CENTRAL AMERICAN MONTHLY REPORT #6

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000901010001-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 22, 2016
• Document Release Date: August 31, 2010
• Sequence Number: 1
• Publication Date: January 1, 1984
• Content Type: MEMO

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DIRECTORATE OF INTELLIGENCE
January 1984
CENTRAL AMERICAN MONTHLY REPORT #6
Overview
Electoral politics are assuming increased prominence in Central
America, a development likely to fuel turmoil in the period just ahead. The
projected balloting nevertheless is likely to constitute a watershed in the
national life of El Salvador and Panama and to have important
consequences in Guatemala and Nicaragua as well.
In El Salvador, bitter partisanship will almost inevitably account for
new political violence during the campaign. The election process will in all
likelihood be accompanied by increased insurgent activity as well. We
expect the voting to proceed-though with difficulties in guerrilla-infested
areas-and to produce a government with enhanced legitimacy at home and
abroad.
The other elections are more problematical. In Panama, the process
as envisaged would ostensibly retire the military from their 15-year rule.
Even if, as we expect, the armed forces retain a strong political role, a
civilian government will provide an opportunity for Panama's transition to a
reasonably representative system. The new presidential bid by
thrice-ousted ex-President Arnulfo Arias, however, may cause the military
This memorandum was prepared by the Central America Branch, ALA. It was
coordinated with the Directorate of Operations. It contains information available as of 3
February 1984. Questions and comments are welcome and should be addressed to Chief,
Middle A merica-Caribbean Division, ALA,
ALA-M-84-1.0013C
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Central Intdliggnoe Agemy
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to renege on the elections or to mamma hem into insignificance as an
exercise in political competition.
Guatemala's movement toward constituent assembly elections offers
some prospect that the country can return to civilian rule. Nevertheless,
the military remains an unstable institution unlikely to provide consistent
support for political reform. And the most prominent civilian political
groups, which habitually engage in politics by assassination, inspire little
confidence that they could provide competent national leadership.
Nicaragua's announced elections similarly must be met with
skepticism, since the Sandinistas are unlikely to permit the kind of contest
that would alter their lock on power. The process, however, may
temporarily open the system sufficiently to provide some feel for where
support and disenchantment with the revolution lie.
Political
The six political parties in the Assembly have nominated their presidential
candidates, and the campaign is under way. Democratic Action was the last to hold its
nominating convention, waiting until 9 January in anticipation of forming a coalition with
the larger Christian Democratic Party, which also was slow to name its vice presidential
candidate. The tiny Salvadoran Popular Party and the Authentic Institutional party still
have not selected vice presidential candidates. Roth of these parties have little chance
of winning the election, and will likely throw their weight behind the Nationalist
Republican Alliance in the event of a runoff with the liberal Christian Democrats.
Party
President
Vice President
Christian Democratic Party
Jose Napoleon Duarte
Pablo Mauricio Alvergue
Nationalist Republican Alliance
Roberto D'Aubuisson
Hugo Barrera
National Conciliation Party
Jose Francisco Guerrero
Pio Arnulfo Ayala
Democratic Action Party
Rene Fortin Magana
Luis Nelson Segovia
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Salvadoran Peoples Party
a
Francisco Quinonez Av
Authentic Institutional Party
Roberto Escobar Garcia
Preliminary polls indicate that voter interest in the elections is high, and halloting
may again be heavy. The polls also indicate that Duarte and D'Aubuisson, who represent
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the two extremes of the registered political spectrum, are the front runners. Both are
controversial and divisive figures, and if either gains a first round majority, considerable
political turmoil may result. If a second round runoff of the top two vote-getters is
necessary, the support of the National Conciliation Party likely will prove crucial, and it
may add stability to the resulting government. The Party, is being courted by
D'Aubuisson but it is still uncertain which way it will go.
In other political developments, a split in the Popular Liberation Forces (FPL), one
of the largest of the five insurgent groups, appears to be widening and eventually may
affect guerrilla unity. Two dissident factions support the protracted war strategy of
former Popular Liberation Forces leader Cayetano Carpio and reject the current
leadership's position, which calls for negotiations on insurgent terms. The largest
faction, the Revolutionary Workers Movement, has severed all ties with the FPL and
represents at least half of the organization's membership. The other dissident faction is
the group's combat and logistic unit in the San Salvador area, which claims credit for the
recent assassination of a rightwing political deputy and generally supports a militant
strategy.
Military
The insurgents also are preparing military actions elsewhere.
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large numbers of guerrillas from all five factions are scheduled to
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arrive soon in the Guazapa stronghold near San Salvador to try to secure the area prior to
the elections. activities in the west also will be intensified.
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For its part, the Army has begun the next phase of the National Campaign in
Usulutan Department. Two elite "immediate reaction" battalions are sweeping the
western part of the department and they hope to follow up an expulsion of the guerrillas
with civic action projects, As in neighboring San Vicente,
however, success of the program will depend on the government's formation of civil
defense units to provide local security.
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Economic
El Salvador's four-year economic decline appears to have halted in 1983. The US
Embassy reports that real GDP last year remained roughly constant. The leveling-out
reflected three main factors, two of which were beyond Salvadoran control-rising ouput
of such basic crops as corn and beans for domestic consumption, higher prices for export
crops, and substantial US economic aid that helped manufacturers to import key raw
materials and other producer goods.
Fundamental improvement in the economy, however, is unlikely in 1984, according
to the Embassy. Although crop projections for 1984 suggest a gain in production of food
staples, the harvest of cotton and coffee-key export crops and targets of insurgent
action-will probably fall again. Markets for manufactured goods will continue to be
limited by the depressed state of neighboring economies, to which El Salvador has
traditionally exported most of its manufactures. 'Because about one-third of local bank
loans to the private sector are in default, the outlook for the banking sector remains
dim.
Political
The Sandinistas announced that national elections will be held in 1985 for a
president, vice-president, and 90-member assembly. All incumbents would serve six-year
terms, and the assembly will draw up a constitution in its first two years. The Council of
State is working on a draft electoral law and a media law, which probably will be ready
for the 50th anniversary celebration of Sandino's death on 21 February. An election date
will be announced at that time, and the Sandinistas are planning to invite several heads
of state to the celebration.
The opposition has taken advantage of recent relaxation of censorship to press its
demands that the Sandinistas must eliminate a variety of state and party controls and
conduct a dialogue with the armed opposition if the elections are to be considered free.
Nevertheless, the opposition was caught off guard by the Sandinista electoral
announcement, and has not developed a unified response. Church-state relations
deteriorated again as the month ended when the regime insisted that a Managua Catholic
high school reinstate 17 pro-Sandinista teachers who had been fired last month.
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The Sandinistas continued their efforts to take the sting out of the December
exodus of Miskito Indians to Honduras by publicizing statements of Bishop Schlaefer and
two Nicaraguan deacons that supported the government's account. Nicaragua probably
believes that Honduras will refuse its request to broadcast its amnesty decree in Miskito
refugee camps, thus embarrassing the Hondurans and providing an excuse for the Indians'
lack of response to the amnesty offer. Moreover, the Sandinistas have attempted to
deflect attention from a reported military incursion into Honduras to forcibly repatriate
refugees by airing charges that Honduran troops massacred some 200 Miskitos attempting
to return to Nicaragua.
National Directorate member Arce stated that the Cuban presence in Nicaragua
might be reduced in the future. In a Managua speech commemorating the 25th
anniversary of the Cuban revolution, Interior Minister Borge echoed this suggestion by
saying that only 800 of the 2,000 vacationing Cuban teachers would return to Nicaragua
in February.
Anti-Sandinista insurgents have apparently begun to make progress toward
unification, which will increase their prospects of gaining more domestic and foreign
support. The Democratic Revolutionary Alliance recently publicly proposed unification
of all groups and development of a political program to defeat the regime. Alfonso
Robelo told US Embassy officials that talks with the Nicaraguan Democratic Force have
been productive, and he expects agreement to be made public soon.
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Economic
Managua has succeeded in securing markets for its sugar that would more than
offset the reduced US quota on sugar purchases from Nicaragua.
Algeria-which heretofore apparently has not been a major
customer-has agreed to buy 80,000 tons of Nicaraguan sugar.
Algeria earlier had
expressed its willingness to buy at the US price-which at about $450 per ton is roughly
triple world market rates.
In addition,
=Managua expects Algeria to become Nicaragua s new main petroleum supplier. The
Sandinistas may fear that Mexico will demand far more stringent terms when its current
pledge to supply nearly all of Nicaragua's oil needs expires in July. Algeria would be
highly unlikely to match the Mexicans in footing most of the $140-million annual bill for
Nicaragua's oil consumption, although the Algerians may well offer the Sandinistas
attractive terms. Should the Sandinistas be required to pay world prices in cash for their
oil imports, the financial and economic strain would be enormous.
An expected Soviet delivery of crude oil to Puerto Sandino in late January has
failed to materialize. A Soviet tanker off-loaded $7 million worth of crude there in early
January, but additional deliveries may have been delayed by the insurgents' mining of the
port in mid-month.
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Political
Chief of State Mejia has issued a new electoral law preparing the way for a
Constituent Assembly election in July, and most political parties are turning to
organizational tasks in anticipation of the voting. Guatemala's strongest party, the
ultra-rightist National Liberation Movement, has agreed to an electoral alliance with a
smaller ri htwin group, and it is discussing a broad rightist coalition with two other
parties, Several leftist and centrist parties also are 25X1
considering an alliance The 25X1
government says almost 700,000 voters have been registered, mostly in Guatemala City,
and that it is moving now to register voters in rural areas. 25X1
If current trends persist, the traditional political parties-with well-established
constituencies and financial backing-are likely to dominate the balloting and control the
assembly. Mejia's decision to allow 23 of 88 assembly deputies to be elected as national
at-large candidates will work in their favor. Moreover, the provision of the law that
permits local "civic committees"-as well as political parties-to nominate candidates
may indirectly help the right wing by damaging the chances of new leftist and centrist
groups. The Western Highlands' Indians, long ignored by Guatemala's political system and
with little party loyalty, may support a host of "civic group" candidates well-known
locally instead of aligning themselves with the newly formed parties courting them.
Lastly, the registration process thus far has concentrated on areas that have been the
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Mejia did not accede to the parties' demand that the assembly have legislative
functions, including the power to name a provisional president, and his opponents may
claim that his opposition demonstrates his intent to remain in power. Some party leaders
also assert that the military's control over the civilian defense forces is paralyzing
political organizing in the countryside. They are concerned that the Army will
manipulate the votes of the estimated 500,000 patrol members, 25X1
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process, but perceptions of the legitimacy of the elections-at home and abroad-could
be undermined if such accusations continue. The government may ask several countries,
as well as the Organization of American States, to send election observers to help ensure
the integrity of the balloting. 25X1
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Economic
Guatemala has reopened its borders with El Salvador and Honduras following
favorable settlement of trade problems with the two countries. The US Embassy reports
that El Salvador has agreed to apply a more favorable exchange rate to some Guatemalan
exports and to repay its $38 million debt to Guatemala over the next five years. The
Salvadorans, according to the Embassy, acceded to key Guatemalan demands in order to
keep the border closing-which had escalated prices of fresh produce in El
Salvador-from becoming a political issue in the March elections. Guatemala's
border-closing dispute with Honduras, which had severely hurt some Honduran
manufacturers, also has been resolved.
Political
Honduras' long-standing border dispute with El Salvador is again causing tensions.
Language in El Salvador's new constitution, which implicitly denies Honduran territorial
claims in the Gulf of Fonseca, recently prompted outbursts of nationalist rhetoric from
Honduran officials. The Hondurans reject the constitution's reaffirmation of a 1.91.7
Central American Court decision delimiting sovereignty in the Gulf, which Honduras has
never accepted. In mid-January, Foreign Minister Paz Rarnica issued two strongly
worded diplomatic notes on the matter and told reporters that an electoral census should
be taken on Meanguera Island in the Gulf-long occupied by Salvadorans. He also
reiterated earlier remarks which were critical of the continued training of Salvadoran
troops at the Regional Military Training Center in northern Honduras.
Given the historical animosities between the two countries, officials in
Tpa twioAlna nrobahly consider this to be a bi? concession on their Dart.
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Nevertheless, we believe Honduran leaders are deeply concerned about the
military situation in El Salvador and see their best interests served by continuing current
cooperation. A meeting between the Foreign Ministers and Defense Ministers of both
countries is scheduled for 10 February to discuss bilateral relations. The territorial issue
probably will remain deadlocked, however, until it is referred to the International Court
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of Justice next year as stipulated in the bilateral peace treaty of 1980.
Military
The Honduran Air Force is Central America's largest, but it continues to have
problems maintaining its effectiveness. A Honduran Air Force A-37 crashed on takeoff
while reacting to the shootdown of the US helicopter at the Nicaraguan border 11
January. This reduces the Honduran A-37 inventory to 10, and the
will have difficulty replacing the lost pilot. Besides its manpower
problems, the Air Force faces the need to replace its aging Super Mystere jet fighters
and C-47 transports. Honduras wants to obtain US F-5 jets and C-130 transports to meet
these requirements
Political
President Monge in mid-January bowed to domestic political pressure and
suspended some development -projects involving US military engineers near the border
with the Nicaragua. Administration officials told the US Embassy that the presence of
armed US personnel would require Monge to obtain approval from the legislature, which
probably fears that a US military presence would jeopardize San Jose's claim to
neutrality and threaten Managua. Government leaders also wanted to avoid protracted
congressional debates that might have delayed passage of the budget and other economic
measures crucial to achieving a new agreement with the IMF. Monge agreed to
smaller-scale projects away from the Nicaraguan border area to demonstrate a
continuing interest in US aid programs, but there is little chance that any of them will
begin before 1.985.
A split between moderate and a ist wings of the Costa Rican Communist
Party has widened over the past mont The
moderates appear to be on the verge o recapturing top party positions trom a radicals,
who staged a surprise takeover in November. The conflict between the two factions will
likely peak at an upcoming party congress. The schism will almost certainly erode the
party's limited influence in the Costa Rican political arena especially the defeated
faction decides to break off to form a separate new party.
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Political
Panama's presidential race achieved added definition in January when longtime
political figure Arnulfo Arias announced that he will again be an opposition candidate for
the election in May. Although earlier attempts to form an opposition alliance have
failed, US Embassy reporting indicates that the party's secretary general is confident
that several other parties will now join the Authentic Panamenistas.
The official added that Arias-if elected-would not seek the removal of Defense
Forces Commander Noriega so long as the military refrained from political activity. He
would, however, press for the retirement of several high-ranking officers and try to end
the military's involvement in various business ventures. In return, Arias would ensure
that the armed forces receive the funding necessary to continue their force
development
The military, in our judgment, will have serious difficulty in accepting an Arias
candidacy because of his longstanding animosity toward the armed forces.
indicated that one of Arias' own
political advisers, for example, has concluded that the military will not allow Arias to
take office, nor accept a president he has endorsed. Arias' intent to retire some senior
officers and curtail the lucrative business dealings of the military may push Noriega to
consider preemptive measures, including possible postponement of the balloting.
Moreover, Arias' decision to run now places added pressure on pro-government candidate
Nicolas Barletta-who lacks Arias' charisma and voter recognition-to quickly prove his
popular appeal or otherwise risk replacement by the military.
Noriega may turn to President de la Espriella to run again, even though the
incumbent recently vetoed amendments to the electoral law that would have removed
some of the legal barriers to his reelection. The opposition severely criticized the
proposed changes in the law. Noriega sought the changes in case
Barletta falters, but Barletta threatened to withdraw unless he received assurances of
continuing military support.
The Contadora Vice-Foreign Ministers met in Panama in late January to install
members of the military, political, and economic committees. The three committees
were established at a joint Contadora-Central American foreign ministers meeting in
early January, which also set forth guidelines for the negotiations. The Central
Americans-with Contadora participation-will now address the difficult task of drafting
treaty terms. The committees are scheduled to complete their agenda by ?9 February
and to present their recommendations no later than 30 April.
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The Sandinistas have attempted to maintain the offensive on Contadora issues by
criticizing statements about US military bases and exercises in Honduras as a violation of
the spirit of the regional negotiations. The Sandinistas scored points when ambassadors
to Nicaragua from three of the Contadora countries recently praised their progress
toward elections.
The Central American "Core Four" are encouraged that the guidelines embrace
the concept of military balance, because this provides a starting point for pursuing
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Foreign Minister D'Escoto indicated Nicaragua's negotiating tactics on is point. The
Sandinistas interpret military balance to mean that Nicaragua should have sufficient
forces to defend itself against an attack by a coalition of its northern neighbors or by the
United States. D'Escoto said that it would be easier for Nicaragua to be flexible if
CONDECA is disbanded, and that a bilateral agreement with the United States is a
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SUBJECT: Central American Report #6
DISTRIBUTION
Copy # 1 - Mr. Robert C. McFarlane
2 - Mr. Donald Gregg
3 - CA Branch
4 - The Honorable Richard B. Stone
5 - General Paul Gorman
6 - HPSCI
7 - SSCI
8 - Lt. Gen. James A. Williams
9 - Mr. Nestor D. Sanchez
10 - Mr. Constantine Menges
11 - Lt. Gen. Lincoln D. Faurer, USAF
12 - Vice Admiral Arthur S. Moreau
13 - Mr. Hugh Montgomery
14 - Ambassador Langhorne A. Motley
15 - Doug Mulholland
16 - DCI - 7D60
17 - DDCI - 7D6011
18 - Executive Director - 7D44
19 - SA/DCI/IC - 7D60
20 - Executive Registry -, 7E12
21 - DDI - 7E44
22 - DDO - 7E26
23 - IAD/SAGO- 1E4846
24 - NIO/LA - 7E62
25 - NIC/AG - 2E49
26 - C/DDI/PES - 7F24
27 - D/OIA - Rm. 3N100, Bld. 213
28 - Director, Legislative Liaison
29 - Le istlative Liaison - 7R04
30
31 - PDB Staff - 7F30
32 & 33 - D/ALA - 3F45
34 - C/DDO/LA - 3C3203
35 - DDO/L 3D5309
36 - C/DDO/L 3C3203
37 - C/DDO/LA 3B44
38 - C/LAS- 3B44
39 & 40 - ALA/PS - 3F38
41 - ALA Research Director - 3F44
42, 43, 44, & 45 - CPAS/IMC/CB - 7G07
46 - DDI/CPAS/ILS - 7G40
47 - C/MCD
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48 - DC/MCD
49 - C/CA
50 - DC/CA
51-C/MX
52 - C/R
53 - C/CC
54
55
56
57
58
59
60
61
62
63
65 -
DDI/ALA/MCD/Ci
(1 February 1984)
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