LATIN AMERICA WARNING AND FORECAST MEETING MARCH 1987

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91B00776R000300050010-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 23, 2016
• Document Release Date: June 7, 2013
• Sequence Number: 10
• Publication Date: March 20, 1987
• Content Type: MEMO

Declassified in Part - Sanitized Copy Approved for Release 2013/06/11: CIA-RDP91 B00776R000300050010-3
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The Director of Central Intelligence
Washington, D.C. 20505
National Intelligence Council
NIC 01264-87
20 March 1987
MEMORANDUM FOR: Director of Central Intelligence
Deputy Director of Central Intelligence
VIA: National Intelligence Officer for Warning
FROM: Robert D. Vickers, Jr.
National Intelligence Officer for Latin America
SUBJECT: Latin America Warning and Forecast Meeting
March 1987
1. The following items were discussed at the Intelligence
Community's Warning and Forecast Meeting held on 18 March 1987.
Nicaragua
2. Despite the resignation of Arturo Cruz, resistance leaders
continue to meet to resolve differences and expand the political
directorate. A successful outcome is possible, but serious obstacles
remain and progress on outlining and implementing reforms on critical
issues will almost certainly be slow. While the leadership has quickly
agreed on how additional funds would be administered, for example, the
more potentially divisive issues such as expanding the resistance
.directorate and civil-military relations are yet to be addressed. The
views and future role of FDN chief Calero and his field commanders is
also uncertain. The plan now is to allow the various resistance groups
to decide among themselves who should serve on the expanded seven-member
directorate, and a tentative deadline of 1 May--which may be optimistic--
has been set to effect the reforms.
Meanwhile, Arias' Central American peace proposal and his other
recent initiatives may complicate the reform effort. In order to
reinforce his image as an neutral "honest broker," he has warned UNO
leaders that they would have to leave the country if they assumed control
over insurgent military operations. The Arias' peace proposal also
complicates the insurgent position, because it calls for an immediate
suspension of US military assistance as a prerequisite for a settlement
without first gaining firm commitments on internal reforms and
negotiations with the armed opposition from the Sandinistas. Looking
toward the Central American summit in late April, which will focus on the
proposal, the Sandinistas will likely try to avoid making a final
decision and prolong negotiations to await the outcome of US
Congressional action on future aid to the resistance.
STAT
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WARNING ISSUE: If the current round of unity talks collapse, it will
seriously damage the international image of the Nicaraguan resistance and
threaten continued external support. To split the Core Four and place
the US on the defensive, Nicaragua may agree to accept an unmodified
version of Arias' peace plan.
Suriname
3. The military stalemate continues for now, but the insurgents
maintain the battlefield initiative, and there are indications that they
are moving into the western part of the country, which is a critical rice
growing area. The rebels have yet to receive any external support, but
the French may be debating direct assistance. The regime, plagued by
domestic unrest in the capital and maintenance problems with its
helicopter fleet, has yet to launch its long-awaited offensive against
rebel strongholds. Bouterse's support in the military is also
uncertain. For now, the government will probably focus on diplomatic
activity, looking for economic and military aid to bolster the regime.
Bouterse, for example, will almost certainly use the draft constitution
to demonstrate his commitment to peaceful change in Suriname. Meanwhile,
there are no indications thus far that the recent government delegation
to Libya won any pledges of support. Bouterse is probably anxious for
Libyan aid, but still fears US retaliation. For its part, Tripoli
apparently has tried to contact rebel forces, presumably anticipating
Bouterse's departure. Bouterse, however, probably will not leave on his
own and rebel leader Brunswijk probably lacks the backing to replace him
if he does leave office.
WARNING ISSUE: If the insurgents manage to open a western front and
receive French assistance, the military balance could shift to the rebels.
2
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Brazil and the Debt Crisis
4. One month after the suspension of payments, Brazil has yet to
define a strategy for negotiating with foreign creditors, and continues
to seek a "political solution" based on an agreement with the banks that
Brazil must avoid destabilizing austerity measures and be allowed to grow
sufficiently to reduce unemployment. Neither side is likely to give and
confrontation is almost certain. Brasilia plans to put forward a
proposal to the banks by the end of March that calls for growth rates of
6 to 7 percent and perhaps $5 billion in new lending without making
necessary internal reforms. For their part, the lenders appear
determined to hang tough and are prepared to write off large portions of
the Brazilian debt in coming months. They also apparently have rushed to
complete pending agreements with other countries, such as Mexico, in an
effort to isolate Brazil in the region and discourage similar moves by
other debtors. At least for now, President Sarney enjoys broad popular
and military support for the moratorium, but mounting economic pressures
may erode his base in coming weeks--labor unrest has increased steadily
since before the moratorium. Only serious economic deterioration,
however, would force Sarney to introduce austerity measures and
protracted negotiations are likely. His declining fortunes may encourage
the constituent assembly to call early presidential elections, possibly
by 1988. The lenders' strategy probably has forestalled any interest by
other debtors in following Brazil's path.
WARNING ISSUE: Deteriorating economic conditions in Brazil will
likely spark additional labor unrest and could prompt military
intervention. The stress of the situation may also adversely affect
Sarney's emotional and physical health and cause him to resign.
Robert D. Vickers, Jr.
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Participating in the NI0/Latin America Warning Meeting of
18 March 1987 were representatives of the following agencies:
DIA: DI0/DIA
DIA/DE3
DIA/DB3C1
DIA/DB3C2
DIA/DB3C3
DIA/OA-5
JSI-4B
National Security Agency
Department of State/INR
CIA Participants:
ALA
OGI
OIA
LDA
OIR
DO/LA
DO/CAk
DO/CATF
DO/EPS
NIO/W
ICS/HC
NPIC
FBIS
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SUBJECT: Warning Report for Latin America NIC 01264-87
DATE: 20 March 1987
DISTRIBUTION:
1 - Department of State (Abrams)
1 - Department of State (Fouche)
1 - Department of State/INR/IC/RD
(Suzanne D. Kuser, Room 6845)
1 - NSC (Sorzano)
1 - NSC (Tillman)
1 - NSC (Flower)
1 - NSA
1 - NSA
1 - NSA
1 - Treasur (Mulholland)
1 - DIA
1 - DIA
1 - DIA
1 - DIA
1 - DIA/D/C-4
1 - DIA AT-5
1 - DIA/DB-6
1 - DIA/JSI-4
1 - DIA/CAJIT
1 - USMC (McTernan)
1 - HQ USMC/INTP (Bullen)
1 - ONI (LaBauve)
1 - NAVOPINTCEN (Conant)
1 - USArmy (Brown)
1 - USA/SOUTHCOM (Col. Stewart)
1 - USA/CINCLANT (c/o CPAS/ILS)
1 - USAF (Silva, Mines)
1 - Vice President's Office (Watson)
1 - NWS
1 - Commerce (Karcich)
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SUBJECT: WARNING REPORT FOR LATIN AMERICA NIC 01264-87
DATE: 20 March 1987
1 - DC I
1 - DDCI
1 - EXDIR
1 - ER
1 - DDI
1 - C/NIC
1 - VC/NIC
1 - DDI Registry
2 - NIO/W
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Declassified in Part - Sanitized Copy Approved for Release 2013/06/11: CIA-RDP91 B00776R000300050010-3
Declassified in Part - Sanitized Copy Approved for Release 2013/06/11: CIA-RDP91 B00776R000300050010-3