VENEZUELA'S CHANGING ROLE IN CENTRAL AMERICA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84S00552R000300010002-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 16
• Document Creation Date: December 22, 2016
• Document Release Date: February 7, 2011
• Sequence Number: 2
• Publication Date: June 1, 1983
• Content Type: REPORT

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tY1 Intelligence
Venezuela's Changing Role
in Central America
Seeret
ALA 83-10092
June 1983
254
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Directorate of Secret
Intelligence
Venezuela's Changing Role
in Central America
Office of African and Latin American Analysis. It
was coordinated with the Directorate of Operations
and the National Intelligence Council. Comments and
This paper was prepared by
Chief, South America Division, ALA,
queries are welcome and may be directed to the
Secret
ALA 83-10092
June 1983
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Venezuela's Changing Role
in Central America
Key Judgments We believe that Venezuela's substantial involvement in Central America
Information available will be scaled back because of several key economic and political consider-
as of 9 May 1983 ations. The presidential election campaign now under way, in which the
was used in this report.
governing Social Christian Party (COPEI) badly trails the moderate left
Democratic Action Party (AD), has diverted the Herrera government's
attention and some of its key personnel. The country's serious economic
problems, at the same time, have reduced administration interest in
Central America and jeopardized some of the aid programs that are at the
heart of Caracas's regional influence.
As a result, the Herrera government will probably become less active in
Central America and more inclined to shift from bilateral approaches to
safer multilateral channels-such as the Contadora Central American
peace initiative-that will expose the administration to less political risk at
home. For the same reason, Herrera will be more reluctant to appear to be
associated with Washington's policies in the region.
We believe that Jaime Lusinchi-the Democratic Action Party's presiden-
tial candidate, a 3-to-2 leader in the polls, and the expected winner in next
December's election-will focus on domestic problems, even at the expense
of Venezuela's traditional interest in Central America. He has publicly
singled out economic recovery as the country's most pressing problem. He
probably also hopes to avoid stirring up differences over Central America
within the party, where it is a controversial issue. In addition, an expected
large congressional leftist bloc-comprising representatives of the Commu-
nist Party, the Movement of the Revolutionary Left, and the Movement
Toward Socialism-could hold Lusinchi's economic policies hostage to
Central American issues.
To the degree that a new Venezuelan AD administration does take
initiatives in Central America, its policies are likely to be more trouble-
some to the United States than has been the case. We expect that the AD
faction headed by former President Carlos Andres Perez-who has been
the party's unofficial spokesman on Central America-will eventually
exert strong influence on the new administration's regional policy.
Lusinchi's expertise and the interest of party moderates are on domestic
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ALA 83-10092
June 1983
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rather than foreign issues and could thus clear the way for Perez to
exercise decisive influence on Central American issues. Perez is a sharp
critic of Washington's policies in Nicaragua and El Salvador, opposes the
exclusion of Cuba from hemispheric deliberations, and may succeed in
moving Venezuela's position on Central America closer to that of the
Socialist International, of which he is a vice president.
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Key Judgments
Emergent Foreign Policy
Venezuelan Objectives in Central America
2
Primary Goals
2
Major Policy Differences
2
The Cuban Factor
4
Emerging Constraints on Venezuela's Involvement
4
Election Campaign Imperatives
4
Foreign Exchange Constraints
5
The New Government's Likely Policies
5
Economic Problems and Political Trade-Offs
5
Implications for the United States
8
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Venezuela's Changing Role
in Central America
Introduction
Over the past decade, Venezuela has used its massive
oil wealth and political stature to influence Central
American affairs. By promoting progressive and dem-
ocratic governments in the region, Caracas generally
has paralleled US efforts there. We believe that
Venezuela's regional activism is now being sharply
circumscribed by its own serious financial problems,
political distractions, and shifting priorities.
This paper examines the evolution of Venezuela's
Central American policy and surveys the growing
economic and political constraints on Caracas's role in
the region. It predicts the likely regional role of what
we see as a weak, lameduck Herrera administration,
projects Venezuela's Central American policy during
the first year of the next administration, and assesses
the implications for US-Venezuelan cooperation in
Central America.
Emergent Foreign Policy
In the 15 years before the energy crisis of 1973-74,
Venezuela was quietly and gradually emerging as an
important actor in hemispheric and international af-
fairs. It helped found OPEC, sought to enhance its
moral influence in the region by quarantining dicta-
torships of the right and left, and stressed Latin
American solidarity and Hispanic nationalism as a
counterpoise to US dominance in the hemisphere. The
Arab oil embargo and the attendant dramatic rise in
world oil prices accelerated Venezuela's entry into
high-stakes international diplomacy and hemispheric
politics. At the same time, Carlos Andres Perez of the
Democratic Action Party (AD)-a social democratic
party and affiliate of the Socialist International-
became President of Venezuela (1974-79). According
to US Embassy reporting, his government's political
and economic initiatives in the region reflected
Perez's ego and ambitions as well as his vision of
Venezuela's hemispheric destiny. Perez, partly by the
force of his own personality, achieved prominence in
Latin American affairs and bolstered his popularity at
Perez took strong positions on such issues as the
Panama Canal treaty negotiations, the Guatemala-
Belize controversy, and the Nicaraguan revolution.
He volunteered to mediate other hemispheric dis-
putes, and he regularly lectured regional leaders on
their own internal problems. Venezuela's influence in
Central America was significant largely because of its
economic and commercial role in the region. In
December 1974, for example, a meeting of Central
American chiefs of state arranged by Perez led to
bilateral agreements under which Venezuela funded a
variety of developmental projects, such as a regional
coffee marketing agency and a Caribbean merchant
fleet
With Venezuela's regional policy relying so much
upon its economic resources, an element of paternal-
ism was inevitable. According to press and US Em-
bassy reports, some beneficiaries resented this, and,
although Caracas rejected charges of expansionism, it
did not deny its intention to extend Venezuela's
influence in a region vital to its security interests. US
officials were specifically told by high-ranking Vene-
zuelan representatives that they especially feared that
economic and political instability could be exploited
by Cuba, which along with Mexico is Caracas's major
competitor for influence in the area
The doubling of world oil prices in 1979 allowed
Perez's successor as president, the Social Christian
Party's (COPEI) Luis Herrera Campins, to expand
Venezuela's assistance program at a time of increas-
ing political turmoil in Central America. Herrera
shifted the focus of Venezuela's aid from predomi-
nantly multilateral channels to bilateral agreements.
The President's advisers believed, according to Em-
bassy sources, that multilateral programs diluted the
political benefits for Venezuela, while direct bilateral
aid was simpler, more effective, and could be used to
help Social Christian governments.
home.
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Luis Herrera Campins
The cornerstone of this aid effort was the joint
Venezuelan-Mexican Petroleum Financing Facility
(1980), which increased the volume of assistance and
extended it to most countries of the Caribbean Basin.
Venezuela and Mexico jointly guaranteed oil deliver-
ies at concessional terms that represented total finan-
cial assistance of as much as $400 million a year.
Separate, annually renewable agreements with each
beneficiary gave-Venezuela more potential leverage in
Central America to further its foreign policy interests,
as well as an opportunity to blunt criticism of Venezu-
ela's and OPEC's oil policies
Venezuelan Objectives in Central America
Primary Goals. Venezuela's concern about Central
America's future is more immediate and probably
more fundamental, in our view, than about its inter-
ests elsewhere in the hemisphere. Venezuelan officials
have expressed concern to US officials that growing
polarization, revolutionary violence, and the as-
cendancy of radical groups in the region could under-
mine political and economic stability in Venezuela.
Successive governments have sought to shield and
strengthen Venezuela's democratic system by foster-
ing democracy in Central America and augmenting
Caracas's economic and political roles. In pursuit of
its goals, Venezuela has adopted policies aimed at:
? Latin American solutions to the region's problems.
? Nonalignment.
? Major power acceptance of. a "zone of peace" for
Latin America as a whole.
? A more effective Organization of American States.
? A Latin American foreign policy under Caracas's
leadership.
? Cuba's interference in the region.
Major Policy Differences. Although Venezuela's two
major political parties generally agree on these overall
goals, they frequently differ-internally and between
the parties-on specific priorities, tactics, and actions.
Both parties have a high stake in Central American
developments because of party competition at home
and their desires to promote the respective interests of
the Social Democratic and Christian Democratic
movements abroad. US Embassy observers think that
these factors, as well as deep rivalries among the
principal foreign policymakers in both major parties,
have generally frustrated efforts for bipartisan sup-
port for the government's Central American policies.
According to US Embassy officials, this has been
especially evident in policy toward Nicaragua and
El Salvador-where the splits are becoming deeper.
President Herrera has attempted to reverse the radi-
calization in Nicaragua in part by assisting the
private sector, the democratic parties, and the
Church. In private conversations with Nicaraguan
representatives, Herrera has been at times brusque
and sharply critical of recent Nicaraguan actions. At
the same time, his government has continued its
contact with Sandinista leaders in hopes of moderat-
ing their positions and exploiting their rivalries, and it
has extended limited aid to Nicaragua in hopes of
gaining leverage. According to US officials, adminis-
tration leaders also believe that continued support for
the Sandinistas serves a useful domestic political
purpose by balancing Herrera's controversial support
for the government in El Salvador.
The opposition Democratic Action Party has publicly
expressed some concern over developments in Nicara-
gua, but the party hierarchy is less inclined than the
Herrera administration to pressure Managua for
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Conflicting Positions on Central America
Supplies oil through the Venezuelan-Mexican joint petroleum
facility.
Provided $14 million Central Bank loan and earmarked 85 percent
of project loans for Central America in 1982 for El Salvador.
Helps fund Salvadoran programs in social development, informa-
tion, and propaganda through Venezuelan Institute of Popular
Education.
Former President Perez (who is likely to be the dominant influence
on the winner of the December presidential elections)
Actively opposes the Salvadoran Government and insists that
various leftists be included in peace talks.
Would sharply reduce economic assistance and funding of Salvador-
an programs in social development, information, and propaganda
until a new broad-based government is formed.
Would seek to reorganize the Salvadoran military by purging
rightist and promoting progressive officers.
Would be more inclined to see Cuban involvement in regional peace
efforts.
Permits ruling party (COPEI) to fund Salvadoran Christian Demo-
cratic Party.
Channels funds to various Nicaraguan democratic opposition
political, private-sector, and Church organizations.
Publicly and privately urges Sandinistas to pursue moderate policies.
Gives some balance-of-payments support and loans for development
projects in hopes of exerting influence on Managua.
moderation. Indeed, some party spokesmen have ac-
cused the government of doing so on Washington's
behalf. Democratic Action leaders have done little to
formulate a position on Nicaragua, we believe, for
fear that an internal party debate on this issue-
pitting moderates against Perez's well-known support
for the Sandinistas-could divide the party durin
and after a presidential election campaign
The Herrera government's disillusionment with Nica-
ragua has stimulated in part its growing involvement
in El Salvador, to stem disorder and radicalism in
Would continue to defend Nicaragua's authoritarian government'
and friendship with Cuba and the USSR as understandable
overreactions to pressures from the United States and other external
forces.
Would oppose efforts to single out Sandinista support for insurgent
groups elsewhere without similar treatment of other external
intervention in the area.
Believes Nicaragua must be a major participant in any diplomatic
effort aimed at political stability in the region.
Would probably seek some increase in financial and material help to
the Sandinistas.
Central America. Working with the Salvadoran
Christian Democratic Party, a key participant in the
ruling government coalition in San Salvador, Herrera
has channeled economic, political, and military sup-
port to the regime, according to the US Missions in
both countries. This support has been publicly and
vigorously opposed in Venezuela by both the more
leftist political parties and the Democratic Action 25X1
Party, although their respective positions are differ-
ent. The leftists have demanded inclusion of Salvador-
an insurgents in the government and a reorganization
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of the Army, while AD's less radical position calls for
a new government that will represent all sectors
except the extreme left. AD leaders also have
charged-with some justification-that the Venezue-
lan Government and ruling party have favored the
Christian Democratic Party in El Salvador.
The Cuban Factor. The divergence of attitudes in
Venezuela on Cuba's increasing involvement in Cen-
tral America also cuts across party lines. Hardline
elements in the government, including the military
and security forces and many COPEI leaders not
serving in the executive branch, favor strong and
direct challenges to Cuban initiatives in the region.
According to US Embassy reports, these groups be-
lieve a tough approach is necessary to force Havana to
abandon what they believe to be its ultimate objective
of overthrowing Venezuela's democratic government.
The Herrera government's official policy on Cuba is
less aggressive, seeking more subtle initiatives that
minimize the risk of polarizing the region and involv-
ing Venezuela in a direct confrontation with Havana.
The administration believes that engaging Cuba in
efforts to achieve peace in the region limits Castro's
options, stands a chance of moderating his regime's
policies, and reduces Caracas's close identification
with the United States.
For many in the left wing of AD, better relations with
Cuba are in line with the party's left-of-center Social-
ist International philosophy. Most party leaders, how-
ever, particularly those associates of AD's late anti-
Communist founder Romulo Betancourt, are more
wary because of their experience with Cuban-support-
ed leftist insurgents in the 1960s.
Emerging Constraints on Venezuela's Involvement
A combination of domestic political and economic
concerns already is causing Caracas to scale back its
involvement in Central America. As part of this
process, the Herrera government is turning back to
multilateral rather than bilateral channels to achieve
a consensus at home and with other regional powers.'
Election Campaign Imperatives. Venezuela's general
election campaign will increasingly dominate politics
until 4 December and divert the attention of both the
government and the public from Central America or
any other foreign policy questions. Most political
observers believe voters are especially preoccupied
with bread-and-butter issues this year, and the Vene-
zuelan public has a habitually low interest in foreign
policy issues. Indeed, this factor will accelerate as
economic and financial conditions worsen.
The governing Social Christian Party and the Herrera
administration are attempting to salvage the candida-
cy of party chief and former President Rafael Caldera
from what appears to be certain defeat. Recent
opinion polls show Caldera trailing far behind his
Democratic Action rival, Jaime Lusinchi, by at least a
3-to-2 margin. The fact that the economy is the major
campaign issue makes it unlikely that Caldera, who is
personally popular, can recover much of this ground.
The present economic and financial crisis probably
will see little abatement before the election, and
' For example, Venezuela is cosponsoring the Contadora initia-
tive-an effort shared with Colombia, Mexico, and Panama-to
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Caldera will continue to be burdened with the public's
disgust at the current COPEI government's mishan-
dling of the economy.'
Considering this grim outlook, President Herrera is
under increasing pressure from party leaders to bring
government resources-monetary and personnel-
into the campaign, thereby giving foreign policy a still
lower priority. Because numerous Cabinet and sub-
ministerial officials have left the government to work
for the Caldera candidacy, many government pro-
grams are in abeyance until after the elections. US
Embassy officials have been told that even major
policy matters, such as border disputes with Guyana
and Colombia, are bein left for the new administra-
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The Herrera government, because of the sharp politi-
cal controversy surrounding its Central American
policies, would like the support of moderate leaders of
the Democratic Action Party in keeping Central
America as an issue out of the election campaign.
Democratic Action leaders have cooperated to avoid
aggravating sharp divisions on this score within their
own party, thus jeopardizing what they regard as
almost certain victory in December.
Foreign Exchange Constraints. A more fundamental
and enduring restraint on Caracas's activism in Cen-
tral America is the country's grim economic outlook.
Declining crude oil prices and reduced Venezuelan
exports have caused a 20-percent drop in anticipated
oil revenues and forced Caracas to make correspond-
ing cuts in 1983 budget projections. This. factor,
coupled with critical mismanagement by the Herrera
government, has led to continued economic contrac-
tion and shrinking reserve levels. The deteriorating
financial situation has caused Caracas to partially
devalue the bolivar, impose exchange controls, and
declare a moratorium on foreign debt payments. As a
result, Venezuelan officials have been discouraging
expectations of some Central American aid recipients
that Caracas will either increase aid or soften credit
terms. In fact, some aid programs have been curtailed
already. In addition, according to US Embassy
sources, the Venezuelan Investment Fund, which
manages most of the country's foreign assistance, is
reviewing separate bilateral aid programs with a
number of Caribbean and Central American recipi-
ents. Fund officials already have told the US Embassy
that they believe some of these programs should be
reduced because of Venezuela's economic problems.
The Petroleum Financing Facility, under which Vene-
zuela paid nearly $400 million in 1982, also is under
scrutiny.
US Embassy has reported previously that the oil
facility has never been popular with the public, the
Ministry of Mines, or the state-owned petroleum
industry.
Because the administration's foreign policy establish-
ment has emphasized that the facility gives Caracas
leverage in Central America, and because of continu-
ing support for it by the country's principal political
parties, we doubt that the government will cancel the
program outright.
substantial changes will be made in the
program when agreements are renewed, probably
reducing the level of assistance. A high-level official
of the state oil company has told the press that
specific changes to be discussed with Mexican offi-
cials in June could cover present interest rates, the
amount of total financing, and a reduction in the
present purchaser's rebate of 30 percent.
The New Government's Likely Policies
Economic Problems and Political Trade-Offs. We
believe that Venezuela's role in Central America
under the next administration will be affected by
economic and political distractions that carry over
from the Herrera government. In addition, to the
extent that Caracas does undertake initiatives in the
region, Venezuelan and US policies are more likely to
conflict because of the personalities and ideologies
that will chart the new government's course.
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Leaders of the Democratic Action Party-the near 25X1
certain winner of the election-already have informed
US Embassy officials that economic recovery will
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preoccupy Jaime Lusinchi and his Cabinet during the
new administration's first year in office. Moreover,
the new government will have to conduct another
nationwide election on 3 June 1984, this time on the
municipal level, scarcely three months after the Presi-
dent is inaugurated. Under these circumstances, the
new government could ill afford a major policy battle
that might result from greater involvement in Central
Americal
The new government's Central American policy will
face a much strengthened leftist bloc in the Venezue-
lan Congress, if present trends reflected in recent
opinion polls hold. These surveys indicate that leftist
parties as a group could displace COPEI and become
the second-largest legislative bloc after Democratic
Action. Although leftist parties have never been able
to function as a cohesive political force, the prospects
of a pivotal role in Congress could help them coalesce.
This could force Lusinchi to adjust his government's
position on Central America in order to obtain the
left's support for more immediate and pressing eco-
nomic programs.
The new government's problem of what position to
take on Central America will be further complicated
by the question of who will take over leadership of the
Democratic Action Party, which has been unresolved
since the death of party founder Romulo Betancourt
in 1981: The party is so divided that one of Lusinchi's
major advisers described it as little more than a
collection of fiefdoms headed by independent and
ambitious barons who have no special allegiance to
the presidential candidate. Two factions of almost
equal strength have major philosophical and leader-
ship differences, particularly on foreign affairs. This
dichotomy is most evident on Central America, where
former President Carlos Andres Perez and the faction
that he leads publicly take positions far to the left of
moderate party leaders associated with the late
Betancourt. Lusinchi, according to the US Embassy
and many local observers, appears to lack the back-
ground or drive to manage Venezuela's political
system which calls for and responds best to clear
guidance and strong leadership. He is thus likely to be
highly influenced by the AD party faction that
emerges dominant from the maneuvering now under
way
The Perez Influence. To the extent that one or the
other faction dominates, the situation probably favors
Perez, largely but not wholly because of his forceful
personality and formidable reputation. Although
Perez is constitutionally barred from again occupying
the presidency until 1989, he exerts great influence on
public opinion regarding Central America, and his
activities at home and abroad are designed for maxi-
mum domestic political impact. The absence of a
clearly defined AD policy toward the region already
allows him by default to garner media attention, and
his position as "former President makes his statements
newsworthy. His activity on this score has hindered
the Herrera government's initiatives in Central Amer-
ica by increasing public scrutiny of them. In addition,
his accusations that COPEI's aim in Central America
is to foster Christian Democracy at the expense of
other democratic alternatives have enmeshed policy
toward El Salvador in a wider and increasingly bitter
partisan rivalry
In both public and private comments, Perez has
revealed his conviction that the revolution in Nicara-
gua was a good thing and that he played a major role
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Perez, President from 1974 to 1979, is Venezuela's
most controversial and charismatic leader, with a
public career spanning Venezuela's 25 year demo-
cratic experiment. He directed the government's
counterinsurgency effort as Interior Minister in' the
early 1960s and acquired the reputation for tough-
ness and vigor that contributed to his presidential
nomination in 1973. Perez capitalized on his detailed
knowledge of his country and its people and prob-
lems, his effectiveness in informal crowds, and his
carefully cultivated air of machismo to win a land-
slide victory over COPEI.
He reflects the traditional Latin American caudil-
lismo, and as President made all significant decisions
and thoroughly cowed his associates. He projected
vigor and commitment publicly, but could be impul-
sive or furious when thwarted. He remains dynamic,
politically astute, and intelligent. Perez also is often
flamboyant and erratic in pursuing his goals, which
include Latin American and Third World solidarity,
close relations with all Latin and Caribbean coun-
tries, and the development of new mechanisms for
regional cooperation that exclude the United States.
in bringing it to pass. In the US Embassy's view,
Perez wants to be a leader on the side of change
throughout the region. He wants Washington to rec-
ognize him as a man it must respect, listen to, and
even promote as peacemaker.
On El Salvador, Perez generally reflects prevailing
sentiment within AD and takes it a few steps further.
He believes, according to US Embassy sources, that
Venezuela is sacrificing its moral authority by align-
ing itself too closely with military regimes and too
often assuming a role that is not identifiably different
from that of the United States. Party leaders favor
negotiations between the Salvadoran Government and
the nonviolent opposition leading to a transition gov-
ernment and new elections. Perez's frequent discus-
sions with US Embassy officials indicate that he
Perez's energy is a natural outcome of his sense of
mission-he believes he has been entrusted by destiny
with the Bolivarian heritage. This is illustrated by
his concern for the interests of smaller countries in
the region, his continuing involvement in resolving
border disputes, and his passionate advocacy of Latin
solidarity toward the United States. In a recent
conversation with Bolivian leaders, Perez described
himself as a citizen of Latin America and not merely
a Venezuelan. This position, he argued, gives him the
right to criticize and comment on any hemispheric
country's internal problems. Regarding himself as a
world leader, and a candidate for the presidency
again in 1988, his unbridled self-condence and
excessive candor have sometimes irritated his inter-
locutors. Perez also resents that, in his view, Wash-
ington has long ignored his position as a world leader
and his criticism of US policy in Central America.
would go further by including guerrilla representa-
tives in the talks, purging the military of rightist
elements, and promoting "progressive" officers
On Nicaragua, the differences within AD are more
pronounced, principally because more political repu-
tations are at stake. The party has been gradually
pulling back from its wholehearted support for the
Sandinistas. In our view, many senior leaders have
refrained from speaking out, however, to avoid a
confrontation with Perez, who gave the Sandinista
guerrillas extensive financial and material help in his
party's name during and after his term as president.
For Perez, radicalization in Nicaragua is more an
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overreaction to pressure from outside forces-particu-
larly the United States-than a Sandinista betrayal
of promises of pluralism and democracy. In public and
private statements, he has repeatedly urged Nicara-
guan leaders to avoid falling for the trap being
prepared for them.
According to the US Embassy, Perez sees Cuba and
regional cooperation as inseparably linked, because he
believes that hemispheric problems cannot be solved
by Havana's selective exclusion. He has criticized the
United States for sabotaging efforts at Latin Ameri-
can political solidarity and for attempting to reduce
Latin American problems to a struggle between Com-
munism and anti-Communism. Moreover, Perez has a
unique view of Fidel Castro. We believe he regards
the Cuban leader as both a close friend-whom he
can trust and influence-and a hemispheric rival-
whom he can outwit. In our view, however, Perez has
more frequently served Castro's nurnoses than the
reverse
The US Embassy reports that Lusinchi and more
moderate Democratic Action leaders are aware that
Perez aspires to the presidency in 1989. They believe
he will use his position with the party and his grass-
roots support-especially in the youth and labor
sectors-to move the party's position on Central
America leftward, closer to that of the Socialist
International, of which he is a vice president. Despite
the economic mismanagement, corruption, and other
failings of Perez's administration, public opinion polls
show that he has regained much of his popularity,
that his forceful and often arbitrary leadership style is
admired, and that he will be a strong candidate in the
1988 campaign.
Implications for the United States .
Preoccupation with domestic matters is traditional in
an election year, but it is more intense in 1983
because of the magnitude of Venezuela's economic
crisis and the unprecedented early collapse of the
governing Social Christian Party's electoral prospects.
The government's fading fortunes have introduced a
timidity into its Central American policy, a fear that
actions out of step with Venezuela's progressive Latin
neighbors will leave the administration vulnerable to
leftist charges of being a US surrogate.
The prospects for Venezuelan cooperation with US
policy in Central America are even poorer for 1984.
Notwithstanding assurances by leaders of the Demo-
cratic Action Party that they seek a close working
relationship with the United States, their determina-
tion to deal with the economy and resolve power
relationships within the party will effectively preclude
cooperation with US aims in Central America. More-
over, whatever Central American policies the Lusin-
chi government adopts probably will reflect the views
of Carlos Andres Perez rather than more moderate
party leaders. Perez has shown himself highly
resistant to US influence or persuasion, and he will
not hesitate to exploit latent anti-American feeling to
aid him in his drive for the presidency in 1988.
Further, his ego and confidence that he can success-
fully orchestrate regional affairs opens him up to
exploitation by Fidel Castro and the far left. The
result will be a Venezuela that is a less constructive
force in Central America and a less dependable ally of
the United States
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Sanitized Copy Approved for Release 2011/02/07: CIA-RDP84SO0552R000300010002-5