COUNTERSPY: WE CAN USE NUCLEAR WEAPONS & WIN...U.S. ARMY MANUALS SAY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00845R000100140001-1
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 60
• Document Creation Date: December 22, 2016
• Document Release Date: June 15, 2010
• Sequence Number: 1
• Publication Date: November 1, 1982
• Content Type: OPEN SOURCE

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Volume 7 Number 1 $2 Sept.-Nov. 1982
WE CAN USE NUCLEAR WEAPONS & WIN...
U.S. ARMY MANUALS SAY
Also in This Issue: U.S. Government Irradiated Humans for Nuclear War Data; Reagan Pre-
pares for War in Outer Space; U.S. Responsibility for Famine in Chad; Is the C.I.A. Subverting
Elections in Canada?; Mauritius Challenges Reagan Over Diego Garcia; Strategic Hamlets
Revived in the Philippines; British Disinformation and the Malvinas War.
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 Approved For Release 2010/06/15: CIA-RDP90-00845R000100140001-1
Counterspy Statement of Purpose: The United States emerged from World War II as the world's
dominant political and economic power. To conserve and enhance this power, the U.S. govern-
ment created a variety of institutions to secure dominance over "free world" nations which
supply U.S. corporations with cheap labor, raw materials, and markets. A number of these in-
stitutions, some initiated jointly with allied Western European governments, have systemat-
ically violated the fundamental rights and freedoms of people in this country and the world
over. Prominent among these creations was the Central Intelligence Agency (CIA), born in 1947.
Since 1973, Counterspy magazine has exposed and analyzed such intervention in all its
facets: covert CIA operations, U.S. interference in foreign labor movements, U.S. aid in cre-
ating foreign intelligence agencies, multinational corporations-intelligence agency link-ups,
and World Bank assistance for counterinsurgency, to name but a few. Our view is that while CIA
operations have been one of the most infamous forms of intervention, the CIA is but one strand
in a complex web of interference and control.
Our motivation for publishing Counterspy has been two-fold:
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their own rights and bring about necessary change when equipped with such information.
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Konrad Ege
John Kelly
Dr. Walden Bello
Director, Congress Task
Force of the Philippine
Solidarity Network
Robin Broad
PhD Candidate,
Princeton University
John Cavanagh
Economist, United Nations
Dr. Noam Chomsky
Professor at MIT,
peace activist
Dr. Joshua Cohen
Assistant Professor, MIT
Ruth Fitzpatrick
Member, Steering
Committee of the Religious
Task Force on El Salvador
4
7
25
37
News NOT In the News
The CIA's Press Corps
Is the CIA Intervening in Canada's Elections?
CIA, BND and the Nazis
Missile Testing or Elections?
Military Issues
U.S. Army Manuals Say: We Can Use Nuclear Weapons and Win
by Konrad Ege and Arjun Makhljanl
U.S. Irradiated Humans for Nuclear War Data
Reagan Prepares for War in Outer Space
by John Pike
Mauritius Challenges Reagan over Diego Garcia
Strategic Hamlets Revived in the Philippines
by John Cavanagh
U.S. Responsibility for Famine in Chad
by Jeff McConnell
Falklands/Malvinas Misinformation
by M. Richard Shaw
New Resources on Guatemala ~
Special Supplement on World Bank and
International Monetary Fund
Introduction: The Bretton Woods Twins
by Cheryl Payer
Tamar Kohns
Political activist
Annie Makh jani
Baker, nursing student
Dr. Arjun Makh jani
Consultant on energy and
economic development
Martha Wenger
Office worker,
CounterSpy's copy editor
(Organizations for
identification only.)
44916, X-523
IMF Asks Employees to Keep Documents Secret
Banking on El Salvador and Against Nicaragua
by John Kelly and Walden Bello
Indira Gandhi's Voluntary Debt Trap
by Arjun Makhljanl
IMF to South Korea: Devalue Againl
Twenty Years of Intervention: The IMF and the Philippines
by Walden Bello and Robin Broad
The World Bank: An Apolitical Institution?
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News NOT in the News
The CIA's Press Corps
It is not really news, but the CIA admitted in
a June 1982 statement to settle a Freedom of
Information Act lawsuit that the CIA has been
using journalists as' agents to not only gather
information but also to suppress unfavorable
news stories and promote CIA-inspired or
produced stories to generate public support for
U.S. policy. The CIA statement admitted that
"some, perhaps a plurality" of journalist-agents
were "simply sources of foreign intelligence;
others provided cover or served as a funding
mechanism." A number of journalists also
"provided nonattributable material for use by
the CIA; collaborated in, or worked on CIA-
produced materials or were used for placement
of CIA-prepared material in the foreign media;
others assisted in nonmedia activities by
spotting, assessing, or recruiting potential
sources or by handling other agents, and still
others provided access to individuals of
intelligence interest or by generating local
support for U.S. policies and activities."
Finally, says the CIA statement,, to some of
the "journalists" the CIA "simply provided
e
4'-- CounterSpy -- Sept.-Nov. 1982
informational assistance or requested
assistance in.suppressing a media item such as
a news story."
The CIA statement fails to address how
the CIA news manipulation affected the U.S.
press. By law, the CIA is forbidden to engage
in operations affecting the U.S. Fallout from
CIA-created or suppressed stories is, of course,
inevitable and has been acknowledged by many
CIA officials. In addition, two recent
examples, the publication of the "El Salvador
White Paper" (see CounterSpy, vol. 5, no. 3)
and some reports by Washington Post reporter
Christopher Dickey suggest direct intervention
by the CfA in the U.S. media. The Columbia
Journalism Review (May-June 1981) stated that
"Dickey, it seems, has been used by intelligence
agencies to, spread the evidence of Nicaraguan
intervention and thus bolster the case for
renewing military aid to the [Salvadoran]
junta."
Is the CIA Intervening in
Canada's I Elections?
Canada's Prime Minister Pierre Trudeau` sandy
Solicitor General Robert Kaplan don't seem to
be interested in adequately investigating
charges that the CIA has manipulated elections
in Canada by funneling money to certain
candidates. When Svend Robinson, a New
Democratic Party member of Parliament raised
questions about "funding by the CIA of specific
election campaigns and candidates in the,
provinces of Quebec, British Columbia, Alberta,
Manitoba and Saskatchewan during the years
1970 to 1976," he-was told by a government
spokesperson that "sensational allegations are
easy to make, and it would be very unwise to
take seriously all allegations just because they
are sensational."
Robinson's questions, presented in
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 Approved For Release 2010/06/15: CIA-RDP90-00845R000100140001-1
Parliament in May 1982, were triggered by
John Meier, a' former executive aide to the
late millionaire and CIA collaborator Howard
Hughes. Robinson described Meier as "very
knowledgeable" about CIA operations "both
inside and outside Canada." Meier presently
lives in British Columbia, and is fighting extra-
dition to the U.S. on a murder charge. He
claims that he is being framed and that his
life is threatened.
Meier made his allegations about CIA
funding of political parties in Canada some six
years ago. According to Robinson, Prime
Minister Trudeau at the time ordered a secret
investigation. A spokesperson for Trudeau says
that this and other investigations indicate that
Meier's allegations "do not merit credence."
Solicitor General Kaplan even claims that all
CIA operations in Canada are carried out with
the consent of the Canadian government.
Robinson is not satisfied with such
assurances. He stated in a speech in
Parliament that during the years in question
- 1970 to 1976 - "the CIA was active, not
only in Chile in attempting to overthrow the
Allende government, ultimately successfully in
1973, but as well in Greece and Central
America." In addition, Robinson said, in 1975
the CIA attempted to destabilize the Labor
Party government in Australia, "a fellow
member of the Commonwealth." Robinson
urged that "in view of the seriousness of
[Meier's] allegations and the obvious threat
these allegations, if substantiated, would pose
to the sovereignty of Canada" a Parliamentary
committee be given the task "to examine all
aspects of CIA involvement in Canada."
CIA, BND and the Nazis
Dr. Hans Langemann has been talking-about
CIA efforts to cover up the Nazi past of a
former West German chancellor, about the
recruitment of Vatican officials by West
German intelligence, about West German in-
telligence gathering during the U.S. war in
Vietnam, and about a lot of illegal operations
by West Germany's Bundesnachrichtendienst
(BND, that country's CIA). Langemann worked
for the BND for 13 years in high-ranking posi-
tions, and later was in charge of the security
section of the Interior Ministry of Bavaria.
Documents and tapes Langemann had
prepared - he was working on a book - were
obtained by the West German monthly konkret.
Konkret reprinted many of the documents, and
published articles based on the Langemann
materials. Langemann was subsequently
suspended from his post and then arrested.
One of Langemann's documents is a 1968
letter from then-BND head Reinhard Gehlen to
CIA director Richard Helms: "Dear Mr. Helms:
I am sending Dr. Langemann to you on a very
urgent matter and at the special request of
the [West German] chancellor [Kurt Georg
Kiesinger] . Langemann is authorized to brief
you orally about an issue that has stirred grave
concern at the chancellor's office. I would be
very grateful if you could advise Dr.
Langemann in this matter, and, if possible,
assist him...." Langemann met Helms on
February 2, 1968. The "urgent matter" was
this: a journalist had discovered documents in
the National Archives in Washington, D.C.
about Kiesinger's activities in the German
propaganda ministry during Nazi rule.
Kiesinger, through the BND and the CIA,
wanted these documents removed from the
Archives, along with copies of the Guides to
Films of Captured Documents, an index to Nazi
documents obtained by the allies after World
War II. The BND believed that without the
Guides it would be virtually impossible for
researchers to find references to Kiesinger in
the vast amount of archive material.
A month later, on March 11, 1968, the
BND officer in charge of the U.S. cabled back
to Gehlen: "Mr. Hart brought me the guides
he had promised on March 8. There were 58
of them.... I propose that a special letter of
thanks be written to Mr. Hart. He has done
a lot for us and hasn't hesitated to exert
himself physically (carrying the books.)"
Mr. Hart was the CIA officer in charge
of Nazi affairs. He had been ordered by Helms
to assist the BND in its attempt to eliminate
references to Kiesinger from the National
Archives. However, it appears that Hart knew
that couldn't be done. There are many micro-
film copies of the Kiesinger documents in a
number of libraries and archives. The ones in
0 the National Archives are still there.
Furthermore, the Guides Hart "exerted himself
physically" to deliver did not even include the
Kiesinger documents. In fact, there are a total
of 1,000 copies of the by now more than 70
volumes of the Guides spread out in libraries
throughout the world. To put it simply, the
CIA was fooling the BND.
(The CIA, of course, was not opposed to
destroying material about Kiesinger's Nazi past
for moral reasons. Recent revelations by CBS-
CounterSpy -- Sept.-Nov. 1982 -- 5
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TV and the Washington Post (7/9/82) show that
the CIA smuggled dozens of Eastern European
Nazi collaborators into the United States to
work for Radio Free Europe, Radio Liberty and
the Voice of America, as well as the Pentagon.
Some of the Nazis brought in were responsible
for the killing of thousands of Jews and had
been leading Eastern European fascist organi-
zations which collaborated with the Nazis.)
The Langemann documents and tapes
also claim that the BND had numerous agents
at the Vatican, including one Catholic Bishop.
These highly paid agents kept the BND up-do-
date about the Vatican's internal affairs and
gathered information from Catholic church
officials around the world, and from Italian
intelligence. One Vatican official who had
provided information about Italy's Communist
Party and its contacts with the West German
Social Democrats was dismissed shortly after
the Social Democratic Party came into office.
The official was told his services were no
longer needed,' and given DM20,000 compensa-
tion.
In Vietnam, according to the Langemann
documents, the BND had several high-ranking
government and intelligence officials on its
payroll. The Vietnamese agents kept the BND
informed about political events and about U.S.
activities in the Vietnam war: "There are
considerable oil resources in the Gulf of
Thailand. The French government knew about
them. back in 1950, but it never publicized the
information, because the large oil companies,
for obvious reasons, wanted to avoid making
the fight for drilling rights an issue in global
politics." The cable further stated two Thai
Ministers "were convinced that the American
Southeast Asia strategy had to be seen in
context with U.S. efforts to obtain exclusive
drilling rights in. the Gulf of Thailand."
After the second konkret issue with the
Langemann material appeared, a court order
was issued to bar the magazine from publishing
further articles based on information from
Langemann. A special parliamentary
committee is supposed to be investigating the
case. Meanwhile, konkret has hinted that the
unpublished Langemann material is explosive;
aff~que
Cpl
~rance 01
Benin Chad, Cameroon
Gabon Niger, Senegal Togo,
Upper Volta French Guiana,
Reunion
0
Others Europe 250 F F
00
9 -- CounterSpy -- Sept.-Nov. 1982
containing the names of numerous BND agents,
and information about the BND's network of
journalist agents.
Missile Testing or
Elections?
The Reagan administration had decided that
the people of the Marshall Islands - a United
Nations Trust Territory in the Pacific admin-
istered by the U.S. - aren't ready to vote.
Or more likely, the administration is realizing
that a scheduled August 17 plebiscite would
have produced "unacceptable" results.
On August 17, the islanders were
scheduled to choose between a "compact of
association" with the U.S. or independence.
For the Reagan administration, this is primarily
a military issue. Part of the Marshall Islands,
the atoll of Kwajalein, is being used by the
Pentagon for the testing of intercontinental
ballistic missiles launched from Vandenberg Air
Force Base in California. Under the "Compact
of Association" advocated by the U.S., the U.S.
would keep Kwajalein as a military facility for
50 years. If the islanders vote for inde-
pendence, the future of the atoll as a U.S.
base is very much in doubt.
The islanders have many reasons to vote
against the compact. When the U.S. took over
Kwajalein after World War H and developed it
into a testing facility, its residents were
forcibly moved to Ebeye Island, four miles to
the north. Ebeye Island is miniscule. Today,
some 8,000 people live under abysmal condi-
tions on its 65 acres, forbidden to go to
Kwajalein, except for their jobs on the U.S.
base. Ebeye has no drinking water - it has
to be brought from Kwajalein - no sewage
drains, hardly any trees and no grass, and only
one elementary school. Ebeye is often referred
Continued on page 16
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Military Issues
U.S. Army Manuals Say:
We Can Win a Nuclear War.
by Konrad Ege and Arjun Makhijani
Three Field Manuals currently used by the U.S. Army
confirm that U.S. military policies are still based on
the mentality that prompted the Truman
administration to drop atomic bombs on Hiroshima
and Nagasaki. The manuals are FM 100-5, published
in 1976 and self-described as "the capstone of the
Army's system of field manuals;" FM 6-20, Fire
Support in Combined Arms Operations, 1977; and FM
101-31-1, a Staff Officers Field Manual, Nuclear
Weapons Employment Doctrine and Procedures, 1977.
(This manual is also being used by the Marine Corps.)
Three assumptions about the use of nuclear weapons
form the basic framework of the manuals:
? The use of nuclear. weapons will "positively and
dramatically alter the course of battle" and achieve
victory.
? Nuclear war can be limited.
? Nuclear retaliation by opposing forces is highly
unlikely. The Pentagon also maintains the option to
use nuclear weapons first, and will not hesitate to
use them against non-nuclear powers.
According to U.S. Army policy, conventional
and nuclear war are fully integrated. Under the
headline "From Conventional War to Nuclear War to
Conventional-Nuclear War," FM 100-5 explains that:
At the close of World War II, the U.S. became
the first nation to develop and employ nuclear
weapons. Following the war and into the '50s, many
persons thought that all future wars would be strategic
nuclear conflicts. As more nations became nuclear
capable and a viable second strike option became a
reality, the advantage to be accrued from the use of
strategic nuclear weapons diminished. Recognizing
the transition and to meet the needs of lower levels
of conflict and flexible response, the U.S. began to
focus on the development of battlefield nuclear
(Konrad Ege is co-editor of CounterSpy magazine and a
freelance journalist. Arjun Makhijani is a consultant on
energy and economic matters.)
THIS MANUAL sets forth the basic concepts
of US Army doctrine. These concepts form
the foundation for what is taught in our
service schools, and the guide for train-
ing and combat developments throughout the
Army. Most important, this manual presents
principles for accomplishing the Army's
primary mission - winning the land battle.
The current US arsenal of nuclear weapons
includes numerous medium to very low yield
weapons delivered by short and mid-range
systems. To provide for maximwn utility on
the battlefield, while at the same time
minimizing risk to friendly forces, civil-
ian personnel and structure-, the develop-
ment trend of battlefield nuclear weapons
is toward tailored effect weapons.
The use or threatened use of nuclear weap-
ons will significantly influence every
phase of the battle, to include purely
conventional operations. Planning and pre-
paration for their use or counteruse must
be continuous. The use of nuclear weapons
begins a new phase in operations - a com-
bined conventional-nuclear phase of uncer-
tain length during which a clear distinc-
tion between offensive or defensive use of
nuclear weapons could be difficult. With
nuclear strikes, either side could deliver
instantaneously crippling combat power.
Depending on the deception, surprise, tar-
get acquisition, and boldness of the user,
such weapons could change the course of
battle very quickly....
Release, or the authority to use nuclear
weapons, will be conveyed from the Nation-
CounterSpy -- Sept.-Nov. 1982 -- 7
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al Command Authority (NCA) through the op-
erational chain of command. In order to
dampen the escalatory effects of using nu-
clear weapons, release will normally be
approved to employ preplanned packages of
weapons to be fired within' a specified
time-frame, and within specified geograph-
ical areas according to the constraints
established by the releasing authority.
Unwanted destruction can be minimized by
careful selection of targets, weapons
yields aim points, and delivery systems.
Retaliatory attacks by the enemy are also
of primary concern. The danger of such at-
tacks can be reduced by a proper disposi-
tion of forces and a strong counterretal-
iatory capability.
The precise circumstances that may require
the use of nuclear weapons will be deter-
mined by the developing battle. Ideally,
normal operational reports will provide
the required current battle information.
Special reports, sent when the tactical
situation indicates the need to employ nu-
clear weapons, will detail what has hap-
pened, what has been done to reinforce the
defense, and assess the seriousness of the
problems.
Situation reports and special reports com-
plement one another and must provide the
required information to portray a complete
picture of the situation for higher au-
thorities. These reports should describe
how a particular package of nuclear weap-
ons, when requested, would be used to
counter the developing threat and permit
resumption of effective operations. Com-
manders should send request messages when
they judge that the use of nuclear weapons
will be essential for accomplishment of
their mission. It is possible that the in-
formation and the situation will be such
that a higher level of command may direct
the use of nuclear weapons without a re-
quest from a corps commander.
Advanced planning for nuclear strikes, or
counterstrokes is essential to timely em-
ployment. Training, planning, logistic
support, and other arrangements to allow
units to use nuclear weapons must be done
before the outbreak of hostilities, or be-
fore deployment. Where the use of nuclear
weapons by either aside is a possibility,
the headquarters of the deployed force
must develop, refine, and update contin-
gency plans for the employment of nuclear
weapons based on guidance from higher ech-
elons of command and the battlefield situ-
ation.
At the time authorized commanders request
the use of nuclear weapons, they must be
able to foresee a situation developing
which will be sufficiently grave to re-
quire their use. One of the criteria to be
followed in requesting release of nuclear
weapons is that the overall defensive ca-
8 -- CounterSpy -- Sept.-Nov. 1982
weapons to support the forward defense and flexible
response strategy. With these developments, the
pendulum has swung from conventional war to nuclear
war and now to the present concept of conventional-
nuclear war.
At the close of World War II, the U.S. became
the first nation to develop and employ nuclear
weapons. Following the war and into the '50s, many
persons thought that all future wars would be strategic
nuclear conflicts. As more nations became nuclear
capable and a viable second strike option became a
reality, the advantage to be accrued from the use of
strategic nuclear weapons diminished. Recognizing
the transition and to meet the needs of lower levels
of conflict and flexible response, the U.S. began to
focus on the development of battlefield nuclear
weapons to support the forward defense and flexible
response strategy. With these developments, the
pendulum has swung from conventional war to nuclear
war and now to the present concept of conventional-
nuclear war.
In other words, U.S. nuclear doctrine has had
to "adjust" since the decade after Hiroshima and
Nagasaki, when the U.S. had a monopoly over nuclear
weapons and delivery systems. Still, even after the
Soviet Union developed long range bombers and
missiles in the mid-1950s, what we might call the
"Hiroshima principle" continued to be the basis of
U.S. nuclear strategy with the "refinement" of so-
called "flexible response." The U.S. government
reserved the, "right" to use nuclear weapons on any
battlefield, including Europe, while the Soviet Union
Most nuclear weapons
scenarios contemplated in
FM 100-5, FM 6-20, and FM
101-31-1, are cases where the
U.S. is the first to use nuclear
weapons and where, even
according to the Army's own
definition, nuclear weapons
are used offensively.
would be prevented from using nuclear weapons by
the threat of U.S. strategic retaliation.
Today, based on FM 100-5, the Army's policy
is that "in any battle, we must have the capability
to use nuclear weapons -effectively, along with our
conventional weapons, in support of the land battle."
The "ultimate objective" of the employment of nuclear
weapons is to "terminate a conflict at the lowest
level of hostilities on terms acceptable to the United
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States and its allies." Corps commanders may request
the use of nuclear weapons if they conclude that their
troops "cannot accomplish [their] mission if nuclear
weapons are not used."
Nuclear weapons use is by no means limited
to "defensive" operations (i.e., when U.S. troops are
attacked, and in a situation where their commander
believes military defeat is certain without the use of
nuclear weapons.) After all, says FM 100-5, "it may
be difficult to distinguish between offensive or
defensive use of nuclear weapons." In fact, most
nuclear weapons scenarios contemplated in FM 100-
5, FM 6-20, and FM 101-31-1, are cases where the
U.S. is the first to use nuclear weapons and where,
even according to the Army's own definition, nuclear
weapons are used offensively.
pability must not be allowed to deteriori-
orate to the point where available forces
cannot conduct effective conventional-nu-
clear follow-up operations after the
strike.
Although many weapons will probably be
available, release may be expected for on-
ly the numbers and types of weapons in-
cluded in planned "packages" of nuclear
weapons. A package is a group of nuclear
weapons of specific yields for employment
in a specified area, within a limited
timeframe to support a tactical contingen-
Sufficient nuclear weapons should be
planned in each package to alter the tac-
tical situation decisively, and to insure
accomplishment of the assigned mission....
Limited and Winnable Nuclear War
In order to use atom bombs so as to "quickly and
decisively alter combat power ratios and change the
course of the battle," but at the same time keep
nuclear war "limited" and prevent retaliation, the
Pentagon plans a "selective..., discriminate [and]
restrained" nuclear strike. One of the primary means
to do this, according to the Army manuals, is to use
nuclear weapons in "packages," defined as "discrete
grouping[s] of nuclear weapons by specific yields for
employment in a specified area during a short time
period to support a corps tactical contingency." A
"package" is supposed to be fired within just a few
hours to "positively alter the tactical situation."
By firing "preplanned packages... within a
specified time frame, and within specified
geographical areas," the Pentagon claims to be able
to "dampen the escalatory effects of using nuclear
weapons." Field Manual 100-5 considers the firing of
a "hypothetical package" of 45 nuclear weapons (the
smallest of which "has potentially lethal effects that
cover more than a square kilometer of area") to be
fired within three hours as part' of a "limited strike."
How ~a commander whose forces are on the receiving
end of a nuclear bomb every four minutes is supposed
to know this is a limited nuclear war is not explained
in the manuals.
The Reagan administration has pushed the logic
of conventional-nuclear war a step further with the
decision to build neutron bombs, which are hydrogen
bombs designed for battlefield use. The primary
stated function of the neutron bomb is supposed to
be against an "overwhelming" Warsaw Pact tank force.
This is shallow deception. NATO already has over a
dozen anti-tank guided missiles for each Warsaw Pact
tank. Moreover, NATO deliberately decided not -to
match "tank-for-tank," but instead to concentrate on
building advanced tanks and sophisticated anti-tank
missiles.1
Neutron bombs would not necessarily stop
tanks. Intense radiation kills slowly and painfully,
and many soldiers in tanks would still be able to
The first use of US tactical nuclear weap-
ons would probably be in a defensive mode
based on prepared defense plans. Later use
could include nuclear support for offen-
sive operations to destroy the enemy or
regain lost territory. Tactical advantage
may be gained by neutralizing lead ele-
ments in the enemy second echelon, and by
eliminating his committed echelon's sup-
port and supporting fire systems. This can
defeat the enemy tactic of echelonment by
destroying the follow-up reserves for the
breakthrough, and by weakening enemy sup-
port. This will reduce pressure on friend-
ly units in contact so they can contain
engaged forces by conventional means and
control the battle....
Plans are prepared to identify avenues of
approach where the enemy is likely to con-
centrate,?and areas where breakthrough at-
tacks are most likely to occur. Divisions
target their weapons, including atomic de-
molition munitions, in these areas, avoid-
ing inhabited areas and public facilities
where civilian casualties and other unde-
sirable collateral damage would exceed
levels allowed in planning guidance.
For the safety of friendly forces and
civilians, target areas closest to the
line of contact or population centers
should be targeted with low-yield weapons.
Corps will review division nuclear fire
plans for tactical suitability, and inte-
grate them into appropriate corps weapons
packages.
Commanders will make a timely request for
approval of a nuclear weapons package,
specifying the desired timeframe and fir-
ing timespan. To convey to the enemy that
we are using nuclear weapons in a limited
manner, all weapons in a package should be
fired in the shortest possible time. The
package must be employed on time, in the
approved areas, on high priority targets.
While not a substitute for strong conven-
tional forces, nuclear weapons provide the
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commander the capability to generate in-
stantaneous combat power of enormous mag-
nitude that can negate the enemy's offen-
sive advantage and deny him his objective.
FM 101-31-1
FMEM 11-4
Staff Officers Field Manual
NUCLEAR WEAPONS EMPLOYMENT DOCTRINE
AND PROCEDURE
Chapter 2
EMPLOYMENT CONSIDERATIONS
This chapter provides an overview of sig-
nificant considerations that furnish the
framework for employment doctrine and pro-
cedures for the conduct of nuclear war-
fare. Such considerations are discussed
because of the unique nature of nuclear
warfare and the potential for national
significance of decisions relating to nu-
clear weapon employment.
a. General. National policy impacts on
the conduct of nuclear operations by es-
tablishing guidelines of use of nuclear
weapons in attainment of national goals.
b. Employment Policies.
(1) The ultimate objective of the em-
ployment of nuclear weapons is to termi-
nate a conflict at,the lowest level of
hostilities on terms acceptable to the
United States and its allies.
(2) National Command Authority (NCA)
would be expected to coordinate military
and diplomatic efforts to insure that con-
ditions for use of nuclear weapons are
both acceptable to allies and in accord
with national goals.
(3) To realize the overall national
purpose of the use of nuclear weapons,
New Strategy
operate them for hours or days. Soldiers in tanks
can also be shielded somewhat from radiation by
modifications to the tanks. A close look at, the
statements' of administration officials, including
Defense Secretary Caspar Weinberger reveals that
neutron bombs are being built for use all over the
world: "There seems to be some feeling," said - the
Secretary, of the neutron bomb, "that it is only
useable in Europe - which is not true." He finds the
neutron bomb a "particularly useful" weapon in
"several theaters.i2
The neutron bomb is an anti-personnel weapon.
Its characteristics are such that it can be used to
destroy, for example, Soweto without immediately
affecting all of Johannesburg. In the face. of the
refusal of many people in the U.S. to fight U.S. wars,
an administration. might use neutron weapons in a
first strike against Third World countries in place of
U.S. troops. Similarly, the "tripwire" strategy for
the Middle East attempts to substitute nuclear
weapons for troops. A few thousand U.S. soldiers,
obviously incapable of controlling a large area, are
to be used as a "tripwire" for unleashing a nuclear
war.3 The neutron bomb and the nuclearized Rapid
Deployment Force are a qualitative intensification of
the nuclear war strategy which has been a
fundamental part of the policy of the U.S. government
since World War H. (The MX, Pershing II and cruise
missiles and the Trident II submarines represent the
same intensification at the level of strategic nuclear
weapons.)
"Requesting" Nuclear Weapons
It is commonly believed that in the U.S. the decision
to use nuclear weapons rests with the President. This
is so only in a formal sense. As noted, the Army
field manuals make clear that operational decisions
about nuclear weapons employment are made by field
commanders - in particular, corps commanders. They
are the ones who initiate the "request" for the
There are strong indications that the U.S. Army
wants to have the command authority over
nuclear weapons changed. In a presentation
for members of Congress ("Air Land Battle
2000") several months after President Reagan
took office, U.S. Army officers urged that the
"existing authority" to order nuclear weapons
use should be "up front," that is, with the local
commander on the battlefield. These Army
officers said that they want to have "pre-
clearance" to use nuclear weapons before the
war is underway.
In a secret April 1, 1982 hearing before
the Defense Subcommittee of the House
Appropriations Committee, Deputy Under
10 -- CounterSpy -- Sept.-Nov. 1982
Secretary of Defense (Strategic and Theater
Nuclear Forces ) T.K. Jones (the man who
believes nuclear war is survivable if there are
enough shovels to go around for everybody to.
dig a hole) and Major General Niles Fulwyler,
the Army's Director of the Nuclear and
Chemical Directorate were asked for their
comments about such a change. Their response
was "sanitized" from the hearing transcript. A
subsequent comment by Fulwyler, though,
suggests that both spoke in favor: "I might
add it would be much simpler to, plan for that
battle and to take care of it if we had pre-
delegation, for obvious reasons."
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"release" of nuclear weapons and decide when to do
this based on their evaluations in the field of what
it will take to prevent defeat or to achieve victory.
And, as FM 100-5 emphasizes: "This manual presents
principles for accomplishing the Army's primary
mission - winning the land battle."
Once a field commander has decided to use
nuclear weapons, his "request" is sent through the
command structure to the "National Command
Authority." The Command Authority, according to
the manuals, would have only a few hours to decide.
In certain situations, even that much authority might
not rest with the National Command Authority. This
applies most notably to the borders which divide Korea
and Germany. The U.S. Army has a large number of
nuclear weapons close to these two borders, so that
the field commander may decide that not using the
weapons may cause them to fall into the hands of
the opposing forces. If the field commander initiates
a request on this basis, the National Command
Authority could hardly refuse.
The U.S. president formally heads the National
Command Authority. A congressional study entitled
Authority to Order the Use of Nuclear Weapons,
however, concluded that the president may delegate
that authority to "subordinate officers in the chain
of command virtually without limitation."4 Some
nuclear weapons experts in the Pentagon are not
satisfied even with the existing extent of field
authority. In a recent issue of Military Review, a
monthly magazine published by the U.S. Army, two
nuclear specialists urged that "battallion commanders
must be authorized to employ tactical nuclear
weapons as they determine necessary but within
certain guidelines." In other words, the article's
authors 'advocate that decisions which might trigger
World War III be made only on tactical grounds of
the immediate situation in a particular section of the
battlefield.
Planning Nuclear Death
In composing, a nuclear weapons "package," the field
commander must decide how many enemy soldiers to
kill instantaneously with nuclear weapons. FM 101-
31-1 details appropriate radiation dosages matter of
factly. It prescribes that in an offensive operation,
the U.S. commander should employ nuclear weapons
in such a way that "40 to 60, percent of the target
[is] unable to defend." If the opposing forces are
advancing against U.S. or allied troops, commanders
are urged to employ nuclear weapons so that 30 to
40 percent of the opposing troops receive between
3,000 and 8,000 rads (Radiation Absorbed Dosis).
Soldiers who receive 3,000 to 8,000 rads ares
"completely incapacitated within 5 minutes and will
remain so for 30 to 45 minutes." They will "then
recover but will be functionally impaired until death"
Within five days. FM 101-31-1 also notes that the
symptoms of the victims are "severe and prolonged
military operations should be conducted in
consonance with diplomatic actions.
c. EYrrployment Purpose. Since the nation-
al purpose of employment is to terminate a
conflict, the employment of nuclear weap-
ons should serve to demonstrate to enemy
leaders that potential losses outweigh
gains if a conflict is continued or esca-
lated. To accomplish this end, nuclear
weapons could be used to positively and
dramatically alter the course of battle
and preclude the enemy from achieving his
objectives. Depending on enemy response to
initial nuclear employment, additional em-
ployment of nuclear weapons may be re-
quired or directed. In all cases, follow-
up strikes should support the basic pur-
pose of decisively terminating a conflict
at the lowest level of violence consistent
with national and allied goals.
2-3. Nuclear Weapons in Support of Tacti-
cal Operations
a. General. The use of nuclear weapons
in support of tactical operations requires
detailed planning at all levels. The spec-
trum of tactical nuclear warfare may vary
from limited to theaterwide friendly or
enemy initiated use. Whatever the nature
of the nuclear use, nuclear weapons cannot
be used in isolation, but must be inte-
grated with the rest of the fire and ma-
neuver on the battlefield.
b. Nuclear Contingency Planning. Because
of the potentially grave consequences of
nuclear hostilities, the NCA will probably
not approve the use of nuclear weapons un-
til all lesser options are clearly per-
ceived as inadequate to maintain the in-
tegrity bf US and/or allied forces. This
means that a field commander must keep
higher headquarters well informed on the
developing situation and when the time
will come, in his judgement, that he can-
not accomplish his mission without the use
of nuclear weapons. As a part of contin-
gency plans a commander should prepare in
advance to integrate nuclear weapons into
force maneuver plans. He may be required
to conduct conventional operations under
the most adverse conditions before nuclear
release is granted, but he must insure
that his evaluation of the risks involved
with the delay in release are made known
to his immediate commander. It is the
corps commander who will normally request
the release of nuclear weapons. Corps is
the critical level in planning for the em-
ployment of nuclear weapons on the battle-
field, although input from division and
lower echelon headquarters is incorporated
in corps plans.
c. Nuclear Weapons Package. Although
many weapons are present in a corps area,
an initial release can be expected for on-
ly the numbers and types of weapons in-
cluded in preplanned "packages" of nuclear
I weapons requested by the corps commander.
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To expedite the release of the requested
package, the corps preplanned package will
be forwarded to higher headquarters for
tentative approval.... At any given time,
corps should have a preplanned nuclear
weapons package to support each probable
tactical contingency; however, it would be
expected that only one package at a time
would be requested. A preplanned package
that is actually executed would be modi-
fied for the situation that exists at the
time of employment. A sufficient number of
nuclear weapons will be planned for each
package to positively alter the tactical
situation and thus expedite accomplishment
of the corps mission....
2-4. Law of Land Warfare and Nuclear Weap-
ons Employment
a. Through the history of warfare, a
body of treaties and customs has developed
that generally represents the collective
views of the belligerents and tends to
limit the application of excessive force
and the manner in which force is applied
to protect combatants and noncombatants,
safeguard fundamental human rights, and
facilitate the restoration of peace. The
grouping together of these treaties and
customs is known as the Law of Land War-
fare....
b. Modern weapons, to include nuclear
weapons, have been measured against the
Law of War or national policy. There must
be some reasonable connection between the
destruction of life and property and the
defeat of the enemy's forces. Some abso-
lute prohibitions exist, but the Law of
War is tempered by the rule of military
necessity, which justifies those measures
not forbidden and which are indispensable
for securing the complete submission of
the enemy with the least possible expendi-
ture of life and .resources. The Law of
Land Warfare encompasses the use of nucle-
ar weapons; however, because of the poten-
tially tremendous destructive power of
these weapons, their use must be carefully
controlled....
2-5. Threat and Target Defeat Considera-
tions
a. General. When assessing the number of
nuclear weapons required to make a posi-
tive change in the tactical situation and
to defeat a threat, consideration must be
given to defeat of individual targets com-
posing the overall threat. There is no
simple statement of threat and target de-
feat criterion that will pertain in all
circumstances.
b. Threat Defeat.
(1) A threat is considered defeated by
nuclear strikes when the resultant force
ratios are such that the enemy forces are
halted and can be controlled by conven-
tional means throughout a sufficient pause
for political channels to be utilized to
12 -- CounterSpy.-- Sept.-Nov. 1982
vomiting, diarrhea, fever and prostration. Convulsions
may occur at higher doses."
In determining the casualty numbers, FM 101-
31-1 advises commanders to consider nuclear weapons
effects other than radiation; that is, blast and heat.
The airblast "can cause damage by pushing, tumbling,
or tearing targets apart... Personnel can also become
casualties when they are subjected to translational
motions or missiling caused by these high winds." In
addition, radiation, blast and heat "by itself might
not result in serious impairment of a soldier's
performance. However, a soldier suffering with burns
from thermal radiation, ear drum damage from
overpressure, cuts and broken bones from flying
objects, and vomiting from radiation sickness is not
likely to be very effective in any capacity."
. DM -2
NueeEPC M/SS/CES -/0
CANNON DEC/YERED -50
19i/reXNrr1W1Y(RCD -S
lk 100-5
Nuclear weapons employment also results in
"collateral damage," a term that lumps together
"undesirable civilian materiel damage or personnel
injuries produced by the effects of friendly nuclear
-weapons" (emphasis in original),,, On paper, the criteria
for "limiting collateral damage" are a part of the
planning when a commander puts his nuclear weapons
package together. But there must be a "balance"
between the death of "friendly" civilians and "military
effectiveness if operations are to be successful."
Therefore, "some damage to populated areas should
be expected." The "operational philosophy" of the
Army is to "limit collateral damage," but "when the
demands of the tactical situation clearly govern, a
unit continues to place primary emphasis on the
accomplishment of its mission."
There is much damage from nuclear weapons
use about which the manuals say very little or nothing
at all:
? Civilian deaths on the side receiving the
nuclear -weapons "package."
? Civilian deaths on the "friendly" side as a result
of nuclear retaliation.
? Death of and medical care for U.S. soldiers as
a result of nuclear retaliation.
? Deaths and diseases due to the persistent and
long-term effects of radiation.
The omission of a discussion about these crucial
components highlights the Pentagon's seriously limited
approach to nuclear war and its belief that nuclear
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war is "winnable" and can be limited. In the scenarios
laid out in the manuals, everything works, in part
because these vital components are omitted.
Commanders command and plans are based on careful
analysis. Events follow the pattern set in these plans.
Communications systems work well.
In real war, things are likely to be different.
For instance, the sudden electromagnetic pulse (EMP)
caused by nuclear explosions could- completely
interrupt electronic communications for hours. Thus,
commands to stop firing nuclear weapons might not
be received. Troops could not be relocated, and the
corps commander might be completely cut off from
the National Command Authority. There would be
immense fear among the soldiers in the command and
control stations, since they know that they are prime
targets in a nuclear war. Such was actually the case
among U.S. troops stationed in West Germany during
the Cuba missile crisis.
All this is in addition to the fact that the
Soviet Union has warned that any nuclear weapons
terminate the conflict. The planning for
threat defeat must consider the type of
units and the percentage of the threat
that must be destroyed.
(2) The planning of a nuclear weapons
package to defeat a particular postulated
threat is based on assumptions of the
threatened area, its terrain, avaliable
weapons to defeat the threat, and the
strategy and tactics of the enemy....
c. Target Defeat. Two basic categories
of targets are area and point. Area tar-
get defeat criteria normally are expressed
in terms of some level (percentage) of ex-
pected coverage of the target area with a
specified level of materiel damage or per-
sonnel incapacitation. Point targets are
generally single-element materiel targets.
Because point targets are single elements
or occupy a small area in comparison to a
damage radius, only the probability (nor-
mally 90 percent) of a specific level of
damage, moderate or severe, is considered
when examining them.
use would turn into global holocaust. Soviet President
policy tiers. Factors to to be considered coverage redsinees-
Leonid Brezhnev reiterated this to Der Spiegel, (1) a
in esti-
magazine in an interview in November 1981: "To mating the fractional coverage require-
come to the central issue: There is no such thing as ' ments for defeat of area targets are:
a 'limited' nuclear war. Once it starts - in Europe (a) Mission of the unit being target-
ed. Because of greater control problems,
or anywhere else - a nuclear war would inevitably I coupled with the more demanding require-
and irremediably turn into a global war." ments of an attack, an attacking unit is
Given firm Soviet statements about their generally more susceptible to mission
nuclear doctrine which rules out limited war, the U.S. abort than is a defending unit.
Army's for nuclear war is utterly removed (b) Size of unit. The fractional dam-
age planning required for target defeat can also
from the reality of the risk of annihilation. Even vary for different sized units. Because
Herbert Scoville, the former deputy director of the of the greater amount of inherent self-
CIA, has noted that "the initiation of nuclear war at sufficiency in smaller units, such as
any level is a disaster that is more likely to oc companies, they require a higher percent-
cur age of losses before they become combat
if national leaders fool themselves into believing that ineffective than do larger units, such as
it might keep small and that they might come out battalions and higher.
the victors."5 U.S. Army doctrine is an
institutionalization of this dangerous foolishness.
Footnotes:
1) See E.P. Thompson and Dan Smith (eds.), Protest
and Survive, Monthly Review Press, New York, 1981,
pp. 64-66.
2) August 10, 1981 press conference.
3) See Konrad Ege and,Arjun,Makhijani, "U.S. Nuclear
Threats: A Documentary History," CounterSpy, vol.
6 no.4.
4) Authority to Order the Use of Nuclear Weapons,
prepared for the Subcommittee on International
Security and Scientific Affairs of the Committee on
International Relations, U.S. Congress, by the
Congressional Research Service, 12/1/75, p.l.
5) Herbert Scoville, "Flexible Madness," Foreign
Policy, April 1974, pp. 175-176.
(2) Area target defeat guidelines. The
followiAg are general guidelines for at-
tack of troop targets:
(a) For units in the offense, an ex-
pected coverage of 30 to 40 percent of the
target with immediate permanent (IP)
(8,000 rad) incapacitation or immediate
transient (IT) (3,000 rad) incapacitation
criterion should result in an inability of
the unit to accomplish its mission within
minutes after the burst....
(b) For units in the defense, an ex-
pected coverage of 40 to.60 percent of the
target should result in the targeted unit
being unable to continue to defend. The
criterion used, IP, IT, or latent lethali-
ty (LL), depends on the length of time be-
tween the burst and the engagement of ene-
my units.
(e) For rear areas or units not in a
position to be committed for some time, a
Continued on page 59
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U.S. Irradiated Humans for
Nuclear War Data
In planning for nuclear war, it is critical to
know precisely what effects nuclear weapons
have on human beings. From 1945 to the mid-
1970s, U.S. government researchers have
gathered just such data by experimenting on
human subjects - prisoners and hospital
patients. Some of the subjects died, and one
of the experiments was virtually identical to
those conducted in the concentration camps of
Nazi Germany. One scientist involved in the
experiments on prisoners is today acting
Assistant Secretary for Health and the
Environment in the Department of Energy, Dr.
Charles Edington.
When Edington worked for the Atomic
Energy Commission (AEC) in 1963, he
recommended that the AEC fund a project to
irradiate the sex organs of male prisoners. The
National Aeronautics and Space Administration
(NASA) wanted to know how ionizing radiation
would affect astronauts. Edington was
apparently aware that the experiments served
no therapeutic purpose. They were simply
experiments for military purposes, and Edington
thought that the AEC might be held liable if
a prisoner developed health problems.
Therefore, he cautioned that he was supporting
the project "as r-long as we are not liable"
(emphasis in original, see document). He added:
"I wonder about carcinogenic effects of such
treatments."
The experiments went ahead, and from
1963 to 1973, the AEC'irradiated the testicles
of 131 prisoners in Washington (Walla Walla)
and Oregon State prisons. Some of the
prisoners received as much as 600 rads. (600
rads, considered a lethal dose if the whole body
is exposed, is comparable to being exposed to
some 25,000 chest X-rays.) The AEC paid the
.prisoners ($5 a month, , and $25 for every
biopsy), and AEC officials claimed that they
participated voluntarily. However, Prince
Hendrix, one prisoner interviewed by journalists
Arnold Levinson and Joseph Albright for Cox
News Service, said he needed the few dollars
he could get to "buy smokes and razor blades
and kinds of little things that you have to
have." Most prisoners agreed to have
vasectomies after undergoing radiation since
the radiation could have caused genetic effects
on their offspring. (Catholic prisoners could
14 -- Counterspy -- Sept.-Nov. 1982
not participate in the experiments because
Catholic doctrine forbids this type of birth
control.)
In 1973, after spending $1.5 million, the
AEC stopped the project, and with it all
medical follow-ups on the subjects. The
prisoner experiments appear to be an outright
violation of the Nuremberg Code, which states
that the "voluntary consent" of human subjects
is "absolutely essential." Voluntary, says the
Code, means that the person should be "so
situated as to be able to exercise free power
of choice... and should have sufficient
knowledge and comprehension of the elements
of the subject matter involved as to enable
him to jnake an understanding and enlightened
decision." Prisoners are certainly not situated
so as to exercise free power of choice, and
the way Hendrix described it, he did not have
sufficient comprehension to make an
"enlightened decision."
These prisoner experiments, conducted
by Dr. C.- Alvin Paulsen and Dr. Carl Heller
are virtually identical to human experiments
conducted by Nazi "scientists." They too
irradiated the testicles of prisoners - concen-
tration camp inmates. The Nazis wanted to
know what it would take to sterilize "non-
Aryans." The AEC wanted to know how
radiation affects U.S. military personnel and
astronauts. Both conducted experiments on
humans, and in both cases the rights of the
human "guinea pigs" were deliberately violated.
Research done by Robert Alvarez of the
Environmental Policy Center (EPC) indicates
that radiation experiments on humans for
nuclear weapons purposes began during World
War II and were conducted under the Manhattan
Project which developed the atomic bomb.
Project scientists injected large quantities of
Plutonium '239 "into the veins of 18 men,
women and children ranging from age 6 to 69
years." The subjects were not told about the
nature of these experiments. The 18 were
supposed to be terminally ill, but several of
them lived for years after the experiment. The
Department of Energy (DOE) admits now that
there was no therapeutic value in the
experiments.
Experiments on hospital patients
conducted in the 1960s and early 1970s were
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ments had no therapeutic value and that the
also designed to provide data on the effects
of nuclear weapons on troops. This $650,000
research, according to documents obtained by
the EPC, was financed by the Pentagon and
conducted at the University of Cincinnati under
Dr. Eugene Saenger. Eighty-seven patients, all
supposedly terminally ill, were subjected to
whole-body radiation treatments; some of them
received up to 250 rads. According to U.S.
Army manuals on nuclear warfare, exposure to
250 rads leads to headaches, fatigue and
nausea. For some people, say the 'manuals,
250 rads is a lethal dose. Most of the people
radiated were charity patients at Cincinnati
General Hospital; three-fourths of them were
Black, and the average IQ of the patients was
86. Twenty-five of the 87 human subjects died
within two months after being "treated," even
though Saenger attested before the experiment
that they were in "relatively good health."
Saenger's own data suggest that the experi-
patients who had received higher radiation
doses died faster. A University of Cincinnati
review of Saenger's experiments found that of
the first 40 patients, nine died within 38 days
after being irradiated. Seven of the nine had
received 150 to 200 rads. Of the patients
given 100 rads or less, only two died within
38 days. Altogether, 18 patients received 150
to 200 rads.
Saenger justifies his human experiments
for the Pentagon in this way: "The most
important field of investigation today is that
of attempting to understand and mitigate the
possible effects of nuclear warfare upon human
beings." And, Saenger added, "I'm a person
who takes the defense of our country very
seriously. I think it is important to find out
the kind of things we are learning in this study."
Much of the information about how
nuclear weapons affect persons exposed to their
radiation comes, of course, from studies done
on the survivors of the U.S. atom bombs
dropped on Japan. The study of the survivors
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is controlled by the U.S. government through
the DOE. The data obtained from the study
is crucial for determining "safe" radiation
levels for workers in atomic plants and soldiers.
A recent study by Dr. Alice Stewart of the
Environmental Policy Center suggests,
however, that actual deaths from the bombing
of Hiroshima and Nagasaki are ten times higher
than what, the DOE assumes. Most deaths have
been caused by a reduction of immunity in the
survivors due to radiation damage done in the
bone marrow.
In order to obtain laboratory data on
nuclear weapons effects, the Army, in
Experiments on hospital
patients conducted in the
1960s and 1970s were
also'designed to provide
data on the effects of
nuclear weapons on
troops.
collaboration with the AEC and NASA, also
funded studies on the effects of total-body
irradiation, the type of radiation soldiers would
encounter ?on the battlefield. For this purpose
two facilities were built, the Medium Exposure
Total Body Irradiator (METBI), which could
deliver up to 300 rads per hour, and the Low
Exposure Total Body Irradiator (LETBI) which
delivered about 1.5 rads per hour. Publicly,
researchers at the two facilities claimed their
work was to improve radiation therapy for
leukemia and other diseases. But in a 1975
report to NASA,. the LETBI/METBI
coordinators, Drs. Robert Ricks and Clarence
Lushbaugh ' also wrote , that the human
experiments were "sorely needed to defend
existing environmental and occupational
exposure constraints from attack by well-
meaning but impractical theorists." The
military purpose of the studies is apparent from
some of the data Lushbaugh and Ricks were
trying to obtain for NASA: How much radiation
causes fatigue and vomiting, and at what stage
does radiation cause changes in the blood
chemistry.
Most of the patients subjected to
LETBI/METBI radiation died soon after
16'-- CounterSpy -- Sept.-Nov. 1982
receiving treatment. Between 1960 and 1975,
194 persons were subjected to the program;
they received doses of up to 500 rads, and as
of 1968, 64 out of 85 patients died within a
period of 50 days to six years after
"treatment." An independent radiological
review of LETBI and METBI caused it to close.
The radiologists found that "there has been
little thought as to therapeutic utility or
potential long-range side effects" in the
program. In addition, "there is little if any
clinically useful data on the METBI and LETBI
programs...," said the reviewers.
The same statement very likely applies
to most, if not all, human experiments that
have been conducted for NASA and the
Pentagon between 1945 and 1975. These human
experiments put the nuclear. war researchers
in the same category as Hitler's "scientists"
and the "scientists" of Japan during the early
1940s who conducted human experiments for
chemical and biological warfare. Nonetheless,
one of them sits in the Department of Energy
and determines standards for "safe" radiation,
and another, Dr. Saenger, has had a nuclear
medicine laboratory dedicated in his name.
K. F%. -
Continued from page 6
to as "the slum of the Pacific."
People on Ebeye - many of whom own
land on Kwajalein are demanding to return
to Kwajalein. In early June 1982, close to
1,000 protesting landowners set up tents on
Kwajalein to press their demand for return or
fair compensation. In spite of the occupation,
the Pentagon went ahead with the 'testing of
missile accuracy. (There are no nuclear war-
heads on the missiles fired at Kwajalein.) The
Kwajalein landowners have now ' announced that
they will hold a plebiscite, parallel with the
one on the compact with the U.S., on whether
they want the testing of the ballistic missiles
to continue on their land.
The fight over Kwajalein and the
Marshall Islands will come to a critical point
on October 1, 1982. On that day, the
Marshallese government maintains, the islands
will become independent if the "Compact of
Association" isn't ratified by plebiscite. The
Reagan administration, however, claims that if
it isn't ratified, the islands will simply remain
a Trust Territory, administered by the U.S.
government and used by the Pentagon for
nuclear weapons testing.
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Reagan Prepares for War in
Outer Space by John Pike
The Reagan administration is readying the U.S.
to fight a war in outer space. A number of
actions in recent months have confirmed this
intention. Reagan's initiatives constitute a
growing threat to world peace.
The administration's commitment to
preparations for space war is most clearly
expressed in Secretary of Defense Caspar
Weinberger's secret Fiscal Year Defense
Guidance 1984-1988.1 According to the
Guidance, the U.S. "should acquire the
capability to negate, as well as disrupt, hostile
space systems." To this end "the services will
actively support an integrated space defense
capability including surveillance; command,
control and communications; and the anti-
satellite segment," which is scheduled to
become operational in 1987. The Guidance
further directs that "the Air Force should
identify concepts defining an enduring strategic
war-fighting anti-satellite system" in its
budgetary request.
A second key document on space wars
is the Space Policy Statement, announced by
President Reagan following his July 4th speech
at the landing of the Columbia Space Shuttle.
The document had been in preparation for a
number of months under the direction of
Presidential Science Advisor Jay Keyworth.
The Statement itself, covering both civilian and
military space activities, is classified. It says
that "the United States will proceed with
development of an anti-satellite (ASAT)
capability with operational deployment as a
goal."
One measure of the administration's
commitment to space war is its growing space
budget. In Fiscal Year 82 official military
space expenditures for the first time exceeded
spending for civilian programs.2 Measured in
1982 dollars, the annual budget for the National
Aeronautics and Space Administration (NASA)
has hovered around $6 billion for most of the
1970s. At the peak of the Apollo program in
1966 the NASA budget was almost $18 billion
(in 1982 dollars).3 Civilian spending has
steadily declined since then, but official
military spending has soared, increasing every
year since 1972. Spending grew over 16 percent
in real terms from FY81 to FY82 alone, to
over $8 billion.4
But these numbers do not tell the whole
story. In addition to the official figures, there
are substantial expenditures for related
activities, such as reconnaissance satellites,
that are not published. For instance, the annual
budget for the National Reconnaissance Office
(the very existence of which was a closely held
secret for many years) has exceeded $2 billion
in recent .years,5 and by FY83 may reach $3
billion. Furthermore, much of NASA's budget
actually covers military activities. The
General Accounting Office (GAO) recently
estimated6 that over 20 percent of NASA's
spending supports Department of Defense
(DOD) activities exclusively, and another 7.7
percent is of use to both NASA and DOD. This
contrasts with the 0.1 percent NASA
acknowledges goes to the military.
Altogether, U.S. spending on future
space wars is in excess of $12 billion, while
spending for civilian space purposes is little
more than $5 billion annually. Expenditures
for space programs are as great as they were
during the peak of the Apollo program. Only
today, the emphasis has shifted from
exploration and discovery to war. To manage
this rapidly growing military space program,
the Air Force formed a Space Command in
June 1982.7 Initially composed entirely of Air
Force units, within the next 18 months the
Space Command will incorporate military space
activities from all the services. At the same
time, the Air Force announced the formation
of a new Space Technology Center, combining
the activities of three Air Force weapons
laboratories. This is expected to further
sharpen the focus of work on space weapons.
The Military Role of the Space Shuttle
The military has been an active, although
silent, partner with NASA in the Space Shuttle
project from the very outset. When NASA
first started work on the Shuttle in the late
1960s, it was looking at a vehicle with straight
wings that could carry about 35,000 pounds of
payload into orbit. The Air Force, however,
wanted a launcher that would put almost twice
the payload into orbit in order to support its
spy satellite activities. In addition, the Air
Force wanted the Shuttle to have delta wings
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to permit it to land at any time, even though
this greatly increased the heating of the Shuttle
on re-entry. These military requirements
increased both the cost and technical risk of
the Shuttle, and delayed its first flight by
several years. Recently the Air Force has
decided that it wants a smaller shuttle after
all.8 Research is now in progress on a small
"space cruiser" that would be launched from
atop a modified 747. This new vehicle could
be used to inspect and disable other countries'
satellites.
The introduction of
weapons into space is a
few years away, but the
U.S. war machine on
earth would grind to a
halt without the support
of its extensive space
assets.
In recent months there has been
mounting criticism of the arrangements for
dividing Shuttle costs between NASA and the
military.9 The total development cost for the
Shuttle program is about $10 billion, with
another $15 billion for buying the Shuttles
themselves as well as the launch facilities. Of
this cost, the Air Force will pay only $2.4
billion for the construction of the Shuttle
launch pad at Vandenberg Air Force Base in
California. When the deal was originally made
between NASA and DOD, it was assumed that
NASA's use of VAFB would offset the
contribution NASA was making to the rest of
the project.
It hasn't worked out that way, NASA
has only two flights scheduled from VAFB,
while DOD has 16 flights scheduled from
NASA's Kennedy Space Center (KSC).10 NASA
is also footing the bill for augmenting the
thrust of the Shuttle's solid rocket boosters.
These lighter boosters will be used only for
placing DOD payloads into orbit, with no NASA
use planned. Consequently, talks are now under
way between NASA and DOD to work out a
more equitable schedule of payments for DOD
Shuttle flights.
The Air Force may turn out to be talking
to itself in these negotiations.11 The number
18 -- CounterSpy -- Sept.-Nov. 1982
two men at NASA is Hans Mark, former
Secretary of the Air Force. In charge of
NASA's Shuttle operations is Air Force Major
General James Abrahamson, whose executive
assistant is Air Force Colonel Joseph Rogeau.
And the chief of exte'rnal relations is former
Air Force General Frank Simokaitis.
-Determining exactly how much the
Space Command will use the Shuttle is a little
tricky, because the numbgrs keep changing.
NASA publishes two lists of Shuttle flights:
the Manifest, which lists only those flights that
are actually scheduled, and the Traffic Model,
which also includes all the flights that are
anticipated but not yet approved by Congress
through the budget. Rising costs, declining
appropriations for space science, and flight
delays keep NASA busy revising these lists, at
times so frequently that a current Flight
Manifest is hard to come by.
The Flight Manifest of September 1980
showed 21 Air Force flights out of a total of
79 flights through 1986. The Manifest of May
1981 gives DOD 23 flights out of 61, and the
March 1982 Manifest has DOD flying 15 out
of 54 Shuttle flights through 1986. The current
Traffic Modet, however, projects 114 DOD
flights out of a total of 233 flights through
1994.
But this doesn't tell the whole story,
since many "civilian" flights will carry
experiments or communications satellites of
military use. The second flight of the Shuttle,
nominally civilian, carried a type of 'radar that
the Navy is examining for use in tracking and
identifying ships from space, and an instrument
the Air Force will use on reconnaissance
satellites to ensure that the areas they
photograph are free from cloud cover. The
third flight of the Shuttle, also nominally
civilian, carried a number of sensors to
evaluate the Shuttle as a platform for observing
earth and space. These tests were very similar
to the tests conducted on the fourth Shuttle
mission, which was the first official "military"
flight.
Current U.S. Military Operations in Outer
Space
The introduction of weapons into space is a
few years away, but the U.S. war machine on
earth would grind to a halt without the support
of its extensive space assets. Communications
is the most significant current contribution of
space technology to the military. Over 70
percent of DOD's international communications
are routed through satellites.
These satellites are in high orbits which
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remain stationary over the equator, out of
reach of Soviet anti-satellite weapons. In
addition to using regular commercial
communications satellite links, three NATO III
satellites maintain links with NATO forces in
Europe and in the United States. Five Fleet
Satellite Communications (FLTSATCOM) birds
provide worldwide coverage for the Air Force
and Navy. The six satellites of the Defense
Satellite Communications System are the
backbone of the Worldwide Military Command
and Control System which connects the White
House and Pentagon with major military
commands around the world. The three
Satellite Data System satellites relay data and
images from spy satellites to ground stations
in the U.S. The Air Force Satellite
Commmunications (AFSATCOM) system would
relay , Emergency Action Messages from the
National Command Authority to all U.S.
strategic forces in the event of a nuclear war.
Warning of a nuclear attack is provided
by the three satellites of the Defense Support
Program, which detect both the heat from the
rockets as well as nuclear explosions. Two
Vela Hotel satellites are also used to detect
nuclear explosions. One of these satellites
detected a suspected South African nuclear test
over the South Atlantic in 1979.12
These two systems also function to
monitor compliance with arms control
agreements. The principal form of such
monitoring is by reconnaissance satellites
(which are often referred to as "national
technical means of verification").13 The KH-
11 satellite is the current reconnaissance
mainstay. These large satellites operate in
polar orbit for as long as two years at a time,
sending back high-resolution television images.
When more detailed photos are needed, the Air
(John Pike is on the National Committee of the Progressive
Space Forum, which is devoted to fighting against the
militarization of outer space. The group can be contacted
at 1476 California St., #9, San Francisco, CA 94109.)
Force launches either a Big Bird satellite,
which is externally very similar to the KH-11
and carries six capsules for returning film to
earth, or a Low Altitude Surveillance Platform,
which carries a single capsule. The photographs
have a resolution of about six inches, which is
adequate to identify types of military radar or
count the number of people in a crowd.
The first Space Transportation System
(STS) launch from VAFB in October 1985 will
carry the DOD Reference Mission 4 (DRM-4)
satellite which is the code term for an
improved version of the KH-11. It will send
back television images with a resolution of six
inches. Subsequent flights will put up a new
DRM-4, and return the old one to earth for
repair and later reuse. DRM-4 launches are
the primary justification for the STS launch
pad at VAFB.
The Navy and Air Force also fly secret
satellites with names like Rhyolite and
Aquacade to intercept foreign radio messages
and radar signals. The Defense Mapping
Agency uses satellite data to prepare the
precise maps needed to guide cruise missiles
to their targets. Five satellites of the
TRANSIT system are used for navigation.
These are being replaced by 18 satellites of
the NAVSTAR system. The NAVSTAR
satellites will be used to determine the location
and thus improve the accuracy of mobile
nuclear weapons and will help guide the aircraft
of the Rapid Deployment Force to a safe
landing.
Weapons into Space
In recent years, the U.S. government has given
much attention to two more directly combative
roles for space platforms: anti-satellite (ASAT)
and ballistic missile defense (BMD). The first
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Satellites and Intervention
A review of recent U.S. interventions
in Third World countries reveals the
importance of current military space
assets. The mission to Iran in 1980
was only the latest in a series of
actions in which satellites played a
key role. But the variety of
contributions by satellites to that
mission suggests that space assets
will play a growing role in the 1980s.
Iran 1980
Operation Rice Bowl, the military
attempt to rescue the U.S. embassy
personnel in Tehran, could not have
taken place without the use of
satellites. The KH-11 reconnaissance
satellite was used to try to determine
exactly where in the embassy
compound the personnel were
located, and to scout out, the route
the Delta Team would 1ake.1 This
initial reconnaissance was backed up
by an on-the-spot inspection of the
route by former Green Beret Major
Richard Meadows, who radioed his
report to the mission's headquarters
via satellite.2
Once the Delta Team reached
Iran, they were to use rock and brush
to form letters on the ground which
could be seen by the KH-11. The
choice of letters and their
orientation would indicate the status
and intentions of the Team.3 While
deployed in Egypt prior to the
assault, Delta Team members
periodically rushed to take cover in
a hanger to escape detection by
Soviet reconnaissance satellites."
And Secretary of Defense Harold
Brown was in direct voice contact
with the Delta Team commander
when the decision was made to abort
the mission.5
Vietnam 1970
The same Major Meadows also
received satellite support when he
led U.S. commandos in an attempt
to rescue U.S. POWs held in a camp
near Hanoi in late 1970. Defense
Meteorological Satellite Program
imagery of the weather in the area
indicated that there would be a brief
period of good weather over the
target, and the raid was timed to
take advantage of this weather
window.6 However, the team was
not aware that reconnaissance
satellites had indicated that the
POWs had been moved from the camp
several months earlier,7 and the raid
was a failure.
Lebanon 1976
When President Gerald Ford ordered
U.S. nationals evacuated from
Lebanon during the civil war in 1976,
Secretary of Defense Rumsfield was
in direct voice contact with the
Boatswain Mate who was
commanding the landing craft
carrying the evacuees, via
communicatons satellite .8
Malvinas/Falklands 1982
During the course of the war, the
Soviet Union launched several
reconnaissance satellites to monitor
the conflict.9 The U.S. launched a
Big Bird spy satellite on May 11 for
the same purpose.
test of a U.S. ASAT system is expected later
this year. The system will consist of a modified
Short Range Attack Missile launched from an
F-15 fighter.14 The warhead will be a
Miniature Homing Vehicle that tracks its target
by the heat it emits. Since it is launched from
a fighter, the ASAT can be based worldwide.
This will give the system much greater
flexibility than the Soviet ASAT which is
launched atop an Intercontinental Ballistic
Missile (ICBM).
Research on space-based ballistic missile
defense is currently focusing on lasers which
will be used to destroy ballistic missiles in
flight. Particle beam weapons have been found
to pose too many technical problems to be of
interest in the near future. ` DOD has three
projects working on Laser Orbital Battle
Stations (LOBS).15 Almost $300 million is
currently budgeted for these programs, with a
total expenditure to date of about $2 billion.
There is growing congressional pressure to
move these projects out of the research phase
and into development of an actual weapon
prototype.16 A recent General Accounting
Office report17 recommended several actions
20 -- CounterSpy -- Sept.-Nov. 1982
Footnotes:
1) Newsweek, 7/12/82, p.19.
2) Ibid., p. 25.
3) Washington Post, 4/25/82, p. A-
15.
4) Cf supra, #1.
5) New York Times Magazine,
4/18/82, p. 78.
4) Armed Forces Journal, July 1982,
p.52.
7) Cf supra, #1, p. 21.
8) Armed Forces Journal, February
1978, p. 19.
9) Aviation Week, 5/31/82, p. 20.
to move things in this direction and the
formation of the Space Technology Center
(mentioned previously) is in response to the
GAO report.
Initially LOBS would be deployed to
perform the less demanding anti-satellite
mission,18 with ballistic missile defense
applications in subsequent years as the
technology improves and the lasers become
more powerful. The ASAT role would require
perhaps five battle stations; the BMD mission
would require several dozen stations. The
powerful BMD lasers could also shoot down
airplanes, but would be relatively ineffective.
against targets on the ground.
The principal objections to LOBS center
around. cost and performance.19 Advocates
claim that LOBS could be fielded for a few
tens of billions of dollars; more objective
estimates put the price tag at several hundred
billion. And it is entirely 'unclear that such a
massive expenditure would produce a useful
weapon. Recognizing LOBS's shortcomings, a
new group, High Frontier (a Heritage
Foundation spin-off with close ties to the
Defense Intelligence Agency) has proposed an
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alternative to LOBS for the ballistic missile
defense mission.20 Under this plan, thousands
of Miniature Homing Vehicles of the type soon
to be tested for the ASAT system would be
placed aboard several hundred large satellites
which would also carry the sensors for the
system. High Frontier claims that such a
system could provide effective BMD years
before LOBS, at a lower cost, and with much
less technical risk. Although the Pentagon has
reacted cooly to the plan - reflecting its
vested interest in LOBS - the scheme has
attracted some support within Congress and
the aerospace industry. (Meanwhile, the ultra-
right U.S. Labor Party, through its Fusion
Energy Foundation, continues to lobby Congress
in favor of an accelerated development of
LOBS.)
Although both ASAT and LOBS are
characterized as defensive weapons, they are
essential elements of the U.S. drive to achieve
a nuclear first strike capability.21 The opening
move of a first strike will be the destruction
of an opponent's space-based assets such as
early warning and communications satellites,
substantially degrading their ability to assess
the attack and coordinate a response to it.
LOBS will then pick off any hostile missiles or
bombers that survive the strike, leaving the
attacking country essentially unscathed. The
possession of LOBS and ASAT permits the use
of other offensive weapons such as ICBMs
without the fear of retaliation. This explains
much of the interest in these systems in the
face of the stand-off in earth-based strategic
weapons.
Placing nuclear weapons in orbit is
popularly regarded as one of the more obvious
military applications in space. But a closer
examinaton of this concept reveals why it has
had very limited application. In the absence
of a very large and heavy propulsion the nuclear
bomb will continue in a very predictable orbit
- making it easy to shoot down - and one
which passes over potential targets only briefly
every few days, making it a rather inflexible
weapon. Furthermore, nuclear weapons are
quite delicate mechanisms, requiring constant
care and attention. Providing adequate
maintenance for orbiting bombs would be a
formidable task indeed. Recognizing the
limited utility of orbiting nuclear weapons, the
U.S. agreed to the terms of the 1967 United
Nations Treaty on the Peaceful Use of Outer
Space which prohibits such devices.
But recently interest in this project has
resurfaced, in response to the increasingly
desperate effort by the Reagan administration
to find a basing mode for the MX
intercontinental missile.22 Under this scheme,
the MX would be fired in a time of crisis,
placing its warheads into orbit, where they
would remain until they were called down on
the heads of the enemy.23 If the crisis ended
without nuclear weapons use, they could be
recovered by the Shuttle. The difficulties such
a system would face suggest themselves, but
as the options for basing the MX are narrowed,
it could attract more attention.
The loss of overseas bases during the 1960s
has forced the U.S. government to move its
communications and intelligence facilities into
space. The progressive decline of U.S. power
is the moving force behind the push toward
LOBS and ASAT. With these systems the
Reagan administration hopes that the U.S. will
be able to effect a technological end run around
the Soviet Union and thereby return America's
position in the world to the conditions that
prevailed in the late 1940s, when the U.S.
enjoyed a nuclear weapons monopoly, and the
attendant political and economic advantages.
Space weapons systems, predicts Aviation
Week, "could open a whole new era of warfare"
and "bring about a radical shift in the balance
of power in the world."24
It is still possible to preclude an arms
race in space, although the immediate prospect
is not bright. Neither the U.S. nor the Soviet
Union has fielded an extensive anti-satellite
system, and Laser Orbital Battle Stations are
years in the future. Extensive testing would
be required for both types of weapons, and
such tests would be rather easy to detect.
Neither country would place much confidence
in the systems in the absence of such testing.
A treaty banning tests of ASAT and LOBS, and
CounterSpy -- Sept.-Nov. 1982 -- 21
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thus by extension also their deployment, would
be readily verifiable. The USSR recently
proposed resumption of negotations with this
in mind, but the Reagan administration has not
taken up the offer.
Although military support functions,
such as reconnaissance and communications,
have found a permanent place in space, it is
not too late to prevent the introduction of
weapons into that arena. What is lacking is
the commitment of the U.S. government to do
so. It is crucial that the disarmament
movement in the U.S. recognize that the
Reagan administration is presently making far-
reaching, possible extremely dangerous
decisions about exporting war to space.
Footnotes
1) New York Times (NYT), 6/6/82.
2) Astronautics & Aeronautics June 1981, p. 74.
3) NYT, 11/1/81.
4) NYT, 7/11/82.
5) 1 e Defense Monitor, vol. IX, no. 9, 1980. This is an
excellent summary of U.S. military space programs.
6) General Accounting Office, Analysis of NASA's FY83
Budget Request for R&D to Determine the Amount that
Supports DOD's Programs, (MASAD-82-33) B-207165,
4/26/82. This report is flawed by the disinclination of the
GAO to allocate the thrust augmentation program on DOD
alone, even though there are no NASA programs slated to
use it. The Space Telescope could use thrust augmentation
to good purpose.
7) NYT, 6/22/82; News Conference: Creation of the Space
Command The Pentagon, 6/21/82.
8) Aviation Week, 6/14/82, p. 28.
9) Washington Post, 5/8/82, p. A-2.
10) Flight Assessment Manifest, NASA, NASA-S-80-2268,
(JCS-13000-6A , 3/3/82.
11) Cf supra, #9.
12) Science, 2/1/80, pp. 504-506.
13) Contrary to popular belief, these satellites cannot read
license plates or newspaper headlines. Not only is there no
military need for such high resolution, but the resulting
image would cover such a minute area that innumerable
photos would be needed to cover any area of interest.
14) Aviation Week, 11/9/81, p. 24.
15) cienc 6/4/82, pp. 1082-1083.
16) Aviation Week, 6/14/82, pp. 26-27.
17) General Accounting Office, DOD's Space-Based Laser
Program - Potential, Progress and Problems (C-MASAD-82-
10), 2/2/82, classified Secret. Obtained by the author under
the Freedom of Information Act on 5/25/82, with classified
data removed.
18) Aviation Week, 7128/80, pp. 65-66.
19) Scientific American, December 1981, pp. 51-57.
20) Lt. Gen. Daniel O. Graham, USA (Ret.), High Frontier,
A New National Strategy, The Heritage Foundation, 1982.
21 TI would like to thank Jack Colhoun for his useful
comments on this topic.
22) Office of Technology Assessment, MX Basing, U.S. GPO,
1981.
23) Aviation Week, 4/12/82, pp. 83-89.
24) Aviation Week, 7/28/80, p. 47.
Mauritius Challenges Reagan over
Diego Garcia
In the dramatic June 11, 1982 elections in the
Indian Ocean island of Mauritius, the ruling
rightwing Labor Party failed to hold a single
seat, and Prime Minister Seewoosagur
Ramgoolam was unceremoniously ousted from
office. The new Prime Minister is Aneerood
Jugnauth of the Mauritian Militant Movement
(MMM) who runs a coalition government, with
the Social Democratic Party (SDP) as a junior
partner.
The MMM victory poses a problem for
the U.S. and South African governments which
had a willing client in Ramgoolam. South
Africa, and apparently the Reagan administra-
tion, worked hard to keep Ramgoolam in power.
But the bankruptcy of his regime was too
obvious for Mauritius' voters.
Ramgoolam had become Prime Minister
in 1965, before independence. Under his reign,
Mauritius' economy began deteriorating rapidly:
22 -- CounterSpy -- Sept.-Nov. 1982
20 percent unemployment, 30 percent inflation,
the Mauritian rupee devalued by 50 percent
between 1979 and 1982, external debts repre-
senting 25 percent of the Gross National
Product, economic dependency on the Inter-
national Monetary Fund and the South African
regime which in 1981 gave Mauritius a $187
million loan. Ramgoolam, who hired 20,000
unemployed workers in the final days and hours
before the election in a last-ditch effort to
placate the voters, proved unable to enact eco-
nomic programs to stem the deterioration of
the country. Instead, he tied Mauritius closer
and closer to South Africa. Today, most of
Mauritius' imports, including 75 percent of its
food and manufactured goods, come from South
Africa.
A 1981 State Department report praised
Ramgoolam's government as being "uniformly
responsive to U.S. requests to provide access
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to its facilities by units of the Indian Ocean
Task Force." Likewise, Mauritius is one of the
few African countries - and a very crucial
one - that provides South Africa with landing
rights. In addition, the British Government
Communications Headquarters maintains a
listening station in Mauritius, and the French
Navy uses the island's ports. Between 1968
and October 1973, Ramgoolam also provided
facilities for the U.S. Air Force in connection
with the U.S. space program.
The immediate concern of the Reagan
administration is that Mauritius is the legal
owner of the Chagos Archipelago in the Indian
Ocean. This archipelago includes the atoll of
Diego Garcia - one of the most important
U.S. overseas bases. It serves as an air base
for U.S. warplanes, including B-52's, and as a
port for the Rapid Deployment Force and
Polaris submarines armed with nuclear missiles.
The electronic communications facilities on
Diego Garcia are described as "some of the
most technologically advanced in the
Pentagon's inventory." Over 600 U.S. military
personnel are permanently on the base, and
tons of military equipment is prepositioned
there, as well as large amounts of fuel. During
the U.S. military intervention in Iran "to rescue
the hostages," U.S. planes and warships used
In 1965, when. Mauritius was still a
British colony, the British government, appar-
ently for military purposes, created a new
Indian Ocean territory. It split the Chagos
Archipelago off from Mauritius - the
compensation to Mauritius was $7 million - and
took several islands belonging to the Seychelles
- another former colony - to create the
British Indian Ocean Territory (BIOT).. At that
time, the British were engaged in an overall
"withdrawal" process from their colonies, and
the U.S. government moved quickly to "fill the
power vacuum": to prevent the liberation
The Reagan
administration ... might
try to destabilize the new
government. There were
several reports before
the 1982 elections that
the CIA had stepped up
activities in Mauritius .. .
Diego Garcia as a springboard. At the present
time, the Reagan administration is undertaking movements of these colonies from taking power
a $400 million construction program on the and to maintain them as U.S. and British allies.
island with $88.2 million to be spent in Fiscal U.S. designs on Diego Garcia go back to
Year 1983. 1962 when the Pentagon, according to a 1976
The military quarterly Strategic Review General Accounting Office Report (Financial
calls Diego Garcia "the pivotal point for U.S. and Legal Aspects of the Agreement on the
forward strategy and power projection into a Availability of Certain Indian Ocean Islands for
vital region" - i.e. the Middle East and East Defense Purposes) "recommended making
Africa. A "loss" of Diego Garcia "would cripple arrangements with the British that would assure
the Defense Department's ability to deploy its the availability of selected Islands in the Indian
forces in the Indian Ocean-Persian Gulf and to Ocean." On December 30, 1966, the U.S. and
maintain sufficient military power there to British governments signed an agreement to
protect adequately U.S. interests in the allow the U.S. military to use Diego Garcia
region."* "for the defense purpose of both Governments."
The way the MMM government of At the same time, the Mauritians were assured
Mauritius sees it, the U.S. cannot lose Diego that the island was to be used only as a
Garcia, because it never owned it: the U.S. communications facility.
base on the island was constructed illegally. In 1968, Mauritius gained independence,
Only a few days after taking office, Mauritius' but the Chagos Archipelago was not returned
Foreign Minister announced that his govern- to Mauritius. (When the Seychelles became
ment would now press its claim to Diego independent the British government returned
Garcia. those Seychellese islands included in the BIOT
*Diego Garcia is an ideally located base to carry out U.S.
interventionist plans in the Middle East region. However,
in their attempts to maintain and enlarge it, Pentagon
officials at times overemphasize its significance. With
U.S. Middle East bases in Turkey, Egypt, Bahrain, Oman,
Somalia and, for all practical purposes, in Saudi Arabia and
Israel, U.S. policy would not collapse if Diego Garcia were
"lost."
to the Seychelles.) Instead, in 1972, Britain
leased Diego Garcia to the U.S. Some 2,000
inhabitants were forcibly removed from the
island and shipped to Mauritius. According to
the British-U.S. agreement, Diego Garcia was
to be used for a "limited naval communicatons
facility." In February 1976, the U.S. finally
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signed the treaty with Britain that formalizes
the presence of today's naval air base on Diego
Garcia.
It might be difficult for the Reagan ad-
ministration to legally defend the presence of
the U.S. base on Mauritius. The Organization
of African Unity (OAU), for example, recog-
nizes Mauritius' claim to Diego Garcia under
international law. Continued British control
over the island also violates the United Nations
principle of the integrity of colonial territory.
Even the 1976 General Accounting Office re-
port raises questions about illegalities in obtain-
ing Diego Garcia. The GAO was unable to
ascertain that the U.S. government had not
violated U.S. law in obtaining the island. At
a minimum, charges the GAO, the Pentagon
"circumvented" congressional oversight. The
GAO was unable to resolve the issue "because
of limitations placed on access to records by
the Departments of State and Defense."
Before losing the June 1982 elections,
the Ramgoolam government was under intense
domestic and international pressure to move
forward on Mauritius' claim to Diego Garcia.
Other countries bordering on the Indian Ocean
- such as India, the Seychelles and Tanzania
- demanded that the Indian Ocean become a
nuclear free zone and a zone of peace.
Domestically, Ramgoolam came under fire
from the increasingly popular MMM, and from
the original inhabitants of Diego Garcia who
had been forced off the island when the U.S.
came. Most of them now live in the slums of
Port Louis (Mauritius' capital) and are demand-
ing the right to return to their homeland.
Ramgoolam did pay lip service, to the
return of Diego Garcia to Mauritius, but he
was not interested in dismantling the U.S. base
there. "The American presence on Diego
Garcia is justified," because, said Ramgoolam,
"the Soviet Union is making a big, big effort
to destabilize the Indian Ocean.... My govern-
ment is engaged to... see that it does not take
place." The only thing Ramgoolam was
interested in was being able to collect rent
from the U.S. for its use of Diego Garcia.
Ramgoolam's attitude toward the return of
Diego Garcia runs counter to the sentiment of
many people on Mauritius, and his catastrophic
loss in the last elections can be partially attri-
buted to that attitude.
It will not be easy for the new govern-
ment in Mauritius to force Britain and the U.S.
to return the island, even though Mauritius has
widespread international support for its claim,
including some support in the British Labor
Party. The Mauritian government has launched
an international campaign to increase public
24 -- CounterSpy -- Sept.-Nov. 1982
awareness of the illegal U.S. presence on Mauri-
tius. Prime Minister Jugnauth announced in
July 1982 that Mauritius "willassert its sover-
eign rights over Diego Garcia in all inter-
national forums."
Mauritius undoubtedly depends on inter-
national solidarity, not only from the OAU,
which has yet to back up its words with actions,
but also from the disarmament movements in
Britain and in the United States. Mauritius'
progressive government is a likely target of
foreign intervention and subversion. One has
only to look at the Seychelles, another Indian
Ocean island nation with a progressive
government which was the target of a recent
South Africa-sponsored mercenary invasion.
Even before the MMM came to power in June
1982, the South African government
manipulated the elections by financially
supporting the MMM's opponents. A U.S.
consultancy firm, "Public Affairs Analysts, Inc.,
in collaboration with Joseph Napolitan
Associates, Inc. ran Ramgoolam's public
relations campaign. Ramgoolam, by
introducing forged documents, also tried to
portray MMM head Paul Berenger as a tool of
Libya.
What will the U.S. and South African
governments do now that the MMM and the
SDP have ousted Ramgoolam, and have the
absolute majority in Parliament so they can
change the constitution? Mauritius is vulner-
able. Its economy depends on sugar exports.
Foreign debts are high, and the government
will not be able to turn the economy around
in the near future. South Africa might decide
to try the "Seychelles strategy," in spite of
the setback there, and send mercenaries to
Mauritius to overthrow the government.
Chances are good that a sizable group could
be assembled. Over 20,000 upper-class white
Mauritians live in South Africa, and more are
expected to leave Mauritius in the face of
nationalizations and other measures which will
break their economic control over the island.
These white Mauritians, with military training
and aid from South Africa, present a great
danger to Mauritius on its way to true indepen-
dence.
The Reagan administration, unhappy
about Ramgoolam's loss, also might try to
destabilize the new government. There were
several reports before the 1982 elections that
the CIA had stepped up activities in Mauritius
to prevent the MMM from coming to power.
It failed dismally, but, for the U.S. government,
the stakes are high in Mauritius, and the
possibilities for intervention - economically
and through covert operations - are many.
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Features
Strategic Hamlets Revived in. the
Philippines
by John Cavanagh
During September. 1981, Deputy Secretary of
Defense Frank Carlucci honored the Philippines
with an official visit, part of a long trip to
the region's U.S. allies. If members of the
Philippine government were unaware of
Carlucci's distinguished CIA career which
culminated in the post of deputy director under
the Carter administration, the tone and content
of his conversations there undoubtedly gave
them a clue. Carlucci met with Philippines
Armed Forces Chief of Staff, General Fabian
Ver, as well as President Marcos and other
officials to grapple with "mutual security
concerns."
In the course of discussions, Carlucci
and Ver agreed that control of internal
subversion and regional military defense
capabilities were closely interrelated. General
Ver later acknowledged that the Philippines'
need for more equipment to support its internal
security operations was discussed. Reportedly,
they also reached agreement on improving local
counterinsurgency programs in view of a
"seeming resurgence" of opposition forces in
the Philippines.)
Rural Counterinsurgency
Crucial in this context is that within weeks of
Carlucci's visit, two cleverly intermeshed,
massive rural programs were launched in the
Philippines, one with an overt
counterinsurgency aim, the other with
counterinsurgency 'designs clothed in official
pronouncements of promoting economic
development.
The overt program was a variation of a
well-tested U.S. institution - strategic
hamlets, whereby rural residents are regrouped
into central locations by the military to
facilitate isolation and destruction of rebel
forces.- Or, in the justification of army
commanders in Laac, the central Philippine
hamleting region, "Laac is like a beautiful lake,
in which there are some bad fish. Thus it is
necessary to drain all the water from the lake
in order to catch these bad fish."2
Hamleting, referred to officially by the
Armed Forces of the Philippines (AFP) as
"grouping," was launched on a major scale in
the Philippines' largest southern island,
Mindanao, in October 1981, and has since been
spread to surrounding provinces on that island.
By February 1982, some 100,000 peasants had
been regrouped in at least 35 hamlets
throughout Mindanao.3
Not that the concept was new, even to
the Philippines. The U.S., in suppressing its
newly-won Philippine colony at the turn of the
century, had herded together thousands of
people at gunpoint into huge concentration
camps called reconcentrados. In 1971 and 1972,
the AFP repeatedly created temporary hamlets,
designated "no-man's land," to regroup villagers
during "search and destroy" missions against
the Muslim insurgency. Other, more
permanent, hamlets were scattered across
Mindanao on a small scale in the late 1970s
and early 1980, but only in the autumn of 1981
were entire municipalities forcibly relocated
into hamlets.
The other major new initiative which
followed on the heels of Carlucci's visit was
the September 1981 launching of the Kilusang
Kabuhavan at Kaunlaran (KKK, Movements for
Livelihood and Development), brandished by
Marcos as the "centerpiece" of his latest
development strategy.4 Backed by a $120
million budget, the program was designed to
(John Cavanagh is an economist at the United Nations
and author of numerous articles on multinational
corporations.)
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serve the political goal of quelling rural support
for the growing opposition National Democratic
Front thr6ugh the economic means of creating
several thousand new jobs. With all the flourish
and fanfare lavished upon the KKK in the local
Philippine press, one would never know that
the program stood as little more than a large
public relations ploy. By realistic estimates,
only 30,000 new jobs are likely to come from
program loans; an insignificant gain against the
more than half million Filipinos entering the
work force yearly.
The U.S. Record
Such a two-pronged counter-insurgent attack
of joint military and political-economic
operations is straight out of the U.S. strategic
experience. During both the Shah of Iran's'
"White Revolution" (1962-1972) and the Latin
American "Alliance for Progress" (1960s), the
U.S. helped orchestrate land and. agrarian
reforms from above to prevent revolutions from
below. Since 1945 in Asia, the U.S. sponsored
land reforms as precautionary measures against
revolution in Japan (1945-1949) and Taiwan
(1949-1954); and as explicitly counter-
revolutionary measures in China (1949), the
Philippines (1951-1953, 1972-present), and
Vietnam (1951-1961, 1966-1973).5
In several cases, the reforms were
carried out in conjunction with U.S.-backed
military operations, Vietnam being the most
salient example. In 1962, as internal resistance
burgeoned in Vietnam despite a land and other
"reforms," a gargantuan strategic hamlet
program was launched. In the ensuing years,
over 16,000 hamlets were created before the
program was abandoned in failure.
A confidential U.S. military assessment
of the Vietnam-based strategic hamlets,
written a year after their inception, offers an
interesting gauge against which to judge the
Philippine hamlet experience. Titled Notes on
Strategic Hamlets, the 17-page assessment was
authored by the U.S. Operations Mission
(USOM, U.S. economic aid apparatus in
Vietnam), in May . 1963. After describing
"strategic hamlets" as "a daring, imaginative
effort to build a nation," it instructs U.S. and
Vietnamese hamlet administrators on a model
hamlet's crucial components.
The document stresses the importance
of "psychological separation of the people from
the VC (the 'Viet Cong'),"6 even over the
physical separation of the people from the
enemy: " . . . the ultimate target is the human
mind. It may be 'changed,' it may be rendered
impotent for expression or it may be
26 -- CounterSpy -- Sept.-Nov. 1982
extinguished, but it still remains the. critical
target."7 Toward this end, hamlet
administrators were instructed to guarantee
hamlet residents several conditions, all of
which, almost two decades later, the Philippine
military (like the Vietnamese before them) has
sedulously ignored.
Indeed, a comparison of the USOM's
textbook world with the Philippines today
reveals that strategic hamlets were doomed to
failure from the start. For the basic
prerequisites of a successful hamlet require
sacrifices that repressive regimes, whose
political and economic policies are geared
toward enriching the upper strata of society,
will never make. It becomes a contradiciton
in terms - a successful hamlet (which would
enhance the well-being of the incarcerated)
will never be found in Ferdinand Marcos'
Philippines, nor, for that matter, in Guatemala8
where the strategy has also recently surfaced
Peasants have also
voiced growing concern
that the hamlets, by
leaving choice land in
their wake, will directly
benefit the numerous
U.S. and agribusiness
corporations that already
control tens of thousands
of hectares of Mindanao's
most fertile land.
brutally. A juxtaposition of USOM visions and
Philippine reality puts the discongruities into
focus.
Hamlets, according to USOM, must
guararitee:9
? "a reasonable livelihood." As
Philippine hamlets are located up to six miles
from farm lands, and since peasants can be
shot on sight if caught in their fields after the
sunset curfew, food cultivation has suffered
drastically and malnutrition is soaring.
? "a reasonable amount of elementary
justice." Mindanao residents were ordered by
government decree to destroy rural homes and
move into hamlets; houses left standing were
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to be burned to the ground. In certain cases,
residents were forced to move twice within
one month. As an independent five-person
commission sent to Mindanao by the Integrated
Bar of the Philippines (a prominent lawyers'
group) concluded, the government ordinance
authorizing hamleting "is inherently
unconstitutional" and "even if the nation were
at war under the laws of war no forced
transfer of civilians is allowed."la
? "a reasonable chance for . . . child-
ren." On this score, the eyewitness account
of the San Vicente barrio (village) hamlet by
Earl Martin (a former Mindanao-based
representative of the Mennonite Central
Committee) is particularly telling: "Scores of
small children have gotten sick because of the
hasty evacuations. At least 10 have died,
victims of impure water, poor sanitation and
exposure to the elements in inadequate
structures. Possibly the number is many times
that."11
Such comparison is especially apt since
the regional AFP commander in charge of most
of the Philippine hamleting (Brig. Gen. Alfredo
Olano) has flaunted the fact that the Mindanao
operation is modeled on the Vietnam-style
"strategic hamlets."12
It seems doubtful that the U.S. would
have condoned such an overtly brutal Philippine
exercise were it not linked to efforts on the
political-economic front. Indeed, economic
reforms (or, at least, the rhetoric thereof) had
been crafted as cornerstones of Philippine rural
counterinsurgency ever since martial law was
declared in 1972. A promised land reform
stood as a centerpiece of Marcos' 1972 "New
Society." By the end of 1980, however, a mere
1,700 tenants had become effective owners of
their own land, far too few in number for the
program to have generated much if any
political support in the countryside.13
With assistance from the U.S. Agency
for International Development and the World
Bank, Marcos also inaugurated an Integrated
Area Development (IAD) strategy in the early
seventies. Focused on four priority regions,
the IAD aimed at offering the areas a set of
services including "security," road building and
agricultural assistance.14 While such projects
provided strategic feeder roads and bridges to
facilitate military access to insurgents, again
they had little impact on winning peasant
allegiance to the government.
The limited scope of these programs in
the face of a rapidly growing insurgency
occasioned the autumn 1981 launching of the
KKK. Not surprisingly, this Imelda Marcos-
administered operation has fed right into the
military maneuvers linked to hamleting. Gen.
Olano admitted that on President Marcos'
orders, the military was disseminating
information about KKK, 15 a program Olano
argued would help bring the poorer towns into
the economic mainstream and therefore help
win over minds.16
The military's role, however, runs far
deeper. In the barrio of San Antonio, peasants
were herded into a strategic hamlet, only to
find 900 hectares of their former home set
aside to grow trees for pulp wood.'? Financing
for the pulp project came from the KKK, while
the plantation was to be administered by Col.
Alejandro Cruz of the AFP, who indicated
hopes to expand the project later into other
barrios and other cash crops. Peasants have
also voiced growing concern that the hamlets,
by leaving choice land in their wake, will
directly benefit the numerous U.S. and
Japanese transnational agribusiness
corporations that already control tens of
thousands of hectares of "indanao's most
fertile land.18
Government Denials
The 1963 U.S. military document on Vietnam
hamlets had forewarned hamlet administrators
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against "surprise dive bombing attacks by
journalists."1 Likewise, Philippine hamleting
came under a sustained press barrage in early
1982 from such publications as the New York
Times, Time, and the Financial Times London ,
as well as several human rights groups inside
the Philippines.20 Defense Minister Enrile
responded defensively on March 2, claiming
that hamleting was not authorized by the
government and that police and military were
ordered "to desist from participating in any
manner of giving assistance or setting up
hamlets."21
Despite these official utterances, the
brutal saga continued. The head of the AFP
Southern Command authorized training of 2,000
Integrated Civilian Home Defense Force
militiamen, reportedly destined for the hamlet
operations.22 All other evidence from
Mindanao suggests that the program, far from
dead, is expanding. A June 1982
correspondence from Mindanao reported that
hamlets "grow in number, especially in the
provinces of Zamboanga del Sur and Davao del
Sur." A fact-finding mission to the latter
province discovered 36 hamlets holding an
estimated 64,000 persons.
Refusing to learn from history, the
Philippine government and military seem
condemned to repeat it, again at enormous
human cost.
Footnotes:
1) From articles in: Asian Wall Street Journal, Philippine
Daily Express and South China Morning Post, as reported
Asia Monitor, voL5, no.3, 1981.
2) Mindanao Documentation Committee for Refugees, The
Strategic Hamlets of Mindanao, December 1981, p.9.
3) New York Times, 2726/82.
4) Southeast Asia Chronicle April 1982, p.23.
5) Bulletin of Concerned Asian Scholars, Winter-Spring
1976. For a detailed description of the U.S. counterinsur-
gency program in Vietnam, see Counterspy, vol. 1, no.2.
6) USOM, Office of Rural Af airsf , Notes on Strategic
Hamlets Saigon, 1963, p.4.
7) Ibid., p.2.
8) The Guardian (New York), 6/9/82.
9) cc su ra, #6.
10) Far Eastern Economic Review, 3/12/82.
11) C supra, #3, p.16.
12) Ibid.
13) See Walden Bello, et. al., Development Debacle: The
World Bank in the Philippines, San Francisco, 1982.
14 CounterSpy, vol.6, no.1, pp.47-48.
15) sCf-upra, #2, p.15.
16) Financial Times (London), 3/8/82.
17) C supra, #2, p.11.
18) "A letter of appeal from the farmers of San Vincente
(Laac), Davao del Norte," November 1981.
19) Cf supra, #6, p.16.
20) New York Times, 2/26/82; Time, 2/1/82; Financial
Times 2/8/82.
21 supra, #10.
22) Ibid.
U.S. Responsibility for
Famine in Chad by Jeff McConnell
Devastated by years of fighting, Chad may now
be facing a famine. This comes in the wake
of the victory of pro-Western Hissene Habre
over the Government of National Transition
(GUNT), headed by Goukouni Oueddi. liabre
has been using the food weapon to consolidate
his control over the country, increasing the
chance of mass starvation.
In light of this developing tragedy, it is
urgent to assess responsibility. U.S. officials
and the "free press" are quick to blame Libyan
leader Muammar Qaddafi. In an editorial two
weeks after Habre marched into Ndjamena,
Chad's capital, the New York Times argued
that his victory resulted from Qaddafi's
"unconcealed imperial ambitions" which have
made "anti-Qaddafi sentiment... into a
formidable factor in regional politics." Such
.sentiment the Times illustrated by Goukouni's
28 -- CounterSpy -- Sept.-Nov. 1982
extrication of himself, "encouraged by France
and the U.S.," from his Libyan connection, and
by Nigeria's relief "to see the Libyans out.*1
The facts point in a different direction.
The devastation of Chad is another "sideshow"
in the onslaught of U.S. foreign policy; in this
case, a by-product of the Reagan
administration's undeclared war on Libya. It
was U.S. policies in the region (perhaps
alongside those of France) that led most
directly to Habre's victory, and thus to the
misery Chad now faces.
Libya's Invasion?
The GUNT was established under the auspices
of the Organization of African Unity (OAU) as
a result of a series of conferences in Nigeria,
culminating in an August 1979 accord. This
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brought a brief respite after years of colonial
and civil wars, but fighting again erupted in
March 1980 between the Forces Armees
Populaires (FAP) led by President Goukouni,
and Habre's Forces Armees du Nord (FAN). In
December 1980, Goukouni was suddenly
successful when he activated a 1980 mutual
defense treaty with Libya. Libyan troops
pushed Habre's troops out of Ndjamena and
eastward across Chad into Sudan.
The French government - a longstanding
foe of Libya in Chad because of Libya's support
to the Chadian anti-colonialist struggle against
France - had earlier given assurances to
Qaddafi that it would not opppose Libyan
assistance to GUNT. Now, President Giscard
d'Estaing reneged on those assurances.2 Unable
to intervene militarily, Giscard instituted
sanctions against Libya. He condemned the
intervention as an "invasion," embargoed arms
exports to Libya, and suspended an oil
exploration agreement. Further, the French
government orchestrated an OAU campaign
against Libya. On January 6, 1981, Goukouni
and Qaddafi issued a communique declaring
that Libyan troops would continue to "keep
security and maintain peace" in Chad. The
communique stated that the two countries had
Le Monde reported that Goukouni had backed
away from a merger, and Qaddafi explained
that his opponents had mistranslated the word
"unity" as "merger," incorrectly implying
annexation.3
Still, capitalizing on this propaganda, the
French government maneuvered the OAU's
Chad committee, composed mainly of French
client states, to issue a strongly-worded
communique ordering Libya and Chad to nullify
their mythical merger agreement and to
demand that Libya withdraw its troops.
Incredibly, in the midst of chaos inside Chad,
the communique also mandated elections in
Chad under OAU auspices by April 1981 and
an OAU peacekeeping force for Chad. The
election mandate was probably intended as
propaganda. Edem Kodjo, OAU's General
Secretary himself, stated that such an early
election was impossible. The peacekeeping
force proposal seems to have been dishonest
as well. The authorization for an OAU force
had been in effect since the August 1979
agreement, yet no force had materialized. In
fact, Libya's troops soon became a de facto
peacekeeping force, and as subsequent OAU
statements made clear, most African nations
were satisfied with it especially after Francois
Mitterrand replaced Giscard in May 1981.
Most were satisfied, that is. Egypt and
Sudan were not. Although the OAU demanded
that states bordering Chad refrain from
permitting non-African powers or Chadian
dissidents to mount attacks into Chad, France
and Saudi Arabia immediately became involved
with Sudan and Egypt in planning such attacks.
These two countries came to regard Chad as
an important strategic back door for attacks
upon Libya. The French government also set
out to destabilize the GUNT coalition directly.
Southern Chad, Christian and animist, is
culturally distinct from the Arab and Muslim
north. It is also economically more developed
than the north and it continued to maintain
close political and economic ties to France
after the Foreign Legion was withdrawn.
The south is controlled politically and
militarily by Nadal Abd al-Kader Kamougue's
Forces Armees Tchadiennes (FAT). "A
agreed "to work for the realization of complete
unity between the two countries." This line
was deliberately misred by anti-Libyan
propagandists to mean that Libya had annexed
Chad. There was ample evidence that this
reading of the communique was a false one.
(Jeff McConnell is a political activist living in Cambridge,
Massachusetts. He is the author of two major articles
on Libya published in Counterspy.)
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CounterSpy -- Sept.-Nov. 1982 -- 29
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consensus appears to have developed among
Nigeria and. other key states of the OAU (in
consultation with French strategists)" noted the
anti-Libyan African Index three months after
Libyan troops went into Chad, "that the
preferable way to get the Libyans out of Chad"
involves an effort to activate "Kamougue's
opposition to the Libyan connection.*4
Reagan Moves to Destabilize
The Reagan administraton also increased its
involvement after Giscard's defeat in May. In
February 1981, a high-level French official
came to Washington to discuss the coordination
of actions against Libya with top administration
officials. Among the actions discussed was the
possible assassination of Qaddafi.5 Presumably
another point of discussion at the meeting was
Chad. The administration was concerned about
increasing Libyan influence in Africa, and in
particular about the security of Egypt and
Sudan. Also, during the spring, the U.S.
government completed an inter-agency study
began under Carter on U.S. options against
Libya and inaugurated a large-scale campaign
against Libya based on the study. This
campaign, a small part of which was leaked to
the press in May and June 19816 included:
? expelling Libyan diplomats from the
U.S.;
? intervening in Mauritius to
(unsuccessfully) prevent progressive forces
considered "pro-Qaddafi" from coming to
power;7 and in proposed "elections" in the
Western Sahara8 and in post-coup Liberia;
? organizing Libyan exiles into a unified
"Libyan Liberation Front" in Somalia and Egypt;
? mounting an Africa-wide anti-Qaddafi
propaganda campaign, similar to that used
against Cuban leader Fidel Castro in the early
1960s, portraying Libya as a source of terrorism
and subversion, falsely attributing to Libya
incidents in Nigeria, Tunisia, Ghana, Somalia,
The Gambia and Sudan;
? increasin CIA and Pentagon presence
in North Africa'
? destabilizing Libya economically, mainly
through disrupting its oil sales;10
? undermining unity in the OAU in
anticipation of Qaddafi's chairpersonship after
August 1982;
? creating military pressure on Libya by
militarizing its border areas and by conducting
land and naval maneuvers around it; and
? attempting to provoke a coup in Libya
and to assassinate Qaddafi.
In a sense, Chad was a "sideshow" to
this larger plan - but an important one. The
30 -- Counterspy -- Sept.-Nov. 1982.
U.S. reportedly provided arms, money and
supplies to the anti-Goukouni effort.11 Egypt
handed over weapons from bases in Sudan, and
since most Egyptian weapons are U.S.-made,
President Anwar Sadat needed U.S. approval
(required by law) to transfer these weapons.
Habre's forces were also trained by Egyptian
and Sudanese military officers in the Sudanese
towns of Koulbous and El Geneina, and Saudi
Arabia reportedly provided him with money.12
At the same time, the U.S. withdrew its
diplomatic staff from Chad and cancelled all
bilateral aid including food aid. This embargo
was especially devastating amid the turmoil
created by Habre's forced withdrawal to Sudan.
His troops killed nearly 5,000 people, destroyed
the crops and livestock of anyone thought to
be supporting Libya, and forced more than
100,000 to become refugees.13 The State
Department professed to have very little
information about events inside Chad, but this
claim is dubious: there are reports that U.S.
military men, recruited by Edwin Wilson and
working for Libya inside Chad, were routinely
debriefed by the U.S. government upon their
return to the U.S.14
In July and August 1981, Egypt airlifted
arms to Habre's forces in El Geneina,15 and
in September, Habre mounted an offensive
against Chad from Sudan. Sudanese President
Jaafar Numeiri used the uncertainty during the
crisis following the shooting of Sadat, and the
fact that Libyan troops were counterattacking
against Habre, to create the impression that
Libya was threatening Sudan militarily from
Chad. The Reagan administration responded
with "training teams" and AWACs16 for Sudan,
and Numeiri stated that the U.S. was
committed to defending Sudan. However, after
European diplomats charcterized Numeiri's
statements about a Libyan threat as
"exaggerated,"17 senior Sudanese officials said
theS believed Qaddafi had postponed plans to
invade Sudan. Most observers agree, though,
that logistically a Libyan invasion of Sudan was
not possible.
The OAU "Peacekeeping Force"
After consultations between Goukouni and
French President Mitterrand in October 1981,
France began supplying arms to Chad and soon
had persuaded Goukouni to ask Libya to
withdraw its troops. An OAU peacekeeping
force was to take Libya's place. Goukouni had
been interested in the creation of such a force
since the Lagos accord of August 1979.
Mitterrand now persuaded Goukouni that such
a force could be raised. Internationally, it was
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reported that Goukouni happily ordered Libyan
troops to leave. However, the Western media
chose to all but ignore statements by Goukouni
which indicate otherwise. In an interview with
West Africa, he stated: "In view of the attitude
o African brothers and due to extra-African
pressure, we were forced to demand the
withdrawal of Libyan forces from our soil, to
enable those countries which are fearful about
Chad because of the presence of Libyan forces
to have confidence in us." West Africa
commented: "The one bright spot in the
immediate future is the end of Chad's
ostracism from the traditional sources of
financial assistance."18
But these new sources of assistance did
not develop. Although small amounts of French
aid came in, a consortium of potential Western
aid donors to be put together by the U.S. after
Libya's departure got nowhere. Moreover,
France and the U.S., which had promised to
bankroll the OAU force, came up with no more
than $24 million, enough for about two months
duty.
The peacekeeping force was made up of
troops from France's client Senegal, the U.S.
client Zaire, and Nigeria. All three countries
are staunch foes of Libya. Habre announced
a ceasefire, and Sudan proclaimed that it was
no longer assisting Habre, but Numeiri, after
meeting with Goukouni to normalize relations,
stated that Goukouni was still an obstacle to
peace in Chad because he would not
negotiate.19 Goukouni in fact had expressed
willingness to negotiate with Habre's forces
though not with Habre himself. For Goukouni,
there was too much blood on Habre's hands to
make him a legitimate Chadian leader. Habre
began military action again in 1982, and the
OAU forces refused to intervene. Moreover,
it was reported that soon after, there had been
secret contacts betweeen Kamougue and Habre.
Thereafter
Kamougue called for
direct
negotiations
with Habre.
Many
African
observers
saw non-African
hands
behind
Kamou
ue's
20
acti
g
ons.
More
indications of
the double-cross
surfaced in Zaire. The contribution by Zaire
to the OAU force arrived in Chad long before
the other troops, only days after President
Mobutu had been formally asked to contribute
to the force. Mobutu's eagerness to dispatch
his crack French-trained 31st Battalion,
especially in light of his own internal problems,
surprised observers at the time.21 Mobutu's
staff director Me Nyma was reportedly told by
Mobutu in January 1982 that Secretary of State
Haig "had developed a plan to end the Chad
crisis by dividing the country into two parts."
One part would be given to Habre, considered
a reliable "Westerner" and anti-Libya. "The
U.S. aim, said Mobutu, is not only against the
Soviet-Libyan menace but also to eject the
French who under President Francois
Mitterrand supported the official [GUNTI
government." During a visit to Washington,
Mobutu was reportedly told "not to take any
step that could aid the stability of GUNT... in
whom the White House has 'no confidence.'
Tacitly to aid FAN... so that they could,
supported by... Sudan, gain control of a larger
part of the country and thus be in a better
position when it eventually came to negotiatons
between GUNT and FAN. To give active, if
secret, support to any of the Chad military
who declare their intention of a coup against
[Goukouni] ."22
The negotiations game continued and the
OAU committee on Chad, still made up of
French and U.S. clients, threatened to pull the
OAU force out unless Goukouni agreed to
negotiate. The New York Times reported that
"pro-Western A Fi an count it es have shown
increasing impatience with Mr. Goukouni
accusing him of blocking settlement efforts.*2~
Finally, at a May 21 conference in Zaire;
Nigeria, Senegal and Zaire made their pullout
The U.S. reportedly
provided arms, money
and supplies to the anti-
Goukouni effort. Egypt
handed over weapons
from bases in Sudan.
threat formal, giving Goukouni until the end
of June.
Meanwhile, encouraged overtly by these
developments and probably covertly as well,
Habre began a march toward Ndjamena. A
Washington Post correspondent wrote from
Paris that "Habre's one-time backers during
the Libyan occupation [sic] period
- especially the United States, Egypt, and
neighboring Sudan - have sworn they have
stopped supplying his troops. However, even
in French official circles, some analysts are
not convinced that--the United States has cut
off ties with Habre."24 Once again Habre laid
waste to crops, creating famine conditions.
Kamougue placed more pressure on the GUNT
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coalition, and Goukouni responded by trying to
reorganize the government. By June 1982,
however, the situation for GUNT was hopeless.
GUNT forces disintegrated into private armies,
and many of them refused to face Habre's
forces. Habre marched into Ndjamena on.June
Soon afterwards, Zaire announced that
it would be pulling out its troops promptly.
However, when the United States asked the
OAU to keep troops in Chad a while longer,
Zaire immediately complied with the U.S.
request. Although the U.S. offered no
reconstruction aid, it did want to make sure
that Habre was able to consolidate his hold
over Chad militarily. Chad's "sideshow" status
was made plain: the U.S. would only do in
Chad the minimum necessary to keep out Libya.
Habre hypocritically told The Economist that
"getting Chad to make to make do without
foreigners" is his goal. (Cynically, this goal is
now shared by the U.S., "exonerating" it of
further responsibilities there.)
Habre also .told The Economist, that
atrocities that had occurred since June 7 were
"only natural since armies have a habit of
behaving badly after winning a long war." The
Economist observed: "Mr. Habre's certainly
do. A French doctor who witnessed his short-
lived conquests of Ndjamena in 1978 and 1980
[times of ferocious brutality] estimates that
some 700 people have been executed since the
rebels marched into the city two weeks ago ....
The water in Ndjamena is contaminated with
typhoid. Shops are shuttered and empty. Mr.
Habre's soldiers have looted what little was
worth stealing. The outdoor markets are
crowded but basic foodstuffs are scarce ..."
In order to neutralize factions of the GUNT
coalition that are holding out and refuse to be
disarmed, Mr. Habre's army, having "laid waste
to crops in many districts, ... is now
deliberately withholding food supplies from
villages suspected of supporting rival factions."
A U.N. adviser estimates that food production
will fall by one-third this year and that "one
million people may be near starvation."25
The U.S. contribution to relief efforts
has been seven planeloads of grain in July 1982,
a very modest contribution compared to U.S.
efforts during politically significant crises. It
is a contribution nonetheless, and a small price
indeed for maintaining Western leverage over
one of Africa's largest countries and for
teaching the lesson of the high cost of close
relations with Libya to other nations.
Footnotes: -
Rene Lehlarchand, "Chad: The Roots of Chaos," Current
History, December 1981, pp. 414-417.
3 LM, 1/8/81 and after; see also International Affairs Winter
1981-82, p.35; FBIS, Middle East, 1/7/81; African Index,
3/23/81.
4) African Index 3/23/81.
5) Atlanta titution 1/27/81.
6) Daily ews New York), 5/17/81; Newsweek, 8/3/81, p. 19.
7) Wall Street Journal, 8/4/81, p. 30; NYT, 6/10/82; Africa
News 7T5/82
.
8 Los Angeles Times, 2/12/82.
9) New Statesman, 1/1/82, p. 14.
10) See G. Henry Schuler, "A Policy for Dealing with Libya,"
SAIS Review, Winter 1981-82, pp. 199-212.
11) The Economist, 11/14/81, 6/5/82; Christian Science Monitor
(CSM), 6/11/82.
127-West Africa (WA), 6/21/82.
13) The Economist 11/14/81.
14) NYT, 10 /24/81; WP 10/26/81.
15) The Economist -10710/81.
16)3, 10 14 81, 10/15/81.
17) NYT, 10/17/81.
18) W 11/23/81.
19) NYT, 2/12/82;
20) A rique-Asie, 6/21/82.
21) WA, 11/16/81.
ATrica Now, June 1982, p. 49.
23) NYT, 3/13/82.
24) WP, 6/4/82.
25) The Economist, 6/19/82.
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For history, see
32
-- Counterspy -- Sept.-Nov. 1982
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Falklands/Malvinas Misinformation
by M. Richard Shaw
By March of this year, the British government
had the idea that something was "going on"
around the Malvinas/Falkland Islands. After
all, on March 18, scrap merchants from
Argentina raised the Argentine flag on the
"Falklands dependency of South Georgia." The
British government's response was two-fold:
publicly, it was skeptical about reports that
the action might be a prelude to an invasion
of the main islands. On the other hand, with
a view to dissuading the Argentine government
from launching any military action, the
Ministry of Defense (MOD) at the end of March
allowed "information" to leak out that a nuclear
submarine, H.M.S. Superb was headed for the
South Atlantic. This was never officially
confirmed, but the MOD "clearly wanted the
story published."1 Subsequently, the MOD led
the press to believe that the submarine was
patrolling the islands.2 But in April, the H.M.S.
Superb turned up in Scotland.3 It had never
been to the South Atlantic.
The H.M.S. Superb story was the opening
salvo of the MOD's disinformation campaign
during the Malvinas/Falklands war. The war
demonstrated that the Defense Ministry is as
much devoted to propaganda as it is to war.
It is an expert in disinformation and in
controlling the flow of the news: it knows
how to lie. Ex-Navy Minister Lord Mayhew
explained and supported the government's
disinformation campaign: "Government
statements should be in the least informative....
Indeed, I think we would forgive Ministers if,
in the interest of the forces, some of their
statements were positively disinformative at
some time."4
One such "positively disinformative"
statement was made by Sir Frank Cooper, the
highest ranking civil service officer in the
MOD. He told reporters in a background
briefing (no attribution) that the British were
planning only hit-and-run raids on the Malvinas
and no full-scale invasion. On May 21, 1982,
British dailies duly reported his statement, and
a typical headline read: "Full-Scale Invasion
Unlikely: Phased Landings and Bombardments
Expected." Within hours of the news reports,
the British launched a frontal assault on San
Carlos Bay, and Sir Cooper was only saved
from being exposed as a liar by his assured
anonymity.?
To ensure that no news items that would
have run counter to official British statements
about the war reached the public, the
government set up an elaborate mechanism of
censorship from the day the fleet left England
with carefully selected reporters from the BBC
and certain newspapers on board. The
arrangement was that a correspondent had to
submit his or her copy to one of the three
MOD "public relations officers" - known to
the journalists as "minders" or "thought police"
- who detected anything that offended the
rules, such as reports about the ships' positions,
troop movements, personnel and equipment, or
"stories that might sap morale."6
A journalist's report was further checked
by the Captain of the ship's secretary, followed
by the Captain. It was then transmitted to
the H.M.S. Warrior- at Northwood in Middlesex,
England, the headquarters of Admiral Sir John
Fieldhouse, Commander-in-Chief of the fleet,7
to be vetted once more. Journalists' reports
were then sent to the Defense Ministry,
London, where prior to their release, they were
again checked by press officers - and doubtful
cases were referred to Rear-Admiral William
Ash, Secretary of the Defense, Press and
Broadcasting Committee, better known as the
"D" Notice Committee.8 In at least two
instances, Ash contacted the editor of the
newspaper concerned and asked for certain
material to be deleted. The editors complied.
Some amazing absurdities resulted from
the censorship: on one day correspondents were
not allowed to name a unit commander involved
in the South Georgia landing, but the following
day his photograph appeared in the Sun,
courtesy of the MOD.9 In another instance,
H.M.S. Warrior's shore-based censors wanted to
cut re erences to two bombing raids on Port
Stanley by British Royal Air Force Vulcans,
and the number of Argentine troops billeted
on the islands. In both cases, the information
had already been printed by all major
newspapers.
On board the fleet, British journalists
chafed at the censorship. Alistair McQueen
complained that "on the few occasions we have
been allowed to send stories to Britain they
have been censored out of recognition, or
(Mark Richard Shaw is a freelance journalist in Britain.)
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delayed so long they arrive too late." He added
that the Navy did not want the press in the
first place and "only political pressure from
the very top [the government] forced the
Admirals to grudgingly allow us to accompany
the force."10
One Briton who returned to England
during the conflict found that he "was
considerably more up-to-date [about] the
conflict than the rest of the British public."
He had been working in Scandinavia, where the
media had been "full of the news of the
Falklands dispute." On Monday, May 31,
newspapers contained accounts of the landing
of 3,500 troops from the Q.E.2, complete with
maps showing the landing places. The British
newspapers gave no such information, but only
vague news of "rumors" with denials from the
Ministry of Defense.
The censorship of TV film and photos of
the fighting was even more stringent. Some
British reporters believe that the Navy never
wanted TV coverage and informed TV crews
only after the ships were well on their way
that the transmitting facilities were not
sufficient for television. Other reporters think
that the transmission of TV films via a military
satellite might have worked, but the Navy
commanders never authorized a test run to see
The war demonstrated
that the Defense Ministry
Is as much devoted to
propaganda as It is to
war. It Is an expert in
disinformation and in
controlling the flow of
the news: it knows how
to lie.
whether transmission would have been
possible."
It was not until seven weeks into the
crisis that the MOD began producing the first
black-and-white stills from the battle zone.12
Until then, British newspaper readers found
themselves looking at sketches of military
successes - not seen since the Boer War.
Government officials claimed that news
photographs arrived weeks later in London
because there were no proper facilities aboard
34 -- CounterSpy -- Sept.-Nov. 1982
the ships. However, with the landing of the
British marines at San Carlos Bay, the task
force suddenly had the ability to transmit
instant photographs. The first photo to be
published in London within hours - rather than
weeks - after it was taken showed three
marines raising the British flag after the
successful invasion, but live action film of the
military landing on Goose Green on May 28
was not televised until June 9, and pictures of
the battle for Port Stanley on June 14 were
not shown until June 19. However, given a
secure land base, and the fact that the film
crews on the spot were equipped with the latest
electronic equipment, there was no.reason that
film of the war should not have been on British
TV much sooner.
The MOD's reasons for censoring films
and photographs are obvious. The government
did not want pictures showing the horror of
Britain's "heroic" war to be seen by the public
- pictures of the sinking of the troopships Sir
Galahad and Sir Tristan where "people were
screaming, trapped in their rooms, people were
in agony"13 or pictures of Argentine survivors
arriving in Montevideo "with scorched faces,
peeling skin and burnt hands thrust into plastic
bags to prevent infection."14 No shots of
blood, guts, gore and mangled bodies, or
pictures of the bodies of those who leapt off
ships with their body fats burning, were ever
televised.
The same rule was applied to pictures
of the dead, decapitated and injured
Argentinian troops. Prior to the capture of
Goose Green, many Argentine troops died
during a fierce air and artillery bombardment
when outlawed anti-personnel BL 755 cluster
bombs15 were deployed. These explode about
50 feet above ground, sending hundreds of
razor-sharp projectiles slicing through the air
to shred any human being in the vicinity. The
scene when the British finally had won the
battle of Goose Green must have resembled an
open-air slaughterhouse where -- according to
MOD figures - 250 Argentinians and only 17
British soldiers died.
Six-hundred-pound cluster bombs were
used again when British troops captured Port
Stanley.16 Once Argentine positions had been
taken by paratroopers, the Gurkhas (British-
recruited mercenaries from Nepal) were given
the job of "mopping up the enemy positions."17
The term "mopping up" is a euphemism for
slaughter. British censors didn't want any
pictures or reports of British officers forcing
Argentine prisoners of war to clear minefields
- a violation of the Geneva Convention.
Likewise, film of British paratroopers pushing
to Port Stanley "blind to anything but victory"
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and bayonetting Argentines out of their
trenches when they did not immediately
surrender were undesirable for the MOD.
(During the sea voyage to the. Malvinas, the
British troops had apparently been
psychologically prepared for brutal killings by
officers' statements such as "any silly sod who
thinks it's better to take prisoners than to
shoot the Argies is a dummy. Shoot them."18
According to the feminist London-based
outwrite, hard-core pornographic movies were
also screened for the troops.)
The British government and media
gained much propaganda leverage with the
discovery of napalm containers at Goose Green.
The weapons were never used by the Argentine
troops. However, British troops were fully
prepared to employ the horrifying weapon in
the defense of South Georgia. Lt. Keith Mills
told the Sunday Times that he arranged for
improvised napalm booby-trap bombs, of plastic
explosives attached to cans of paint and petrol,
to detonate if the Argentinians stormed the
beaches. "The paint was just to give the
burning petrol some substance and weight so
that it would travel and stick. Had they landed
on 'the beach and jetty, they would have been
incinerated. We would have turned the beach
into an inferno."19
British reporters and editors, who rarely
dared to attack the British government during
the war, now have begun to speak out, and a
bipartisan panel of the Parliamentary Defense
Committee has begun hearings on the
government's handling of censorship. It appears
that the censorship often had little to do with
protecting British soldiers and military secrets.
Its real intent was to keep information from
the British public which might have led it to
question or oppose the war. London Times
reporter John Witherow and other journalists
were told by Invincible Captain Jeremy Black
that "Britain lost the cod war [conflict over
fishing rights] with Iceland because of a bad
press,... and that he was trying to rectify it."20
British censors apparently also
remembered that critical reporting about the
U.S. war in Vietnam - limited as it was and
late as it came - contributed to public
sentiment against the war in the U.S. Said
John Nicholson of Independent Television News,
"It was a question of 'Look what you people
did in Vietnam, turning a nation against the
war."' The BBC's Brian Hanrahan - many of
whose censored reports were run on U.S. radio
- argued that a balance should have been
struck "between the military need to keep
things secret,... and to provide information in
an acceptable form to the country which is
supporting, financing and running the
operation."21
Margaret Thatcher's government tried to
portray the Malvinas war as a battle for
principles, liberty, self-determination and
democracy. At the same time, her MOD
instituted censorship which was designed to
prevent the people in Britain from being
informed about the war. A large segment of
the British media, instead of fighting
government restrictions, went along with
Thatcher's censorship and portrayed any
questioning about the war as unpatriotic.
Censorship and the willingness of most British
editors and reporters to go along with it were
a critical factor in creating and maintaining
considerable public support for Thatcher's war
in the South Atlantic. The people in
"democratic" Britain hardly had a chance to
decide whether or not to support the war.
They were simply not informed about crucial
issues, and knowledge about the issues is a
prime condition for making a decision.
Footnotes:
1 The Economist, 5/15/82, p. 28.
2) New Statesman, 5/7/82, p. 16.
3) The Sunday Times, 5/16/82.
4) The Sunday Times, 5/30/82, p.19.
5) See New York Times, 6/25/82, p.A-12.
6) The Observer, 5/9/82, p.31. A "minder" is a term of
British criminal slang referring to a "heavy guy" or "protec-
tor" of a criminal boss.
7) The Economist, 5/22/82, p.31.
8) See M. Richard Shaw, "British Right Censors for South
Africa," Counterspy, vol. 6, no. 2, pp.47-54.
9) The Observer, 5/9/82.
10) Daily Mirror, 5/14/82.
11) See New York Times, 7/3/82, p.2.
12) Daily Telegraph, 5/21/82, p.4.
13) See Sunday Express, 6/13/82.
14) Daily Telegraph, 6/17/82, p,1.
15) The Sunday Telegraph, 6/13/82.
16) Time, 6/21/82, p.31.
17) Daily Telegraph, 6/16/82, p.32.
18) Washington Post, 7/4/82, p.A-17.
19) Sunday Times, 6/6/82.
20) Cf. supra, #11.
21) Ibid.
CounterSpy -- Sept.-Nov. 1982 -- 35
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New Resources on Guatemala
Bitter Fruit, by Stephen Schlesinger and
Stephen Kinzer, Doubleday, $16.95.
The C.I.A. in Guatamela, by Richard
Immerman, University of Texas Press, $24.50.
Guatemala, by North American Congress on
Latin America (NACLA, 151 W. 19th St., NY,
NY 10011). $9.75.
The July 1 declaration of a state of siege in
Guatemala by the military regime of General
Efrain Rios Montt, with the words, "it is time
to do what God orders," makes it even more
urgent that people in the U.S. become aware
of the recent history of U.S. relations with
that country. Fortunately, the resources under
consideration here provide the opportunity to
construct an historical view of the 1954 CIA
overthrow of a democratically elected
Guatemalan government, as well as Gen.
Montt's 1982 coup, and of the structural factors
that determine the relations between the U.S.
and Guatemala.
Bitter Fruit and The CIA in Guatemala
dramatically tell the story o the 1954 coup,
with a detailed account- of "Operation Success,"
and the role of the CIA, State Department and
corporate officials responsible for it. Both are
based on primary sources available in the U.S.,
and on documents released through the
Freedom of Information Act. Written by
former Time staff writer Stephen Schlesinger
and the Boston Globe's Latin American corre-
spondent Stephen Kinzer, Bitter Fruit is billed
as "a fast-paced adventure" book with "as much
action as a spy novel." The book focuses on
the people and events behind the scenes as the
action unfolds. Though descriptive and ex-
tensively researched, this "popularization" leads
at times to a confusing lack of analysis and
an over-valuation of the importance of individ-
ual actors. For example, Guatemala's
indigenous population is at one point described
as "passive peasants," but two pages later, when
massacred by the government, they become
"rebellious Indians." During their recounting
of the United Fruit Company's (UFCO) plunder
of Guatemala, the authors still assert that "in
some senses, the Fruit Company was benevolent
and paternal."
History professor Richard Immerman
starts from the thesis that the U.S. intervention
in Guatemala in 1954 "involved much more than
a covert operation to defend United Fruit
36 -- CounterSpy -- Sept.-Nov. 1982
Company." The basis for the U.S.-Guatemalan
conflict, was "in sum, this: during the period
of cold war tension, neither the United States
government nor the public understood Guate-
malans." Immerman's account is as limited as
the questions he poses - his conclusion barely
mentions the consequences to Guatemala of
the 1954 coup, but instead reasons that because
of the easy CIA success in Guatemala, U.S.
policy makers failed, to learn the real political
lessons, and therefore reflexively applied the
same tactics to disastrous effect in the Bay
of Pigs. Immerman's study of the cold war
mentality represses the question of the
continuity of U.S. policy in the region to the
present, despite the ever-changing public re-
lations campaigns of successive governments.
NACLA has recently re-issued its 1974
book on Guatemala, edited by former staff
members Suzanne Jonas and David Tobis. Al-
though not updated, it remains a crucial exposi-
tion of the economic, social and cultural
composition of Guatemala, and of the economic
and military strategy the U.S. has used there
to prevent national development and
democratic government. The articles in
Guatemala present a thorough class analysis
without reducing events to abstract categories,
or solely to the effects of U.S. hegemony.
While rigorous and demanding, it is graphically
excellent and accessible to the non-specialist.
These three sources are factual and well-
documented, but their aims and achievements
differ widely. The first two present the ap-
pearance of "fairness to both sides," but since
they are based on U.S. government and press
sources, they reflect the "objectivity" of these
sources, and limit the conclusions of their
research in order to stay within the bounds of
"respectable" criticism. The NACLA book
makes use of the same factual revelations, but
goes beyond them to situate events such as
the 1954 -coup in the context of the determining
relations of power. At the same time, NACLA
does not sacrifice popular accessibility as it
builds an adequate and complex analysis of
historical events. The' first two will be of
interest to those already familiar with
Guatemala, who seek the details behind the
archetypal CIA coup. NACLA's book is an
excellent introduction to Guatemala's history
and to the structural aspects of underdevel-
opment and domination. - David Schaller -
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Special Supplement on
World Bank and IMF
Introduction
The Bretton Woods Twins
by Cheryl Payer
The International Monetary Fund and the World
Bank were founded in 1946, after the end of
World War 77. They are called the Bretton
Woods institutions after the New Hampshire
resort which was the site of the planning
conference in 1944. The intent of the planners
was to restore some semblance of the free
movement of international trade and payments
which had existed, briefly, around the turn of
the century. After the great crash of 1929,
most nations attempted to protect their
economies by imposing restrictions on trade
and payments, and this protectionism was held
by the planners to be responsible for the length
and severity of the depression of the 1930s.
It was believed that if governments could easily
obtain international loans in times of crisis
they could avoid imposing restrictions on
international payments while other solutions
were invoked.
The Third World (most of which was still
under colonial rule at the time) did not play
much of a role in the original design of the
IMF and the World Bank. The Fund was
designed to be the referee of exchange rate
changes of the major developed countries as
well as the source of funds in times of crisis,
and the reconstruction of war-ravaged Europe
was supposed to be carried out by the Bank,
as its original name (International Bank for
Reconstruction and Development) recalls. But
it was quickly discovered that the industrial
powers would not tolerate supervision by an
international organization controlled by
economic rivals, and the IBRD was soon
superceded by the Marshall Plan as a supplier
of capital for European rebuilding. By 1949,
both institutions had turned to Latin America
and to the areas undergoing formal
decolonization as their major field of activity.
For over 30 years they have played a role
second only to the bilateral aid program of the
United States in determining the course of
economic change in the Third World, and their
multilateral form has made them a convenient
facade from behind which the industrial
countries can dictate policies which would be
strongly resented on a bilateral basis.
Member nations of the IMF and the
World Bank control the institutions on the basis
of a system of weighted voting which ensures
veto power on the most important issues to a
handful of the wealthiest nations in North
America and Europe. As these controlling
powers are without exception capitalist, they
have taken care to elaborate and to impose on
their borrowers a philosophy of economic
development which invariably favors the
capitalist class and imposes the burden of
austerity on the working classes and the poor.
The Third World governments which borrow
money from the Fund and the Bank are both
victims and co-conspirators, in varying
proportions, of this capitalist scheme.
The United States, by far the' most
powerful member and the largest subscriber to
both institutions, frequently imposes its policies
(Cheryl Payer is a former visiting professor at the
University of Hawaii and author of Debt Trap: The IMF
and the Third World, and the forthcoming book, World
Bank: ACritical Analysis. Both books are published by
Monthly Review Press.)
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on them. The U.S. Treasury Department, in
its report on the multilateral development
banks issued last February, even boasts of the
occcasions on which it has been able to
determine policy and practice in the Fund and
Bank. For the most part, however, their
policies represent a consensus, a united front,
of the wealthy nations vis-a-vis Third World
members.
The International Monetary Fund
The function of the International Monetary
Fund (IMF) is to extend short-term balance-of-
payments support to countries which are in
temporary payment difficulties, so that these
countries will not be forced to impose
restrictions on international trade and
payments. In recent years such credits have
been extended almost exclusively to Third
World nations. The typical 'form of such
support is that of a "stand-by arrangement" or
line-of-credit which is extended after
agreement is reached between Fund officials
and high financial officers of the borrowing
country on the specifics of a stabilization
program to be implemented by the latter. The
IMF credit is made conditional on the faithful
implementation of this program, and the higher
the sum that is lent, proportional to that
country's quota in the Fund, the more severe
is the "conditionality."
Although it cannot be denied that the
economic management of most of the
governments which borrow from the Fund very
much needs to be improved, the terms of the
IMF's stabilization agreements are a giant step
in the wrong direction. They are invariably
socially regressive, penalizing the working
classes with wage freezes and higher prices
while offering generous tax and legislative
concessions to foreign investors. Further, if
one assumes that the correction of the
underlying balance of payments problem is the
aim of the program, they are self-defeating,
for the effect of the program is usually an
intensification of both present and future
deficits, and thus an intensification of the
foreign debt crisis. As neither the IMF
bureaucracy nor the wealthy nations which fund
and control its operations are unintelligent or
suicidal, one must assume that the real purpose
of this conditionality lies elsewhere. To be
explicit, these credits serve to discipline
governments which are inclined to criticize and
confront foreign investors, and to support
governments which are approved by the IMF's
major stockholders.
The discipline function is apparent in
38 -- CounterSpy -- Sept.-Nov. 1982
the conditions which borrowing countries are
forced to accept. These typically included
liberalization of imports and removal of
restrictions ' on foreign payments, devaluation
The terms of the IMF's
stabilization agreements
are.. Invariably socially
regressive, penalizing
the working classes with
wage freezes and higher
prices while offering
generous tax and
legislative concessions to
foreign investors.
of currency, tight domestic credit restrictions,
an end to subsidies on items of popular
consumption, and the previously mentioned
wage controls and subsidies to private (and
especially foreign) investors. The key item is
the first, the dismantling of import and
exchange controls. For a country which has a
balance of payments problem to begin with,
such a prescription must lead to a worsening
of that problem, and it can only be carried
out with the help of the foreign credits supplied
by the IMF and by other credit institutions.
These credits do nothing to help the
plight of the poor and working people in the
affected country. On the, contrary, the IMF-
designed stabilization program aims at reducing
local purchasing power in order to free
resources for export or for payments on the
foreign debt; and it does so in the most socially
regressive fashion, taking only from the poorer
classes - because the , wealthy, and the
corporations, must be pampered as potential
investors. Such programs bear a strong
similarity to the Reagan administration's
"supply-side" policies in the U.S. Local
businesses, however, may be hurt or destroyed
by the credit squeeze and the - reduced
purchasing power of their customers, and in a
typical stabilization program many of them are
bought out by foreign competitors.
This tough (and class-biased) economic
discipline is not applied even-handedly to all
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clients of the IMF, even though all stabilization
programs will appear superficially similar,
containing most of the elements enumerated
above. The severity with which these
conditions we imposed varies considerably
among countries, and a double standard ensues
which makes clear the second major function
of the IMF - that of supporting governments
allied with or approved by the United States
and other major donors. To understand this,
one has only to observe the difference in the
way certain governments are treated when they
fail to meet the performance targets set for
theih as part of the stabilization program. For
example, a confidential evaluation of a three-
year Extended Fund Facility (EFF) program in
the Philippines acknowledged that the
government had failed to meet virtually all the
performance targets set by the program.
Despite this, the IMF judged the performance
as "satisfactory," and blamed the disparities on
external forces beyond the control of the
government. In that same year, however, the
Fund quickly suspended its standby arrangement
with the government of Jamaica when that
country (which was no less at the mercy of
international conditions) missed a few
performance targets. The difference in
treatment is no doubt explained by the fact
that the Jamaican government was slightly
leftist and its major opponent was on its right,
while in the Philippines the opposite was the
case. Other conspicuous cases in recent years
in which strong support has been extended to
corrupt and repressive governments which have
not been seriously disciplined are Zaire and
Turkey.
When I chose the phrase "the debt trap"
as the title of a book on the IMF several years
ago, I was thinking of nothing more sinister
than the natural seduction offered by the
availability of cheap credit. In recent years,
however, a pattern has emerged which
suggested that the IMF is deliberately baiting
a "trap" for potential borrowers who are
understandably wary of accepting' Fund
conditionality and/or are not yet in a crisis so
severe as to force them to borrow money on
any terms available. In such cases the IMF
appears to be offering especially easy
conditions in the first agreement signed with
such reluctant borrowers. Then when (as is
almost inevitable) the government misses one
or more performance targets, the agreement
is suspended by the Fund. In the meantime,
however, the money borrowed from the Fund,
and the much larger amounts made available
by the commercial banks which hide behind the
skirts of the Fund, have already been spent
and must be repaid. The trap is sprung. The
second agreement, negotiated by the borrowing
government under much less favorable
conditions, contains much harsher conditions
than the first. Costa Rica, Bangladesh, and
Tanzania are three of the fifteen countries
which found their credits suspended in the past
year. It is almost certain that the $5.9 billion
credit to India last fall will prove to be this
kind of a trap, enticing a reluctant borrower
into a first, easy contract which will eventually
be followed by a harsher one.
The World Bank is supposed to lend funds for
economic development, in contrast to the
balance of payments support supplied by the
IMF. The greater part of its funds are
committed to the financing of specific projects.
In the early years of the Bank, most of the
money was devoted to the fields of
transportation and electric power, which are
still among the largest categories of Bank
loans. In subsequent decades the number of
sectors eligible for Bank funding was widened
considerably - industry, mining, health,
education, and population control all receive
loans. Under the presidency of Robert
McNamara (1968-1981) new forms of lending
were devised which were supposed to increase
the productivity of poor people (according to
Bank publi-^ity). Lending to agriculture became
the most important single sector, including a
large subclass of loans targeted at small
farmers. In Third World cities the upgrading
of slum and shantytown areas was claimed to
aid in solving the shelter problems of poor
people.
In the past few years two new forms of
lending have become important. Loans for the
F,RE1&N Alt : W-Ig11bu tAl~ MONEY f
1" RJR A~PiE tN A RICl C01$TRY AIID G1YE
R1o tT1E Wqf pEca tN A RaoR aD1NtiRy,
exploration and development of oil and gas
fields were made or the first time, while
lending for mine development increased.
Secondly, the Bank began to make so-called
CounterSpy -- Sept.-Nov. 1982 -- 39
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"structural adjustment loans." These closely
resemble IMF program loans both because they
represent balance of payments support not tied
to specific imports and because the conditions
attached to these loans are very similar in
content to the conditions imposed by the IMF.
These are called "lionproject" loans by the
World Bank.
In addition to the large amounts of its
own resources which are committed each year
to this type of lending ($13 billion in fiscal
year 1981), the Bank magnifies its financial
leverage by coordinating and subordinating a
number of international financial and technical
organizations, bilateral aid agencies, and export
credit institutions. Through its massive
program of research on economic policy and
the economic conditions of specific member
countries it has achieved a position of financial
and intellectual hegemony over other agencies,
including the regional development banks,
several specialized agencies of the United
Nations (the Food and Agricultural
Organization and UNESCO), and several of the
most "Liberal" bilateral aid programs (of
Canada, the Netherlands, and the Scandinavian
countries). The World Bank also plays a critical
role in the coordination of the overall aid
programs of bilateral and IMF credit to
individual countries through its position as
convenor of nearly all existing aid consortia or
consultative groups. In so doing it is
effectively organizing creditors' cartels which
present a united front to borrowers and limit
their possibilities of negotiation.
The basic aims and philosophy of the
World Bank are very close to those of the IMF,
which is hardly surprising considering that both
institutions are owned and ruled by an almost
identical group of stockholding nations, with
weighted voting ensuring that the wealthy
industrial nations are almost always able to
control decisions, whether on broad policy
questions or on specific loans.
Like the IMF, the World Bank has the
primary aim of promoting the interests of
private, international capital in its expansion
to every corner of the world. Unlike the IMF,
however, it can intervene in a much greater
variety of ways and at many different points
of the policy process - from the financing of
specific projects, through policy for the
"sectors" in which such projects lie, on up to
the grand questions of the overall direction of
national policy and of the extension of or denial
of support to particular national governments.
Specifically, the World Bank assists the
expansion of international capital in all of the
following ways:
40 -- CounterSpy -- Sept.-Nov. 1982
? By acting as intermediary for the flow
of funds abroad, with taxpayers' money from
its developed member countries serving to
guarantee the safety of the bonds it sells;
? By opening up previously remote regions
through transportation and telecommunications
investments, thus destroying the natural
geographical protection such regions had
previously enjoyed;
? By directly aiding certain multinational
corporations, notably but not exclusively in the
mining sector;
? By pressuring borrowing governments to
improve the legal privileges of and to moderate
the tax burdens on foreign investment;
? By insisting on production for export,
which benefits chiefly the corporations which
control international trade and purchase the
produce;
? By selectively refusing to loan to
governments which repudiate international
debts or expropriate foreign-owned property;
? By opposing minimum wage laws, trade
union activity, and all kinds of measures which
would improve the share of -labor in the national
income;
? By insisting on procurement through
international competitive bidding, which favors
the largest multinationals;
? By opposing all kinds of protection for
locally owned business and industry; and
? By financing projects and promoting
national policies which deny control of basic
resources - land, water, forests - to poor
people and instead appropriate them for the
benefit of multinationals and their
collaborative local elites.
Although, for obvious reasons, the IMF
and the Bank refuse to acknowledge the fact,
there are profound contradictions between the
interests of international corporations and
those of impoverished citizens in the Bank's
borrowing countries, and the latter have been
and are being severely hurt both by the overall
thrust of the two institution's pro-corporate
policies and by the specific projects financed
by the World Bank.
It must be recognized, however, that the
governments which borrow from these two
institutions are not innocent victims of
international pressure, but beneficiaries of the
credits. Uncritical support of borrowing
governments vis-a-vis the IMF and the World
Bank will not reach the heart of the problem.
These governments are always, more or less,
collaborators and co-conspirators against the
best interests of their own people.
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IMF Asks Employees to Keep Documents Secret
The following memorandum is being circulated very similar to the argument of an Executive
in the World Bank and the IMF because of IMF Director who leaked secret IMF documents
leaks of documents from these two institutions to the Indian newspaper Hindu. According to
to CounterSpy magazine and the Congress Task the Hindu, he "explained that he was breaking
Force of the Philippine Solidarity Network. the confidentiality rule not in order to
The main argument of the memo asking Bank prejudice the [impending IMF] loan [to India] ,
and Fund employees to stop passing on but solely because he was persuaded that a
documents is virtually the same argument the transaction of this scope and size by any
CIA has used in carrying out its dirty work. country deserved to be discussed in full by its
CounterSpy's position, and our reason for Parliament, press and public."
publishing the IMF and World Bank material is
OFFICE MEMORANDUM
operational Vice Presidents
Ernest Stern, SVP, Operations
Confidential Documents
DATE: Jupe 8, 1982
Recently there have been a number of confidential documents leaked
to the Press. Some of these have been Bank documents and others
documents of the international :Nonetary'Fund. In the most recent
cases the organizations which .lave made use of this material have
claimed that the L?LF documents were obtained from Bank sources.
There is, I hasten to add, no evidence that our investigations have
uncovered thus far, to prove that this is true. Nonetheless, I
think it is timely that we all remind ourselves and our colleagas
of our obligations to maintain confidential information for official
use only.
It.may be that from time to time individuals feel strongly about
governmental. policies in a member country but it should be clear
that such feelings cannot be expressed through the misuse of official
information without violating ou - basic obligation and conmitmect to
serve as international civil servants. What is at stake is the
credibility of the Bank as a repository of information which is
necessary to the formation of ov- professional judgement and to the
soundness of the advice we can offer our member governments. The
misuse of official information will gradually but inevitably reduce
the will ingness.of officials in member countries to be frank with us
and will adversely affect the willingness of other institutions to
collaborate with us. This cannot be the result which any staff member
desires.
Because there have been a number of such instances, I would appreciate
it if you would take the opportunity at your regular staff meetings in
the coming weeks to discuss this issue with all staff. If there are
any questions about how the Bank handles confidential documents, or
about rules for their release, feel free to consult my Operational
Advisers or the relevant staff is PA.
CounterSpy -- Sept.-Nov. 1982 -- 41
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Banking on El Salvador and
Against Nicaragua by John Kelly
and Walden Bello
Major Robert d'Abuisson isn't worried about
Congress or even whether President Reagan
certifies his human rights record: he has the
International Monetary Fund (IMF) and the
Inter-American Development Bank (IDB) in his
back pocket. The IDB is preparing a $194.1
million program for El Salvador. This program
includes a loan for what the Washington Letter
on Latin America calls the "most frankly
political, if not military, transaction in the
IDB's history"1 - $20 million to rebuild the
Golden Bridge (Puente de Oro), destroyed by
guerrilla forces in 1981.
The IDB has also scheduled $55 million
to complete the San Lorenzo hydroelectric dam
project. The IMF reports that guerrillas
continue to sabotage power lines throughout
the country. In this context, funding the San
Lorenzo dam can be seen as a political/military
transaction. Yet another military-type
transaction was the IDB's recent provision of
$30.8 million for some 200 kilometers of rural
roads in the northwestern part of
Chalatenango,2 a center of guerrilla activity.
Bruce Brown of Chicago's Harza Engineering
Company was in El Salvador in June and August
of 1981 completing a road feasibility study for
the IDB. In doing the study, Brown told the
Salpress News Agency, fighting conditions in
the area "were taken into account- and it was
estimated that the project could be executed
under the prevailing conditions."3
In October 1981, some 7,000 troops were
sent into Chalatenango. In May 1982, the
military launched a so-called "clean-up"
offensive involving about 4,000 troops in
Chalatenango.4 El Parisio, which is to be
serviced by the IDB-financed roads, is the base
of the military's Fourth Brigade and, according
to Salpress, all the bridges and roads from El
Parisio to the eastern part of the zone have
been cut.5 Regarding another IDB-financed
road being built further to the east in
Chalatenango, Brown said that "a few sections
are right in the heart of guerrilla-controlled
territory."6
Thanks to- the IMF, the Salvadoran
regime can also all but ignore the Senate
Foreign Relation Committee's threat to end
42 -- CounterSpy -- Sept.-Nov. 1982
U.S. economic aid if the government modifies
or delays the land reform. In fact, the
suspension of the land reform by President
Alvaro Magana and the rightist Constituent
Assembly came shortly after the IMF
recommended cutbacks in the land reform. The
IMF also stated that coffee production in 1982
could be "some 500,000 uiq ntals less than
projected" because of "low prices and
undertainties about, land ownership." Cotton
production would also be greatly reduced, in
part, "by lingering problems related to agrarian
reform."7
When the regime suspended the land
reform, it said its goal was to increase
production. The suspension thus conforms to
the IMF's strategy to increase production and
export earnings and to the Reagan
administration's position on land reform
reflected in its recent instructions to the
government of Honduras. "Continuation of the
land reform" in Honduras, said the U.S.
Embassy, "is desirable if it can be achieved
without disrupting production."
The IMF recommendations and
projections were contained in a confidential
IMF staff report - leaked to CounterSpy
magazine, - which proposes granting El
Salvador a loan of $83 million. , President
Magana, who said he was "happy" following a
recent meeting with IMF representatives, said
the Fund would soon announce the granting of
the loan.8
On July 16, 1982 the IMF granted the
Salvadoran regime a loan of $84.7 million
- $36.3 million to reimburse El Salvador for
the decline: in value of coffee exports and $48.4
million in standby credit. Tom Leddy, Deputy
Assistant Treasury Secretary for International
Monetary Affairs told the New York Times
that there had been considerable debate in the
Reagan administration about the loan. In
response to the Times suggestion that the
money could be used for arms, Leddy
acknowledged that the IMF "doesn't say you
(John Kelly is co-editor of CounterSpy magazine and the
author of the forthcoming book, The CIA in America.
Walden Bello is the director of the Congress Taskforce
of the Philippine Solidarity Network and the Coalition
Against the Marcos Dictatorship.)
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can't spend it on this or that." Representative
Stephen Neal (D.-N.C.), chairperson of the
House Subcommittee on Internatonal Trade,
Investment and Monetary Policy, told the Times
that: "It seems unusual to me that such a
loan would be treated in a routine fashion,
when there is so much controversy about the
country."9
The starkly political nature of this loan
is underscored by the support it gives to one
side of an ongoing war. It recalls the IMF
loan granted to Nicaraguan dictator Somoza
nine weeks before his defeat and as such
represents much more than "business-as-usual"
at the IMF. As noted, it could contribute to
circumventing any aid suspension by the U.S.
Congress. The loan is unusual even in a fiscal
sense because El Salvador's economy is in a
shambles. According to the IMF report:
? The government is virtually bankrupt
with its liquid reserves (readily available cash)
reduced to $2.5 million in 1981.
? Massive flight of capital has wreaked
havoc in the private sector, with net capital
outflow amounting to more than $800 million
between 1979 and 1982.
? Arrears in payments of debts to
international private banks rose from $41
million in 1980 to $65.5 million ' in 1981.
? The state enterprise sector is in dire
straits with its overall deficit totalling $600
million in 1981.
Financially speaking, the Fund is
throwing money down a rathole. Politically,
it's a different story. As the report admits,
the IMF is supporting a "holding pattern" for
the rightist regime and a set of policies for
"restoring and retaining an economic setting
conducive to the renewal of growth and private
investment - once noneconomic factors permit
it." The Fund, in short, is trying to sustain
the economy until the country is pacified
politically. This is precisely the strategy
The unevenhandedness of the IMF is poignantly
illustrated in its recent report on Vietnam as
quoted by the New York Times (7/11/82). The
Fund, which is promoting a parallel (black)
market exchange rate arrangement in El
Salvador, has advised Vietnam to stop offering
better-than-official exchange rates to
Vietnamese citizens and tourists who bring in
hard currencies. Through this arrangement
Vietnam obtains sorely-needed foreign
exchange. If the government offered less than
it does now for privately remitted dollars, it
would, of course, obtain fewer of them, which
would increase Vietnam's shortage of hard
currency.
articulated by President Magana following his
recent meeting with IMF representatives.
Two components of the IMF's strategy
for El Salvador highlight its complicity in the
government's pacification. To relieve the
balance of payments deficit, the IMF report
proposes making imports more expensive, thus
reducing the demand for them, by devaluing
the colon. However, the colon will not simply
be devalued. There will be a black ("parallel")
market exchange rate (4 colones to the dollar)
and an official exchange rate (2.5 colones to
the dollar). The Fund arrangement allows "non-
essential imports" to be purchased at the black
market rate while the regime can buy essential
commodities - including guns, warplanes, and
ammunition at the cheaper, official exchange
rate. As the report points out, "monetary and
fiscal policies" are "designed to accommodate
national priorities;" and "national defense" tops
the regime's "highest national priorities."
A second key component of the Fund's
strategy is continuation of the wage freeze
which reduced workers' real wages by 11
percent in 1981. The IMF's complicity here is
seen in the report's admission that the
government's "constraints on the militancy of
the labor unions are likely to keep the growth
of wage rates below inflation levels."
Government constraints in El Salvador include
assassinations of union leaders and rank-and-
file members.
An $83 million loan cannot by itself
sustain the Salvadoran regime, particularly if
Congress reduces U.S. aid. However, stamping
the rightist regime with the IMF seal of
approval could give it access to aid from other
countries and from international commercial
banks. The report acknowledges as much: "The
authorities hope that an arrangement with the
Fund in due course would contribute to
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strengthen the confidence of the international
community in the economic management of the
country, thereby permitting theft to
restructure their short-term debt and to reopen
badly needed foreign lines of credit."
President Reagan is also in a position'
to circumvent the will of Congress with regard
to El Salvador. Loopholes in the law - some
not used since the Vietnam war - allow Reagan
to unilaterally provide military aid. The
President's emergency drawdown authority
under section 506 of the Foreign Assistance
Act permits $75 million a year in military aid
without Congressional approval. Reagan used
this authority in fiscal 1982 to send $55 million
in military aid to El Salvador - more than
double the $26 million Congress authorized.
Reagan can also sidestep Congress on economic
aid. In fiscal year 1982, the Commodity Credit
Corporation and the Housing Guarantee
Program provided $34 million to El Salvador
and are, of course, available to give funds in
1983.
Nicaragua
"Economic shortcomings might provoke at least
limited civil unrest by the end of the current
harvest season (May-June 1981)."10
In Nicaragua, the World Bank has to carry the
ball because "political passions" have yet to
"cool" over the IMF's $66 million loan to
Somoza just before his defeat. "It is, therefore,
left to the Bank," says its Country Program
Paper (CPP) for Nicaragua, "to continue
pressing for a rational policy framework,
necessary to overcome its current economic
problems."11
The confidential CPP - also leaked ;to
CounterSpy magazine - like the IMF's El
Salvador report, reveals ttfat is much more than
"business-as-usual" at the Bank. In it an
unmistakable allusion to the Reagan
administration, the CPP admits to "increasing
constraints and political limitations of the
Bank" regarding Nicaragua. In line with these
political limitations, the CPP lays out -an
agenda recalling Richard Nixon's "game plan"
to "make the economy scream" in Chile under
President Salvador Allende. As such, the CPP
statement can be seen as supplementing the
widely-reported $19 million covert CIA
destabilization of the Sandinista government.
Baldly ' asserting that the "ideological
struggle between economic models is, in the
final analysis, a power struggle," the CPP
comes down firmly on the side of the private
44 -- CounterSpy -- Sept.-Nov. 1982
sector which prevailed during Somoza's reign.
The CPP literally complains that the
government has given the "unhappy" private
sector "no longer-term assurances or power."
While it is usual for the Bank to support the
private sector, it is much more than "business-
as-usual" for the Bank to interject itself into
an on-going, ideological struggle and demand
power for one side.
The CPP contemplated the immediate
termination of all Bank assistance. This option
was rejected because the "Bank might [also]
be accused of an inability and/or unwillingness
to support a 'progressive' Government in
Central America and of not understanding its
post-revolution difficulties." Actually, the
Bank fully understands Nicaragua's post-
revolution difficulties. It understands that the
Sandinista economic system is still in "flux"
and ? thus vulnerable to being undermined.' "In
spite of the Marxist/Leninist proclivities of
Nicaragua's leaders and the greater role of the
state in the economy," says the CPP, "the usual
tools of centralized economic management are
still nascent." The Bank also wants to keep a
toehold in Nicaragua because some 80 percent
of the production and commercial enterprises
are privately owned.
While opting to stay in Nicaragua, the
CPP proposes the immediate suspension of all
Bank assistance in the areas of water supply,
roads, and education. This proposal flies in
the face of the Bank's mission to support
economic infrastructures. It can also be seen
as a conscious undermining of the government's
program since the CPP admits that the
government has targeted these areas as vital
to Nicaragua's recovery. The failure of the
government to deliver in these areas could
generate anti-Sandinista sentiment similar to
what arose against Allende in Chile. These
proposals are highly provocative given the
CPP's own findings that the "demand for
education (especially basic education) is high,"
and only 34 percent of the rural population has
access to safe water and only 32 percent to a
'sewage disposal system. As a condition for
receiving additional Bank assistance, the CPP
demands that the Sandinistas should "adopt a
set of consistent economic policies to restore
internal stability, both economically and
politically, raise the level and quality of private
investment, restore the productivity of capital
stock, closely monitor the level and orientation
of public expenditures, improve the efficiency
of state enterprises and recover the human
capital lost in the past three years." In short,
let the economic model of the private sector
prevail which, as we saw, the CPP admits would
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mean relinquishing of power by the Sandinista
government.
The CPP discusses three areas in which
the Bank will continue to "carrot and stick"
Nicaragua: agriculture, industry, and energy.
For agriculture, the CPP proposed a credit
program "directed to the private sector
primarily for livestock development."' The
Bank, however, is delaying funds for this
project even though it is in line with the Bank's
strategy of promoting production and exports.
The Bank even refused anxiously-sought funds
in time for the April 1982 planting season - a
latter day, "Let them eat cake" policy. The
Bank is delaying until the government agrees
to the terms of the private sector which
apparently is willing to watch other
Nicaraguans go short on food. Industry has
been brought to a near standstill by the private
sector, and the CPP says there should be no
Bank funding here until the private sector is
given power.
Regarding the energy sector, the CPP
complains that the power company (INE)
"management has been relatively unresponsive
to Bank inquiries and suggestions." The CPP
proposes assisting the INE "provided problems
with ongoing projects cah be resolved and the
INE become receptive to the Bank's advice."
Presumably, following Bank advice would
include firing what the CPP called "superfluous
lower-level employees."
Perhaps unwittingly, the CPP paints a
rather unattractive picture. of the private
sector. Capital flight prior to and during the
revolutionary war exceeded half a billion
dollars with "disastrous effects on the financial
system." At the same time, most of the private
sector supposedly opposed Somoza. Obviously,
The [World Bank] lays
out an agenda recalling
Richard Nixon's ,"game
plan" to "make the
economy scream" in Chile
under President Salvador
Allende.
they were hedging their bets. Private sector
members who have remained in Nicaragua have
taken "cheap and, at times, abundant credit,"
and made use of existing "low wages." They
have used this abundant credit, says the CPP,
for "short-term investments" which turn a fast
buck but don't aid Nicaragua's reconstruction.
On the other hand, the CPP presents
the Sandinista government in a favorable light
- even in World Bank terms. Shortly after
coming to power, the government instituted a
"massive expenditure of rural credit for the
small holder - who previously had had little
access to financing." The government has also
set low wage ceilings - a constant demand of
the Bank. In general, concludes the CPP,
"Nicaragua has handled its external obligations
responsibly and in spite of continuous foreign
exchange constraints, met debt service
payments punctually. It lived up to an
agreement with the Bank to repay the Somoza-
era arrears, and it has expressed a strong desire
to maintain an active relationship with the
Bank and the IDB."
Nevertheless, the CPP recommends
drastic cuts in Bank assistance for Nicaragua
and that future Bank assistance be contingent
on Sandinista "plans to follow our Bank advice."
The one-sided political nature of the
CPP is underscored further by another World
Bank report, "Nicaragua: The Challenge of
Reconstruction" completed only three months
before the CPP.12 This report said that the
Sandinista government had agreed to implement
the Bank's economic recommendations; that its
intentions were "encouraging;" and that the'
Sandinista economic programs are "expected to
define a framework wherein private sector
business can satisfactorily operate." The report
urged that the government seek "large amounts
of external financing, much of it at
concessional terms." With foreign assistance
and efficient management, it concluded,
"Nicaragua will indeed be able to reconstruct
its economy as well as continue to enhance
the social situation of its citizens."
In line with this assessment, the Bank
prepared for vote a $16 million loan to finance
storm drainage and low-income-neighborhood
improvements in Managua. This was in January
1982, only a few weeks before the CPP would
recommend its drastic cuts. The $16 million
loan had the approval of
the
U.S.
executive
director at the Bank,
the
U.S.
Treasury
Department, and the Latin American bureau of
the State Department. They recommended
approval of the loan in a cable to then-
Secretary of State, Alexander Haig, while he
was abroad.13 Haig ordered a "no" vote,
claiming that anything else would violate U.S.
policy toward Nicaragua. The loan was
approved on January 14, 1982 with only the
U.S. voting against it. On January 17, 1982,
CounterSpy -- Sept.-Nov. 1982 -- 45
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The U.S. State Department is reportedly
pressuring private banks to refuse credit to
Nicaragua. Evidence of this pressure was
reported in the Journal of Commerce (3/9/82)
regarding a $130 million loan to Nicaragua
being syndicated by the London-based
consortium Intermex. One U.S. banker, told
the Journal that the loan might be politically
impossible because: "We are listening to what
happens in ... Washington."
the Mexican daily UnoMasUno reported a
statement by State Department spokesperson
Sue Pittman that the Reagan administration
would oppose any Nicaraguan credit and aid
request to any international lending institution.
Shortly thereafter, in February 1982, the Bank's
middle management - who reportedly bypassed
the Bank's Nicaragua loan officers14
- circulated the CPP, and Nicaragua has not
received a cent from the Bank since its January
loan. In an indirect admission of the
extraordinary nature of the CPP, the Bank has
denied that the CPP represents official Bank
policy in a letter by Nicolas Ardito Barletta,
vice president for Latin America and the
Caribbean.15 However, each of the CPP's
recommendations for Nicaragua has been
implemented.
Explaining an earlier denial of an IDB
loan to Nicaragua, an official of the U.S.
executive director's office of the Treasury
Department told the Center for International
Policy that "we had an overall problem with
the direction" of the Nicaraguan government.16
This appears to be the truth of the matter in
the World Bank's more than usual "business as
usual" dealings with Nicaragua. In the
meantime, the economy, screams in Nicaragua.
Footnotes:
1. Washington Letter on Latin America (WLLA), 6/23/82, p. 5.
2. BB Profile #3321F, 11/19/81 IDB pub ical tion).
3. peal Tess, 12/11/81, p. 1.
4. Washington Post, 7/4/82, p.A-23.
5. C . supra, #3, p. 2.
6 iii'
7. IMF, El Salvador - Staff Report for the 1981 Article IV
Consultation, 4/8/82.
8 New York Times (NYT), 6/11/82,
9. N ,71782, p. 2.
p. 6.
10. Cleto DiGiovanni, "U.S. Policy and the Marxist Threat to
Central America," The Heritage Foundation Back ounder,
10/15/81. DiGiovanni is an admitted former CIA officer. The
Heritage Foundation has provided many officials in the Reagan
administration. DiGiovanni's backgrounder also reported that
"Nicaraguan workers continue to have, an emotional attachment
to the revolutionary movement. This attachment can be
expected to weaken as the economy deteriorates.... There are
some indications of growing broadly based support to take to
arms to overthrow the Sandinista government; and this support
could increase as further economic problems develop."
11. IBRD, "Country Program Paper: Nicaragua," 2/16/82.
12. IBRD, "Nicaragua: The Challenge of Reconstruction,"
10/9/81.
13. Center for International Policy, "AID Memo," 5/11/82, p. 6.
14. Ibid.
15. WLLAA, 6/9/82, p. 8.
16. Cf supra, #13.
Indira Gandhi's Voluntary
Debt Trap by Arjun Makhijani
In November 1981, year-long secret
negotiations paid off when the government of
India got a loan of $5.9 billion from the
International Monetary Fund (IMF). This loan
is the largest IMF loan ever; it is also the
largest amount of money the Indian government
has ever borrowed. It will increase India's
foreign debt from 11 to 15 percent of the
national income and double the burden of
India's debt service.
As usual, the IMF loan is made provided
that the, government agrees to certain
conditions and "performance tests." These add
up to promoting the interests of multinational
corporations and India's monopolists (i.e.
several large Indian conglomerates which
46 -- CounterSpy -- Sept.-Nov. 1982
control much of India's industrial output) with
whom these corporations collaborate closely.
This will be done at the expense of the working
people's living conditions, poor as they already
are. There will be even more hunger and
misery. A similar loan to Bangladesh is already
taking its toll of lives in that country.
The IMF packet does not call for a
curbing of 'military expenditure. This too is
normal.-- perhaps the IMF anticipates protest
and government repression of the protests as
part of the IMF "medicine."
The conditions of the loan to India and
the interests the loan serves are a modern
version of the conditions under which British
(John Kelly also contributed to this article.)
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imperialists created famine in India in the
nineteenth century. "India must be bled," Lord
Salisbury proclaimed in British Parliament in
1875. The multinationals of Britain (and, after
independence, the monopolies of India) were
created on the rubble of the indigenous Indian
manufacturers and on the bones of the millions
who starved and are still starving as a result
of the thorough destruction of what was in
pre-British times one of the centers of world
manufacture. Today the instrument of bleeding
is the IMF.
Conditions and "Performance Clauses"
In obtaining its $5.9 billion loan, the Indian
government agreed in writing to meet IMF
"performance" criteria and "conditions"
revealed in confidential documents circulated
to the Fund's Executive Board. "Performance"
criteria are established for the first year of
the arrangement and then set for each
successive period.
India got the first part of its loan - $300
million - by January 1982, another $600 million
by March 25, 1982, and $900 million by June
30, 1982. In 1983, $1.8 billion will be given,
and the final $2.3 billion in 1984. There are
two sets of conditions applied to the loan. The
first set applies to the entire period 1981-84;
the second set contains specific performance
criteria for 1981-82. These criteria will be
reviewed in 1982, leading to modified and/or
additional "suitable performance clauses" to be
met by the government.
The general conditions which apply for
the duration of the entire loan are:
? no imposition or intensification of
restrictions on payments and no restrictions on
transfers for current international transactions;
? no imposition of import restrictions for
balance of payment reasons;
? no multiple currency practices; and
? no bilateral economic agreements not
approved by the IMF. Each of these conditions
is designed to make it easier for multinational
corporations to expand their markets in India
and to repatriate profits. These conditions will
tend to aggravate the balance of payments
problem and lead to a drain of resources from
India.
The specific "performance" criteria
which applied until June 30, 1982 were:
? a ceiling on net domestic credit
expansion in 1981-82 to 19.4 percent;
? limitations on growth in total liquidity
(i.e., money supply) in 1981-82 to 15.7 percent
and on credits from the banking system to the
government;
? a ceiling of $1.7 billion during 1981-82
on the government's nonconcessional (i.e.,
commercial) loans with an original maturity
between one and twelve years.
Beyond these specific conditions and
"performance clauses," the government of India
The Indian government's
stated excuse for
accepting the IMF loan
was to alleviate the
current account balance
of payments deficits
which reached $1.4
billion in 1981. However,
the conditions of the IMF
loan will aggravate
medium and long-term
balance of payments
problems.
has given additional assurances in a secret
memorandum to the IMF. It has pledged to
take "measures to encourage investment and
production in the private sector," ease
excessive regulations, "reform the . price
structure" (i.e., increase prices) of public sector
and agricultural goods, "contain subsidies on
public foodgrain distribution," decrease direct
taxes to "promote investment" and follow a
"realistic policy" on exchange rates. These
conditions, "performance clauses" and
assurances clearly add up to the "supply side"
economic policies espoused by the Reagan
administration.
Non-fulfillment of any condition can
interrupt the whole loan arrangement which
then cannot be resumed without consultation
with the Fund. The Fund can then impose
additional conditions. The bottom-line is that
the government "shall remain in close
cconsultation with the Fund" and "shall provide
the Fund ... with such information as the Fund
requests in connection with the progress of
India in achieving the objectives and policies
set forth."
CowiterSpy -- Sept.-Nov. 1982 -- 47
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The Attack on Workers' Livelihood
The effect of the credit ceilings imposed by
the IMF will be a "severe curtailment in the
living standards of the working people,"
according to Professor Patnaik of the
Jawaharlal Nehru University. Credit squeezes
endanger small and ? medium enterprises, and
many of them simply close and fire their
workers. Tight money also causes delayed wage
payments, denied bonuses and wage increases,
and even reduced wages. Credit stringency
forces the government to raise funds by
increasing indirect taxes and the prices of
public sector goods and services. Public
expenditures must also be curtailed which
results in reduced salary increases and welfare
and relief expenditures. This involves limiting
or even eliminating the distribution of
foodgrain at controlled prices, which the IMF
regards as "subsidies" to the working people.
Further decreases in income would result
from the overall effects of these policies. As
Patnaik points out, a "shift from direct to
indirect taxes in India hasa regressive impact
on income distribution ... 55 percent of the
indirect tax revenue in 1973-74 came from
households with a monthly per capita income
of [$12] or less. Likewise, when private
profitability is protected and even stimulated,
the impact of public sector price increases
must be borne largely by ordinary people.
Profits and Markets
While the meager income of workers is thus
attacked, there will be more money for
Sovereignty?
In his September 28, 1981 letter of intent to
the IMF's Managing Director J. DeLarosiere,
Indian Finance Minister Venkataraman stated
that "the Government will consult with the
Fund on the adoption of any appropriate
measures consistent with the national policies
accepted by our Parliament, in accordance with
the policies of the Fund." Later, Venkataraman
stated publicly that "we have clearly indicated
to the Fund that the measures we adopt will
be fully in line with our declared policies
accepted by Parliament. We have not allowed,
nor shall we permit in the future, any
abridgement of the sovereign right of
Parliament and of the government responsible
to it to determine national policies."
What the Finance Minister did not reveal
was that the Fund wrenched his meek assertion
of the Parliament's role and that the
multinational corporations and Indian
monopolists because of a * "considerable
liberalization" of transactions relating to
foreign collaboration and royalty payments as
well as the "liberalized" import regime to which
.the government has agreed, according to an
IMF staff report. In a secret memorandum to
the IMF, Indian Finance Minister Venkataraman
emphasized that he would lift anti-monopoly
regulations and domestic licensing provisions
and would allow an expansion in the "import
of foreign technology." These conditions
represent a bare-faced "open sesame" to
increased profits for multinational corporations
and Indian monopolists at the expense of the
public. As Patnaik summarized, "the removal
of controls, delicensing, creating a hospitable
climate for multinational goods (via import
liberalization) and for multinational capital ...
are means for strengthening the monopoly
sector; accelerating concentration of output
and capital, destroying indigenous skills and
technology, and increasing dependence on
technology imports and capital."
Exports are to be "promoted" even at
the expense of domestic consumption. There
are no conditions which limit subsidies to
exporters. In addition to these conditons which
amount to the usual IMF "medicine" for
promoting multinational corporations, the IMF
has imposed a ban on bilateral payment
agreements. Such agreements are a principal
means of India's trade with the socialist
countries. The ban undercuts both the
monetary authority and foreign policy of the
Indian government by forcing the mediation of
U.S. dollars in all of India's foreign trade
government in turn assured the IMF that the
phrase "consistent with national policies" was
only meant to suggest "actual adoption of
measures" and not at all "intended to exclude
from the consultation process... any policies
that the Fund considers are and would, be
consistent with achieving the objectives of the
[IMF] programme."
Such secrecy has been important in
getting the loan. Venkataraman offered to
make the documents "almost public." He then
changed that to a statement "summarizing" the
details because "these documents" were "never
released" - although some 50 copies were
expected to be circulated within the IMF.
Evidently, the executives of the IMF are
allowed to know the conditions under, which
the Indian people would live, but the Indian
people are not.
48 -- Counterspy -- Sept.-Nov. 1982
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transactions. This ban will also be a setback
to mutually beneficial independent trade with
other Third World countries. This is
particularly important for India as it is quite
highly industrialized in terms of total industrial
production (though not per capita). Such a
void in the market left by a decrease of these
bilateral agreements would, of course, be filled
by the multinational corporations.
Finally, the Indian government has
undertaken to follow a "realistic policy in
regard to exchange rates" - which means that
a large scale devaluation, while not an
immediate IMF demand, is an option for the
near future. In the confidential IMF staff
report assessing the loan, it is noted that the
government recognizes that "the profitability
and competitiveness of exports is an important
objective and that exchange rate policy has an
important bearing on this." It adds that while
the IMF does not believe that a "discrete
change in the nominal exchange rate is
necessary at the present time," it intends to
"keep exchange rate policy under review."
Promoting Multinationals and Monopolists
The Indian government's stated excuse for
accepting the IMF loan was to alleviate the
current account balance of payments deficits
which reached $1.4 billion in 1981. However,
the conditions of the IMF loan are such that
the loan will aggravate medium and long-term
balance of payments problems even as it
provides a stop gap measure to alleviate
current deficits. A long-term strategy for
solving balance of payments deficits requires
a decrease in imports relative to exports.
However, the IMF conditions call for a
simultaneous increase of imports and exports.
Moreover, the already poor terms of trade will
deteriorate further under the conditions
imposed. Finally, protectionism in the
capitalist countries has been one of the basic
factors which has caused export growth to be
slow. All this means that imports and profit
repatriation will tend to grow faster than
exports, a development which will be reinforced
by those IMF conditions which disable small
and medium size industries in India. The export
volume is thus unlikely to keep pace with
imports and the enormous added debt service
requirements created by the IMF loan itself.
In sum, by the time the repayments of the IMF
loan begin, India will in all likelihood be in
greater balance of payments difficulties as a
result of the loan and its conditions.
.Further borrowing on capital account
(medium and long term) will, no doubt, follow
the increased deficits. This process of ever-
increasing debts on capital account to meet
current deficits is much like tearing down the
timbers from one's house in order to stoke the
fireplace. The IMF anticipates this and looks
forward to imposing further conditions, a fact
illustrated by the restrictions the IMF imposed
on India's commercial borrowing. These
effectively prevent the government of India
from escaping the IMF conditions by resorting
to.such commercial borrowing. The prohibition
practically ensures that the government will
borrow from the IMF and submit to its
conditions. Thus, Finance Minister
Venkataraman's argument that India has
nothing to fear from the IMF's conditions since
it can resort to commercial borrowing is false,
in the near term.
In the medium and long term the other
IMF conditions will probably result in a partial
failure to meet at least some of the
"performance" criteria, or at least a worsening
of the balance of payments situation. This
will likely cause India's credit rating to fall,
preventing commercial borrowing.
It is in this complicated moneylender's
web that the IMF has sought to trap India at
the behest of the interests representing the
multinational corporations and Indian
monopolists. The multinational corporations in
particular have striven hard to erode the
modest economic and political independence
which was the fruit of the many decades of
struggle by the Indian people against British
imperialism. The IMF loan is the latest and
biggest step in that erosion.
Doctor Eye Em Ef,
neatly shod, comes early
down dusty village roads in his
white coat.
Silently, he measures and formulates.
Take this bitter medicine,
says he, forcing down her a dose of
anti-body marked DEVALUATION,
it will make me well.
CounterSpy -- Sept.-Nov. 1982 -- 49
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IMF to South Korea:
Devalue Again! by Tim Shorrock
In a move to decrease domestic spending and
increase exports, the International Monetary
Fund (IMF) is pressuring the South Korean gov-
ernment to devalue its currency for the third
time in two years. But the government,
weakened by a massive financial scandal and
growing popular unrest - and aware of the
possible political consequences of further con-
sumer price increases - is resisting. This
controversy is only the latest indication of the
serious differences between the IMF and the
World Bank and the Korean government over
the direction of the Korean economy which
have surfaced in the last two years.
The World Bank and the IMF have played
a major role in South Korea since the 1960's,
when the military government of Park Chung
Hee launched a program of rapid economic
growth through reliance on exports and foreign
capital. Organized by the U.S. Agency for
International Development, the export program
followed the general direction for developing
countries set by the World Bank: basing growth
on markets in the advanced capitalist countries;
channelling capital to competitive sectors of
the economy; integrating the export sector with
the international division of labor; limiting
growth or expansion of the domestic economy;
keeping domestic consumption to a minimum;
and organizing production through a powerful
state apparatus. In the early stages of the
program, the Korean government was a model
pupil. Much of its export production was for
U.S. or Japanese corporations, primarily in the
textiles and electronics industry. But in the
late 1970's, using capital supplied by Japanese
banks, the Park government began to invest in
heavy industry against the advice of the World
Bank and the U.S. government.
This new program was carried out under
two disastrous illusions: this first was that
cheap electric power would be available in-
definitely. The second was that the world
economy would pick up in the late seventies
and early eighties, bringing South Korea into
the ranks of the industrialized countries by
1990. These illusions died hard in spite of
drastically higher oil prices which deepened the
world recession, and protectionist measures
which were enacted by Western Europe, the
U.S. and Japan to alleviate unemployment. In
50 -- CounterSpy -- Sept.-Nov. 1982
the U.S. and Japan, South Korea's biggest
markets, the housing industry took a nosedive,
as did consumer spending. All of these factors
damaged the industries that accounted for the
bulk of South Korea's ,earnings - shoes, ply-
wood, and textiles. The slowing down of the
world economy destroyed all hopes of export
markets for South Korea's heavy industrial
products.
The heavy industry program instead
brought havoc to the industrial and financial
structure of the country. The government
distributed millions of dollars of loans at low
interest rates to firms anxious to capitalize on
the new programs in steel, petrochemicals,
cars, and power generation equipment. Little
capital was spent on new equipment or modern-
izing the traditional export earners, such as
textiles, clothing or electronics. The capital
shortage in these industries caused thousands
of bankruptcies and growing unemployment.
The influx of foreign loans, and money from
Korean workers in the Middle East, also brought
soaring inflation, which reached 50 percent in
1979. Combined with the massive worker and
student unrest generated by Park's repressive
rule; the Korean economic situation reached a
crisis level. In the uncertainty following the
assassination of Park in October 1979, foreign
capital imports almost stopped, and many
foreign companies began to count their profits
and run. In May 1980, Chun Doo Hwan took
control of the government in a military coup.
Soon after taking power, his new military
government - with the help of the World Bank,
the IMF and the U.S. government - began to
enact reforms to "rein in" Korea's wayward
economy and realign its industrial structure to
the role Korea had been assigned in the inter-
national division of labor.
The basic direction of Chun's economic
policies was set by the World Bank in a report
written in the spring of 1980 by a Bank eco-
nomic team. The team's primary criticisms
were that, first, under Park, the government
became too involved in making economic deci-
sions and funnelled capital into industries that
(Tim Shorrock is a freelance writer living in San Francisco.
He traveled to South Korea last year as part of a two-
year study on nuclear power in South Korea conducted by
Nautilus.)
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were not internationally competitive; second, inefficient, high-cost activities disappear,
wages were too high. The report states that to be replaced by firms that produce on
"a sustained economic recovery, aside from a an efficient scale and are integrated into
number of political adjustments" requires "a the world economy.... Further considera-
willingness to make difficult choices, and the tion should be given to participating in the
ability to convince people through political international division of the production
means that a bout of austerity is in their long- process that would involve producing some
parts and components for domestic use and
term self-interest." Most of the Bank's criti- for export while importing others. One
cism was directed against the import substi- alternative is to take part in worldwide
tution industries (steel, auto, petrochemicals) sourcing by General Motors that has
which had been developed to lessen South interests in Korea; another possibility is
Korea's dependence on the U.S. and Japan. In to" establish links with Japanese firms.
other words, South Korea had violated the General Chun is following these directives
World Bank's idea of a proper division of labor. closely. One of his first moves after taking
To get the economy back on the (World power was to consolidate heavy industries, such
Bank) track, the Bank recommended a series as the automobile and turbine generator indust-
of policy changes, most of which were adopted ries. Both were running at low (sometimes
by the Chun government, as a condition for less than 20 percent) capacity. Major con-
receiving further Bank loans. The most impor- glomerates were reorganized, with each large
tant changes were called for in the heavy industry assigned to one company. New policies
industry sector, which the , Bank wanted
reorganized and consolidated. South Korea was for foreign investment now allow 100 percent
ordered to participate in the international divi- equity in any sector of the economy.
sion of labor by opening its economy further The government also went on a campaign
to multinational corporations, even in sectors to convince workers that their wage increases
previously closed, such as consumer goods, in the mid-70's were responsible for inflation
pharmaceuticals and insurance. and the loss of export competitiveness. Wage
The World Bank ruled out domestic increases were being kept far below inflation
expansion - building the economy through sup- levels. Chun and his secret police attacked
goods and services to Koreans the labor movement and sent many unionists
plying g to prison. The Federation of Korean Trade
Unions was reorganized on the principle of one
company, one union, and the industrial unions
In the 1 ~80s? [Korea] will were dismantled. The government set up
"labor-management committees" to take the
still supply cheap labor- place of collective bargaining. As one Korean
activist said last year, "The Korean labor move-
only now it will be the ment has been destroyed." By the end of 1980,
high technology Chun had restored "order" - at a price. The
9y Carter administration was pleased with his per-
worker rather than the formance and increased economic aid and mili-
textile or shoe worker tary aid. With the election of Ronald Reagan,
the feelings grew even warmer, and Chun was
that will be replaced. rewarded for his work by a state visit to the
United States in February 1981.
The "new era" in U.S.-South Korean rela-
tions - announced at the meeting between
- "because it would not improve the Chun and Reagan - has not increased U.S.
competitiveness of Korean industry, and in part investment in any appreciable way. In fact,
because it would lead to a deterioration of investments have slowed down, and many small-
Korea's balance of payments." The major scale Japanese investors have also left in spite
thrust of the Bank's recommendations was a of South Korea's "streamlining" of several ex-
return to a policy of export orientation, along port industries to induce investments in
with cut backs in wage increases. The key accordance with World Bank directives. The
paragraph of the 1980 report underlines the new policy will link Korean high-skilled labor
- still relatively inexpensive - with U.S. and
Bank's stress on integration with the division Japanese technology and capital. The key
of labor: industries in this strategy are cars, ship building
In conjunction with import liberalization ~
and the increased participation of foreign aircraft parts, nuclear power plants, compu-
capital, the government should let ters, and overseas construction. Some recent
CounterSpy -- Sept.-Nov. 1982 -- 51
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agreements include the following:
Automobiles. The Korean car industry
has been running at around 30 percent capacity
since it was forcibly reorganized in 1980.
There are currently two companies: Saehan,
a joint venture between Daewoo and General
Motors; and Hyundai. Recently, Mitsubishi
Motors of Japan announced that it would
acquire a 10 percent stake in Hyundai and
quadruple its capacity to 400,000 vehicles. The
new plant will build Mitsubishi-designed cars,
possibly for sale in the United States. The
Korean government has also proposed to U.S.
companies that they utilize its low-cost labor
to produce car parts. Already, two U.S.
companies (Burns Brothers and International
Harvester) are buying Korean parts.
. Nuclear power. Several companies in
the U.S. nuclear industry are now looking to
Korea as a production base for reactor exports.
Westinghouse, which is already building six
reactors in South Korea, has been discussing
plans with the giant Hyundai company and the
Korean government to manufacture nuclear
reactor components for export. . Bechtel
Corporation has reached agreement with the
government-owned Korea Nuclear Engineering
Company to ' form a joint venture. The firm
will be guaranteed a monopoly on the domestic
nuclear markets for engineering, and will
attempt to secure contracts overseas. Both
companies are depending on new markets for
nuclear techpology in the Third World. But
their most promising market, Mexico, recently
announced the indefinite postponement of its
large nuclear program, casting doubts on these
hopes.
Computers. - Several large Korean firms
are moving into link-ups with U.S. computer
and telecommunication companies. Lee Byung
Chul, founder of Samsung, South Korea's
largest company, recently visited the United
States to discuss cooperation in this field with
General Electric, ITT and Hewlett-Packard.
These ties with Japan and the U.S.
reflect changes in the international division of
labor. South Korea is now playing a different
role than in the 1960's when it produced mainly
components or assembled goods. But it remains
tied to the level of technology and the state
of the Japanese and U.S. economies. In the
1980's, it will still supply cheap labor - only
now it will be the high technology U.S. worker
rather than the textile or shoe worker that
will be replaced.
These new investments and the changes
in economic structure and policy have not
improved the Korean economy. The GNP
(Gross National Product) growth of seven
percent in 1981 barely offset the GNP drop of
52 -- CmmterSpy -- Sept.-Nov. 1982
six percent in 1980. South Korea's domestic
economy remains in a depressed state. The
government's policy of limiting credit to hold
down inflation has restricted borrowing, leaving
small and medium firms in precarious positions.
Profits are down throughout the economy. The
depression has increased unemployment, now
running at an official rate of. five percent.
Some analysts put real unemployment at close
to 30 percent. The drop in real wages for ,the
second year in a row has worsened the position
of the workers, while the crackdown on
organized labor has increased their anger
(recently two executives of a U.S. computer
firm, Control Data, were taken hostage and
held for several hours by angry workers.) Rural
incomes have also dropped substantially.
Because of the lack of substantial new
foreign investment, South Korea's foreign debt
has skyrocketed. Total debt by the end of
1981 stood at $32.5 billion, nearly 55 percent
of the GNP. In 1981, South Korean paid over
$3.6 billion in interest alone - an increase of
$1 billion from 1980. All of these factors have
seriously damaged the country's competitive
edge over its trade rivals in Taiwan, Singapore,
and Hong Kong. In the last year, export orders
have fallen drastically. The government has
tried to take some measures to stabilize the
economy. Interest rates have been lowered,
and public spending in housing has increased.
But Chun's policies have come under attack
from the IMF, which is. seeking to restore
export competitiveness by devaluing the
currency.
The IMF is pressuring the government
to devalue the won because such a move, says
the Fund, would give exporters a boost and
bring in the foreign exchange that is needed
to pay Korea's debt. It is also cautioning the
government not to rely solely on wage cuts or
improvements in productivity to increase
exports. The IMF pressures have come to light
in a position paper, made available to
CounterSpy.
The falling off of exports in the last
two years, says this Fund paper, "is a matter
of concern, since a sustained growth of exports
is needed to accomplish the two-fold task
facing the Korean authorities: to complete
the required external adjustment and to renew
sustained economic growth. But the
government strategy - keeping wages and
prices low, curbing inflation by reducing the
current account deficit - "involves risks....
The reduction in the rate of inflation has been
achieved to some extent at the expense of
export incentives." Instead, the IMF is pushing
for a sudden restoration of competitiveness
through devaluation. The Fund did note that
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"the prospects for significant wage moderation
were much better now than in early 1980...
after two years of economic difficulties, the
public had come to appreciate the need for
wage restraint, and nominal wage increases
were expected not to exceed 10 percent in
1982.... Based on settlements so far concluded
the [Korean] authorities were hopeful that
their wage objectives for 1982 would be
achieved."
The Fund warned, though, that "wage
moderation and gains in productivity" alone
would not be sufficient "to bring about the
needed boost to exports." The Fund also
advised against lowering interest rates. This
would force companies to borrow from
domestic banks, which the Fund says could
"lead to the crowding out of small and medium-
size enterprises as large companies would be
in a better position to obtain financing."
Therefore, the IMF concludes, "given the
depressed profit situation, exporters need
better incentives to undertake the investments
necessary to improve productivity. An
adequately flexible exchange rate policy would
not only provide more effective export
incentives, but is also likely to be less costly,
in the long run, in terms of price stability."
It is probable that the Korean
government will undertake the devaluation. It
badly needs to $100 million structural
adjustment loan from the IMF, which will be
released once the IMF "has reviewed and is
satisfied with the progress achieved by Korea
in carrying out the measures agreed upon under
the loan program." The devaluation will be
painful, and is likely to fuel unrest by pushing
up consumer prices. Many domestically-
oriented firms also oppose the devaluation
because it will increase the prices of raw
material and machinery imports.
South Korea has little room to
maneuver. As long as its economy is dependent
on exports, the country will continue to be
hostage to the demands of the World Bank and
the IMF.
Twenty Years of Intervention:
The IMF and the Philippines
by Walden Bello and Robin Broad
The recent exposure of confidential
International Monetary Fund (IMF) directives
to the Marcos regime prescribing draconian
measures to "stabilize" the unravelling
Philippine economy has returned one of the
capitalist world's most powerful - and most
obscure - institutions to the center of national
controversy. The Fund probably enjoys a
notoriety worse than the CIA in the Philippines.
Because of its on-going interventions in
economic policy-making and their harsh impact
on living standards, the IMF is seen as one of
the chief engineers of the crisis now engulfing
the nation.1
In 1962, the IMF carried out its first decisive
intervention. It forced the government of
President Diosdada Macapagal to abolish
foreign exchange controls on imports and
devalue the peso by 100 percent relative to
the dollar. Decontrol and devaluation were
part of the IMF's strategy of "liberalization,"
which as usual consisted of lifting protectionist
barriers to imports, abolishing controls on
foreign investment, and depreciating
"overvalued" currencies. The latter were
regarded by the Fund as obstacles to the "free
flow" of capital and commodities - that is,
the unrestricted entry of foreign capital and
goods into Third World economies.
The Fund was regarded as singularly
fitted for its role as the vanguard of
liberalization by the U.S. government and U.S.
corporations which stood to benefit the most
from the strategy. Though the U.S. government
was the decisive voice in the IMF - controlling
as it did over 21 percent of voting power - the
image of the Fund as a multilateral institution
CounterSpy -- Sept. -Nov. 1982 -- 53
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composed of 140 member nations provided a
guise of neutrality and objectivity to its
dictates. This was underlined by a high-level
panel of U.S. business and government officials
in 1971. "As the Filipinos deal more with...the
IMF, World Bank and the 'Asian Development
Bank (ADB), they will learn to address
economic problems more realistically and
accept the constraints on economic behavior
that are required for participation in the inter-
national economic community."2
The impact of the 1962 devaluation was
severe. Between 1962 and 1964, Philippine
workers saw their real wages decline by 10
percent.3 While big agricultural exporters such
as the sugar landlords reaped windfall profits
from the devaluation, the nascent Filipino
entrepreneurial class found itself in a very
precarious position, facing a 100 percent
increase in the peso cost of their imported
inputs and repayments on foreign loans. An
estimated 1500 Filipino entrepreneurs were
forced into bankruptcy, and many of those who
survived were pushed into joint ventures with
U.S. capital. The inevitable economic slow-
down helped depress the growth of
manufacturing from the 11 to 12 percent
average annual growth of the 1950-57 period
to a mere five percent annually throughout the
sixties.
To counteract the IMF's abolition of
import controls, . desperate national
manufacturers propelled the creation of a pro-
tectionist system of tariffs which effectively
undermined the key objective of the IMF's
liberalization strategy - the unrestricted entry
of foreign goods into the domestic Philippine
market. "Although the strict import
restrictions prevailing in the 1950s were
gradually decontrolled in the early 1960s," com-
plained the World Bank, the IMF's sister
agency, "they were replaced by a highly
protected tariff system.... Policy reform in
the 1960s did not alter the bias of the incentive
system in favor of import substitution" by
national entrepreneurs.4
Repeat Performance
The opportunity for a more drastic intervention
presented itself in late 1969, after Macapagal's
successor, Ferdinand Marcos, "won" an unprece-
dented second term in the fraudulent elections
held in November of that year. Marcos' costly
electoral drive bankrupted the Philippine
treasury, leaving the country with hardly any
foreign exchange to cover the mounting trade
deficit and to service the external debt.
Desperate, Marcos turned to the IMF for help.
54 -- CounterSpy -- Sept.-Nov. 1982
But in return for granting a $37 million loan,
the Fund demanded and got what it wanted
- another devaluation of the peso, this time
by over 60 percent relative to the dollar.
As in 1962, the devaluation wreaked
havoc on Filipino entrepreneurs. As they
teetered on the brink or fell into the abyss of
bankruptcy, the World Bank congratulated
Marcos for his "commendable display of
political courage."5 The quid pro quo for the
IMF loan went beyond devaluation. A
"Consultative Group" of aid-giving countries
and international agencies was created under
the joint leadership of the IMF and the Bank.
The key function of this body was revealed by
the U.S. Treasury Department: "The [World]
Bank has sought to influence borrowers' policies
indirectly through the mechanism of 'inter-
governmental Consultative Groups on particular
borrowing countries. Through these groups, the
Bank attempts to rally other donors around its
recommendations.*6
Another condition for the loan was the
installation of an IMF "resident officer" right
in th s Philippine Central Bank and the creation
of a joint "Central Bank-IMF Commission" to
overhaul the debt management policies of the
government. According to one report, the IMF"
representative "sees reports, official figures
and analysis from government agencies.... He
probably has access to more documents than
some high Central Bank officials."7 The
Central Bank-IMF Commission went beyond
sanitizing debt management: it pushed the
government to allow foreign equity partici-
pation of up to 40 percent in local banks in
line with its plan to double the, capital base
Throughout the
seventies, the Philippines
was under one or other
variety of "standby
program," giving the
country the dubious
distinction of being one
of the few nations to
complete not just one but
several IMF stabilization
agreements.
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of the commercial banking system. Nine inter-
national private banks, including some of the
larger U.S. banks, promptly seized this oppor-
tunity.8
The IMF and Martial Law
The imposition of martial law on September
22, 1972, provided unprecedented opportunities
for the IMF and the World Bank to fully re-
structure the Philippine economy. While the
World Bank presided over an ambitious strategy
of technocratic "development from above," the
Fund assumed near total control over external
economic policies.
Throughout the seventies, the Philippines
was under one or other variety of "standby
program," giving the country the dubious dis-
tinction of being one of the very few nations
to complete not just one but several IMF sta-
bilization agreements. By mid-1980, the
Philippines owed the IMF almost $1.6 billion,
making it the Third World country, most
indebted to the agency and second only to the
United Kingdom in overall indebtedness.9 The
Fund's power, however, stemmed not only from
its large claims on Philippine debt. Perhaps
even more important was the "good credit risk"
status that it stamped on the regime. As one
Bank report saw it, "the Government regards
the IMF's role as essential not only for the
large volume of resources provided, but also
for the reassurance on economic management
provided to private sources of finance.*1 The
IMF nod became increasingly important as. the
country's chronic balance-of-payments crisis
went from bad to worse, necessitating huge
infusions of foreign capital to bridge the gap.
The root cause of the worsening external
economic position was the IMF-prescribed
economic strategy itself.' Beginning in the mid-
seventies, the Fund and the World Bank threw
the Philippines onto a path of economic liberali-
zation and "export-led growth." That is, they
based economic growth not on an expanding
domestic market but hitched it to the demand
of export markets in the advanced capitalist
countries. This growth path was seen as a way
to avoid radical income redistribution, which
was the only means to expand the internal
market to sustain continued growth. Devel-
opments in the late seventies, however, showed
that export-led growth was a suicidal strategy:
the world prices fc, the Philippines' key
exports, sugar and coconut, declined `drasti-
cally; the deepening international recession
stopped the growth of export markets in the
West; and, because of the recession, the
advanced capitalist countries began to erect
tariff-and non-tariff barriers to labor-intensive
manufactured imports from the Philippines and
the Third World.
With imports continuing to rise while
export earnings were declining, the current
account widened steadily to $2 billion in 1980
- a development that forced the Marcos
regime to contract over $11 billion in loans to
international banks to cover the yearly deficits.
By 1981, servicing the external debt came to
about $1.6 billion, forcing the regime to go
deeper in debt, simply in order to pay off
installments of the already existing debt.
To many observers, it was obvious that
the IMF-World Bank strategy of making the
Philippines almost completely dependent on ex-
port markets was responsible for the disaster
overtaking the economy. But the Fund and
the World Bank proceeded to administer a cure
that consisted of heavier doses of the disease
of liberalization. The Fund took advantage of
its power to dictate the credit ratings of the
Philippines in order to knock out, once and for
all, the protectionist system and ideology.
The IMF had become impatient with
Marcos' unfulfilled promise to dismantle the
protective mechanisms sheltering politically
powerful national capitalists producing for the
domestic market. The IMF-World Bank ulti-
matum delivered to the government during the
Consultative Group meeting in December 1979
called for "restructuring of the economy."11
Industry Minister Roberto Ongpin tendered the
government's capitulation: "We are in agree-
ment with the findings... that Philippine in-
dustry has suffered because of an over-
protected system`. We are determined to take
the difficult and often painful decisions to
dismantle ' some of the protective devices and
thus to promote a free and competitive
system.1112 The Fund could not conceal its
pleasure, triumphantly announcing to the Group
that "further steps will be taken to reduce the
level of protection in order to open import
substitution industries to the test of external
competition."13
"Structural Adjustment"
The main weapon for the destruction of the
Philippines' protected industries was a $200
million Structural Adjustment Loan from the
World Bank. The carrot was a package of two
IMF loans totalling $654 million, which was
badly needed to tide the regime through its
balance-of-payments difficulties. The con-
certed pressure bore fruit: in January, 1981,
the government decreed drastic tariff
reductions on 590 commodities. But structural
adjustment - which was a euphemism for the
execution of the national entrepreneurial class
CounterSpy -- Sept.-Nov. 1982 -- 55
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formerly sheltered by the protectionist
measures - was not the only demand of the
IMF and the World Bank. The Fund demanded
another round of devaluation.
Under the "flexible" exchange rate
system imposed by the Fund after the
devastating devaluation of 1970, the peso had
depreciated from P6.43 to the dollar in 1970
The root cause of the
worsening external
economic position was
the IMF-prescribed
economic strategy Itself.
to P6.78 in 1973 and P7.50 in 1975. For the
IMF, devaluation represented a "quick fix" to
the Philippines' worsening external payments
position in the late seventies: it would sup-
posedly "cheapen" Philippine exports, resulting
in a much greater volume of goods sold and
thus more foreign exchange earnings.
But the Fund had another, more
strategic objective in pushing devaluation: by
raising the peso, prices of raw material, inter-
mediate goods and machinery exports, mone-
tary depreciaton would help squeeze out the
remaining "inefficient" Filipino producers. It
was one more prong of the concerted offensive
to totally denationalize Philippine industry in
the name of efficiency.
The IMF Versus the Central Bank
The IMF plan, however, encountered opposition
from several Filipino officials, including
Central ' Bank Governor Gregorio Licaros.
Having helped implement the previous devalua-
tions, Licaros had apparently learned the bitter
lesson that the so-called virtues of monetary
depreciation were an illusion. He now argued
that the "relief" provided by devaluation - an
upsurge in foreign exchange earnings - would
at best be temporary and superficial while the
consequences - recession - would be severe.
The growing gulf between the Fund and
Licaros is captured in a number of recently
leaked IMF documents. An IMF mission in May
1980 recommended that, in order to achieve
"external competitiveness" and "promote
greater balance of payments adjustment... the
authorities permit greater flexibility in the
56 -- CounterSpy -- Sept.-Nov. 1982
exchange rate."14 The response from Licaros
was disconcerting: "The Philippine representa-
tives regarded the current level of the
exchange rate as broadly applicable."15 In
August 1980, the World Bank added its voice
to the IMF's call for devaluation, informing
the Philippine government that "the foreign
exchange account could, be balanced by a
moderate devaluation."16
The opportunity for the Fund and the
technocrats to get rid of the stubborn Licaros
emerged early in 1981, in the aftermath of the
"Dewey Dee affair." After Dee, a Filipino-
Chinese industrialist, fled the country, leaving
$100 million in bad debts, it was discovered
that Licaros had been receiving kickbacks from
Chinese-Filipino friends like Dee whenever the
Central Bank approved their foreign exchange
deals. The Licaros scandal was hushed up for
fear of the impact on the Philippines' credit
rating should it become widely known that the
Central Bank Governor was not, after all, a
model of bourgeois propriety. Yet it provided
the excuse that the IMF, World Bank, and their
technocrat allies within the Philippine govern-
ment needed to oust Licaros in early 1981.
With Licaros out of the way and replaced
by a more flexible technocrat, the devaluation
demanded by the IMF took place. In June
1981, the exchange rate had deteriorated from
P7.5 to the dollar to P7.9. By March 1982, it,
stood at P8.3. The IMF was pleased, but it
also made it clear to the new authorities that
the currency had to be debauched even more
to make up for Licaros' earlier stubborness.17
By 1981, the Fund and the World Bank
stood at the pinnacle of their power in the
Philippines. Not only had they virtually com-
pleted the liberalization of the Philippine
economy and thus brought about its fuller inte-
gration into the world capitalist order, but they
had also managed to install a cabinet of techno-
crats headed by Prime Minister Cesar Virata
who amounted to no more than fronts for the
implementation of Bank and Fund-dictated
policies. Yet, it was a phyrric victory, for in
the process major sectors of Philippine society
had united in a determined nationalist
movement to regain economic sovereignty.
Footnotes:
1) Many of the materials used in this article are from
Development Debacle: The World Bank and the Philippines
Institute for Food and Development Policy, San Francisco,
1982, authored by Broad and Bello with David Kinley, Elaine
Elinson, David O'Connor and Vincent Bielsky.
2) CSIS, U.S.-Philippine Relations, Georgetown University,
Washington, D.C., 1971, p. 72.
3) John Power and Gerardo Sicat, The Philippines:
Continued on page 59
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 Approved For Release 2010/06/15: CIA-RDP90-00845R000100140001-1
The World Bank:
An Apolitical
Institution ?
The following excerpts from a World Bank
memorandum seriously undermine the image of
the Bank as an apolitical institution. The first
paragraph shows that Bank personnel are
physically present even in military situations.
The second paragraph describes the Bank's
intimate relations with three of the most brutal
regimes in South America and its rather blase
attitude towards the social repercussions of
Bank-enforced programs.
WORLD BANK / INTERNATIONAL FINANCE CORPORATION
OFFICE MEMORANDUM
TO: Files
FROM: Office of the Senior Vice President, Operations
[,D;vrc- May 17, 1982
SUBJECT: Minutes of Operational Vice Presidents' Meeting of May 5, 1982
Present:
Members: Messrs. Stern (Chairman), Ardito-Barletta, Baum, Chaufournier,
de la Renaudiere, Kirmani, Kraske, Thalwitz.
Others: Messrs. de Silva, Theodore&, Kopp, Ms. Pratt.
Security in the Field
1. The meeting discussed a memorandum on the above subject (memo
Paijmans to Stern, April 9). The meeting generally endorsed the policy
recommendations and procedures contained in the memorandum and agreed
that the primary principle to be followed was that staff would not be
placed in the field where it is determined that a significant, security
risk exists. It was agreed, however, that primary responsibility for
decisions regarding evacuation of staff, purchase of air tickets in
advance, and continuation of supervision, should rest with the Resident
Representative in countries having such staff. The Bank would generally
follow UN guidelines regarding security and evacuation. Resident Repre-
sentatives would have the authority deviate from them and, in general,
Resident Representatives would be expected to evacuate their staff when,
in their judgment,. staff would be exposed to unreasonable risks as a
result of remaining in country. All staff (and dependents) having a
direct contractual relationship with the Bank would be included in any
evacua on plan. This would inclu a oca saff, who should be offered
the option of being evacuated if remaining in country would expose them
to serious risk. Examples of such risks should be provided for the
guidance of Resident Representatives and headquarters would be con-
sulted to the extent practicable. Local staff who were evacuated would
normally be expected to return to their home country as soon as condi-
CounterSpy -- Sept.-Nov. 1982 -- 57
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 Approved For Release 2010/06/15: CIA-RDP90-00845R000100140001-1
tions permitted. (Personnel and Administration had noted that there
may be other practical problems in implementing the recommendation on
on local staff evacuation.) In countries where no field office exists,
the Region should designate an appropriate senior manager to make
decisions regarding security/emergency situations, in consultation with
the Field Office Coordinator. The.Senior_Vice President, Operations,
should be kept informed regarding all reports on crisis situations.
Managers were asked to discuss these issues with their staff and to
clarify that protect supervision involving armed escort is not permitted,
not only because of the threat to the safety of staff, which staff them-
selves have tended to discount, but also because effective supervision
of development projects is incompatible with the association of a
military presence.
Mr. Ardito-Barletti's Recent Trip
3. Mr. Ardito-Barletta reported on his recent trip to Uruguay,
Chile and Argentina, all of which Piave tried, with varying degrees of
success, to open their economies in recent years in an attempt to remedy
severe Balance of Payments difficulties, exacerbated by depressed commod-
ity prices. Chile appears to be having the greatest success and has
moved very rapidly. Interest rates are highly positive and inflation is
now very low. The adjustment process was proving to be socially painful,
however, with stagnant levels of investment and very high unemployment.
Uruguay had done somewhat less well, but was still making good progress
in balancing its budget and reducing inflation. In addition, Uruguay
had introduced a series of mini-devaluations, with the result that the
adjustment process, while somewhat slower, may be less painful than in
Chile. In Argentina, the opening of the economy had put tremendous
pressure on the industrial sector and on investments. Argentina did
not devalue or balance its budget initially, however, and this had
forced the country to undertake a very large devaluation subsequently.
The addition of the economic blockade resulting from the current
military situation created further severe stress, which the economy was
not likely to be able to sustain.
4. The difficulty faced by these and other countries pointed to
some gaps in our understanding of policy measures at the micro level,
particularly regarding the timing and magnitude of adjustments we
should recommend. An evaluation of stabilization policies pursued by
the IMF and the World Bank would be extremely useful. Knowing what has
and has not worked in the past would be a helpful guide in making policy
recommendations in the future. Concern also was expressed regarding
the possible implications of a slower-than-anticipated recovery of the,
world economy, and the need to focus systematically on the global adjust-
ment process. In this context, the Chairman noted the recent appointment
of Professor Anne Krueger to succeed Mr. Chenery as Vice President,
Economics and Research Staff. Professor Krueger has a long-standing
interest in these particular areas, and it was hoped that she would
initiate such studies after assuming her new post next September.
58 -- CounterSpy -- Sept.-Nov. 1982
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 Approved For Release 2010/06/15: CIA-RDP90-00845R000100140001-1
Continued from page 13
less stringent defeat criterion, IT or LL
can be used. The coverage criterion se-
lected should consider the time-dependent
effects of nuclear radiation. The evacua-
tion of personnel with sublethal or de-
layed lethality doses may be adequate to
reduce a unit's strength and capability
sufficiently to abort a mission. For these
reasons, use of the LL (650 rad) casualty
criterion may be sufficient for targeting
in some cases.
(3) Consideration of lesser effects
over entire target area. An area target is
attacked with a specified coverage and de-
feat criterion (IP, IT, or LL). It is im-
portant to realize that. rarget degradation
occurs beyond the distance where the spec-
ified radius of damage extends. The smal-
lest nuclear weapon has potentially lethal
effects that cover more than a square
kilometer of area. Also, to estimate the
overall effect on a targeted unit, the
combination of effects should not be over-
looked. Each degrading effect by itself
might not result in serious impairment of
a soldier's performance. However, a sol-
dier suffering with burns from thermal ra-
diation, ear drum damage from overpres-
sure, cuts and broken bones from flying
objects, and vomiting from radiation sick-
ness is not likely to be very effective in
any capacity. Hence, when a commander re-
quests that a certain percentage of the
target receive a specified degree of dam-
age, it should be recognized that much of
the remaining portion of the target would
receive damaging effects....
12) Robert Ongpin, "Statement," in World Bank, "Meeting of
the Consultative Group for the Philippines ... December 13
and 14, 1979," Wasington, D.C., Annex VI, p. 5.
13) Andreas Abadjis, "Statement," in ibid., Annex V, p. 2.
14) IMF, "Philippines - Staff Report for the 1980 Article IV
Consultation and Review of Stand-by Arrangement,"
Washington, D.C., 7/17/80, p. 14.
15) Ibid.
16) World Bank, "Working Level Draft Country Program
Paper," p. 14.
17) IMF, "Philippines - Staff Report for the 1982 Article IV
Consultation," Washington, D.C., 3/24/82, p. 20.
Journal of the Institute for the Study of Labor and Economic Crisis
Edited by Marlene Dixon, Susanne Jonas and Tony Platt
In each issue, leading writers and activists of the world's progres-
sive movements address a particular theme within the framework of
the world capitalist crisis, providing new insights into our ever more
complex world. Contributors include: Andre Gunder Frank,
Immanuel Wallerstein, Samir Amin, James Petras. Pedro Vuskovic,
Ruy Mauro Marini, Fernando Claudin among others.
World Capitalist Crisis and the Rise of the Right
In-depth analysis examining Reaganism and the dangers of
neofascism; articles on the Right's Links to growing racism, the
attack on women, evangelical movements. invaluable for movements
resisting austerity and repression in the coming period.
No. 4, Winter 1981-82
Immigration and Changes
in the International Division of Labor
a. Collateral damage is undesirable ci-
vilian materiel damage or personnel inju-
ries produced by the effects of friendly
nuclear weapons.
b. While the overall goal is to limit
collateral damage, there must be a balance
between collateral damage constraints and
military effectiveness if operations are
to be successful. Therefore, some damage
to populated areas should be expected....
Continued from page 58
Industrialization and Trade Policies, Oxford University Press,
New York, 1971, p. 38.
4) World Bank, Transition Toward More Rapid and Labor
Intensive Development: The Case of the Philippines
Washington, D.C., Oct. 1980, p. 5.
5) Quoted in D. Rosenberg (ed.), Marcos and Martial Law
in the Philippines, Cornell University Preess, Ithaca, NY,
1979, p. 196.
6) U.S. Department of the Treasury, "Assessment of U.S.
Participation in the Multilateral Development Banks in the
1980s," Consultation Draft, 9/21/81.
7) Asian Wall Street Journal, 8/15/79.
8) Central Bank of the Philippines data, 1975; see also World
Bank, Current Economic Prospects and Position of the
Philippines, 1975, p. 12.
9) World Bank, "Working-Level Draft Country Program
Paper," Memorandum from Bruce Jones, 8/29/80, p. 13.
10) Ibid., p. 14.
11) World Bank, "Consultative Group for the Philippines:
Chairman's Report of Proceedings," 3/20/80, p. 71.
Focus on immigration to the U.S. from Mexico, Puerto Rico,
the Caribbean and Central America, and the creation of cheap-labor
havens and increased poverty. Case studies and theoretical essays by
U.S. and Latin American scholars: Frank Bonilla, Manuel Maldonado
Denis, James Cockcroft and many others.
No. 5, Summer 1982
Upcoming Issues
? Proletarianization and Class Struggle in Africa
Edited by: Bernard Magubane and Nzongola-Ntalaja
? The Middle East
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