LATIN AMERICA WARNING AND FORECAST MEETING OCTOBER 1988

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91B00776R000400140022-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 23, 2016
• Document Release Date: June 13, 2013
• Sequence Number: 22
• Publication Date: October 27, 1988
• Content Type: MEMO

Declassified in Part - Sanitized Copy Approved for Release 2013/06/14: CIA-RDP91 B00776R000400140022-9
The Director of Central Intelligence
Washington, D.C. 20505
NIC 03228-88
National Intelligence Council 27 October 1988
MEMORANDUM FOR: Director of Central Intelligence
Deputy Director of Central Intelligence
VIA: National Intelligence Officer for Warning
FROM: Martin W. Roeber .
National Intelligence Officer for Latin America
SUBJECT: Latin America Warning and Forecast Meeting-
October 1988
1. At the October Latin America Warning and Forecast Meeting,
Intelligence community representatives reached the following judgments:
-- In Panama, the economic decline appears to have slowed, but
the government continues to build monthly arrearages that
could lead.to a collapse if:mechanisms created for muddling
through the crisis--such asthe use of government checks
currency and delaying payments to creditors--falter.
-- In Haiti, President Avril has taken a number of steps to
meet the demands of foreign donors, but his failure to win
renewed assistance could result in another coup--with
unpredictable results. Despite some rise in leftist
sentiment, neither Cuba nor Nicaragua seems inclined to
invest any effort in the badly splintered extremist ranks.
-- In Chile, moderates have emerged from the plebiscite in
control of the opposition movement, but their position will
erode in favor of the left if the Pinochet regime refuses to
give ground on constitutional refo 'ng the
likelihood of stepped up violence.
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3. Panama
Financial pressures on the regime continue as arrearages mount, but
there is little likelihood the downturn will prompt large-scale unrest in
the near term., While the government continues to build substantial
monthly deficits and delays payments to creditors, the sharp declines in
overall economic activity registered in past months appear to have
slowed. Indeed, earlier dire predictions of sharp drops in the GDP next
year have been revised upwards. Moreover,'the regime will probably use
the damage caused by hurricane Joan to justify another delay in'payi'ng
workers' overdue annual bonuses, a move that will ease short-term
financial pressures. In addition, the regime's sharp crackdown on
opposition leaders will probably discourage demonstrati.ons,,at.leastfor
now.
In terms of managing the elections issue the'.Intel.ligence Community.:.
believes Noriega has several options. He could.:
-- Decide to hold elections, putting himself or a surrogate forward
as the government's candidate and using the time before the vote
to undermine the opposition and develop mechanisms for
manipulating the outcome.
- Opt for a plebiscite that could take a variety of forms ranging
from whether the term of Acting President Solis Palma should be
extended until 1992 or whether to postpone elections,
capitalizing on anti-election sentiment among both pro- and
anti-government forces that for different reasons see the rapidly
approaching May date working against their interests.
The political opposition still seems inclined.to.participate in the
May 1989 elections, should they take place. To justify their decision,
some point to the Nicaraguan elections in 1984, in which the opposition
declined to participate and eventually lost their legal status and any
voice in the government. The Intelligence Community still believes that
the government could not win a fair election against a unified
opposition. Analysts agreed with the opposition view, however, that it
would have to win by a margin of at laact 3n_nn0 votes to make electoral
fraud impossible for the regime..
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Warning Issue: The economic decline appears to have slowed, but the
governmen continues to build monthly arrearages that could lead to a
quick collapse if regime mechanisms for middling through the crisis--such
as the use of government checks and running arrearages with
suppliers--falter.
4. Haiti
potential plotters.
toward scheduling elections.. His lack of economic resources,: however.,
continues to limit his maneuvering room within the military, and Avril
faces continued pressure from-within the armed forces. While the
restoration of. external assistance would not be any panacea, it would
demonstrate to those who put Avril in power that he could do what his
predecessors could not. thereby strengthening his.hand in holding off
area of human rights, Avril'has closed the.most notorious prison in.Haiti
and, ?in:terms"of restoring democracy, has taken at;least,.tentative steps
Without economic assistance, President Avil's chances of holding
power are substantially diminished. Avril's actions since assuming,power
in September, therefore, have been aimed at winning . renewed. foreign aid.
He has moved against narcotics trafficking. by. re tiring Col. Paul, seized
a .major shipment of cocaine and invited DEA'to return to Haiti In the
increasingly likely.
Warning Issue: Although Avril appears to be reasserting control over
the military gradually, his hold on power remains tenuous and without
renewed aid another cp n__with unpredictable results--will become
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SECRET
after the December 1989 elections.
military in the wake of his loss, trying to shift the blame to
subordinates and holding frequent meetings with different groups within.
the armed-forces., He;als`o,i.s'still.considering running as the government
candidate,. although there is growing sentiment against him within the
ruling Junta. Nonetheless, the Junta will probably not ask Pinochet to
resign either the presidency or his command of the Army, at least until
by the military since 1973. The center-right has moved away from
Pinochet.in.an effort to put its. own candidates in power next year.
Pinochet himself is 'working to regain prestige and . power, within the
The Chilean political landscape remains fluid in the. wake of the
government defeat in the .5 October plebiscite as both sides assess the
results and map out longer-term strategies. At this juncture the
conservative camp is trying to put the best face on the defeat pointing
to the substantial--43 percent--number of "yes" votes and interpreting
the defeat as a referendum on Pinochet himself and not on the gains made
In assessing prospects, the Intelligence Community agrees that:
-- The impending December to February vacation period will give both
sides breathing space to work out internal differences and reduce
tensions.
-- The "no" vote forces will probably be able to maintain their
unity for the next few months. The opposition has agreed to back
one candidate--who will be selected from the Christian Democrats,
possibly by early December--in the December 1989 election. The
opposition also intends to press the regime for an earlier
election date and for other constitutional reforms intended to
reduce the influence of the military over the next government.
-- If the moderates fail to make some headway with the regime on the
issue of reforms, it willl make their task of holding together
much more difficult and probably prompt the Communists to abandon
their modera ort to violence against the
government.
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-- If the opposition can remain unified, however. no regime
candidate will be able to win the election.
The Intelligence Community was divided, however, over whether
Pinochet would be able to hold firm to his position not to enter into a
dialogue with the opposition on constitutional reforms. Some analysts
believe that Pinochet will be forced to make at least some concessions to
the opposition and that he will not be able to stage-manage events
because his weakened position will embolden other Junta members who
support a moderate course. While a decision to move up the election date
would be unlikely, Pinochet might be forced to agree to changes in the
constitution in areas such as the amendment process or the composition of
the Senate. Other analysts believe that Pinochet will be able to stand
his gound, arguing that his power was only modestly affected by the.
defeat and that other Junta members will be disinclined tin take on the
President on these issues and prompt military infighting.
Warning Issue: Moderates will probably lose ground to the far
left--prompting an increase in violence--if Pinochet refuses to show
flexibility on political reform
Martin W. Roeber
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