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Review
Brazil: Political Challenges
Facing Sarney
assault on rising inflation.
Assuming office as an accidental president following
Tancredo Neves's death in April 1985, Jose Sarney
has established himself as a leader of considerable
political skill and has guided Brazil through a smooth
transition to civilian government. Although viewed as
diffident and indecisive during the early months of his
presidency, Sarney's initial low-key style helped hold
together a tenuous governing coalition and retain the
support of the military. Simultaneously, his selection
of capable advisers and administrators, ability to gain
the support of influential leaders for political reform,
and actions to respond to the popular will for
economic improvements strengthened his political
base. Buoyed by rising popularity and the outcome of
last November's municipal elections, Sarney has
made increasingly assertive use of his presidential
powers to fend off opposition from his labor and leftist
critics and has launched a bold, politically popular
assembly-begins drafting a new constitution.
Although his public approval rating is now near 90
percent nationwide, Sarney faces major challenges in
his second year. His ability to administer successfully
his economic stabilization package in the face of
interest group resistance will be a key factor in
determining the strength of protest by his opposition
critics and ensuring military backing. Moreover,
gubernatorial and congressional elections in
November will test the strength of popular sentiment
in support of his governing coalition. The political
atmosphere will heat up even more as the new
congress-also empowered to act as a constituent
In our view, Sarney will keep sufficient centrist
political and popular backing to overcome these
challenges. Bolstered by a respectable economic
performance, he will probably emerge strengthened
from the elections and will be a stabilizing influence
in the difficult task ahead of institutionalizing Brazil's
fledgling democracy. A domestically strong Sarney
administration will promote friendly relations with
the United States, although frictions will beset
commercial ties.
Keeping a Low Profile
Sarney faced an uphill struggle for public and
political acceptance when he assumed the presidency
after Neves's death. He lacked Neves's broad
popularity and faced opposition from powerful leaders
both within and outside of the government.
the leaders of the Brazilian
Democratic Movement Party (PMDB)-the majority
partner in Neves's coalition government-had
accepted Sarney as the vice-presidential standard
bearer, but distrusted him because of his former
membership in the old military government party.
Moreover, the military and Brazil's ruling political
elite disliked him for having left their party to form
the Liberal Front Party-a center-right party-and
for joining Neves's Democratic Alliance.
Throughout 1985, according to US Embassy and
Brazilian press reports, Sarney adopted a conciliatory
style aimed at winning the confidence of the coalition
and bolstering his public standing. He invoked
Neves's memory to rally support for a unified civilian
government in the weeks following the president-
elect's death. He conferred with politicians of all
stripes to prevent infighting and seek civilian
consensus on policy initiatives. Sarney also capitalized
on the popular yearning for political liberalization by
moving rapidly to push through Congress legislation
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ALA LAR 86-014
20 June 1986
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 Setting His Own Course
Early this year, Sarney became less beholden to the
governing coalition and adopted a more forceful style.
Because of the limited success of the PMDB in the
municipal elections last November-it won most of
the mayoralties but lost Rio de Janeiro and Sao
Paulo-and his shrewd political maneuvering in
encouraging defections to his own party, Sarney
believed his political base had been strengthened.
Buoyed by a sense of greater independence, he began
to employ the powers of the presidency more freely,
using federal troops to squelch a truckers' strike in
January, reshaping the Cabinet to make it more
politically conservative and personally loyal, and
streamlining the presidential staff to make it more
effective in implementing his policies and dealing with
Congress. At the same time, Sarney showed a deft
touch by stroking the bruised egos of PMDB
chieftains, who were angry at his Cabinet shifts, thus
heading off their defection from his government.
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implementing direct presidential elections and a
constitutional assembly, legalizing banned leftist
parties, and holding democratic municipal elections in
November. True to the spirit of the "New Republic"
he allowed unions to strike over bread-and-butter
issues and endured with grace the criticisms of Leonel
Brizola-Brazil's leading leftist and governor of Rio
de Janeiro state-who was campaigning for
immediate direct elections. The President's conduct-
above the partisan fray but supportive of the
democratic process-during Brazil's first elections
under civilian rule significantly raised his prestige.
Sarney also proved adept at successfully cultivating
the military. US Embassy reports indicated he
deflected attempts by radical leftist groups to conduct
widespread investigations into human rights abuses
under the military government and made high-profile
appearances at military ceremonies. Moreover,
apparently Sarney heeded military advice to go slow
on reestablishing diplomatic ties to Cuba and
resuming large-scale arms sales to Libya. To keep the
military happy, he also increased funding for weapons
procurement~
Brazilian political commentators assert that the most
effective tactic in Sarney's strategy to consolidate his
political base was his economic policies. Because of
pressure from the majority party in the coalition, he
adopted a domestic economic program that stressed
rapid growth as necessary to redress long-neglected
socioeconomic inequities-the so-called social debt.
To achieve these goals, according to US Embassy
reporting, the administration permitted large real
wage increases, boosted public spending, and
accelerated monetary growth, stimulating a domestic
boom that expanded economic activity by 8 percent,
the world's highest growth rate last year. Despite
growing demand, tough controls kept prices from
skyrocketing. In the external economic sphere, Sarney
capitalized on Brazil's strong external payments
position. He bowed to widespread sentiment among
Brazilians-USIS-sponsored polls indicate consistent
anti-IMF opposition to fund prescriptions-and took
a tough stance toward the IMF and Western banks in
monitoring domestic adjustment policies.
Simultaneously, however, Sarney became concerned
about the potential for rising prices to spark social
discontent. US Embassy reporting indicated that
soaring demand and drought-induced losses of food
supplies sent prices soaring. For example, the official
cost-of-living index rose by 17 percent in January, a
record that sent shockwaves through the country.
Sarney ordered tighter
February a bold stabilization package, the Cruzado
Plan, designed to squelch inflation that was
accelerating to a 400-percent annual rate. The
program-which imposed a competitive wage-price
freeze, introduced the cruzado as part of a currency
reform, and dismantled Brazil's indexation system-
drastically reduced inflation to near zero in March
and April, and became immensely popular. Moreover,
Sarney forestalled a major split in the coalition over
the political costs of inflation, defused simmering
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labor unrest, and deprived Brizola-at least
temporarily-of an issue around which he could
construct a leftist opposition movement.
Challenges Still Ahead
Sarney's astute political maneuvering and bold attack
on Brazil's hyperinflation have dispelled the image of
a weak president. Sarney, however, still faces
challenges that will test his executive ability to
administer the stabilization program and political
General Confederation of Workers, encouraged by
leftist leaders, to launch a wave of strikes in the
months preceding the congressional elections.
Fending Off the Left.
Brazil's leftist opposition parties also are looking to
exploit any drop in Sarney's popularity resulting from
a resurgence of inflation or economic stagnation to
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acumen to keep the transition on track.
Managing the Economy. Sarney's ability to suppress
inflation without prompting a recession remains the
key to the success of his government. While we believe
that the economic program will cut inflation below
100 percent this year because of rigorous price
controls, it is likely to slow growth substantially by
discouraging new investment. Businesses remain
reluctant to expand, despite high demand, in the face
of widespread uncertainty over future policy
adjustments, especially easing of frozen prices.
Moreover, the US Embassy reports that price-control
dodging by private firms and a $900 million public-
sector deficit in March have begun to erode
expectations that inflation will be controlled. The
cruzado is now trading at a 50-percent premium on
Brazil's parallel exchange market-an indicator of
waning public confidence. Expecting prices to rise
soon, consumers are drawing down savings to sustain
high spending levels, and many manufacturers are
withholding goods from the market, causing spot
shortages. In the next several months, Brasilia will
have to regain public confidence, get the deficit under
control, and begin introducing complementary
economic reforms to keep the program on track
Dealing With Labor Unrest. We believe labor is likely
to mount the first organized attack on the economic
program should the plan be seen as faltering. The US
Embassy reports that labor leaders are becoming
more vocal in their criticism of the Cruzado Plan and
a number of short-lived wildcat strikes for higher
wages have erupted recently. According to
the US Embassy, the radical
leftist Unified Workers Central is planning a series of
strikes over the next few months. Should the unions
win wage concessions, we would expect the moderate
Brizola is still Sarney's most formidable leftist
opponent. A highly charismatic leader and political
gambler, Brizola was the only major political figure to
attack the Cruzado Plan when it was announced.
While he came under immediate severe criticism in
the press, he has positioned himself to exploit a
seeking electoral alliances with other opposition
parties to strengthen his influence in the next
Congress, Brizola is courting the left wing of the
PMDB, which is dissatisfied with the growing
influence of more conservative elements in Sarney's
government.
to contend with a military establishment that still
wields considerable clout and weighs in on issues it
regards as important to its institutional integrity and
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Sarney Confronts the Challenges
We are reasonably confident that Sarney will be able
to maintain a stable transition in the months ahead.
On the economic front, we believe he probably will.
achieve the main objectives of his stabilization
program-significantly reduced inflation and
respectable growth-and reap substantial political
gain. In our view, he probably will retain the backing
of the centrist political majority and the military,
while keeping the left off balance. Capitalizing on
these achievements, he is likely to be instrumental in
the election of a moderate Congress and to exercise
considerable influence in the drafting of the new
constitution.
In our view, Sarney will probably engage in backstage
political maneuvering while his economic advisers try
to hold the stabilization program together. We believe
Sarney will maintain rigorous price controls for all or
most of 1986 because steps to clamp a tight lid on
fiscal spending and credit expansion will be politically
difficult in this important election year. Despite the
sharp acceleration of prices in January and February,
we project that the program will cut the annual
inflation rate to about 75 percent by the end of the
year. We believe this would keep Sarney's popular
approval rating high and help secure the acquiescence
of labor and business to the wage and price controls.
We expect economic growth to slow as a result of the
program's wage restraints and continued investor
uncertainty, but will record a politically acceptable 4-
to 5-percent real economic growth rate in 1986.
We believe Sarney will increasingly use his
presidential power to undermine the left and labor. In
our view, he is likely to use the administration's legal
authority to prevent violent, disruptive labor strife and
expensive wage settlements. To keep Brizola from
luring away the left wing of the PMDB, Sarney has
stated that he intends to
move forward with judicial, political party, and
agrarian reform. Recently, he has ordered the police
to prevent violent disruption of the agrarian reform
program by leftist groups or landowners. Finally, the
administration has introduced legislation to restrict
payments of oil royalties to the states-a move aimed
directly at chastening Brizola, who depends on these
revenues to fund social spending aimed at bolstering
his popularity.
We believe Sarney will throw his weight behind
moderate and conservative candidates in the coming
elections. He has already taken initial steps in this
direction by pushing businessmen to promote
conservative candidates
We expect that Sarney will remain solicitous of the
military's concerns. Despite the need to control the
government deficit, he will back a fairly high level of
funding for force modernization, as well as the
indigenous nuclear program favored by the military.
Moreover, he will probably continue to cultivate close
personal relations with key officers-especially Army
Minister Leonidas-and take their advice on internal
security matters and key foreign policy issues. He also
is likely to lobby actively among civilian politicians to
forsake any attempt by the constituent assembly to
alter the traditional role of the military.
Implications for the United States
We expect a politically and economically secure
Sarney administration to strive to maintain
reasonably harmonious relations with the United
States. We judge that frictions will continue over
Brazil's nationalistic-albeit popular-trade, foreign
investment, and debt policies. Nevertheless, his
administration should continue to be sympathetic-
though not acquiescent-to US political concerns
such as restricting arms sales to pariah states-
including Libya-narcotics control, and blunting
Cuban and Soviet adventurism in South America.
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Cuba: Betting Heavily
on Nuclear Power
Havana has invested considerable resources in the
development of nuclear power in an effort to reduce
its dependence on Soviet oil by the year 2000. The
Soviet Union and other CEMA countries, as well as
Argentina, India, and the United Nations, are
assisting Cuba in this effort. Cuba's first nuclear
power plant is under construction on the south coast,
and two other plants are in the planning stages. To
support its nuclear program, Havana has established
several research and academic programs since the late
1960s. Since the Chernobyl' disaster, the Castro
regime has sought to reassure the Cuban populace
about the safety of its nuclear power program, but
there are still many unanswered questions regarding
the measures Moscow and Havana have taken to
prevent a nuclear accident in Cuba. In addition to the
safety concerns, Havana probably will encounter
obstacles in integrating the nuclear plants into its
existing power grid.
Three Nuclear Power Stations
Cuba, with massive assistance from the USSR, is
building its first nuclear power plant at Juragua near
Cienfuegos on the south central coast.
Soviet-built 440-megawatt (MW) reactors.
CEMA and Western Assistance
The USSR and CEMA countries have underwritten
most of the Cuban nuclear program by providing
labor, materials, and funding.
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Cuban press reports, there are 150 to 300 Soviet
specialists currently working at the Juragua site. The
Soviets also funded Cuba's Nuclear Research
Institute, which was built in 1969, and assisted in the
training of Cuban technicians-many of whom
graduated from the Faculty for Nuclear Science and
Technology at the University of Havana. In addition, 25X1
Moscow supplied a research reactor to the Nuclear
Research Institute, and has reportedly agreed to
supply another for a second nuclear research center it
will build for the Cubans in western Cuba. Hungary
according to the
Cuban media, will also give a research reactor to the
Cubans. Bulgaria has helped in the construction of
the Juragua plant, and Czechoslovakia has a nuclear
cooperation and training agreement with Cuba.
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project-initially scheduled for completion last
year-has reportedly encountered construction
delays
work is now under way on the first two reactors,
but they probably will not be operational until the
early 1990s.
construction of two
other nuclear power plants is planned, one in Holguin
Province in eastern Cuba and another in Pinar del Rio
Province in the west.
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been involved in the Cuban nuclear program.
International Atomic Energy Agency (IAEA),
through funding made available by the United
Nations Development Program, has helped train
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ALA LAR 86-014
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Cuban students in nuclear science and engineering
and is reportedly constructing laboratories at the
Faculty of Nuclear Science and Technology.
India signed a
bilateral nuclear cooperation agreement with Cuba in
May 1985,
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Safety and Nonproliferation Issues
The reactors under construction at the Juragua
nuclear power station are the standard Soviet export
model of the VVER-440. This is a pressurized-water
type reactor, similar to many US reactors. (In
contrast, the reactors at Chernobyl' are graphite-
moderated boiling water reactors-a type not
exported by the USSR.) The specific reactor model
being built in Cuba, the VVER-440-V213,
incorporates a combination of passive and active
emergency core cooling systems designed to safely
cool the reactor if the largest reactor cooling pipe
should break. This is the same design criteria used in
Western reactors.
The Juragua reactors will have a unique containment
system. The VVER-440-V312 reactors in the USSR
and Eastern Europe have an "added on" type of
containment, which is called a localization-tower. The
Cienfuegos site posed unique problems that precluded
using either a localization-tower or the standard
Soviet-designed reactor building. To meet these
requirements, Soviet engineers produced a design that
appears similar to the Soviet-designed VVER-1000
containment system in use at the Novovoronezh
nuclear power station and other sites in the USSR.
One of our main concerns about the containment
system for the Cuban reactors is whether adequate
provisions are included to handle the hydrogen
generated if significant melting of the nuclear fuel
should occur. (It was a hydrogen explosion that
destroyed the reactor building at Chernobyl'.) The 25X1
Soviets have largely ignored the problem of hydrogen
buildup, apparently assuming that the emergency
cooling systems will operate successfully, preventing
fuel melting. In addition, the Cuban personnel trained
by the Soviets and other. CEMA countries to run the
facility may not be competent. 25X1
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Handling of radioactive waste at the plant will
apparently follow standard East European practices.
A special building is planned to process and
temporarily store low-level waste. The waste will be
stabilized by adding bitumen and placed in special
containers. Spent nuclear fuel will be stored for
several years in a pool in the reactor building, then
returned by ship to the Soviet Union.
Despite these protective measures, several questions
remain unanswered about the safety of the Juragua
plant. Although the Soviets have no experience
building a nuclear power plant in a tropical climate,
the Cuban press says the main structures of the
facility will be built to withstand earthquakes,
In the wake of the accident at Chernobyl',
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being discussed in Havana, possibly with Soviet
diplomats or technical advisers. Havana has ample
time, however, for comprehensive, detailed civil
emergency planning prior to completion and
commissioning of the first units. Moreover, the IAEA
will probably assume a more active role in facilitating
emergency response planning for nuclear power plants
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possible that an operational safety review team from
the IAEA will visit Cuba to conduct a safety analysis
on the new reactors. Given Soviet President
Gorbachev's positive reaction to an increased safety
role for the IAEA, it seems unlikely that Moscow
would discourage such a visit.
Despite Cuba's refusal to sign any treaty requiring it
to relinquish a nuclear weapons option, we doubt that
Havana would attempt to develop a nuclear weapons
capability using fuel or technology from the nuclear
power program. Cuba has agreed to permit the IAEA
to monitor the plant through continuous camera
surveillance and periodic on-site inspections.
Moreover, the Soviets have traditionally controlled
their exported nuclear technology and spent fuel from
reactors they have supplied to other countries, and
there is no reason to believe that this policy will
change with Cuba.
two countries have agreed that all plutonium
byproducts from the reactors will be returned to the
USSR. The return of the spent fuel would leave only
lower level radioactive waste and, of course, the
incipient radiation absorbed by the reactor
components.
Outlook
When the nuclear power plant at Juragua is fully
operational, it should reduce Cuba's oil consumption
substantially. According to the Cuban press, each of
the four reactors will save 600,000 tons of petroleum
per year, or about a third of Cuba's current annual
petroleum demand. However, Cuba's petroleum needs
will grow significantly over the next decade, as new
nickel and thermoelectric plants-intensive petroleum
consumers-are built. As a result, by the turn of the
century, the potential oil savings from the Juragua
plant could be relatively small-perhaps reducing oil
consumption by no more than 10 percent. Although
the two other nuclear plants now in the planning
stages could triple the oil savings, it is doubtful that
either plant will be operational by the year 2000,
judging from the long delays typically associated with
major projects in Cuba.
Because Havana needs to cut back on its petroleum
consumption to expand economically, it has little
option but to forge ahead with the nuclear program
despite the risks involved. Not only must the Castro
regime be concerned with safety issues, but it must
also integrate the nuclear plants into the existing
power grid. the Juragua
plant will account for 25 percent of Cuba's electrical
generating capacity when completed. Such a high
dependence on one facility will make it difficult for
Havana to offset a loss of power in the event of a plant
shutdown. Moreover, the time required to train
personnel to operate the nuclear plants cannot be
underestimated. Other countries have traditionally
experienced long learning curves with their nuclear
power programs, and given its underdeveloped
technological base, Cuba is not likely to be an
exception.
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Cuba: Showing the Flag
in Latin America
Vice President Carlos Rafael Rodriguez's 13-day trip
to Peru, Uruguay, Argentina, and Mexico in late May
and early June demonstrates Havana's commitment
to build on its diplomatic gains in Latin America over
the past two years. Rodriguez, President Castro's
highest ranking and ablest foreign policy envoy,
presented Havana's views to the presidents of all four
countries on the Contadora negotiations, the Third
World debt crisis, and bilateral economic relations.
Rodriguez generated heavy media coverage with his
visits and he took pains to portray Havana's policies
as moderate and pragmatic. While he did not
persuade any of the Latin leaders that closer ties to
Cuba-either economic or political-are in their
interest, the high-level attention from Havana
undoubtedly will help consolidate political support for
Cuba from sympathizers in the region and lends some
legitimacy to Cuban views on regional developments.
Rodriguez's tour clearly was intended to provide a
major boost to Castro's efforts to reintegrate Cuba
into the Latin American fold. The Cuban Vice
President, a polished and articulate spokesman and
influential adviser to Castro, is empowered to deliver
authoritative statements of Cuban policy on a broad
array of issues-from Havana's involvement in
Angola to debt negotiations with Western creditors.
In dealing with Latin America and the West,
however, Rodriguez is Castro's chief dissembler,
whose mission is often to obscure artfully Cuba's
policy motives and persuade skeptical hosts of
Havana's benign intentions.
press accounts of Rodriguez's talks with the four
presidents indicate that his mission was indeed to
persuade them through his moderate rhetoric and
distorted portrayals of Cuban policy that Havana is a
responsible neighbor. Accompanying Rodriguez were
Deputy Foreign Minister Ricardo Alarcon, a key
official heavily involved in Cuba's policy regarding
the Contadora negotiations and Havana's relations
with the United States, and Carlos Martinez
Salsamendi, another high-level Cuban official who
frequently deals with the West.
Peruvian President Garcia greeting Cuban Vice
President Carlos Rafael Rodriguez on his arrival
in Lima. Peruvian Foreign Minister Wagner in
background at left. Rodriguez probably urged
Promoting Regional Solidarity
Coming on the heels of the opening of diplomatic
relations with Uruguay last fall and the
rapprochement with Peru last winter, Rodriguez's trip
was largely an effort to build on Cuba's improving
relations in the hemisphere, in our opinion. He
reiterated Castro's current propaganda thrust-the
need for Latin American unity-at each stop and set
the stage for Havana's subsequent entry into the
Latin American Integration Association (ALADI) as
an observer by addressing the organization at its
headquarters in Montevideo. Rodriguez opened his
remarks by asserting that Cuba's socialist system
should not overshadow its Latin American heritage,
and he underscored Cuba's status as an
underdeveloped Latin American country. Cuba's
admittance to ALADI follows Cuba's successful bids
last year to obtain membership in the Andean Pact
and the Latin American Parliament.
Secret
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20 June 1986
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Anatomy of a Public Relations Tour-Rodriguez's Junket to Latin America
Peru
21 May Met at airport by Peruvian Prime Minister Alva Castro.
Hosts Peruvian Foreign Minister Wagner at Cuban Embassy in evening.
Breakfasts with Peruvian President Alan Garcia and Foreign Minister Wagner;
two-hour session focuses on Central America, the Nonaligned Movement, and the
foreign debt crisis.
Pays a protocol visit to the Presidents of Peru's Chamber of Deputies and the
Peruvian Senate; holds a press conference shortly before his departure, asserting
that "there was never any incompatibility between Fidel Castro and Alan Garcia,
only momentary disagreements. "
Argentina
23-24 May Transits Buenos Aires en route to Uruguay.
Uruguay
25 May
Uruguayan Vice President Enrique Tarigo and Foreign Minister Enrique Iglesias
welcome Rodriguez, marking the first official "high-level" contact between the
two countries in 21 years.
Begins official activities by visiting Montevideo City Hall, meeting with the acting
Mayor, and receiving a medal at celebrations for 250th anniversary of the
founding of Montevideo.
Meets privately with Uruguayan Foreign Minister Iglesias, and holds separate
sessions with officials from leading opposition parties and the leftist Broad Front
coalition.
27 May Meets with President Sanguinetti for one-hour discussion focusing on Central
American situation and Contadora-sponsored negotiations.
Delivers speech to student leaders, faculty members, and administrators at
National University on subject of world peace, criticizing the United States for
provoking an arms race and supporting Soviet disarmament proposals.
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Addresses the Latin America Integration Association and, as expected, announces
Cuba's intent to join organization as an observer. Lunches with Vice President
Tarigo and several Uruguayan lawmakers.
In the afternoon speaks with members of the respective Foreign Relations
Committees of the Uruguayan Senate and Chamber of Deputies, strongly
attacking the United States as the source of the conflict in Central America.
29 May Lunches with news media; Cuban Deputy Foreign Minister Alarcon signs bilateral
trade agreement.
30 May Gives long interview to local and international media, playing up common
viewpoints between Cuba and Uruguay, before departing for Argentina.
Argentina
30 May Meets with President Alfonsin to discuss situation in Central America, the
Nonaligned Movement, and bilateral relations.
31 May Discusses the Central American situation and Contadora-sponsored peace efforts,
as well as bilateral issues, with Argentine Foreign Minister Dante Caputo.
Grants a lengthy interview to the official Argentine news agency, arguing that
Latin America needs a political organization that replaces the OAS and excludes
the United States.
Mexico
1 June Arrives in Mexico City for an "in-transit " visit, but waits two days to meet with
President de la Madrid.
2 and 3 June Meets with Mexican Foreign Affairs Secretary Sepulveda, and President de la
Madrid the following day; Central America figures prominently in both sessions,
but Rodriguez undoubtedly raises Mexico's recent suspension of line of credit.
Grants exclusive interview to Mexico's largest daily newspaper on flight to
Havana, praising de la Madrid's tougher stand on the foreign debt problem.
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Rodriguez clearly ruled out, however, any Cuban
attempt to rejoin the Organization of American
States (OAS).
Rodriguez stated in an interview in Argentina that
the OAS does not work in favor of Latin America's
interests because of interference from the United
States and that it is increasingly less relevant to Latin
America's problems. Sweet-talking his hosts,
Rodriguez said that the nature of the member
countries of the OAS today-presumably referring to
the numerous new civilian governments in the
region-is not the same as of those who voted Cuba
out of the organization in 1964. He claimed that
Latin America needs a political organization that
excludes the United States-along the lines of the
Latin America Economic System-but implied that
the impetus for an alternative to the OAS must come
from the Latin American democracies, not from
Cuba. The OAS has been mentioned recently as an
alternative to the Contadora group as a mediator in
Central America, and Rodriguez's protests may
conceal a fear that the talks will pass to an
organization where Cuban access is restricted and
support for Nicaragua is limited.
The timing of the trip as well as Rodriguez's traveling
companions suggest that Central America,
specifically the Contadora talks, was one of Havana's
key concerns. The trip was undertaken just two weeks
before the 6 June "deadline" for the signing of a
Contadora-sponsored negotiated settlement in Central
America, and Rodriguez publicly made an effort to
deflect blame from Nicaragua to the United States
and other Central American countries for the failure
to reach an accord. He reiterated in each capital that
the negotiations for peace in Central America must
continue even if the treaty was not signed in early
June, but gave no indication that Havana was
advising the Sandinistas to sign. Repeating the
standard Cuban line, Rodriguez said Nicaragua
should sign if the agreement was "compatible with its
interests" and that Cuba would withdraw all its
military and civilian advisers from Nicaragua if the
agreement required such a move and the United
States "stops threatening" Managua. He stuck to
recent Cuban statements that there are about 800
advisers.'
Cuban military advisers and some 550 to 650 civilian
personnel in Nicaragua. According to our estimates,
the actual numbers are some 2,000 to 2,500 military
advisers and 3,500 to 4,000 civilian technicians and
Complementing his obvious public diplomacy efforts,
Rodriguez apparently used his private discussions
with the four Latin American leaders-all of whom
are involved in the Contadora efforts-to sell Cuba's
"balanced and positive" positions on Central
America. Deliberately misrepresenting Havana's
views, according to US Embassy reporting from
Montevideo, Rodriguez told Uruguayan President
Sanguinetti that a Cuban-style revolution could not
be copied in Latin America and that Cuba was trying
to disengage gracefully from its commitment to
Nicaragua. Regarding the Contadora talks, a
Uruguayan Foreign Affairs official told US Embassy
personnel that Rodriguez vaguely criticized
Nicaraguan intransigence. He added that Nicaraguan
leaders were "immature types with no political talent"
and that the Soviets also were not disposed to support
Rodriguez may have done some horsetrading with
some of his hosts, particularly with Peruvian
President Garcia and perhaps even with Argentine
President Alfonsin. Press accounts indicate that the
Nonaligned Movement (NAM) was a major topic of
discussion in both Lima and Buenos Aires. Although
Castro is pledged to support the announced
Nicaraguan candidacy to host the next summit, we
believe Rodriguez probably brought with him an offer
of Cuban support for a Garcia bid if the Sandinista
campaign falls flat. Nicaragua's candidacy met with
little enthusiasm at the NAM ministerial in India last
' Intelligence Community analysts recently agreed that, based on
new reporting and a reevaluation
of previous reporting, our previous estimate of 2,500 to 3,500
Cuban military advisers in Nicaragua should be lowered to 2,000 to
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Vice President Rodriguez with
Uruguayan President
Sanguinetti during his official
five-day visit to Montevideo.
Rodriguez announced that he
delivered an official invitation
from Cuban President Castro
for Sanguinetti to travel to
A Peruvian Foreign
Affairs official told US Embassy personnel that the
Cubans recently dangled an offer of their support and
influence in the NAM for a Peruvian leadership role,
much as they held out an offer of such support for
Alfonsin in early 1985. Peruvian Foreign Minister
Wagner admitted earlier this year that the strong
position of Cuba in the NAM was an important
reason for Peru to improve relations with Havana.
In return, Havana almost certainly would look for a
continued increase of bilateral exchanges, particularly
economic trade and barter agreements, between the
countries as a means of reinforcing Cuba's
reintegration into regional affairs. Castro probably
also wants sympathetic treatment of Nicaragua in the
Contadora talks by the three support-group countries
Rodriguez visited, and their help in assisting the
Sandinistas resist conditions imposed by the other
Central American countries that are damaging to
Managua's interests. In addition, Rodriguez may
have been asking for a specific commitment from the
Latin American leaders to back a Cuban bid to host a
major international meeting in the future-perhaps of
the World Health Organization or of another UN
organization-if Havana withdraws its invitation to
host next year's seventh United Nations Conference
on Trade and Development (UNCTAD). Rodriguez
may have received such assurances because,
subsequent to his trip, according to the Secretary
General of UNCTAD, Cuba agreed to withdraw its
candidacy-under US pressure-if the membership
endorsed Latin America's right to host the succeeding
UNCTAD conference.
Building on Incipient Bilateral Ties
Rodriguez apparently also brought with him an
agenda of specific bilateral issues to be covered in
each country, although we doubt that the Cuban Vice
President intended to pursue new agreements on
economic cooperation, trade, or other types of
exchanges. If he did, Havana was surely disappointed
because the tangible results from his journey were
few, according to reporting from US Embassies in the
various capitals he visited.
Rodriguez's one-day stop in Lima was eventful, but
noncontroversial, with separate meetings with
President Garcia, Foreign Minister Wagner, Prime
Minister Alva Castro, and leaders of the Peruvian
legislature. Rodriguez played down the acrimonious
public debate between Lima and Havana last year,
describing the current state of relations as "optimum"
and brushing aside differences on handling the foreign
debt. According to US Embassy sources, Rodriguez
brought Garcia a personal message from Cuban
President Castro, which we believe probably was an
invitation for Garcia to visit Havana during Cuba's
26 July anniversary celebrations.
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Secret
Cuban President Castro with Peruvian Prime
Minister Alva Castro in Havana in early May
1986; this was his second trip to Cuba in six
months. Alva Castro worked out several
economic cooperation agreements infshing,
agriculture, and medicine with his Cuban hosts.
visited Cuba in early May to work out an
extension of an agreement under which two Cuban
fishing vessels would operate in Peruvian waters but
deliver their entire catch to Peru. Rodriguez played
up the fishing agreement to the press and noted that
his visit coincided with a 10-day stay of a 23-member
Cuban delegation led by Cuba's Minister of Fishing
that provided the Peruvians with advice on fishing,
livestock, public health, and the preservation of
national patrimony.
Rodriguez's official five-day visit to Uruguay was the
public relations high point of his trip because the
Cubans met privately with Sanguinetti and held
separate sessions with Foreign Minister Iglesias as
well as officials from Uruguay's three major
opposition groups, including the leftist Broad Front
coalition. The Cuban Vice President made major
addresses to the joint Foreign Relations Committee of
the Uruguayan Congress, to the student organization
at the National University, and to ALADI. He was
also feted and presented with a medal at celebrations
honoring the 250th anniversary of the founding of
Montevideo. Cuba's efforts to make Rodriguez's trip
a public relations success and as noncontroversial as
possible is reflected by US Embassy reporting
indicating Havana requested that its leftist contacts in
the Broad Front not make any pro-Cuban
demonstrations or stage anti-United States
disturbances during his stay. Rodriguez
brought with him an official invitation from Castro
for President Sanguinetti to visit Cuba soon.
The two countries signed a three-year economic
cooperation and trade agreement during the visit that
will give each country most-favored-nation status
regarding customs fees, import and export taxes, and
other trade-related regulations.
bilateral trade between
the two countries is restricted by hard currency
shortages in both nations. the economic
agreement was vague, with many details yet to be
worked out, and primarily called for barter of
agricultural products, Cuban assistance for Uruguay's
rice industry, and the export of Uruguayan chickens
to Cuba. The Cubans also presented the Uruguayan
National Bank with a proposal for a reciprocal
payment and credit arrangement, and, according to
the US Interests Section in Havana, a one-year
commercial credit arrangement was worked out with
a third-country Western bank that will allow
Uruguay to test Cuba as a market for its products.
Rodriguez's visit came on the heels of a large
exposition of potential exports to Uruguay, but, as US
Embassy officials in Montevideo note, if Rodriguez
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Vice President Rodriguez
meeting with Uruguayan Gen.
Liber Seregni, leader of the
leftist opposition Broad Front
was seeking Uruguayan credits to finance Cuban
exports, his visit was surely unsuccessful in that
regard.
Rodriguez's shorter and "private, in-transit" visits to
Argentina and Mexico appear to have been motivated
primarily by economic concerns. According to US
Interests Section sources both
Argentina and Mexico recently suspended
longstanding large credit lines to Cuba, and, although
Rodriguez spoke at length about Central America in
both capitals, his first order of business undoubtedly
was to try to persuade Presidents Alfonsin and de la
Madrid to restore the credit arrangements. According
to the Mexican Embassy in Havana, Cuba had been
pressing the Mexicans to increase their three-year
$150 million credit to $200 million, but Rodriguez
was unsuccessful even in preserving the current
accord. Castro himself apparently tried to salvage the
remainder of the 1984-86 $600 million credit line
from Argentina just before the Rodriguez meeting
with Alfonsin. The Cuban leader met in Havana with
the Argentine Ambassador to Cuba, bringing along
his top economic advisers, in a probable move to
impress upon the Argentines the importance of their
credits to Cuban economic development.
Outlook
On face value, the tangible benefits to Cuba of the
Rodriguez tour were minimal, and Havana's point
man on foreign economic relations scored few gains in
terms of substantive agreements heralding increased
Cuban-Latin American ties. His failure to persuade
the Argentine and Mexican leaders to restore credit
lines to Cuba, moreover, will be a serious setback to
the Cuban economy and damaging to Havana's
efforts to expand its economic relations in the region.
Nonetheless, despite the lack of substantive bilateral
agreements and continuing differences of opinion
between Havana and South American leaders on
bilateral and regional issues, Rodriguez's trip was a 25X1
major success for Cuban public diplomacy and
propaganda efforts. Rodriguez's dissembling tactics
with heads of state puts at risk his own credibility, as
well as Cuba's, but his personal diplomacy and
statesmanlike appearance probably will help
accomplish Castro's goal of reducing the perception of
a "Cuban threat" in Latin America. His comments on
the Nicaraguan leadership's immaturity and
intransigence, for example, help reinforce Cuban
public statements of support for a negotiated
settlement in Central America and cast Havana as a
positive influence on the Sandinistas and a benevolent
player in regional politics. Similarly, his comments on
Moscow's "unhelpful role" in Central America and
desire to pull out are meant to assure Latin leaders
that Cuba's role in Central America should not be
seen in an East-West context and, by implication, that
it is Washington that has introduced the East-West
struggle into a regional setting.
Although the Latin American leaders who met with
Rodriguez are likely to remain wary of Havana's
motives and meddling, Rodriguez probably had some
success conveying to them a sense of Cuba's desired
image of "moderation, openness, frankness, and
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independence" on issues of great concern to them.
Sanguinetti, for example, publicly stated that there
were more areas of agreement between Cuban and
Uruguayan policy than he expected. The Rodriguez
trip also probably has ensured that the increase of
contacts and official travel between Havana and
Latin American capitals over the last year will
continue apace. We doubt that Sanguinetti or Garcia
will travel to Cuba soon, but the invitations from
Castro that Rodriguez delivered will put pressure on
them to visit sometime in the future and could give
the Cuban leader a propaganda windfall and
diplomatic success even greater than that provided by
Ecuadorean President Febres-Cordero's visit in April
1985.
Secret 16
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Cuba: Addressing
Domestic Problems
President Castro's speech on 6 June closing the
ceremonies marking the 25th anniversary of the
Interior Ministry reflected his continuing concern
over the trend of domestic events. Castro's address
was not broadcast and only summarized in the Cuban
media, suggesting that his remarks were frank to the
point of requiring judicious editing prior to release to
the general public. Castro admitted there was an
increase in crime that had led the Politburo to devise
a "sanitary plan" consisting of a wide range of
corrective measures, but the speech summaries did
not elaborate on the specifics of the plan. As has
occurred several times over the past two years with
speeches on politically sensitive subjects, Castro's
comments may have been videotaped for later viewing
by selected audiences such as party officials and
military officers.
According to summaries of the speech carried in the
Cuban media, Castro bluntly acknowledged that the
Interior Ministry's "main task" today is the struggle
against "antisocial activities," such as burglary and
crimes of violence, and admitted that some
"hooligans" have even been so bold as to take on the
police. His unusual stress on the need for integrity in
the Interior Ministry implies that some of its
personnel have been found wanting in that quality
tending to confirm
that Cuba's chief internal security organ has
become riddled with corruption and other weaknesses.
Castro held out little hope for government help in
alleviating the housing crisis and insisted that the
problem be resolved through a "revitalized
microbrigade" system that has been in use for years,
despite the fact that this approach has proved wholly
inadequate, according to reporting from the US
Interests Section.
Judging from the media's abbreviated coverage,
Castro's speech reflects a serious preoccupation with
internal matters and a determination to adhere to a
rigid ideological line despite mounting problems that
demand a more pragmatic approach. It also suggests
that the Interior Ministry will play an ever more
critical role in population control if current trends in
crime and corruption continue and overt repression
becomes increasingly necessary.
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Continuing the trend set in his speeches earlier this
year, Castro lashed out against peasants, workers, and
others who use their positions for personal
enrichment. His criticism of the labor movement for
"violating the principle of paying each worker
according to his work," in our opinion, probably
means the regime, will soon produce new regulations
that link salaries much more closely to productivity as
part of a program to overcome worker apathy.
Portending more bad news for the average Cuban,
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ALA LAR 86-014
20 June 1986
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Video Recorders
The Castro regime apparently is becoming concerned
about the potential impact of Western video media on
the Cuban population. This concern was underscored
by a recent announcement that the Communications
Ministry had established a series of new regulations
governing transmission and reception of radio
communications through the use of artificial Earth
satellites and dish antennas. Any such activity must
now have prior approval of the Ministry.
In assessing this new development, the US Interests
Section in Havana notes that video cassette recorders
are becoming available, and that most members of the
elite now have them. Uncontrolled access to television
broadcasts via satellite from other countries, if only
through a few receiving stations, could result in a high
volume of information inimical to the regime being
copied on video tapes and passed through Cuban
society. According to the Interests Section, the new
regulations seem aimed at controlling this politically
dangerous source of ideological penetration.
visited Cuba in March noted there was increased
Western influence in Cuba as a result of the greater
availability of video cassette recorders, the
accessibility of US television and radio transmissions,
and better communications in general. Two years
earlier reported being told by
an official that there
were already 10,000 video cassette recorders in the
country and that "countless" cassettes with pirated
US television programs and tapes brought in by
travelers from abroad were circulating in Cuba. The
source said that taping television programs from
Miami was becoming a big business because of the
strong popular demand
The regime's political watchdogs have long been
concerned about the political threat posed by video
recorders and tapes, and several recent events
probably helped stiffen their resolve to try to control
their use. Presumably prompted by the immense
popularity of the recorders, thieves hijacked an entire
shipping container of them outside Havana earlier
this year, according to sources of the US Interests
Section.
=three arrests were made last April in connection 25X1
with a pornography ring in which two party
members-one a member of the Central Committee's
America Department who held high diplomatic
rank-made videotapes of teenagers performing 25X1
sexual acts in exchange for drugs. Regime officials
were reportedly furious because some of the
pornography was set against a background of portraits
of Fidel Castro and other heroes of the revolution.
The new regulations governing satellite
communications, in our opinion, are likely to be only
the beginning of a wave of legal and administrative
measures aimed at clamping down on the flow of
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ALA LAR 86-014
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Guatemala
El Salve gua
Panama
COS
Rtca '
C9~ T#tontcaRB
=E{
matte
Qua#m
AGUATtArA Jalapa
Boundary representation is
not necessarily authoritative
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Guatemala: Rebels
on the Defensive
Guatemala's four insurgent factions-whose forces
we estimate number some 1,500 full-time
combatants-have been unable to recover from
serious setbacks suffered over the past four years and
are likely to remain on the defensive for the
foreseeable future. The Army's aggressive
counterinsurgency campaign is keeping the rebels off-
balance and increasingly isolated in the countryside,
forcing the guerrillas to emphasize low-risk attacks
against economic targets and military patrols, largely
in remote areas. In addition, battlefield reverses have
caused the insurgents to focus on political rather than
military action to challenge the six-month-old civilian
administration, with little likelihood of success.
Although the rebels may gain some publicity by
turning to acts of rural and urban terrorism to
embarrass the government and maintain their
credibility, we believe they will remain incapable of
mounting any serious threat against the government.
Since the inauguration of President Cerezo, the
military has kept the insurgents on the run with
frequent sweep operations in areas of concentrated
guerrilla activity, especially in northern Peten
Department and the highlands of northwestern
Guatemala. For example, since March the Army has
diverted troops from inactive zones to increase its
forces in the western de artments of
reporting. A heightened
military presence and aggressive patrolling have
caused higher guerrilla casualties and hindered rebel
efforts to o erate even in areas where the have
strength. that one
insurgent action su ere a major set ac when the
Arm ismantled a
rebel base and communications site in San Marcos in
February, and, in April, killed four of the faction's
leaders during a subsequent sweep operation in
Quezaltenango Department. Meanwhile,
the Army frequently
is able to respond to guerrilla attacks against military
and civilian outposts, despite continuing
transportation and logistic difficulties.
In addition to military action, the Army is
undercutting popular support for the rebels with civic
action programs and is receiving government promises
of support for future projects. Cerezo has pledged not
to disband the 915,000-strong Civil Defense Force-a
program the military views as vital to its
counterinsurgency efforts-and is promoting the
Army's model village and other rural development
programs, according to the US Embassy. In our view,
the success of these and other programs limits the
insurgents' ability to infiltrate and recruit from
among local Civil Defense Forces and inhabitants of
model villages, many of whom are former guerrilla
sympathizers.
The military hopes to continue restricting rebel 25X1
activity in urban areas by preventing the resurgence
of insurgent cells, which have been largely controlled
since 1983. the 25X1
Army last December dismantled one of the guerrilla's
last functioning urban safehouses.
will probably support the military's attempts to limit
urban actions by insurgents.
Insurgent Tactics
Insurgent leaders are currently reassessing their
military options in light of their failure to disrupt the
reports indicate that the insurgents continue to
Secret
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Secret
execute hit-and-run ambushes against military patrols
in northwestern Guatemala and in the Peten-where
the Army is currently conducting aggressive sweep
operations-but they have concentrated on attacking
small isolated Army and Civilian Defense Force units
while avoiding contact with larger units. We believe
these low-risk efforts probably reflect the insurgents'
desire to inflict casualties on the military without
engaging battalion-sized Army units in heavy combat.
In the face of military setbacks, the guerrillas are
turning to a strategy of attacking lightly defended
economic targets in the Peten and southwestern
Guatemala to embarrass the government and scare
off potential investors. Since February, for example,
guerrillas in the Peten have launched several attacks
against unprotected foreign and domestic oil
installations during which they burned vehicles and
other equipment.
By March, attacks had become so frequent that one
Spanish firm agreed to continue exploration activities
only after Cerezo ordered some 700 troops to protect
the area from future harassment,
In other attempts to disrupt economic activity, the
guerrillas are terrorizing farm owners and their
workers by periodically occupying or burning farms
and cooperatives in the vital agricultural areas of
southwestern Guatemala.
coffee and sugar growers, disruption of economic
activity-such as roadblocks and the stealing of farm
payrolls-impacts directly on the local population and
works against the insurgents' goal of regaining
popular support from among the several thousand
workers who migrate annually to the area during the
harvest season.
Insurgent Problems
The insurgents are having increasing difficulty
retaining full-time combatants as a result of their
military setbacks.
all of the insurgent
groups are suffering from a rising defection rate and
high combat losses. Moreover,
insurgent leaders are increasingly
frustrated at their inability to infiltrate and recruit
from among local civilian defense units and
inhabitants of newly constructed model villages.
The insurgent factions also have been unable to
overcome longtime personality conflicts and
ideological differences.
he factions have failed to cooperate in
planning and logistics.
While Cuba probably will continue to provide training
frustration in fostering rebel unity
may result in diminished arms supplies and financial
aid.
Opting for Political Action
As a result of the military's success against the
insurgents, guerrilla leaders have been emphasizing
political action.
they believe they can best challenge the new
demonstrations.
political groups and by organizing strikes and mass
civilian government by infiltrating labor, student, and
Although the improved political climate may make it
easier for the insurgents to make limited inroads on
the political front, rebel attempts to manipulate the
labor movement and political organizations will be
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Rebel Armed
Forces (FAR)
Jorge Ismael Soto Garcia
Approximately 400
members
The Peten
Guerrilla
Army of the
Poor (EGP)
Ricardo Ramirez de Leon
Approximately 600
members
Northwestern
Guatemala
Revolutionary
Army of Peo-
ple in Arms
(ORPA)
Rodrigo Asturias Armado
Approximately 450
members
Southwestern
Guatemala
Guatemalan
Labor Party/
Dissident
Faction
(PGT/D)
Jose Alberto Cardoza
Aguilar
Less than 50 members
Nothing recent
limited by their inability to revive weak urban support
networks. moderate labor
leaders are, for the most part, reluctant to establish
ties to the insurgents and even called off Labor Day
demonstrations to curtail violence incited by leftists.
Moreover, although some groups on the democratic
left might be willing to accept manipulation by the
insurgents, they would need to conceal their ties or
risk reprisal by the government.
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- Disputed territory
El Salvador- Honduras Border Dispute
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Honduras-El Salvador:
Border Dispute Drags On
Honduras and El Salvador agreed last month at the
presidential summit in Guatemala to submit their
longstanding border dispute to the International
Court of Justice later this year, but their agreement
allows them almost three years to reach a bilateral
settlement. Despite some optimism on both sides for a
quick out-of-court settlement, the suspicions and
maneuvering that have made the issue controversial
since independence from Spain in the 1820s are
unlikely to disappear immediately. Over time,
however, transfer of the dispute to a new venue, as
well as the growing expense of the judicial process and
the prospect that Nicaragua may try to get involved,
probably will encourage both sides to make
concessions. Meanwhile, the two countries are likely
to maintain their current limited cooperation on
security and diplomatic matters.
The agreement to go to the World Court is in accord
with a peace treaty signed in 1980 that allowed either
Tegucigalpa or San Salvador to submit the border
dispute for Court arbitration if the issue was not
resolved bilaterally by last December. Bilateral talks
have been fruitless and sometimes acrimonious,
according to US Embassy reports, because deep
nationalist sentiments and constitutional
prohibitions-passed since the 1980 treaty-on
yielding "sovereign territory" made it impossible for
either side to compromise.
two national elections in each country
and an active insurgency in El Salvador also stymied
the talks, and poor coordination of military actions in
and around disputed territory led to sporadic clashes
and heated diplomatic exchanges.
onduras-concerned that
El Salvador's greater military strength precluded a
fair bilateral agreement-intended all along to
demand Court arbitration. El Salvador, appearing
equally confident of its legal case, also came to accept
the Court's involvement.
Last month's agreement, however, still postpones
binding arbitration by the Court for three more years.
It calls for El Salvador and Honduras to present their
cases by the end of this year and then, at 10-month
intervals, exchange a series of three arguments and
counterarguments. All disputed areas-including 40
percent of the 405-kilometer land frontier-are open
to negotiation, according to the US Embassy in San
Salvador, even though recent bilateral talks have
focused mostly on the two largest "pockets" of land,
or bolsones, and on the Gulf of Fonseca and its
islands. The bolsones are small-all six together are
about twice the size of Washington, D.C.-and have
little economic value.
Both sides claim the disputed territories are closely
linked to national interests, although under the 1980
treaty neither has been permitted to locate troops or
civil authorities there. El Salvador, which is one-fifth
the size of Honduras and has a slightly larger 25X1
population, views the bolsones as important to relieve
growing demographic pressures. 25X1
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resolve the territorial status in order to deny
antigovernment guerrillas refuge in a no man's land.
Honduras, for its part, has claimed that sovereignty
over the Gulf of Fonseca is vital to its security and
trade interests and that the land bolsones are of
"historical" importance.
Shadowboxing
Despite the apparent deep interest on both sides in 25X1
resolving the dispute, neither so far has displayed
willingness to make significant concessions. Although
El Salvador's chief negotiator told the US Embassy in
early June that confidential talks will resume soon
and could lead to a settlement within three months,
we see little basis for such optimism. In the past,
Embassy reporting from both capitals has suggested
that each time agreement was within reach, San
Salvador and Tegucigalpa raised new demands. When
El Salvador offered a "sovereign channel" to the
Pacific last August, for example, Honduras
resurrected an old demand for ownership of
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ALA LAR 86-014
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Direct agreement: Honduran
newspaper cartoon reflecting
Tegucigalpa's perception of
bilateral talks before agreeing
to World Court adjudication.
?E61_0 DFRECTO..
Meanguera Island, the major island in the middle of
the Gulf of Fonseca, according to US diplomatic
reports. More recently, while drafting the accord in
May, they had trouble even agreeing on what they
still disagreed on, according to the US Embassy in
Tegucigalpa.
Until the first round of Court arguments sometime
before October 1987, both sides appear likely to
remain largely inflexible. US Embassy reporting
indicates that El Salvador is likely to continue
pushing for acceptance of the "Cruz-Letona" line,
which was rejected by Tegucigalpa in 1881 on the
grounds that its negotiator had ignored instructions.
Similarly, Honduras may persist in its claim of
sovereignty over Meanguera Island, although El
Salvador has controlled it for more than 100 years.
Tegucigalpa probably will at least assert
that a 1917 decision by the Central American Court
of Justice-that declared the Gulf a closed sea with
Honduras, El Salvador, and Nicaragua to decide
jointly on its use-and a Law of the Sea Treaty
provision calling for cooperation among nations
bordering closed seas legally preclude San Salvador
from curbing Honduran use of the Gulf.
Pressures for Bilateral Agreement
We believe that momentum eventually will build for a
settlement that will be privately presented to the
Court for approval rather than adjudication. Removal
of the issue from the domestic political agenda
probably will allow nationalist feelings to cool over
time, contributing to more constructive dialogue. The
US Embassies report both countries are concerned
that a protracted court case will be extremely
expensive; Honduras has already budgeted $3.5
million in scarce foreign reserves for it. The internal
democratization process in both countries, as well as
the concomitant strengthening of relations with other
democracies, may also aid progress in bilateral talks
because these factors probably have engendered
greater respect for the rule of law and international
institutions like the Court. As a result, the
governments may be more sensitive to appearing to
obstruct peace. In addition, unlike in the past-when
historical accounts indicate that deals were scuttled
by squabbles between local governors near the
border-the central governments of both countries
now are probably more confident of their ability to
implement an agreement.
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Secret
The prospect of Nicaraguan intervention in the case
also will probably motivate San Salvador and
Tegucigalpa to compromise before formally entering
the arbitration process. Their submission of
sovereignty over the Gulf of Fonseca for court review
leaves the case open for other concerned parties to
become involved, such as by submitting a brief on the
issue, even though US diplomatic reporting indicates
that the Court has been reluctant to allow substantive
interventions. In accordance with the 1917 Central
American Court finding that the Gulf was a shared
sea, moreover, Nicaragua may claim a right to be
involved in any decisions regarding its status. El
Salvador's chief negotiator has told the US Embassy
that he has already been approached by a Nicaraguan
Foreign Ministry official on the topic, and Honduras's,
top border negotiator-apparently concerned that
Managua would support El Salvador's position-was
received coolly when he sought Nicaragua's views
recently. While the
prospect for Nicaragua intervention alone is unlikely
to cause either country to cave in to the other's
demands, we believe it will weigh in their decisions
because of the shared desire to keep full pressure on
the Sandinistas for a multilateral negotiated
settlement to regional tensions. According to the US
Embassy in Managua, the issue is one of the few areas
where Nicaragua can attempt to extract bilateral
concessions in exchange for agreeing to support one or
the other's claims.
Outlook for Cooperation
By removing the border issue as an immediate irritant
in bilateral relations, the agreement to go before the
World Court probably will facilitate continued
limited cooperation on security issues of mutual
The US Embassies in both capitals report,
furthermore, that strong bilateral support is growing
for Honduras to proceed with a plan to build fences
and conduct regular military patrols around
Salvadoran refugee camps, which have provided
The two countries also appear likely to remain united
in opposition to Nicaragua. In the Contadora process,
US Embassy reporting indicates that they are
committed to maintaining solidarity with the other
Central American democracies. They also are
working to revitalize the Central American Defense
Council and to improve the exchange of military
intelligence
Although nationalism on both sides will limit this type
of cooperation, removal of the border issue to a back
burner may help stabilize the relationship.
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West Germany-Nicaragua: Social
Democrats and Sandinistas
Sandinista.
The Social Democratic Party (SPD) has become more
critical of the Sandinistas, but it remains unwilling to
disavow them altogether. Party leaders publicly note
human rights abuses in Nicaragua, in part to refute
Christian Democratic charges that they ignore
repression by leftwing dictatorships. But the SPD
almost certainly will continue to focus its criticism on
US policy toward Nicaragua, especially because the
rank and file apparently remains strongly pro-
moral superiority vis-a-vis the United States.
Background
Like other West European leftists, the Social
Democrats initially supported the Nicaraguan
revolution enthusiastically, and until recently they
dismissed Sandinista human rights violations as mere
"mistakes." SPD leaders believed that Nicaragua was
choosing the "third way" between capitalism and
Communism they long had recommended for the
Third World. The SPD contended that Western
isolation of the Sandinistas would make them
dependent on the Soviets. At the same time, criticism
of US policy in Central America became another way
of demonstrating West European independence and
Nonetheless, some Social Democrats soon began to
voice concern in private about the Sandinistas' failure
to implement the proclaimed objectives of the 1979
revolution: political pluralism, a mixed economy, and
Embassy in Managua, SPD Latin American expert
Hans-Juergen Wischnewski told the Sandinistas in
May 1983 that the Social Democrats' continued
support would depend on the degree to which
pluralism and nonalignment were achieved.
In public, however, the Social Democrats continued to
defend the Sandinistas. In February 1984, for
instance, Wischnewski told the Bundestag that
Managua was improving its human rights
performance despite past mistakes. The Social
Democrats have vehemently attacked US economic 25X1
measures against Nicaragua, mining of Nicaraguan
harbors, and arming of the Contras-policies also
criticized, although less stridently, by leading
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public statements by the Social Democrats cited US
assistance to the Contras as a major reason for
repression by the Sandinistas.
Recent Criticism
Last February, a commission of the SPD Bundestag
group led by former Hamburg Mayor Hans-Ulrich
Klose issued the first systematic Social Democratic
criticism of the Sandinistas. The report-based on a 25X1
factfinding mission to Nicaragua in November and
December-catalogued a series of repressive practices
including:
? The creation of neighborhood "Sandinista Defense
Committees" with. the potential of spying and
informing on dissidents. 25X1
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along with continuing attempts to resettle peasants
from war zones, in part to keep them from
supporting Contra forces.
? "Popular tribunals" independent of the regular
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? Detention of an unknown number of political
prisoners.
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The commission urged the SPD to criticize human
rights violations in Nicaragua, even though it claimed
that those in El Salvador were much more serious.
The report also recommended, however, that the
Social Democrats continue to seek dialogue with and
promote economic development in Nicaragua while
condemning US policy in the region.
Little Change in Policy
Despite increasing criticism of the Sandinistas, the
Social Democratic leadership has not changed its
basic stance toward Nicaragua. In March, party
Chairman Brandt issued a statement strongly
condemning US assistance to the Contras, criticizing
Bonn's suspension of development aid to Nicaragua,
and endorsing the Contadora process. The statement
acknowledged that the goals of the Sandinista
revolution "have not always been pursued resolutely,"
but it laid the blame primarily on external
intervention. Brandt also claimed that Nicaraguan
President Ortega had assured him that Managua
would pursue dialogue with the unarmed opposition
and investigate alleged human rights violations.
members of the former Somoza regime.
Other Social Democrats also have continued to voice
general support for the Sandinistas. The SPD-Green
majority in the Hessen state parliament, for instance,
voted in April to initiate educational, scientific, and
economic cooperation programs in a region of
Nicaragua. Wischnewski, despite his criticism of the
Sandinistas, claimed in a recent press release that
they were sincerely seeking national reconciliation.
After helping in June to arrange the release of eight
West German leftist volunteers captured by insurgent
forces, Wischnewski publicly defended the
Sandinistas' handling of the incident and urged Bonn
to improve relations with Managua. In March, Social
Democratic members of the Bundestag publicly urged
the US Congress to refuse assistance to the Contras,
whom the party press continues to portray as
Further, one Social Democrat's acerbic public
criticism of the Sandinistas recently led to his
resignation from the party. Cologne University
international law professor Martin Kriele, a longtime
SPD member who defended the Brandt
administration's treaties with Eastern Europe against
constitutional challenges in the early 1970s,
repeatedly has argued that the Sandinistas are Soviet-
and Cuban-style totalitarians. He also has charged
SPD leaders with whitewashing Nicaraguan abuses,
and his most recent book expressed sympathy for the
Contras. Kriele's statements prompted his local Social
Democratic organization to recommend his expulsion.
Kriele probably could have won an appeal to higher
party organs, according to press reports, but he
resigned last March to avoid lengthy proceedings and
further embarrassment to the SPD during an election
campaign.
Prospects
The Social Democrats almost certainly will continue
to blame the United States more frequently than the
Sandinistas for instability in Central America. Even
moderate party leaders believe that US assistance to
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the Contras hinders chances for a peace settlement
and at least partly explains repression by the
Sandinistas. Although some leaders such as
chancellor candidate Johannes Rau may tone down or
avoid criticism of US policy toward Nicaragua in
order to undercut Christian Democratic charges of
anti-Americanism, not all party members are likely to
follow suit.
The SPD may play down its views on Nicaragua
during the election campaign, in part to avoid
exposing its internal differences. Party leaders can
point to their recent criticism of the Sandinistas to
counter Christian Democratic charges that they
ignore human rights abuses by leftwing dictatorships.
But they probably will avoid harsher attacks on
Managua's human rights abuses, which probably
would provoke open dissent by party leftists.
The Social Democrats are even less likely to criticize
Managua's ties to Moscow and Havana, a topic they
have avoided in recent years. The SPD probably
reasons that such criticism would run counter to its
general emphasis on East-West detente and raise
questions among the electorate about its previous
uncritical support for the Sandinistas
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Venezuela: Presidential Politics
Heating Up
presents a formidable challenge.
Although the presidential election is still two years
away, the campaign is rapidly heating up. The pro-US
"orthodox" faction of the ruling Democratic Action
party-led by President Lusinchi and his allies-faces
a political challenge from former President Carlos
Andres Perez, leader of the party's populist wing, who
is actively seeking the 1988 nomination. A sharp critic
of US foreign policy and a charismatic and energetic
politician, Perez at this juncture appears to have the
greatest electoral appeal within the ranks of possible
Democratic Action presidential choices. Lusinchi and
the party organization oppose Perez's bid and will try
to block his candidacy. Nevertheless, continuing
economic setbacks could eventually force party
leaders to turn to their strongest votegetter,
particularly if the opposition Social Christian party
support.
Background
Last year, Lusinchi and party leaders with similar
views outmaneuvered Perez, turning back his effort to
place supporters on the National Executive
Committee, which controls the electoral college that
will select Democratic Action's next candidate. By
dominating the executive committee, the "orthodox"
leadership could veto Perez's nomination, just as party
founder and former President Betancourt blocked the
bid of a leftist candidate in 1968 who had strong voter
Earlier this year, Lusinchi appeared to be in charge of
the political process and appeared likely to name his
successor in 1988. US Embassy reporting suggested
that he had met Perez's challenge and that COPEI,
the largest opposition party, was divided and still
smarting from its massive electoral defeat of 1983.
Furthermore, Lusinchi had corrected Venezuela's
external payments deficit and was preparing to tackle
unemployment and eight years of economic
stagnation by implementing growth-stimulating
New Political Vulnerabilities
We now believe, however, that the political fallout
from the recent decline in international oil prices-
which account for about 90 percent of export earnings
and 70 percent of government revenues-has hurt
Lusinchi and may have weakened the "orthodox"
wing of Democratic Action and its hold on the
nominating process. Opposition leaders-including
COPEI's presidential hopeful, Eduardo Fernandez,
and Perez-have found plenty of ammunition to use
against Lusinchi and his allies. Provided with a
readymade issue by the oil crisis, Fernandez has
spearheaded a hard-hitting attack on the
government's economic policies, in particular its debt
refinancing agreement-entered into before the oil
price collapse. Fernandez, according to US Embassy
sources, has blamed government mismanagement and 25X1
has attacked the refinancing deal as subservient to
foreign interests. While Democratic Action did unite
behind Lusinchi in an effort to limit the political
damage, Fernandez's campaign is paying early
dividends and COPEI appears to be regaining
support, according to recent Venezuelan polls.F__1 25X1
Perez's Moves
Seizing on reports of COPEI's resurgence and on
current economic issues, which he has used against
Lusinchi in party circles, Perez is in the strongest
position to take advantage of widespread discontent.
By exploiting his popularity, emphasizing
his role as Socialist International Vice President and
spokesman for Venezuela, and the growing opposition
challenge, Perez has attracted the support of mid-
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20 June 1986
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Colorful, outspoken former President (1974-79) ...
has enormous popular following and would like to be
president again ... a founder of Democratic Action
party but at odds with moderates who control the
party and are wary of his independent style and leftist
views ... well-traveled spokesman for Third World
causes ... supporter of Sandinista regime ... often
strident critic of US policies ... energetic campaigner
with forceful, personalized leadership style ... has
ridden out corruption scandals in the past ... about
64.
While he has made inroads with lower level party
functionaries, Perez has only one clear-cut supporter
on the National Executive Committee and will have
to rely on his popularity to overcome this electoral
obstacle to his nomination. He is trying to convince
the party leadership that without him COPEI will
regain the presidency in two years.
Lusinchi's Counterstrategy
Lusinchi and other orthodox leaders have begun to
advance the candidacy of Reinaldo Leandro Mora,
Senate President and Democratic Action Vice
President. According to press reports, Lusinchi met
with the party leaders at the highest level last month
to name Leandro Mora, a politician who has
demonstrated skill in building consensus, as their
choice and to initiate his campaign. Lusinchi has
reportedly won labor's support, which constitutes a
Popular, charismatic COPEI secretary general (since
1979) ... controls most of party apparatus ... has
recently emerged as front-runner for 1988 COPEI
presidential nomination with growing support within
the party ... widely popular according to national
opinion survey ... generally well disposed toward the
United States ... softened sharp commentary by
fellow COPEI members on US airstrikes in Libya ...
articulate, polished ... 45 years old.
key factor in Democratic Action's political
framework. Moreover, other opponents of Perez
reportedly have already begun to line up in favor of
Leandro Mora.
We believe, however, that continuing economic
stagnation coupled with a growing challenge from
COPEI could force the party to turn to Perez as their
strongest votegetter.
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Latin America
Briefs
General Leonidas Pires Goncalves is successfully redefining the Army's role in
Brazil's "New Republic" with the support of President Sarney and the Congress.
Handsome, urbane, and politically astute, the Minister is supportive of civilian
government and is filling key jobs in the Army with supporters who hold similar
views. he is shifting the Army's primary 25X1
responsibility to protecting Brazil from external threats, and has formalized a
major force modernization program that includes a large purchase of new armored
fighting vehicles and tanks. Beyond this, Leonidas has received approval to create
Brazil's first Army Air Corps and equip it with modern helicopters. He is
enhancing career and advancement opportunities and beginning new military
hospital construction projects-popular moves supported by his troops. 25X1
In contrast to the aloofness exhibited by his predecessors toward civilian
politicians, Leonidas is actively courting congressional and presidential support for
his efforts. He has increased the size of the Army's Congressional Liaison Staff,
In an effort to earn congressional good will and 25X1
obtain funding to replace outdated equipment, he has invited influential
legislators, including those who opposed the former military government, to tour
Army facilities to demonstrate the Army's new commitment to defense activities.
He has managed to nearly double the Army's 1986 budget, with much of the
increase going toward the purchase of new equipment. During a presidential tour
of Army bases in the Amazon, which Leonidas orchestrated, the Minister
apparently convinced Sarney that the Army needed its own helicopters to deal
with potential incursions by guerrillas and narcotics traffickers from neighboring
Peru and Colombia-both new concerns of the President. As a result of his efforts,
Leonidas is already being labeled as one of Brazil's best Army Ministers,
Uruguay Wrestling With the Human Rights Issue
Uruguay's armed forces support civilian rule but worry that leftist demands will
lead to Argentine-style trials of officers for alleged human rights abuses
committed under the former military government. The Supreme Court is
deliberating over one case that would set a precedent for trying officers in civilian
or military courts.
Secret
ALA LAR 86-014
20 June 1986
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President Sanguinetti is taking a cautious approach to this sensitive issue.
Earlier this month, Sanguinetti met and discussed the human rights
US Embassy.
question with opposition Blanco Party President Wilson Ferriera, according to the
cases be brought to trial.
Sanguinetti and most Uruguayan politicians would like to defuse the issue quietly.
In our view, the Supreme Court is likely to award jurisdiction over officers' trials
to the military courts. Sanguinetti may have negotiated an amnesty for human
rights offenders during his meeting with Ferriera, similar to the earlier one
granted to Uruguayan political prisoners. In any event, US Embassy officials
believe that lack of evidence would limit the number of convictions should any
be limited by the new quota system.
The members of the Andean Pact (Bolivia, Colombia, Ecuador, Peru, and
Venezuela) have agreed to liberalize trade based on a new quota system. The issue
had been one of the Pact's most contentious problems. Ecuador, the strongest
critic, previously maintained that liberalization would only benefit Colombia,
Venezuela, and Peru, but agreed to support an initiative that provides for
reciprocal benefits. The new program requires each country to allow limited
importation of 30 to 50 products that had been banned on the grounds that
importation would hurt domestic producers. The program will be reviewed after
three years. Under the new agreement, Ecuador, for example, would permit
limited competitive imports of Venezuelan, Peruvian, and Colombian
petrochemical and metallurgical products, but it would benefit by exporting
Ecuadorean chocolate, large kitchen appliances, fish meal, and wooden goods. Pact
members have agreed that, because of Bolivia's economic woes, its exports will not
Colombia, the world's second-largest coffee producer after Brazil, will probably
meet its 1986 coffee export goal of 12 million bags and may gain $3 billion in
foreign exchange earnings this year. The Colombian Coffee Growers Association
estimates the 1985/86 coffee harvest will yield 11.5 million bags, a volume similar
to that of last year. Colombia's coffee stocks from previous crops are at a record
high-I 1 million bags-and domestic consumption remains at only 2 million.
Bogota has so far rejected Central American and Mexican pressure to reduce
coffee sales.
Coffee export revenues typically contribute more than 50 percent of all legal
exports. Increased export earnings will improve the ability of the next government,
which takes office in August, to lower the budget deficit and reactivate the
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Secret
Despite President Garcia's recent 60-day renewal of martial law in Lima, the
Sendero Luminoso insurgents continue to target high-ranking civilian and military
officials. Sendero Luminoso has also demonstrated an increasing ability to damage
Peru's economic infrastructure outside of Lima. Using stolen explosives,
Senderistas recently blew up a key rail bridge linking Lima and a provincial
capital in Peru's central copper mining region, causing an estimated $3 million in
the precise timing of the detonations, which occurred as a train loaded
with copper ore was crossing the bridge, indicates a high level of skill.
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Secret
Secret
Declassified in Part - Sanitized Copy Approved for Release 2012/03/07: CIA-RDP87T00289R000301560001-4