MONTHLY WARNING ASSESSMENT: LATIN AMERICA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B01027R000300060030-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 21, 2016
• Document Release Date: July 17, 2008
• Sequence Number: 30
• Publication Date: February 23, 1981
• Content Type: MEMO

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THE DIRECTOR OF CENTRAL INTELLIGENCE
NFAC-954-81
23 February 1981
MEMORANDUM FOR: Director of Central Intelligence
Deputy Director of Central Intelligence
THROUGH : Deputy Director for National Foreign Assessment
National Intelligence Officer for Warning
FROM : Assistant National Intelligence Officer for Latin America
SUBJECT : Monthly Warning Assessment: Latin America
1. Action Requested: none, for your' information only.
2. El Salvador
problems), could find it inc e y hard to cope
of materiel on which to draw. The security forces, still suffering from
major deficiencies (e.g., limited mobility, logistical and oraanizational
The armed struggle between insurgents and security forces remains
largely stalemated. Since the January offensive, the guerrillas have
combined their hit-and-run tactics, picking the time and place for engaging
the security forces. For the time being, there is little question that the
security forces can continue to contain the threat; but over time, their
prospects could become uncertain. Even if the insurgents' foreign arms
supplies are cut off for a time, they appear to have'on hand vast quantities
The effort to push a negotiated solution--now being talked up by a
leading spokesman for El Salvador's revolutionary front and by influential
figures of the left and center elsewhere in Central America, Venezuela, and
Europe--could be problematical. On the one hand, it may-represent concern
by El Salvador's left, stemming from the failed January offensive, US
assertiveness, and recent questioning of the left outside El Salvador. The
call for talks, if genuine, could reveal splits between the guerrillas--who
control the front and have shown no disposition to abandon armed struggle--
and the front's politicians calling for talks.
25X1
LOA I
State Dept. review completed
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On the other hand, if the momentum for negotiations grows, the
Salvadoran junta could encounter difficulties. Pressure to negotiate could
lead to strains between civilian groups and the military, who would agree
only reluctantly--if at all--to meaningful talks with the left. Yet, failure
to try negotiations--or at least appear willing--would have serious con-
sequences. The junta's international image would suffer yet another blow.
The Venezuelans, who have consistently supported the government, might begin
to rethink their position. Finally, some Western Europeans, who have recently
begun to reconsider their long hostility toward El Salvador's government
and toward US support for it, might well feel they had been deliberately led
astray by Washington, which has labored so hard to convince them the junta is
not unreasonable and hopelessly repressive.
3. Nicaragua
Relations with the Sandinistas could conceivably reach their most
crucial juncture yet, within the next several weeks. Nicaraguan actions
during that time could well determine whether Manuagua and the US can continue
to dialogue, or will reach a "showdown" over Nicaraguan aid to El Salvador's
insurgents.
Responding to the strongest demarche yet from Washington, the
Sandinistas now claim they are turning off that support. The Administration
has told the Sandinistas that failure to make good would result in a public
Presidential determination--delayed in their behalf--of complicity in aiding
foreign terrorists, and a definitive cutoff.of badly needed aid. The
Administration's unannounced timetable for verifying fulfillment--or definance--
is approximately 30 days.
Over the last ten days or so, we have been unable to verify further
Nicaraguan shipments of arms to the guerrillas. Nonetheless, reporting does
indicate they are actively seeking alternative means of supplying the
insurgents, undetected. Moreover, the Sandinistas see a leftist victory in
El Salvador as vital to their own survival, and are committed to helping assure
an eventual guerrilla win.
If, at the end of the "probationary" period, the President cites the
Sandinistas and declares the legally required aid cutoff, reaction'in Managua
will likely be severe. Sandinista hardliners could claim Washington's actions
"prove" that cordial relations with the US are not possible after all. Under
these circumstances, the Sandinistas likely would use the US as a scapegoat
in excusing economic failures, and for justifying a crackdown on domestic
opponents. Moreover, the US Embassy in Managua could become the target of
deliberate or spontaneous harassment or even force.
4. Ecuador-Peru Conflict
A long-standing but generally quiescent border dispute in a remote
area has brought these two countries to blows several times in the last few
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weeks. Ecuador appears to have instigated the current round of incidents,
which began in late January, by encroaching on territory generally regarded
as Peru's. The Ecuadorans then refused, for a time, to withdraw to uncontested --
territory, even while invited outside observers tried to arrange negotiations.
President Belaunde of Peru heads a military establishment that is
superior militarily and one which is anxious to "teach the Ecuadorans a
lesson". So far, Belaunde--Peru's first civilian chief executive since 1968--
has had no real difficulty in urging restraint, but the possibility of a
widened conflict does exist, unless negotiations make headway soon.
5. Brazil
Brasilia continues to have difficulty coming to grips with its
massive foreign debt ($55 billion by year-end 1980) and alarming inflation
(over 100 percent annually). It has taken some steps to restore the shaken
confidence of international lending institutions and foreign governments,
but may yet be obliged to seek help from the IMF--a move that could wound
nationalistic pride. The government continues its policy of gradual political
liberalization, but that process could be imperiled if Brasilia should move
to impose far-reaching austerity measures to stabilize the economy.
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