NICARAGUA: DOMESTIC AND FOREIGN POLICY TRENDS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP93T01222R000300140001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 39
• Document Creation Date: December 27, 2016
• Document Release Date: January 17, 2013
• Sequence Number: 1
• Publication Date: February 1, 1988
• Content Type: MEMO

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Director of
Central
Intelligence
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Nicaragua: Domestic and
Foreign Policy Trends
Special Interagency Intelligence Memorandum
NI SIIM 88-.10002
February 1988
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NI SIIM 88-10002
NICARAGUA: DOMESTIC AND
FOREIGN POLICY TRENDS
Information available as of was used
in the preparation of this emoran um, approved for ,
publication on that date by the Chairman of the
National Foreign Intelligence Council.
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CONTENTS
Page
KEY JUDGMENTS
1
DISCUSSION
3
Introduction
3
The Insurgency
4
Compounding Economic Problems
10
The Sandinista Reform Effort
10
Deteriorating Foreign Sector
11
Foreign Economic Assistance
11
Impact of the US Embargo
11
No Solution in Prospect
11
The Nicaraguan Political Scene
15
The Sandinistas
15
The Opposition
15
Sandinista Strategies
18
The Political Front
18
The Military Front
18
The Regional Diplomatic Front
24
The View From Managua
24
. . . And From the Region
24
ANNEX A: A Look at the Regional Peace Talks
27
ANNEX B: Sandinista Support for Subversion
35
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KEY JUDGMENTS
Nicaragua's Sandinista leaders are beleaguered by the most acute
problems they have faced to date, but recent developments have
enhanced their chances of consolidating power.
With extensive support, the anti-Sandinista armed opposition has
become an effective military force and has waged an increasingly
successful and widespread campaign of attacks, ambushes, and sabo-
tage. Moreover, the impact of the war combined with the Sandinistas'
internal mismanagement kept the economy on a bare survival footing
last year. Despite continued massive Soviet Bloc economic assistance
equivalent to one-fourth the country's gross domestic product, per
capita GDP fell by more than 5 percent in 1987, real income losses re-
duced the average Nicaraguan's purchasing power to less than half its
1977 level, and inflation soared to 13,000 percent in the last quarter.
The cutoff of US military assistance, however, .has dealt the
insurgency a serious blow. Its continued viability hinges on the uncer-
tain support of Honduras. Even assuming continued Honduran coopera-
tion, without renewed lethal deliveries, we estimate the number of
effective combatants inside Nicaragua would drop to perhaps 5,000 to
6,000 in the next several months. Operations would become more
defensive and more geographically limited. The southern and Atlantic
fronts would probably cease to exist. Renewed humanitarian assistance
would affect the pace, but probably not the ultimate level of decline.
For their part, the Sandinistas will step up efforts to destroy or ex-
pel the insurgents and to interdict overland resupply. The Sandinistas
are constrained to some extent by their continuing fear of i US invasion
and hindered by morale, discipline, and desertion problems. Nonethe-
less, small-scale Sandinista cross-border operations will probably in-
crease, although they most likely will stop short of major actions unless
the Resistance masses men and supplies so as to offer more lucrative and
accessible targets than in the past.
At the same time, while some elements of the domestic opposition
may continue to look for opportunities to test the limits of regime
tolerance, there is little likelihood that opponents can generate large-
scale demonstrations or force the regime to implement political reforms
beyond those required to assure a continued shutoff of US lethal aid.
The Sandinistas control the National Assembly, and their effective
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security apparatus neutralizes and intimidates dissidents. Thus, opposi-
tion elements will be more inclined to creeping accommodation with
the government, especially if the insurgency no longer challenges the
Sandinistas militarily. Managua is eager to appear in full compliance
with the Peace Accord and will rely on informal mechanisms?
semiofficial mobs and actions against low-echelon opposition figures?
to maintain its grip.
On the diplomatic front, we see little shift in Sandinista near-term
strategy. The Sandinistas will pursue cease-fire negotiations while
holding to demands that will put the insurgents at a strong disadvan-
tage, and continue to push for bilateral talks with Washington. The four
Central American democracies?most of which face growing domestic
difficulties in complying with the Peace Plan---=are unlikely, however,
to develop a unified strategy to put the Sandinistas on the defensive. If
the United States extends humanitarian aid the Sandinistas would see it
as an effort to continue the insurgency, and they might suspend talks
with the insurgents but not roll back internal political reforms.
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DISCUSSION
Introduction
1. We believe that, although Nicaragua's Sandinista
leaders are beleaguered by the most acute internal
security and economic problems they have faced since
winning power in 1979, developments in recent
months have considerably enhanced their chances of
consolidating Marxist-Leninist rule. Their improved
prospects result not only from the recent denial of
continued US military assistance to the antigovern-
ment insurgents, but also from their success in skill-
fully pursuing more flexible policies in dealing with
their domestic opposition, the leaders of the other
Central American nations, and international pressures
and opinions
2. Since the Presidents of Nicaragua, El Salvador,
Honduras, Guatemala, and Costa Rica met in Guate-
mala last August, the Nicaraguan Government has
made several symbolic and conditional concessions in
order to appear in compliance with the regional peace
process that was given impetus at that time. They
ended a protracted state of emergency, suspended the
prison terms of hundreds of their opponents, allowed
the major opposition newspaper La Prensa to begin
publishing again, abolished the feared revolutionary
tribunals, and?after repeated delays and machina-
tions?entered into direct talks with representatives of
the insurgency
S. Although none of these or other moves the
Sandinistas have taken since the Esquipulas II meet-
ing?and the summit in San Jose, Costa Rica, in
January?have reduced the government's monopoly of
power, they have lent credibility to a growing interna-
tional perception that Nicaragua is willing to make
important concessions conducive to internal pluralism
and amicable coexistence with its neighbors. We be-
lieve, however, that President Daniel Ortega; his
brother, Defense Minister Humberto Ortega; Minister
of Interior Tomas Borge; and other top Sandinista
leaders continue to share a fervid commitment to
Marxist-Leninist doctrines and goals in their domestic
and foreign policies
4. For the moment, the Sandinistas' armed adver-
saries and other domestic opponents have been dis-
couraged , by recent developments. In particular,
doubts about the long-term viability of the insurgents
will almost certainly increase and result in reduced
popular support for their cause, as well as substantial
erosion in the size and effectiveness of their forces. In
addition, leaders of already fractious civilian opposi-
tion parties and groups?although somewhat embold-
ened by the greater freedom of assembly and expres-
sion they have been allowed in recent months?
remain pessimistic about their prospects. Most no
doubt fear that, if the insurgency collapses, the Sandi-
nistas will be invulnerable to other sources of domestic
pressures
5. We believe, furthermore, that other Central
American leaders and democratic institutions?partic-
ularly in Honduras and El Salvador?have also been
made more vulnerable because of recent develop-
ments. Doubts about the reliability of US policy and
commitments have mounted, especially in Honduras,
and leaders and elites throughout Central America are
probably reevaluating their own priorities. In addition,
the regional peace process has given impetus to greater
political uncertainties?particularly in El Salvador?as
radical opposition leaders and forces have become
more directly involved in overt political activity.
6. Guerrillas and radicals in Central America?
particularly in El Salvador?have long been the recipi-
ents of clandestine Sandinista support, and informa-
tion from various sources suggests that, despite Mana-
gua's pledge to terminate aid, it continues in various
forms. We believe that, despite commitments they
have made in the regional Peace Accords, the Sandi-
nista leaders remain united in their long-term commit-
ment to revolutionary internationalism, and that in the
foreseeable future they will be unlikely to terminate
their assistance to and collaboration with leading
regional insurgents and radicals.
7. The Azcona government and military command-
ers in Honduras will also be confronted by tough
problems?and choices?over the next several weeks.
Leaders in Tegucigalpa have long considered their
support for the Nicaraguan insurgents a potentially
grave liability, and they will now have to decide how
to balance the commitments they have made in the
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peace process with their antipathy toward the Sandi-
nistas and their more than six-year-old commitment to
providing sanctuary and other crucial backing to the
insurgents.
8. Over the short term, the following key variables
will be important determinants of how US interests are
affected:
? US initiatives and capabilities to provide assis-
tance to the Nicaraguan insurgents.
? Honduran willingness to continue to provide
sanctuary and support to the insurgents.
? Sandinista performance in dealing with Nicara-
gua's severe economic problems and the more
vocal and better organized expressions of opposi-
tion to the government.
The Insurgency
9. With extensive support, the anti-Sandinista
armed opposition has become an effective military
force and has waged an increasingly successful and
widespread campaign of attacks, ambushes, and sabo-
tage, although it is still not operating in the core
Pacific lowlands. In their principal areas of operation
in northern and central Nicaragua, the insurgents in
the last year sustained a large force presence?be-
tween 10,000 and 14,000 men?and have maintained
the tactical initiative. Their improved performance
has increased the regime's casualties and economic
costs and clearly stretched the capabilities of its armed
forces. Combat action last year increased by 40 per-
cent over 1986. Although the majority of insurgent-
initiated actions has focused on relatively small, lightly
defended objectives, recent operations have clearly
demonstrated an increased insurgent capability to
conduct occasional large-scale operations against mili-
tarily important targets
10. Despite a concerted Sandinista psychological
warfare effort, insurgent morale and cohesiveness
remained sound through 1987. Few combatants have
accepted amnesty from the government, and there
currently are no indications of large numbers of
fighters abandoning the struggle. The insurgents ap-
pear to enjoy considerable popular support in central
and northern Nicaragua. They have begun giving
greater emphasis to small-scale civic action, and there
are increasing reports that they are able to count on at
least some of the rural population for active assistance
in the form of food, medical support, and intelligence
on Sandinista troop movements.
11. Despite these gains, insurgent recruitments have
only managed to keep pace with losses, and the
insurgency remains confined largely to rural areas of
the country. The insurgents apparently are attempting
to establish internal front cells outside their normal
areas of operation, but they have been largely unsuc-
cessful in the face of the government's strong counter-
measures.
12. The insurgents remain highly dependent on
external logistic support and an increasingly tenuous
aerial resupply system. Sandinista air defense capabili-
ties are posing a growing threat to the latter and are
adversely affecting insurgent capabilities. Operations
security by insurgent ground forces in preparation for
resupply drops also remains inadequate and was a
factor in the January shootdown of an insurgent DC-6
aircraft in southern Nicaragua.
13. Without aerial resupply, the insurgents will
have to rely on a still embryonic overland network and
caches inside Nicaragua. They probably have ade-
quate ammunition to sustain a reduced level of opera-
tions in the coming months, but access to food stocks in
country is far less certain. The insurgents' viability will
largely depend on Tegucigalpa's willingness to allow
them to expand their logistic infrastructure along the
border and to return to Honduras, at least periodically,
to refit and replenish supplies.
14. Even under favorable local conditions, but lack-
ing a renewal of lethal aid from the United States, the
insurgents will be forced to adopt a more defensive
strategy. This will permit the Sandinistas to regain the
tactical initiative and operate with greater impunity
against insurgent units. Logistic and associated security
functions will tie down perhaps a third or more of the
insurgent force and will decisively lessen its offensive
capability. Transporting supplies to units in central
Nicaragua?where the insurgents enjoy their greatest
success?will be extremely difficult and may require a
pullback of those forces to shorten supply lines. Doubts
about the insurgency's long-term viability will almost
certainly increase and result in less popular support.
The ability to recruit will be diminished both by more
limited areas of operation and popular perceptions,
resulting in a gradual erosion of strength even under
favorable local conditions
15. Attacks on government supply depots would
help alleviate shortfalls, but will be more difficult to
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z
The Honduran Lifeline
For at least the next several mouths, Honduran
sanctuary is the key to maintaining the Nicaraguan
insurgency as an effective fighting force. If Honduras is
used as a resupply base, then the Nicaraguan Resistance
can probably maintain itself?even absent any further
US Congressional action?as a viable combatant group
although at substantially reduced levels. If Tegucigalpa
were to deny effectively all sanctuary and support to
the Resistance, the organized insurgency would almost
certainly collapse, although some remnants would con-
tinue fighting in remote areas.
Since the 3 February vote against further funding,
the Honduran Government has vacillated. It initially
demanded that the Resistance attempt to go it alone
without any use of Honduran territory. More recently,
it presented a more accommodating policy in which
there would be further cooperation in exchange for a
signal?undefined by Tegucigalpa?of continued US
Government involvement and ultimate responsibility.
Simply put, the bottom line for Honduras is to avoid
being left holding the bag as:
? The last ally of a US Government policy that ends
in failure, leaving it isolated diplomatically and
politically in Latin America.
? The primary target of a resurgent Sandinista
government that, freed from its concentration on
the insurgency, would use its military power and
subversive network to undermine the Azcona
administration.
? The ultimate sanctuary for an insurgent-associated
refugee flow that could number in the tens of
thousands. This would overwhelm its legal, mili-
tary, and ,economic resources, resulting in a tre-
mendous domestic backlash against incumbent
civilian and military leaders.
The Hondurans are boxed in by their past policy
choices. Thus, despite periodic bouts of unease and
dissatisfaction with US policies that have led to pres-
sures against the Resistance and the demands of Wash-
ington, Tegucigalpa's self-interest?to maintain the Re-
sistance as a buffer against Managua and avoid the
chaos that might result from its rapid dissolution?
won out.
The margin for Honduran acceptance of any for-
mula, however, has grown razor thin. Major military
figures have now firmly staked out positions opposed to
continued Honduran involvement in the insurgency
program. Honduran acquiescence from this point for-
ward will be subject to quick reversal and depend on its
monitoring of the field situation in Nicaragua and its
reading?frequently flawed?of the political winds in
Washington. Other factors influencing Tegucigalpa will
be Nicaragua's success in using verification mechanisms
as effective pressure and whether the other Central
American democracies?Guatemala, El Salvador, and
Costa Rica?give it some form of support for its backing
of the Nicaraguan insurgents.
Insurgent command and control,
tinny, cl111.1 u1a1pI11 e will be sorely tested as tactical
commanders compete for scarce resources in the face
of heavy military pressure. If casualties mount and
there is no prospect of renewed aid, some commanders
will abandon the struggle
16. Without renewed et a e iveries, insurgent
strength almost certainly will erode, with the pace
affected most substantially by action on humanitarian
aid and the stance of the Hondurans. The largest
insurgent faction, the Nicaraguan Resistance Army--
North, currently claims a total strength of nearly
17,000, 12,000 of whom reportedly are inside Nicara-
gua. A review of delivery rates, however, indicates
that the number of its effective combatants?those
properly outfitted and armed and able to operate on a
continuous basis?is lower, perhaps averaging some
8,000 to 9,000 over the last six months. Without
renewed lethal assistance, we expect this number will
drop to some 5,000 to 6,000 over the next several
months, reflecting both the insurgents' tactical need to
conserve resources as well as its hardcore supporters.
17. Moreover, we see little prospect that the north-
ern group will be able to continue to supply the
smaller, less effective guerrilla factions in southern
Nicaragua and along the indigenous areas of the
Atlantic coast. Without such support, we expect the
southern group of some 1,800 men to cease to func-
tion. The coastal Indian groups will splinter even
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further?one of the Indian leaders from the coast
reached a tentative cease-fire agreement with the
government in February?and only a few small bands
are likely to survive from its present effective strength
of about 500
18. In the absence of lethal or humanitarian aid, the
decline to a 5,000- to 6,000-man force level in Nicara-
gua would be more rapid. Should Tegucigalpa at the
same time effectively pressure the insurgents to end
their use of Honduran territory, then force levels
would probably dwindle to 3,000 effective combatants
within three months. Even under this adverse scenario,
insurgent numbers might run as high as 5,000, and the
drawdown might extend over six months if the insur-
gents have cached large amounts of materiel inside
Nicaragua, an unlikely circumstance, but one which
we have insufficient data to evaluate.
19. Maintaining unity will be a formidable chal-
lenge for the Nicaraguan Resistance, which was estab-
lished in May 1987 as the preeriiinent political body of
the insurgent movement. The expanded Resistance
Directorate has been more cohesive and representative
than its predecessor organization, and its members
have avoided open splits over major issues. They have
expanded ties to regional leaders and internal opposi-
tion figures, although they have yet to attract broad
grassroots backing inside Nicaragua.
20. The cutoff of aid threatens the cohesiveness of
the directorate, which will be read as a measure of the
political and long-term viability of the entire Resis-
tance. In planning their strategy for cease-fire talks
with the Sandinistas, the more moderate directors will
be likely to push for increasing accommodation with
the Nicaraguan Government as funds begin to dry up,
and they may now even consider returning to Mana-
gua. Alfonso Robelo, who withdrew from the director-
ate in January, has been quoted in the press as
considering a return to Nicaragua, and Aristides San-
chez recently broached the possibility of completely
abandoning the armed struggle. Because two key
directors?Adolfo Calero and Alfredo Cesar?repre-
sent distinct viewpoints, arguments in negotiating
strategy are likely to intensify and could threaten the
balance of the directorate. We believe the directors
will work toward maintaining unity in the short term,
but the pressures promoting disunity will gradually
intensify. Defections at this level will not ipso facto
result in massive troop desertions, but would be a
contributing factor in prompting commanders to reas-
sess their allegiance
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Figure 1
Insurgent Operating Areas, February 1988
Boundary representation is
not necessarily authoritative.
TEGUCIGALPA
onduras
Goff? de
Fonseca
cis
La as ireengt ...
as
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Ocotal \ \ ? .?.\ \ \ \ \\\?
El
Salvad
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set\ \ \ \\\\\\ ,\
\\
tMatagatp \\"\\\\"
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tia
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?Boaco \\ \ \ \ \?
\\\\\\ \\\\'
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.\-\\\\\\\\\\
\?\\\ ,\?4,
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MANAGUA
North Pacific
Ocean
Puerto Cabezas
Caribbean
Sea
ERN-North (Nicaraguan Resistance
Army-North)
ERN-South (Nicaraguan Resistance
Army-South)
Yatama (Atlantic Coast Indian
Organization)
San Carlos
Concentrated insurgent activity
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Figure 3
Nicaragua: Insurgent Activity by Type,
October 1986 -December 1987
Percent .
Sabotage 6
Attacks 9
Ambushes 31
Meeting
engagements
54
316107 2-88
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Compounding Economic Problems
21. The impact of the war?combined with the
Sandinistas' internal mismanagement?kept the econ-
omy on a bare survival footing last year, and the
apparently accelerating downturn will continue to
defy solution. claims
per capi a ULM tell by more than 5 percent in
1987, reducing overall economic activity to more than
one-third below prerevolutionary levels. Combined
with real income losses in earlier years, the average
Nicaraguan's purchasing power is now less than half its
1977 level. Inflation skyrocketed in the final months of
1987, soaring to an annual rate of 13,000 percent
during the quarter ending in January 1988. Inflation
drove real wages for salaried employees to just 6
percent of their 1980 level by December 1987, forcing
the vast majority of Nicaraguans to trade in the black
market for basic goods. The war also forced the regime
to curtail politically beneficial development projects,
and to redirect virtually all public investment toward
the military infrastructure
22. Shortages of raw materials and other producer
inputs intensified during 1987. In particular, critical
fuel shortages in recent months?caused primarily by
a large increase in military consumption?have forced
factories to close and hampered the harvesting and
processing of this year's export crops. The US Embassy
reports that a lack of pesticides and fertilizers has
dramatically reduced many crop yields. A power crisis
caused by fuel oil shortages, drought, and disabled
equipment added to production problem
The Sandinista Reform Effort
23. In May, the Sandinistas began lifting some
controls on the distribution of consumer goods in an
effort to ease shortages. Producer prices were periodi-
cally increased throughout the year and some restric-
tions on farmers and manufacturers were eased. Nev-
ertheless, many private producers still complain
publicly that the Sandinistas maintain a monopoly on
economic decision making. According to the US Em-
bassy, several private-sector leaders?suspicious that
the regime had initiated a divide-and-conquer ap-
proach?turned down lucrative offers by the govern-
ment to reestablish private cotton farms
24. In mid-February 1988, the regime instituted its
most sweeping economic reforms in several years in an
effort to slow inflation and restore some of the con-
sumers' lost purchasing power. The reforms included
the issuance of a new currency, creation of a single
exchange rate for all imports and exports, and a five-
Pro-Sandinista Organizations
Sandinista National Liberation Party
? Membership estimated at 20,000 to 30,000.
? Prerequisite for preferential access to jobs, school-
ing, government services.
? Membership confers economic privileges.
? Holds 61 of 96 seats in National Assembly.
Sandinista Defense Committees
? Organized nationwide.
? Neighborhood block committees modeled on
Cuban Committees for Defense of the Revolution.
? Used to surveil, control, and mobilize population.
Sandinista Youth
? Membership composed of party activists in teens,
twenties, and thirties.
? Hardcore source of support for regime; mobilized
for progovernment demonstrations and mobs.
Confederation of Sandinista Workers
? Main instrument of worker control and mobili-
zation.
? Membership unknown, but includes all govern-
ment workers, employees of parastatals, as well as
many private-sector workers.
Association of Nicaraguan Women
? Regime front; ostensibly nonpolitical.
? President Lea Guido is a party activist and mem-
ber of Borge faction.
Coordinator of Nicaraguan Professional Associations-
Heroes and Martyrs
? Membership about 15,000 to 18,000; composed of
most government professional and university
employees.
? Not officially an organ of the ruling party, but is a
front; sole -independent- activity advocacy of
higher professional salaries and exemption from
official wage scales.
fold increase in average wages. The government re-
tains nearly all its controls over the economy, however,
and did not take actions to reduce the deficit, the key
to controlling inflation. According to press reports,
black markets sprang up almost immediately after the
latest reforms were decreed, and dollars were selling at
10 times the official rate
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Deteriorating Foreign Sector
25. Preliminary data suggest that hard currency
export earnings probably declined last year. Rapidly
expanding trade ties to the Soviet Bloc?which last
year absorbed 40 percent of Nicaragua's exports?and
the Sandinistas' increasing tendency to finance imports
by preselling exports are responsible for reduced cash
earnings. Soviet Bloc countries, instead of paying cash,
have been applying Nicaraguan exports as partial
a ment for their economic assistance to Managua.
Foreign Economic Assistance
26. The economy depends on substantial Commu-
nist Bloc assistance. Preliminary figures indicate that
economic aid from the Soviet Bloc declined slightly
last year, but still exceeded Nicaraguan export reve-
nues and aid from all other sources combined. Mana-
gua undoubtedly was disappointed that the USSR did
not increase aid in 1987. In January 1988, Moscow
signed an economic assistance package to provide
Managua with at least $300 million per year in aid
during the period 1988-90. Nevertheless,
Moscow has grown
increasingly impatient with Sandinista economic mis-
management and is demanding more accountability.
27. Economic assistance from Western sources has
remained fairly stagnant with increasing aid from the
Scandinavian countries offsetting declining disburse-
ments from others. Sweden, Norway, and Finland
increased aid last year and now account for more than
half of all bilateral assistance from the Organization
for Economic Cooperation and Development (OECD).
Press reports indicate that several countries?includ-
ing West Germany and France?are considering reini-
tiating aid programs with the Sandinistas, pending the
outcome of the Central American peace talks
Impact of the US Embargo
28. Over the past year, the US trade embargo has
taken an increasing toll on Nicaragua's capital equip-
ment?especially its electricity generators?while di-
rect trade losses have declined slightly. Embargo-
induced trade losses fell to roughly $36 million in 1987
because the regime has become increasingly successful
at finding new markets and circumventing the sanc-
Nicaragua: Direct Costs Million US $
of US Sanctions
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1985 a
1986
1987
Total
34
44
36
Export Losses
20
28
21
Beef
5
9
5
Sugar
4
?4
Bananas
3
8
7
Airline
2
3
3
Seafood
2
3
1
Tobacco
1
1
1
Import Losses
14
16
15
Machinery and chemicals
10
12
11
Other
4
4
4
a Embargo phased in beginning 7 May 1985; costs are estimated net
foreign exchange losses.
tions. Most of the country's largely US-made equip-
ment, already rundown from a lack of investment and
misuse, is teetering from a shortage of spare parts.
Electrical generators are failing increasingly and as a
result are causing blackouts, rationing, widespread
factory closures, and lost wages.
No Solution in Prospect
29. The recent reforms, at best, will have only a
short-term impact. The Nicaraguan economy almost
certainly will continue to decline for the next quar-
ter?and the rest of the year, even if the Sandinistas
take the unlikely step of trying to implement structur-
al economic reforms. Deteriorated infrastructure and
years of regime mismanagement have devastated the
country's capacity to produce. Lack of public confi-
dence in the recent reforms and Managua's failure to
address the root causes of the country's economic
problems will mean a relatively quick return to very
high levels of inflation. Worsening consumer shortages
will fuel public discontent and could lead to more
support for opposition groups, including the Resis-
tance.
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Figure 5
Nicaragua: Economic Indicators
Note scale chanie
Per Capita Income
Index: 1977=100
100
Consumer Price Inflation
Percent
Export-Import Volumes
Index: 1977=100
M Imports 150
Exports
a Preliminary.
120
90
60
30
_I .i_
111111111111111
u1111111111111.
11111111111111
1979
81
83
85
87
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Figure 6
Nicaragua: Annual Economic Assistance
by Major Source, 1979-87 a
Soviet Bloc?Cuba
Latin America
- OECD
- Multilateral
- Middle East
0
1979
80
81
82
83
84
85
86
b
'Does not include aid from private and other minor donors.
b 1987 figures are estimated.
1979
80
81
82
83
84
85
86
87b
Soviet Bloc?Cuba 20
50
90
180
270
320
450
580
535
Latin America 50
150
300
230
220
120
80
40
40
OECD 85
140
80
95
100
90
80
75
80
Multilateral 50
120
120
65
86
75
50
35
40
Middle East 0
0
125
25
40
40
40
20
10
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Figure 7
Nicaragua: Export Earnings and Foreign
Economic Assistance
El Export earnings
Economic assistance:
Other
El Soviet Bloc?Cuba
IL 1
Million US $
800
r---
600
!MI=111=1,1,?.,
400
200
0
Foreign economic assistance is estimated.
1979 81 83 85 87'
316105 2-88
Figure 8
Nicaragua: Petroleum Sources
Percent
1981
Other 56
1984 1987 .
Mexico 46
Other 8
Soviet Bloc?Cuba
46
Other 6
Mexico 1
Soviet Bloc?Cuba
93
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The Nicaraguan Political Scene
The Sandinistas
30. The Sandinista Directorate has remained re-
markably cohesive despite the stress caused by the war
and the economic disaster. The Ortega brothers and
the "pragmatic" wing of the party associated with
them have incrementally asserted their dominance
over the "hardline" elements grouped around Interior
Minister Tomas Borge. For example, the Jaime Whee-
lock faction has lost independence and influence.
31. The rivalry between the Borge "hardliners" and
the Ortega "pragmatists" probably reflects personal
ambition more than ideological or strategic differ-
ences. The hardliners are generally less Concerned
with the image projected abroad and therefore are
more willing to use repressive measures against domes-
tic dissent, and they associate themselves more openly
with the Soviet Bloc. Daniel Ortega has no sympathy
for real political pluralism, but has recently displayed
a more sophisticated sense of timing and public diplo-
macy and is thus more inclined to make tactical
concessions that will help achieve strategic objectives.
32. There are signs that the concessions made at
Esquipulas II?in particular the decision to meet with
the insurgents?have aggravated these chronic differ-
ences. Even if there were no outright divergence over
policy, Borge may well try to exploit Ortega's seeming
"softness" toward the insurgents and remaining oppo-
sition elements as a means of reinforcing his waning
strength in the party. If Ortega's moves do not result in
a continued shutoff of lethal US aid, hardliners like
Tomas Borge could argue persuasively that he yielded
too much to the regional peace process and push for a
tougher internal line. Paradoxically, an opening of
political space to the opposition might enhance the
role and clout of Borge's Interior Ministry fiefdom as
the principal arm of internal control. We doubt,
however, that Ortega will push the opening to the
point of precipitating an intraparty crisis.
33. In the absence of credible polls or elections,
there is no reliable means of gauging popular support
for the government or membership in the Sandinista
organization. It is clear nonetheless that the regime has
the support of a substantial hardcore of ideologically
committed loyalists, as well as of others whose alle-
giance is based mainly on self-interest. The lack of
distinction between party and government gives the
Sandinista organization, with its front groups and mass
organizations, power and influence beyond mere nu-
merical strength. The Sandinistas have nearly two-
thirds of the seats in the National Assembly, allowing it
to control the legislative process without the assistance
of other leftist parties and collaborationist members.
34. The regime's internal security forces also re-
main strong, and Sandinista leaders reportedly are
confident that the Ministry of Interior apparatus will
remain capable of neutralizing any effort by either the
insurgents or the political opposition to develop cells or
strong party structures in key urban areas. Ministry
operatives continue to report arrests of alleged internal
front members and have used physical and psychologi-
cal coercion to extract confessions from suspects to
discourage would-be dissidents from actively support-
ing insurgent efforts. The Sandinistas continue to
expand their prison system. In the last year, five of the
seven penitentiaries have undergone major expansion.
Three more state security prisons, which house politi-
cal prisoners, have been added to the six existing
institutions, so the total number of prisons is now 16.
Forced relocations of the rural population and the
development of armed agricultural cooperatives are
part of the regime's ongoing strategy to deny the 25X1
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The Opposition
35. Although opposition to the Sandinistas might
constitute a popular majority, its inability to make
common cause continues to cripple its effectiveness
and render it vulnerable to Sandinista intimidation
and co-optation. Bitter personal rivalries have splint-
ered the largest parties?the Conservatives, Social
Christians, and Liberals?and have prevented any
leader from emer s a spokesman of a united
opposition.
36. The major vehicle for concerted action among
the nonviolent opposition, the Democratic Coordina-
tor, has been undermined by disagreements among its
members, its generally weak leadership, and the dispa-
rate aims of its members. The businessmen's associa-
tion, COSEP, has provided a limited degree of organi-
zational ability and has articulated private-sector
interests, but it frequently has been at odds with
Coordinator-member political parties and shares few
interests with the labor components. Since late 1987,
the Democratic Coordinator has improved in organiz-
ing opposition activities, and, in January, several of its
leaders traveled to Guatemala for an unprecedented
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Opposition Groups in Nicaragua
The main opposition coalition--the- Democratic Coordinating Board (CDN)?is composed largely of moderate and
conservative political parties that boycotted the 1984 general election. Several anti-Sandinista business and labor
organizations also are board members. New opposition groups outside the scope of the CDN have appeared in recent
months. The so-called legal opposition is dominated by ideologically left-of-center parties but also includes several
leftwing extremist groups.
Democratic Coordinating Board
Social Christian Party (PSC)
Most prominent internal opposition party. Party
rocked by internal divisions, presidency claimed by
two contenders. One party leader recently went into
exile. Under heavy pressure from regime; local orga-
nizers inducted into Army. Has ties to Christian
Democratic parties in Europe and Latin America.
Democratic Conservative Party of Nicaragua (PCN)
Was largest opposition party under former dictator
Somoza. Highly factionalized, poses little threat to the
regime. Breakaway faction under banner of Democratic
Conservative Party (PCD) works with regime and is
represented in Sandinista-dominated National Assembly.
Social Democratic Party (PSD)
Party -beginning to deteriorate. Former leader recently
went into exile. Has little support outside Managua.
Constitutionalist Liberal Party (PLC)
Least influential party in CDN. Untested source says
party has agreed to cooperate with anti-regime faction
of PCN.
Liberal Party (PALI)
Created last year by former businessman. Trying to gain
allies among CDN members, particularly faction of PSC.
Superior Council of Private Enterprise (COSEP)
A private-sector umbrella group formed in 1972. Broke
with FSLN in 1980 and is now opposition voice of
middle- and upper-income members of the CDN.
Nicaraguan Workers Central (CTN)
Split into two factions. Largely inactive.
Confederation for Labor Unification (CUS)
Considers itself a major target of Sandinistas. Solidly
structured and well-financed. Affiliated with AFL-
CIO. Leaders spend little time in Nicaragua.
The Catholic Church
Not formally part of internal opposition, but leadership
generally critical of Sandinistas and supportive of inter-
nal and external opposition.
The FSLN controls 61 of 96 seats.
b All political parties except MAP-ML are members of a multiparty bloc
formed to dialogue with the FSLN under provisions of the Central
American Peace Plan.
Other Anti-Sandinista Opposition Groups
Central American Unionist Party (PUCA)
Very small; inactive; cooperates with CDN, but not a
member.
January 22 Movement of Mothers of Political Prisoners
Recently formed human rights group. Participated in
antiregime demonstrations earlier this year. Sandinistas
have increased pressure on group.
Opposition Parties in the National Assembly
Democratic Conservative Party (PCD)
(14 seats in Assembly) a
Breakaway from main conservative party. Generally
supports regime but highly critical of constitutional
process. Has small anti-FSLN faction.
Independent Liberal Party (PL)
(9 seats in Assembly)
Leadership increasingly critical of Sandinistas but in-
cludes proregime faction.
Popular Social Christian Party (PPSC)
(6 seats in Assembly)
Broadly supportive of regime in past. Party leaders may
be taking more independent course.
Nicaraguan Socialist Party (PSN)
(2 seats in Assembly)
Moscow-line Communist party. says party
constantly fluctuates between pro- an. inista and mar-
ginally anti-Sandinista positions.
Communist Party of Nicaragua (PCdN)
(2 seats in Assembly)
Small, ultraleftist party.
Popular Action Movement?Marxist-Leninist
(MAP-ML) b
(2 seats in Assembly)
Ultraleftist party critical of regime for moving too
slowly toward Communism.
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dialogue with the Resistance. The Coordinator has also
cooperated with other opposition elements in forming
a larger coalition?which includes radical leftist par-
ties that consider the Sandinistas too "bourgeois"?to
press for constitutional reform.
37. The independent labor unions, especially the
Confederation for Labor Unification, have become
somewhat more aggressive since the Esquipulas II
meeting, and have formed a coalition in hopes of
benefiting from the Central American Peace Accord.
Unions have made a few tentative efforts at strikes and
have made some modest gains, but their overall
attitude is still one of caution
38. The regime's virtual monopoly of the media has
at least temporarily ended following the reopening of
La Prensa?the prestigious independent daily?and
Radio Catolica. Both remain heavily dependent on
external financial support and are vulnerable to a
variety of government pressures, including outright
censorship. La Prensa, although it has boosted circula-
tion, has lost some of its credibility by printing
inaccurate stories and indiscriminate attacks on the
Sandinistas, and it is unclear to what extent it can
expand its influence beyond its present following. The
Sandinistas still refuse to license any competing televi-
sion stations, despite their implied commitment to do
so in the Esquipulas II accord, and continue to domi-
nate radio news?far more important than print me-
dia in reaching the general population
39. The Catholic Church is generally regarded as
the government's most formidable opponent, and Car-
dinal Miguel Obando y Bravo is widely acknowledged
as the de facto leader of the opposition. The church
has not assumed an overtly political role, however, and
its primary support for the opposition is in lending it
moral authority. Moreover, past confrontations with
the regime have demonstrated its vulnerability to
Sandinista reprisals, and some bishops and clergy not
directly subject to the Archbishop's authority sympa-
thize in varying degrees with the regime.
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40. Obando's room to maneuver has also been
limited by his acceptance of the mediator role be-
tween the Sandinistas and the insurgents. He continues 25X1
to consult with the latter and with internal opposition
forces, and lately has become more assertive in putting
forward his own proposals. But the Cardinal is con-
strained by the need to avoid an overtly pro-insurgent
stance in the dialogue. 25X1
41. Although the internal opposition plans to step
up protest activity, it is pessimistic about how long the
opportunity will last. The US rejection of lethal aid to
the insurgents may well prove a further psychological
blow to the opposition, lending added substance to its
fears of having to face the triumphant Sandinistas
alone. The practical result is likely to be creeping
accommodation and self-restraint. Most opposition
leaders have never believed they could overturn the
Sandinistas, and they are unlikely to become more
assertive if they interpret the US posture as tending
toward acceptance of Sandinista control
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Sandinista Strategies
The Political Front
42. Managua is eager to appear in full compliance
with the Peace Accord to avoid a renewal of lethal aid.
At home, the regime is likely to make further political
concessions for international consumption while cir-
cumscribing the opposition by less direct methods. The
Sandinistas, for example, may release more political
prisoners and set a date for municipal elections. In the
face of international pressure, the regime may even
agree to implement some of the reforms the opposition
alliance has demanded?such as naming a human
rights prosecutor?in hopes of luring some opposition
parties back into the national dialogue.
43. The Sandinistas want to deny the United States
any pretext to resume military assistance, and they
also want to build pressure for on-site verification of
insurgent bases in Honduras and for limited humani-
tarian aid to the insurgents. The Sandinistas probably
recognize they cannot afford to renege on their formal
commitments in the short term and are unlikely to
move against those institutions?such as La Prensa or
the church?or individuals whose symbolic stature
makes them readily visible to foreign scrutiny. They
may be less fastidious about going after lower echelon
or provincial opposition figures who attract less atten-
tion. They may also rely more on the informal repres-
sive apparatus?government-controlled mobs and
neighborhood committees?where official actions
would be embarrassing. To protect their international
image, the Sandinistas probably will continue to par-
ticipate in cease-fire talks, consider additional cosmet-
ic reforms, and solicit sympathetic countries to verify
their compliance. The regime continues to exercise
tight control through existing public security laws.
Opposition marches, for example, still require police
approval. Managua also has balked at discussing fun-
damental political reforms with dissidents and repeat-
edly has dismissed insurgents' demands to expand
cease-fire talks to include political issues. Moreover,
the regime continues to aid regional leftist groups
while keeping a low profile to avoid detection. Over-
all, we believe the Sandinistas will continue to resist
making significant, irreversible political concessions in
dialogues with either the internal or armed opposition.
The Military Front
44. Barring a favorable cease-fire arrangement, we
expect the Sandinistas will try to step up their efforts
to destroy or expel the insurgents. Over the past year,
the Sandinistas have followed a three-pronged strategy
that seeks to wear down the insurgents militarily,
interdict their resupply operations, and reduce the
prospects for active popular support. With no cease-
fire in place and insurgent forces in decline, efforts in
all three areas, and especially in the first two, will now
accelerate.
45. Soviet and Cuban military assistance to the
regime has remained high over the past year and has
continued since the peace process began. Nonetheless,
the Soviets appear to have kept direct deliveries of
major weapon systems to a minimum since last August,
presumably to avoid stimulating US support to the
insurgents. These military deliveries have provided the
Sandinistas with the wherewithal to withstand the
insurgent threat while concurrently developing their
conventional and reserve force structure. Although
units in the field continue to complain of spot short-
ages of fuel and munitions, the military establishment
is generally well equipped and continues to enjoy
firepower superiority over the insurgents.
Sandinista Ground Force Structure
Conventional Defense Forces:
2 tank brigades
4 tank battalions
4 mechanized infantry battalions
2 infantry brigades
2 tank battalions
6 infantry battalions
1 artillery brigade
1 group, BM-21 rocket launchers
3 groups, 152-mm howitzers
8 regional artillery groups
11 reserve brigades
6 militia brigades
Counterinsurgency Forces:
12 irregular warfare battalions
2 frontier brigades
17 light hunter battalions
49 permanent territorial companies
12 support bases
20 reserve/militia brigades a
a These brigades are not full-time active duty. Brigade headquarters
are responsible for exercising command and control over a designated
area, and may have none or several reserve or militia battalions under
its supervision at any given time.
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46. Forced conscription and mobilizations of re-
serve and militia elements give the government a large
military manpower pool superior to that of the insur-
gents. The regime, however, has not been able to
develop an adequate force ratio relative to the insur-
gents to defeat them. The regime continues to fear a
US invasion and is reluctant to draw down its conven-
tional force structure in order to support the counter-
insurgency effort. Faced with more sophisticated and
successful attacks, the Sandinistas are attempting to
draw more heavily on the large urban population on
the western coast to meet their expanding manpower
needs. However, they are having to rely more on
oppressive tactics to meet their mobilization goals and
are encountering increasing resentment and resistance
from the population. Morale, desertion, and discipline
problems persist throughout the military and are
adversely, but not decisively, affecting operations.
47. In the field, Sandinista forces have continued to
rely on large multibattalion sweeps to keep the insur-
gents on the move and to force them to expend
supplies. However, eve.n the Army's best counterguer-
rilla units are increasingly reluctant to close with the
insurgents or pursue them without committed artillery
or close air support. Combat losses of helicopters have
exceeded deliveries over the past year and have caused
the Air Force to become ,more cautious. The Soviets
are attempting to increase helicopter survivability by
providing new countermeasures equipment and may
be advising pilots on improved tactics. The regime also
has attempted to compensate by using AN-26 trans-
port aircraft?with little success?in a bombing role.
Despite these efforts, the Sandinistas' mobility and
combat air support capabilities have declined and in
recent months have slowed the pace of offensive
counterinsurgency operations. Nevertheless, the Army
remains capable of dispatching reinforcements to be-
seiged areas in sufficient time to prevent the insur-
gents from holding their objectives for extended peri-
ods.
48. Acquisition and deployment of additional radar
systems and new air defense weapons are improving
the military's ability to identify and react to insurgent
aerial resupply operations. The insurgent destruction
of the radar facilities at Siuna in December 1987
decreased the regime's overlapping coverage but did
not decisively impair its overall capabilities. The Air
Force has developed a basic ground-controlled inter-
cept capability and has used this to vector armed
transports in pursuit of insurgent resupply flights. The
movement of all 36 of the regime's radar-directed air
defense guns to northern Nicaragua has forced the
insurgents to forego use of their forward drop zones in
the north-central part of Nicaragua and may have
contributed to a reduction in the intensity of insurgent
operations in that area. Counterinsurgency forces,
possibly equipped with the latest Soviet shoulder-fired
missile, the SA-16 Igla, shot down an insurgent DC-6
in the south in January, and similar teams are now
deployed in increased numbers near the insurgents'
principal drop area in the northern part of Nicaragua.
Insurgent pilots continue to fly but are reporting
growing numbers of near misses from Sandinista mis-
sile and ground fire.
49. We expect the Army will increase its effort to
push insurgent forces in the north further up the Rio
Bocay valley and will seek to interdict potential
overland resupply routes to insurgent units in central
Nicaragua. The Sandinistas also will undertake con-
certed psychological operations to weaken insurgent
resolve and undercut their popular support. Should a
cease-fire be established, we believe the military will
attempt to place its forces to monitor and control
insurgent resupply and to be in position to resume
offensive operations, should developments run counter
to the regime's interests.
50. Prospects will grow for increased Sandinista
reconnaissance and small-scale, cross-border opera-
tions. The military has continued such tactical activity
to collect intelligence and to position missile teams to
interdict insurgent aircraft. The pace of these opera-
tions has declined since November when the insur-
gents moved the majority of their forward base opera-
tions and personnel from the Las Vegas salient to the
more remote northern Bocay area. With insurgent
forces beginning to seek refuge in the salient area
again, we expect the number of these reconnaissance
operations will increase.
51. There are currently no indications the regime is
planning to resume large-scale operations into Hondu-
ras. Last August, the military did move artillery
elements forward toward the border in a manner that
presaged previous incursions, but these forces were
withdrawn after the insurgents abandoned the salient
area. We expect the Sandinistas will want to avoid
actions that would risk provoking Washington or
Tegucigalpa to take action favorable to the insurgents.
Chances for a large-scale operation would grow, how-
ever, should the insurgents receive new funding or
succeed in establishing support bases and overland
supply routes in the border area. Chances would be
greatest if the insurgents set up such bases in an area
like the salient, where the road network on the
Nicaraguan side of the border facilitates the regime's
ability to move and logistically sustain its forces. (s NF)
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Figure 9
Counterinsurgency Battalions, Early February 1988
Boundary representation is
not necessarily authoritative.
onduras
El
Salvad
TEGUCIGALPA
Ocotal.
MRI
Etteli
Golfo de
Fonseca
Potosi
.Matagalpa
MAII?VMAN
*Puerto Cabezas
Caribbean
Sea
District
uefields
North Pacific
Ocean
MR IV
Rivas.
Lago de
Nicaragua
Sao Carlos
=I Military region boundary
O 25 50 Kilometers
O 25 . 50 Miles
C o c a
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Figure 10
Sandinista Active Duty Force Strength,
Figure 11
Nicaragua: Communist Military Aid,
1980-87 1980-87 a
Thousand Million US $
80
600
500
60
400
300
200
20
100
ennnennm
0 0 1.6 9.4 11.2 13.9 20 20.8 22 21.7
1980 81 82 83 84 85 87
1980 81 82 83 84 85 86 87
Note: Over the past two years, Sandinista reserve and
militia units have assumed an increasingly
important role in local defense.
1987 Nonactive Duty Personnel:
Militia 8,230-28,975
Reserves 12,480-17,550
Total Military Establishment: 95,710-121,525
316110 2-88
a The figures listed below the bars indicate the amount
of military aid in thousands of metric tons.
316108 2-88
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Figure 12
Sandinista Air Defense
Air surveillance site
IN Bar Lock (98-nautical-mile range)
0 Flat Face (86-nautical-mile range)
...KS-19/S-60 AAA site
100 Kilometers
180 Miles
El
Honduras
TEGUCIGALPA
Ivador
gr
o
ea
-
ite
Caribbean Sea
Area formerly covered by
site destroyed in December 1987
4,4
Estell
?Siuns
?Matagelpa
Chinandega?
Nicaragua
North
Pacific Ocean
0
Rash..
ANAGUA
Masayaf Bluefiel s??
?
?
Rivas.
4111
.San Carlos
?Puerto Ulnas
Costa Rica
.,SAN JOSE
Boundary representation),
not necessarily tiuthoritellye.
hr
Panatila
0
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The Regional Diplomatic Front
The View From Managua ...
52. Managua probably calculates that increased
pressure for on-site verification required by the Cen-
tral American Peace Accord will further undermine
Honduran support for the Nicaraguan insurgents and
force it to seek a bilateral accommodation, as well as
deflect attention from its own areas of noncompliance.
The Sandinistas probably will intensify attempts to
include Canada and sympathetic West European
countries on inspection teams operating under the
auspices of an international organization. President
Ortega, who found only guarded European interest in
such participation during a five-nation tour in late
January, is planning a second trip to Europe in April,
53. The regime probably will pursue cease-fire
negotiations while holding to demands that essentially
require the insurgents to surrender. In order to convey
flexibility, Managua will continue to tie further con-
cessions?such as an invitation for insurgent leaders to
join the national dialogue to discuss political issues?to
the successful conclusion of a cease-fire. The Sandinis-
tas probably hope the insurgents will grow frustrated
and renounce the talks
54. The Sandinistas are also likely to continue push-
ing for bilateral talks with the United States, although
they probably have less interest in such discussions
now that lethal aid to the insurgents has been cut off.
Aside from demonstrating its willingness to negotiate,
the regime probably would pursue direct negotiations
with Washington in hopes of ending the trade embar-
go and obtaining economic assistance
55. Managua would see renewal of humanitarian
assistance that was not specifically aimed at bringing
insurgent combatants out of Nicaragua and winding
down the war as a thinly veiled decision by Washing-
ton to continue to support the insurgency, even if there
are restrictions on the deliveries of lethal assistance.
The Sandinistas might suspend talks with the insur-
gents, and they are likely to try to increase efforts to
use the Peace Accord to force Honduras to end its
support for the Resistance. Domestically, we believe
the Sandinistas would be unlikely to grant additional
concessions to the opposition, but they probably would
hesitate to use the aid as a pretext for a rollback of all
political reforms. In our view, internal policy debates
over how to react to a humanitarian aid package
would exacerbate tensions within the Sandinista Direc-
torate
... And From the Region
56. The four Central American democracies?Hon-
duras, El Salvador, Guatemala, and Costa Rica?have
lacked a clear and coordinated strategy to counter
Managua's well-orchestrated diplomatic initiatives and
to focus international attention on Nicaragua's failure
to democratize. Indeed, the Sandinistas' concessions
probably have been more successful in placing their
neighbors on the defensive. The Presidents of the four
democratic nations have even acknowledged they
lacked a clear picture of how the peace process would
evolve when they signed the agreement last August
because it provided only a general framework for a
final settlement.
57. The disarray among the democracies has been
heightened by domestic tensions arising from their
own efforts to comply with the Peace Accord. The
Hondurans, for example, are grappling with the Nica-
raguan insurgent presence, which is a major vulnera-
bility, and El Salvador believes it cannot give strong
backing to the anti-Sandinistas without undermining
its position relative to its own insurgency. Guatemala
clearly does not want to jeopardize the gains of two
years of "active neutrality"?including greatly in-
creased international prestige and promises of Europe-
an and Mexican aid?by harshly criticizing Nicaragua.
Costa Rican President Arias is the least vulnerable
among the democratic leaders, but he has opposed
insurgent military pressure on Nicaragua and believes
that Managua should be given reasonable time to
democratize.
58. We see little likelihood that the democracies
will be able to set aside the domestic problems posed
by the Peace Accord any time soon. Their willingness
to step up pressure on Nicaragua at the January
summit in San Jose, for example, probably reflected
the influence of US diplomacy, pressure from their
own militaries, and outrage at the biased report of the
International Verification and Followup Commission
rather than any coherent strategy. The Presidents
demanded immediate and total compliance with com-
mitments to democratization in language that was
clearly aimed at Managua but set no follow-on dead-
lines. They also directed that the Central American
Foreign Ministers assume principal responsibility for
verification, in effect abolishing the International Ver-
ification and Followup Commissions. Although the
democracies looked on the US Congressional vote to
cut off aid to the anti-Sandinistas as depriving Nicara-
gua of an excuse for noncompliance, they did not take
advantage of the Central American Foreign Ministers
meeting in mid-February to criticize Nicaragua pub-
licly.
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59. In our view, the lack of coordination will also be
felt as the democracies work to develop a joint position
on verification and arms control. Although they ap-
peared determined initially to retain control of the
verification process, they have been reluctant to con-
demn Nicaragua's attempt to circumvent the summit
agreement by organizing unilateral international veri-
fication. Recently, there have been signs some of the
democracies may be more accommodating to interna-
tional verification proposals. The democracies also are
ill prepared for discussions on security issues?which
the Contadora countries will mediate?and their pre-
vious proposals did not require any Nicaraguan disar-
mament.
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ANNEX A
A Look at the Regional Peace Talks
Cease-Fire
The Central American Peace Plan Framework,
Signed 7 August 1987
Free Elections
? Takes place in 90 days.
? -Within constitutional framework."
? No provision for direct talks with insurgents.
External Aid to Insurgents
? Governments will request cutoff of aid to irregular
forces to take place in 90 days; permits aid for
repatriation or relocation.
? Governments will request insurgents to refrain
from receiving aid.
? Governments reiterate pledges to prevent their
territory from being used by insurgents and to
refrain from giving or permitting military logistic
support for those -who try to destabilize" the
Central American governments.
Amnesty
? Takes place in 90 days.
? Insurgents( must release their prisoners simul-
taneously.
National Reconciliation Commission
? To be formed within 20 days from signature.
? Purpose is to verify fulfillment of pledges on
amnesty, cease-fire, democratization, and elec-
tions.
? Composition: one member and one alternate from
government, church, opposition parties, and lead-
ing citizens; government chooses church and oppo-
sition members from lists they provide.
Democratization
? Takes place in 90 days.
? -Broad, democratic, and pluralist systems," but
each nation has right to choose economic and
political system without foreign interference.
? Complete liberty for television, radio, and press;
no prior censorship; all ideological groups may
own and operate news media; full access to media
for political groups.
? All political organizations have right to organize
and hold public demonstrations.
? End state of seige/emergency.
? -Once the conditions that characterize a democracy
have been established," the governments must
establish free elections.
? Central American Parliament elections by July
1988; OAS, UN, and (unidentified) third states to
observe.
? Municipal, legislative, and presidential elections to
be overseen by international observers; schedule in
accordance with current constitutions.
Arms Control Talks
? Security and verification agreements to be negoti-
ated with Contadora mediation; talks to include
measures to disarm insurgents.
? (No date for termination of negotiations.)
Refugees
? Governments pledge to protect and aid; facilitate
repatriation.
Development
? Governments pledge to reach accords to expedite
development; joint negotiations for international
aid.
International Verification
? Purpose is to verify and follow up on provisions of
document, including reconciliation.
? Membership: OAS and UN Secretary General;
Central American, Contadora, and support group
foreign ministers.
? Will analyze progress within 120 days.
? Central American presidents to meet within 150
days.
Other
? Accord is a presidential agreement, not a treaty;
no provision for legislative ratification.
? Agreement is open ended.
? No sanctions for violations of agreement.
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Key Results of the San Jose Summit, 15-16 January 1988
Democratization: Presidents demand immediate and total compliance with commit-
ments to dialogue, cease-fire talks, general amnesty, and democratization. These include
the lifting of any state of emergency, total freedom of the press, political pluralism, and the
dismantling of special tribunals. The final communique thus rejects Managua's previous
attempts to condition compliance on the verified end of US aid to the insurgents.
Aid to the Insurgents: Honduran obligation to end aid to the anti-Sandinista insurgents is
implicit in demand for full compliance with peace commitments, but is given secondary
importance. There is no criticism of US aid to the Nicaraguan guerrillas or joint appeals to
the United States to respect the agreement.
Verification: Central American Foreign Ministers will review the report of the
International Verification Commission and replace the commission as the principal body
for verification. No progress is made on creating a border-monitoring force, but summit
participants agree to request outside technical help for the Foreign Ministers.
Central American Parliament: Importance of the parliament underscored, but no
timetable announced for elections.
Next Summit Meeting: No dates are given for review of compliance with summit
commitments.
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Chronology of Nicaraguan Cease-Fire and Verification Proposals
19 September 1987
Nicaragua presents detailed proposal for creation of political and security commit-
tees at the meeting in Managua of the International Verification Commission.
22 September 1987
The Nicaraguan Government announces a troop pullback from certain zones to
permit cease-fires with local guerrilla commanders. Within three weeks, the govern-
ment sets up some 200 local and regional peace committees to encourage guerrillas to
accept amnesty. Meanwhile, the Sandinistas maintain their opposition to meeting with
the insurgent leadership.
5 November 1987
On the day of the deadline for complying with the democratization and cease-fire
provisions of the peace agreement, President Ortega announces he will agree to
indirect cease-fire talks with the insurgents through an intermediary.
13 November 1987
Nicaragua announces an 11-point cease-fire plan. The Sandinistas offer to suspend
offensive operations for two weeks to permit the insurgents to assemble in three zones
by 5 December. The insurgents would surrender their arms by 5 January 1988 upon
international verification of government compliance with peace commitments. The
insurgents would be permitted humanitarian aid if delivered by an international
agency.
25 November 1987
The anti-Sandinista insurgents propose a cease-fire from 8 December-17 January.
At the outset, the government would be required to lift the state of emergency, decree
a full amnesty, take measures to democratize, and dissolve Sandinista neighborhood
committees and paramilitary security groups.
3-4 December 1987
After conducting separate talks with the government and insurgents in Santo
Domingo, Cardinal Obando calls for two short cease-fires to honor a religious holiday
and Christmas and for the government to make democratic reforms. The insurgents
accept Obando's proposal in principle, but the Sandinistas say all US and Honduran
aid to the insurgents must cease before they could accept.
21 December 1987
A second round of indirect talks in Santo Domingo is suspended when the insurgents
refuse the Sandinista demand that the insurgents meet with the government's foreign
advisers. The guerrillas agree to do so only if government representatives also
participate. Obando publicly endorses direct talks before the meeting.
24-25 December 1987
Both sides accept a Christmas truce and accuse the other of violating it.
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16 January 1988
President Ortega announces at the conclusion of the Central American summit that
he will immediately lift the state of emergency and conduct direct talks with the
insurgents. A full amnesty will be implemented after conclusion of a cease-fire
agreement.
21 January 1988
Nicaragua publicizes diplomatic note to the eight Contadora countries proposing
that Contadora representatives visit Managua on 27 January to verify steps taken to
comply with the summit agreement.
26 January-2 February 1988
President Ortega visits Spain, Italy, Norway, and Sweden to request their participa-
tion in verification of Nicaraguan compliance with peace commitments.
28 January 1988
The Nicaraguan Government and insurgent Miskito Indian leader Brooklyn Rivera
sign a communique in which they invite Canada, Costa Rica, Cuba, Denmark,
Finland, Holland, Norway, and Switzerland to be witnesses to their agreement and to
lend moral and material support to development on the Atlantic coast.
28-29 January 1988
At the first round of direct talks between the Sandinistas and insurgents in San Jose,
the insurgents endorse the Nicaraguan internal opposition's proposal for 17 constitu-
tional amendments and propose that the opposition participate in the talks. The
insurgents propose that the negotiations be concluded within 60 days, during which
time both sides would not acquire additional military supplies.
A new Sandinista plan would permit the insurgents to keep their arms for a short
period until international verification of Nicaraguan compliance. It also proposes
creation of an additional verification mechanism?composed of the Contadora
countries and international political parties?to guarantee political rights to insurgents
accepting amnesty.
18-19 February 1988
? At the second round of face-to-face talks between the insurgents and the govern-
ment, Cardinal Obando suspends negotiations when the government team does not
immediately endorse his cease-fire proposal. The Cardinal proposes that the govern-
ment grant a general amnesty, allow full freedom of expression, and reconsider forced
military conscription in exchange for a 30-day truce. Insurgent negotiators accept the
proposal in principle. President Ortega tacitly endorses the plan, although he says that
the Sandinistas would only grant amnesty and lower recruitment levels after a cease-
fire was implemented. Both sides say they are willing to reconvene at any time.
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Nicaraguan Compliance With the Central American Peace Plan
Compliance Areas of Noncompliance
Democratization
State of siege
Nicaragua lifted the state of emergency on
18 January.
Nicaragua failed to lift all political restrictions by the date specified
in the Peace Accord, 5 November. The Sandinista party newspaper
accused the opposition of -abusing the political space- created by
the peace agreement. In addition, in his statements to a labor group
on 13 December, President Ortega indicated that the Sandinistas
would not cede effective political power even if they were defeated
in a free election.
Restrictions on opposition activities
The opposition is permitted to meet in- The requirement that the opposition seek permission to hold
doors; outdoor marches and rallies are per- marches and rallies 72 hours in advance violates reasonable stan-
mitted with prior government approval. dards for freedom of assembly.
The Nicaraguan regime continues to physically harass members of
opposition groups. Examples include punitive application of mili-
tary conscription against oppositionists, assaults by pro-Sandinista
groups on protesting mothers of political prisoners, and the arrests
of opposition leaders who have met with the insurgents. In mid-
November, President Ortega publicly defended the activities of
Sandinista counterdemonstrators, saying they were carefully con-
trolled and had not killed anyone. Even after the lifting of the state
of emergency, Sandinista activists smashed windows at the head-
quarters of the opposition umbrella organization on 22 January
while police stood by.
The Sandinistas have actively encouraged a pro-regime faction to
take over the Independent Liberal Party, the second largest
opposition party in the National Assembly.
Freedom of the press
The government permitted the opposition The government has warned La Prensa on several recent occasions
newspaper La Prensa to reopen and pub- against publishing statements of insurgent leaders, a practice that
lish without censorship. contrasts with the ability of the guerrillas in El Salvador and
Guatemala to publish guerrilla communiques in the press. The
Sandinistas have also attempted to intimidate La Prensa by
accusing the newspaper of promoting violent opposition protests.
Two La Prensa employees were briefly detained by the police and
one reporter was beaten and warned against antiregime reporting
in October.
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Freedom of the press (continued)
The Sandinistas permitted the church ra-
dio station to reopen and?along with six
other stations?to broadcast news pro-
grams without censorship. On 26 January,
the government announced it would
broaden press freedom, allowing several
other stations to broadcast news.
President Ortega announced on 18 November that he would not
approve the request of private businessmen to open a television
station?arguing that many West European countries had a
monopoly.
Refugees
The government has invited all exiles to
return. The National Assembly repealed
legislation allowing the seizure of property
of those who have left the country for over
six months.
The government has refused to restore property to exiles who
return or reverse politically motivated confiscations.
Judicial procedures
Nicaragua abolished the anti?Somocista
Popular Tribunals on 18 January.
Prisoners continue to be held incommunicado and in conditions
that do not meet international standards, including recent accusa-
tions of torture. The government press has boasted that the end of
the special tribunals will have little effect on processing those
accused of counterrevolutionary activities. Moreover, justices on
Nicaragua's Supreme Court resigned to protest government non-
compliance with judicial orders.
Progovernment organizations
Sandinistas continue coercive pressures to join Sandinista mass
organizations, including labor and carnpesino groups.
Nicaragua continues to grant quasi-governmental functions to
Sandinista mass organizations, especially the Sandinista defense
committees.
Government-military ties
Nicaragua says it refuses to consider ending the subordination of
the Nicaraguan Army to the Sandinista party.
Free elections
Nicaragua says it will discuss with the-
opposition setting a date for municipal
elections. Nicaragua ratified the treaty for
a Central American Parliament and will
accept international observers to monitor
the election of delegates.
Electoral tribunal is Sandinista dominated.
National reconciliation
Nicaragua was the first Central American
country to form its National Reconciliation
Commission. It also established local peace
commissions in late September as part of
its strategy to promote a partial cease-fire,
split the insurgents, and co-opt local
church leaders. The government initiated a
national dialogue with opposition political
parties on 5 October.
Nicaraguan national dialogue talks exclude major opposition busi-
ness and labor groups. Fourteen .of the 15 opposition political
parties walked out of the talks on 15 December 1987 to protest the
Sandinista refusal to forward their joint proposal for constitutional
amendments to the National Assembly. The Sandinista action will
delay the implementation of amendments until at least early
1989?and probably later?since they must be approved in two
consecutive legislative sessions.
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Cease-fire
Nicaragua proposed an 11-point cease-fire
plan 13 November, and the insurgents
introduced a counterproposal 25 Novem-
ber. Cease-fire talks under the mediation
of Cardinal Obando took place in Santo
Domingo 3 and 21 December. Both sides
agreed to a Christmas truce, 24-25 Decem-
ber, and accused the other of violating it. A
third round of new talks took place 18-20
February in Guatemala.
On 20 January, the Sandinistas proposed
that an international commission guarantee
political rights after a cease-fire.
The Peace Plan does not detail the specific obligations of the
signatories, saying only that governments must? carry out -all
necessary actions- to achieve cease-fires permitted by their consti-
tutions. The Presidents of the Central American democracies
appeared to treat the Sandinistas' previous refusal to conduct direct
talks with the insurgents as noncompliance.
Nicaragua's unilateral invitations to Contadora and West European
countries to verify Sandinista compliance circumvents an agree-
ment at the January summit that the Central American Foreign
Ministers would have principal responsibility in all verification
- -
matters.
Amnesty
Nicaragua released 985 political prisoners
on 22 November. The government has said
it will release all prisoners?including f or-
mer National Guardsmen?upon a cease-
fire. In the absence of a cease-fire, Nicara-
gua will release prisoners to foreign
governments.
Nicaragua, unlike the democracies, has not released all political
prisoners by the date specified in the Peace Accord. The Sandinistas
also have not permitted international human rights groups access to
state security prisons. Democratic leaders have denounced Nicara-
gua's latest proposal, saying the concept of exile is incompatible
with full amnesty.
External aid to insurgents
Nicaragua continues to aid the Salvadoran insurgents and has made
no moves to persuade them to give up armed struggle.
International verification
Nicaragua is disposed to accept interna-
tional verification of all aspects of the
peace agreement and has attempted to
accelerate creation of an inspection mecha-
nism.
The Sandinistas unilaterally have attempted to arrange internation-
al verification of their compliance, violating an agreement at the
January summit that the Central American Foreign Ministers have
principal responsibility for verification.
Arms control
Central American and Contadora repre-
sentatives met in Caracas on 10 December
and agreed to meet again in Panama in
February.
Nicaraguan Defense Minister Ortega on 12 December confirmed
Sandinista plans for a massive arms buildup, including a 600,000-
man Army. Although President Ortega later said the buildup was
merely a proposal contingent on US actions, Costa Rican President
Arias is quoted in the press as saying it is not -in the spirit- of the
Peace Accord.
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ANNEX B
Sandinista Support for Subversion
Within Central America
Despite Managua's assertions to the contrary,
sources of varying reliability suggest that Nicaraguan
support for radical leftist and insurgent groups in the
region continues. The Central American Peace Plan
requires Nicaragua to end such aid, but the Sandinistas
believe the other signatories?Costa Rica, El Salvador,
Guatemala, and Honduras?will not be able to enforce
this provision,
El Salvador's Farabundo Marti National Liberation
Front remains the chief beneficiary of Sandinista
support. Sandinista leader Tomas Borge has continued
to provide the Salvadoran rebels with weapons and
other support?presumably ammunition-
the Sandinistas
Table B-1
Nicaraguan Support for Guerrillas and
Radical Leftists in Central America,
January 1987-February 1988
El
Salvador
Guatemala Honduras Costa
Rica
Military training X
Political/ideological X
training
Communications
facilities
Weapons and X X
ammunition
Funds X
Transit, infiltration X X
Residences, offices X X
Logistic support X
Medical support X
Funneling support X
from third countries
were planning to transfer 500 M-16s and 10,000
additional rifles to the insurgents as early as December
1987.
the Salvadoran rebels
continue to maintain communications facilities in
Nicaragua. Moreover, the Sandinistas provided mili-
tary training late last summer and autumn?including
the use of surface-to-air missiles,
although they have stopped short of giving
suc weapons to the rebels. Nicaragua also has provided
transit for Salvadoran insurgents trained in Cuba and
Libya,
Managua provided similar, albeit more limited
support to Guatemalan and Honduran leftists:
? The Sandinistas were training Guatemalan rebel
leaders as late as October 1987 by assigning them
to counterinsurgency battalions,
icaragua also continues to ship weap-
ons to t e rebels,
? The Sandinistas continue to provide funds to a
variety of Honduran leftist groups and allow
them to reside in Nicaragua
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Divisions within the Costa Rican radical left have
caused Nicaragua to diminish its support in recent
years. Past Sandinista support has included training,
weapons, cash, and logistics through the Nicaraguan
Embassy in San Jose.
Since the Peace Plan was signed in August 1987,
Managua has taken a number of steps?all easily
reversible?to mask its support and demonstrate its
compliance with the accord. Last autumn, for exam-
ple, the Sandinistas declined to fill a request by
Salvadoran guerillas for 1,000 AK-47 assault rifles and
500 RPG-7 rocket launchers to avoid possible US
detection,
Similarly, Managua ordered all
Salvadoran rebel factions last September to centralize
radio communications in a single facility under Sandi-
nista control to make it difficult for the United States
to claim that Nicaragua was violating the Peace Plan.
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n December that the
Salvadoran rebel presence in Nicaragua had been
curtailed only for propaganda purposes and that the
leadership would be allowed to return in the future
and continue their operations as before.
Elsewhere in Latin America
Nicaragua, working in tandem with Cuba, has been
a key source of training and support for leftists
elsewhere in the hemisphere. Guerrillas and other
leftists from Argentina, Chile, Colombia, the Domini-
can Republic, Ecuador, Mexico, and Uru ?ua have
received military training in Nicaragua,
Managua has also provided Colom-
bian and Peruvian rebels with weapons and other
material support, In
addition, Nicaragua facilitates contacts among Latin
American leftists.
36
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/17: CIA-RDP93T01222R000300140001-6
25X
25X1
25X1
25X1
25X1
25X1
?
Declassified in Part - Sanitized Copy Approved for Release 2013/01/17 : CIA-RDP93T01222R000300140001-6
Secret
Secret
Declassified in Part - Sanitized Copy Approved for Release 2013/01/17: CIA-RDP93T01222R000300140001-6