LATIN AMERICA REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00289R000301660001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 27
• Document Creation Date: December 22, 2016
• Document Release Date: August 1, 2011
• Sequence Number: 1
• Publication Date: October 10, 1986
• Content Type: REPORT

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Directorate of
Intelligence
Review
MASTfiq FILE COPY
D NOT GIVE OUT
Oil MARK O
Latin America
ALA LAR 86-024
10 October 1986
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Secret
Review
The recently formed Democratic Current, a leftist faction in the
ruling PRI, is unlikely to be able to open the party to broader
decisionmaking, but its mere existence suggests that the process of
naming a successor to President de la Madrid will be more rough-
and-tumble than usual.
Agrarian reform is the most controversial political issue in Brazil
today, pitting peasant organizations and leftist groups against
landowners. The Sarney administration lacks the political force and
the financial resources to enact thoroughgoing reform, and its
gradual approach to redressing the country's inequitable land
distribution will displease all parties in the dispute.
Argentina: The Evolution of Alfonsin's Cabinet
President Alfonsin's dissatisfaction with the performance of key
ministers, combined with squabbling within the Cabinet, has led
him to appoint a younger, more technocratic Cabinet. The new team
will help Alfonsin govern more effectively.
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Trinidad and Tobago: Heading Into ElectionsF----] 19
A rapidly deteriorating economy, a newly organized opposition, and
growing divisiveness in the ruling party may lead to a defeat for
Prime Minister Chambers' government in elections many observers
predict will be held next month.
Briefs Cuba: New Anticrime Commission Created
Brazil: Beef Shortage Causing Public Discontent
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Articles have been coordinated as appropriate with other offices within CIA.
Comments and queries regarding this publication may be directed to the Chief,
Production Staff Office of African and Latin American Analysis,
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Latin America
Review
Mexico: Democratic Current
Stirs PRI
The recently formed Democratic Current (CD), a
leftist faction in the ruling Institutional Revolutionary
Party (PRI), is attracting considerable attention
within the party and throughout the country. The
group ostensibly supports internal democratic
reforms, including more open debate on national
issues and greater participation of the rank and file in
decisionmaking, according to press reports. The
movement, however, probably exists more as a vehicle
for PRI leftists to increase their visibility in the party
and to influence the nomination of the 1988
presidential candidate. Although the CD is a source of
concern within the PRI and is highly publicized in the
Mexican press, we do not believe it represents a
serious challenge to the ruling party: its goals are
illusory and ill defined, and mainline party activists,
who dominate the PRI, have launched a strong attack
against it. Nevertheless, the existence of such a
movement puts
additional pressure on President de la Madrid and
suggests that the road to naming a successor may be a
bumpy one.
Origins of the CD
Former PRI President and UN Ambassador Porfirio
Munoz Ledo founded the CD last summer
purportedly in response to charges by PRI leftists that
the party was ideologically stagnant and incapable of
responding to the needs of the country. Munoz Ledo,
a protege of former President Luis Echeverria, held
two Cabinet positions and the PRI presidency during
the leftwing Echeverria administration. In recent
years, his political career has suffered-most
drastically when he was recalled as UN Ambassador
for his unabashedly anti-US behavior-and his
influence within the PRI has waned. We believe
Munoz Ledo and other PRI leftists are using the CD
to try to regain some of the prestige they enjoyed
Porfiro Munoz Ledo-trying to
play a larger role in the
selection of the 1988
presidential candidate
during the Echeverria administration and to play a
larger role in the selection of the 1988 presidential
candidate, who traditionally is chosen by the
incumbent.
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~nitial strategy 25X1
included quietly courting party officials and
attempting to mobilize sectors of the Mexican left
without alienating President de la Madrid and the
current PRI leadership. He probably hoped to build a
solid support base before the plan was made public.
Secret
ALA LAR 86-024
10 October 1986
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In further attempts to garner support, Munoz Ledo
has solicited the backing of the Catholic Church. The
negative publicity surrounding the organization,
however, has frightened off the church hierarchy,
which is not prepared to risk losing the benefits it
receives from its special relationship with the mainline
The Mexican media, which the PRI probably is using
to influence public opinion about the CD, have given
much attention to the issue in recent weeks. Press
articles have intimated that the initiative is a direct
challenge to the current administration and suggest
that former President Echeverria is behind the
movement-an association that Munoz Ledo
probably wants to avoid because of Echeverria's lack
of popularity in Mexico, particularly within the ruling
party.
Limited Support
The CD to date has established only a limited
following-most PRI members probably, and
rightfully, fear alienation from within the party if
they support the effort.
Outlook
The CD lacks the support of most senior officials and
commands little loyalty from the rank and file.
Because of these shortcomings, we do not believe it
has much chance of directly challenging the de la
Madrid administration. The group appears to have
only a vague political agenda and to consist largely of
frustrated leftists on the fringe of party affairs. Its
leaders probably will find it an ineffective vehicle to
increase their participation in major decisionmaking
or to influence the presidential succession.
Conservative, mainstream PRI leaders are seeking to
discredit the group, and Munoz Ledo probably will be
unsuccessful if he seeks to use the CD to advance his
own presidential aspirations or to gain a Cabinet post
in the administration entering office in 1988.
Nonetheless, the group is likely to continue to
publicize its views. In an effort to secure greater
popular support, it may try to draw more attention to
dissatisfaction with electoral fraud used by the PRI in
recent elections. In our judgment, the CD is unlikely
to foster any radical change or split within the PRI,
however, and its actions probably will serve only to
isolate Munoz Ledo and his limited following.
Nevertheless, the mere existence of such a movement
puts additional pressure on de la Madrid and suggests
that political jockeying for the presidential succession
will be more rough-and-tumble than usual.
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Brazil: Tensions Over
Agrarian Reform
In May 1985 President Sarney launched with much
fanfare a land reform program he hoped would bolster
support for his government, prevent instability in
rural areas, and increase agricultural productivity.
Despite these intentions, agrarian reform has
burgeoned into the most controversial issue on the
Brazilian political scene, according to the US
Embassy in Brasilia. Delays in the program have
prompted peasant organizations and leftist parties to
accelerate land seizures, damaged church-state
relations, and provoked a minor Cabinet crisis.
Landowners have used legal ploys, illegal tactics, and
even violence to undermine the government's efforts
to carry out land redistribution. Lacking both the
political power and the financial resources to enact
thoroughgoing reform, the Sarney administration, in
our view, will continue its gradual approach to
redressing Brazil's inequitable land distribution. This
approach will probably prove unsatisfactory to all
parties in the dispute, thereby ensuring that land
reform will remain a contentious issue for the future.
More immediately important, in our view, it will
probably cost Sarney some support in the elections
this November, as clashes between both leftist and
rightist groups persist, and reform-related violence
Brazil: Production of Domestic
Food Crops 1970 Versus 1985
remains high.
Rural Inequality
Official statistics indicate that land concentration in
Brazil is severe and increasing. According to the 1980
rural census, only 1 percent of all rural landowners
control 46 percent of the arable land, while 50 percent
of all farmers control just 2 percent of rural property.
A recent census indicates that large landowners-
farmers holding more than 1,000 acres-have
increased their holdings rapidly in the past 15 years.
With government financial incentives favoring large-
scale production of export crops and sugar cane, large
landholders have increased their holdings at the
expense of small and medium-sized farms, often
forcing tenants and sharecroppers from land on which
they had raised domestic food crops for years.
Moreover, Brazil's massive hydroelectric construction
Total
55,288,000
60,903,985
Beans
2,211,000
2,547,925
Corn
14,216,000
22,017,154
program has destroyed the holdings of many small
producers. Finally, persistent high inflation has
caused rural-and urban-elites to accumulate, but
not cultivate, property as a speculative investment.
the increasingly inequitable
land distribution constitutes a serious social and
economic problem. For example, the Embassy reports
the number of farm laborers with little or no land
surged from 6.7 million in 1978 to 10.6 million in
1984. As a result,
violence between landowners and the landless has
proliferated in recent years, and 116 people died in
conflicts over land in 1984. Some experts estimate
that speculators hold 550 million acres-38.8 percent
of Brazil's privately owned agricultural land-in a
country that has the world's sixth highest
malnutrition rate, according to the World Bank.
Large tracts of idle land and the decline in the
number of small farms have caused the production of
domestic staples to increase less than consumption
requirements since 1970, forcing Brasilia to augment
food imports.
Secret
ALA LAR 86-024
10 October 1986
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Sarney's Reform Creates a Furor
In a move calculated to reduce rural violence and
bolster popular support for his government, Sarney
announced in May 1985 his intention to promote land
reform. In his speeches touting the plan, Sarney said
that agrarian reform would be part of a longer term
effort by his government toward eliminating social
inequities. He foresaw a process that would bring
unused arable land into production, increase domestic
food supplies, and provide jobs in rural areas. He said
that 20-30 million people would receive land under his
program.
Nelson Ribeiro, then Minister of Agrarian Reform
and Development, drafted the preliminary reform
plan. the plan was
modeled after an existing land redistribution statute
that the military regime failed to implement during
its 20-year rule. Instead of immediate expropriation of
massive landholdings, the reforms were to be carried
out over a 15-year period. In the first stage,
landholdings were to be inventoried and the
government empowered to purchase or expropriate
unproductive land from privately owned large farms
for distribution to the rural landless.
Despite the administration's efforts to craft a
moderate program sanctioned by law, the proposal
created an instant political furor that surprised and
embarrassed Sarney. The Embassy reported that
leftist parties and peasant groups began organizing to
take land through violent seizures. Landowners
reacted by criticizing the government's infringement
of private property rights, and they formed armed
groups to stop the takeovers. The Brazilian press gave
extensive coverage to the spate of armed clashes that
left scores dead in rural areas in the summer months
of 1985. As violence mounted, the Embassy noted
that serious criticism of the plan arose from the
National Security Council and Sarney's military
ministers. Seeing the violence that the mere
anticipation of land transfers provoked, the military
ministers feared implementation of the plan would
lead to widespread rural unrest in Brazil's New
Republic.
Land Reform and the Breakdown
of Brazilian Democracy in 1964
Academic research indicates that the controversy
surrounding land reform in 1962-63 helped
contribute to the political crisis that provoked a coup
against Brazil's constitutional government. Joao
Goulart, who succeeded to the presidency when Janio
Quadros resigned suddenly in 1961, was hoping to
use land reform to undercut his leftist critics and
bolster support for his government. In May 1962, he
proposed a constitutional amendment sanctioning
land expropriations for redistribution to peasants.
The intent was to improve social justice and
agricultural productivity. According to historical
accounts, Goulart's program immediately drew the
ire of the left as a halfhearted measure, while
influential landowners and political office holders
castigated his program as demogagic. The
disenfranchised in the rural areas were mobilized
into peasant leagues to carry out land invasions. The
Catholic Church, traditionally pro-status quo,
experienced internal ferment, as a significant number
of pro-reform activists arose in its ranks. Despite
Goulart's politicking, he was never able to gain the
support of Congress for his constitutional
amendment. Some academics contend that the
legislative battle over land reform contributed in part
to a paralysis in democratic government that
heightened political polarization and thwarted
economic reform. The resultant economic chaos and
social unrest helped convince the military to take
power from the civilians to restore order and to
restart development.
properties would not be touched.
The furor caused the administration to backtrack and
revise the plan. Sarney ordered a watered-down
version of the program last October that sanctioned
expropriations only after negotiations failed. The
President's approval was required on national and
regional redistribution plans as well as future
expropriation decrees. In his announcement of the
program, Sarney assured landowners that productive
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Tensions Increase in 1986
Sarney's efforts to calm the ferment by seeking a
compromise solution have backfired.
he leftist parties and labor are stepping up
their pressure on the government to carry out massive
reform this year. Aside from their ideological
commitment to land reform, many leftist politicians
believe they can exploit the issue to win votes in the
coming congressional elections.
the Workers Party is providing much of
the logistic support for organizing large-scale
demonstrations by the "landless" in the countryside.
According to the Embassy, however, the most
powerful pressure group advocating reform is the
Catholic Church. The National Council of Bishops
and the Pastoral Land Commission-largely
dominated by leftist clergy-are in the forefront of
the effort, but even church moderates favor peaceful
land redistribution. The National Council of Bishops
has criticized the government's plan as inadequately
funded and poorly administered. Although the
church's hierarchy offers largely rhetorical protest,
local priests and dioceses are
forming lay groups in rural areas that combine
religious education with political instruction for
peasants. The church hierarchy condemns violence,
but some local priests in
rural areas are heavily involved with leftist parties in
instigating violent land seizures.
These activities are meeting considerable resistance
from landowning conservatives. The toughest
opposition group is the Rural Democratic Union,
founded primarily by cattle ranchers in late 1985.
According to Embassy reports, it claims to be just
another lobbying group defending the broad interests
of all farmers and ranchers in Brazil's New Republic.
The organization, however, emphasizes agrarian
reform to the exclusion of most other issues. It has
attacked the administration's program in a major
antiland redistribution campaign this year, and it
claims to have opened 10 local chapters with 7,000
members. The Rural Democratic Union holds
auctions of donated cattle to fund political lobbying of
Congress and promote sympathetic candidates in the
November elections. On many occasions, however, the
members resort to vigilantism to achieve political
goals. For example, the Embassy reports that
caravans of the group's members have forcibly
expelled squatters from occupied lands
Political Fallout and Increasing Rural Unrest
Implementation of the land reform program has been
slowed in the wake of the political controversy. To
date, official statistics show that 8,000 families have
been resettled on expropriated lands-only 5 percent
of the families slated to be moved this year.
Spokesmen for the government's Institute for
Colonization and Agrarian Reform-the agency
administering the reform-admit that the majority of
these expropriations have been difficult, albeit highly
visible, legal cases intended to-address particularly
thorny areas of the law. At the same time, the
Embassy reports that Marco Maciel, Chief of the
Civilian Household, with Sarney's apparent approval,
has exercised strict control over the pace of reform,
pushing a gradualist approach. Moreover, we believe
that a lack of adequate funds and a high degree of
administrative incompetence have also impeded the
effort.
Despite the administration's efforts, violence has
worsened. The Ministry of Agrarian Reform
estimates that by June there had been 92 murders
related to land controversies. According to the
Brazilian press, violent incidents were particularly
numerous in May, and culminated in the murder of a
Catholic priest active in supporting the landless. This
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murder shocked the country
Official disagreements over the appropriate pace of
land transfers sparked a minor crisis in the Cabinet
later in May. Brazilian press reports said that clashes
between the aggressive, left-leaning Minister of
Agrarian Reform, Nelson Ribeiro, and conservative,
right-of-center Maciel increased in frequency and
bitterness. Ribeiro resigned in protest after he failed
to gain presidential approval for his reform plans,
which included emergency laid expropriations. To
smooth over the crisis, Sarney publicly reaffirmed his
administration's commitment to land redistribution
and appointed a young leftist politician, Dante de
Oliveira, as the new minister.
Outlook
The Sarney administration is publicly committed to
continuing its pragmatic approach to land reform.
Recognizing the political sensitivities surrounding the
issue and aware of the military's fears of provoking
widespread rural unrest, we believe Sarney will take a
crisis control approach to prevent violent activities by
leftist and rightist groups. The government will
probably carry out a limited number of high-profile
expropriations, focusing on idle properties where large
numbers of squatters live or where armed conflict
appears likely. Lacking the political support and
financial wherewithal to carry out land reform, we
believe the government's program will fall far short of
its goal of creating a stable, more productive rural
society. Sarney probably is gambling that such a
piecemeal approach will satisfy political liberals who
support his coalition without alienating the powerful
landholding class, including many congressmen. We
believe this approach runs the risk of satisfying
neither political group, thereby causing the loss of
some support for Sarney in the November elections.
workers' organizations will continue vociferous
propagandizing, demonstrations, and land invasions in
support of peasants. At the same time, landowners
will continue to impede-by legal means and vigilante
actions-implementation of the reforms. The
underlying tensions will remain, as will the potential
for violence in the rural areas.
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For the longer term, we believe agrarian reform will
continue to be a politically explosive issue. The
Catholic Church, the leftist parties, and rural
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Argentina: The Evolution of
Alfonsin's Cabinet
Argentine political and economic institutions.
President Alfonsin's Cabinet has changed
considerably since he took office nearly three years
ago. The President's dissatisfaction with the
performance of key ministers, combined with
squabbling within the Cabinet, has led to the
appointment of a younger, more technocratic Cabinet.
The new team will help Alfonsin govern more
effectively and buttress his goal of modernizing
appointments to their UCR credentials.
Cabinet Discord
Alfonsin began his tenure in December 1983 with a
cabinet comprised mainly of prominent members of
his Radical Civic Union (UCR) party. The President
incorporated only a few trusted personal advisers,
such as Foreign Minister Dante Caputo and Defense
Minister Raul Borras, into the Cabinet, according to
the US Embassy in Buenos Aires. Seven of the 10
original administrative chiefs were members of
Alfonsin's statist-oriented Renovation and Change
faction of the UCR, while one, Interior Minister
Troccoli, belonged to the UCR's conservative
National Line faction. Most political observers
regarded only Caputo and Social Action Minister
Aldo Neri as technocrats who did not owe their
Alfonsin, in our view, designed the Cabinet to satisfy
competing interests within the UCR and provide solid
support-through the predominance of his
Renovation and Change faction-for his policies. As
Alfonsin settled into the presidency, however, his
agenda for Argentina began to diverge substantially
from that of many of his Cabinet members. In his
quest to strengthen the country's political institutions
and halt spiraling inflation, Alfonsin began to move
away from the statist and nationalist tradition of his
Renovation and Change faction by implementing an
economic austerity program and seeking
rapprochement with Washington.' Moreover,
Alfonsin insisted on making all important decisions
himself, relying only on a few trusted advisers for
guidance, according to Embassy reporting. This
independent style of leadership, combined with his
departure from traditional UCR policies, resulted in
growing friction between Alfonsin and some old-
guard Radical Party Cabinet members.
In addition to disagreements between Alfonsin and his
Cabinet, severe problems within the ministries
themselves, such as ineffective leadership and political
infighting, hindered the President's efforts to carry
out his policies, according to press and Embassy
reports:
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? Economics Ministry. We believe economic policy
suffered in the early days of the new government
from serious policy disputes among Alfonsin's
economic advisers. The original Economics
Minister, Bernardo Grinspun (a longtime member of
Renovation and Change), was one of the first
Radical stalwarts to leave the Cabinet, resigning in
early 1985 over differences with the President on
the direction of economic policy and over public
quarrels with the then Director of the Central Bank.
Similar disputes with Alfonsin led to the removal of 25X1
Energy Secretary Conrado Storani in April 1986.
Most recently, the President replaced his second
Central Bank Director with a technocrat more
willing to restrain burgeoning monetary growth and
take other measures to control inflation.
? Defense. This Ministry has been the most
troublesome for Alfonsin, who has had four defense
ministers. The first two, Raul Borras and Roque
Carranza-both close friends of the President-
died in office. The third minister, German Lopez,
had greater difficulty than his predecessors in
working with the military and was involved in
several feuds with other Cabinet members that
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Minister of Foreign Relations and Worship (Since December 1983)
Former academic ... capable minister despite diplomatic inexperience before
assuming the post ... has confidence of Alfonsin, according to US diplomats ...
in firm control of Foreign Ministry, although often clashes with career diplomats
over foreign policy issues ... both leftist and rightist extremists criticize his
moderate, pragmatic policies ... new to UCR party, where he has little support
... 42 years old.
Minister of Economy (Since February 1985)
Respected technocrat ... relative newcomer to UCR party ... key economic
official in Alfonsin administration ... masterminded Austral Plan, government's
anti-inflationary "economic shock" program ... favors free market policies ...
emphasizes growth in industry ... 46 years old.
Minister of Defense (Since June 1986)
Fourth Minister of Defense since 1983 ... as number two in the Ministry
established good links to armed forces, especially Army, despite lack of military
background ... twice passed over for minister because of his youth (now about 42)
and lack of solid party support ... appointment as Minister marks first time
Alfonsin had awarded important portfolio on basis on experience in ministry
rather than close political ties ... building sound security relationship with US
... described by US diplomats as crafty political survivor.
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Minister of Education and Justice (Since June 1986)
Close associate of Alfonsin and founder of President's Renovation and Change
UCR faction in Rio Negro Province ... shares Alfonsin's objection to human
rights abuses during military regime ... was surprise choice for Cabinet post ...
given credit in press for influencing Alfonsin to propose Viedma, capital of Rio
Negro, as the future federal capital ... former director of the Rio Negro
newspaper and founder of Argentina's first two private news agencies, Noticias
Argentinas and Diarios y Noticias ... 58 years old.
Minister of Public Works and Services (Since July 1986)
Youngest member of Cabinet (37) ... earned portfolio through great energy and
dedication displayed in previous job as under secretary for river and marine
transport ... not in public life until 1983 return to democracy ... has promised to
speed up privatization programs and reduce government influence, especially in
maritime sector ... member of Coordinadora faction of UCR
Secretary General of the Presidency (Since February 1986)
Young (37), sharp, influential member of UCR`s Coordinadora faction ...
mentioned as future UCR candidate for Cordoba governorship ... appointment to
current post followed strong performance as national deputy from Cordoba ...
active in defense and foreign policy issues in Congress.
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eventually led to his resignation. The record
turnover of ministers in this department, in our
view, has complicated the government's already
tense relationship with the armed forces.
? Labor. This Ministry, in our view, has also suffered
from a lack of leadership continuity. Alfonsin's first
labor minister mishandled the Congress's vote on a
trade union reform bill, seriously damaging
government-labor relations and dealing the
administration its first legislative defeat. His
replacement served only six months before resigning
to devote full time to his position as leader of the
UCR in Buenos Aires province, thus necessitating
the appointment of the current minister.
? Education and Justice. Minister Carlos Aramburu,
whom the US Embassy describes as a respected
UCR member, resigned in June 1986 for what he
said were health reasons. The press reported,
however, that Alfonsin was unhappy with
Aramburu's lackluster performance, the Ministry's
bungling of the state-of-siege proclamation last
November, and the tensions that educational policy
was provoking with the church.
The New Cabinet
According to the press, over the past three years
Alfonsin has used 19 individuals to fill eight
ministerial positions and 73 appointees to fill 29
Cabinet secretary slots. We believe that these changes
have dramatically altered the outlook and priorities of
the Cabinet. The average age of Cabinet members has
declined from 58 to 48. The President has weeded out
many ideologically inflexible UCR party militants of
Lavagna, to the rival Peronist Party.
his own generation, replacing them with technocrats
such as Economics Minister Juan Sourrouille and
Labor Minister Hugo Barrionuevo. These men, along
with Caputo, Defense Minister Horacio Jaunarena,
Education Minister Julio Rajneri, and Public Works
Minister Pedro Trucco, are widely considered by the
press to be team players who believe in Alfonsin's
political agenda. A growing minority of Cabinet
members, especially lower ranking heads of the
secretariats, are Radicals who belong to factions other
than Renovation and Change or, as in the case of
Industry and Foreign Trade Secretary Roberto
Implications
We believe that Alfonsin now has a relatively cohesive
Cabinet that reflects the changes in his views since he
assumed office. This younger, innovative team
supports the President's increasingly pragmatic and
nonideological approach to government and, like
Alfonsin, is not wedded to the UCR's traditional
policy prescriptions. These ministers also lack the
autonomous power base in the UCR enjoyed by their
predecessors and are consequently more beholden to
the President. The new Cabinet, in our judgment, will
enable Alfonsin to present a more united front in the
executive branch's efforts to overcome the obstacles
that have hampered Argentina's economic and
political development over the past 50 years.
Although Alfonsin has a more technically competent
Cabinet, the executive branch still suffers from
several problems. In our view, one major flaw in
Alfonsin's strategy has been his failure to fire any of
his ministers. Some, such as German Lopez, ex-Public
Works Minister Neri and former SIDE chief Rossi,
have resigned, but Alfonsin has merely shuffled many
of the originally troublesome Cabinet members to
other posts in government. Ex-Economics Minister
Grinspun is currently serving as Planning Minister;
former Energy Secretary Storani is now Minister of
Social Action; and both Rossi and Domestic
Commerce Secretary Concepcion were moved to
important posts outside the Cabinet before finally
resigning. Alfonsin's inability to rid his government of
incompetent or ideologically incompatible officials
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means that he will still face resistance to innovative
policies from within the executive branch. Both the
Radical party and most of the government outside the
Cabinet have not undergone the same political
evolution as Alfonsin, and we believe that the
President does not yet have a strategy to deal with this
anomaly.
Finally, Alfonsin must also coexist with the number-
two figure in the executive branch, Vice President
Victor Martinez, a conservative leader of the UCR's
Martinez and his allies probably will not significantly
influence administration decisions, his presence will
continue to strain decisionmaking in the executive
branch and hamper the speedy implementation of
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Alfonsin's policies.
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Trinidad and Tobago: Heading
into Elections
The People's National Movement (PNM), which has
governed Trinidad and Tobago since that country won
independence from the United Kingdom in 1962, may
be unseated by the National Alliance for
Reconstruction (NAR) in elections many observers
predict will be held next month. The rapidly
deteriorating economy, newly organized opposition,
and growing divisiveness in the ruling party centered
on George Chambers's lackluster performance as
Prime Minister are largely responsible for the PNM's
troubles. Still, the opposition must overcome internal
squabbles and the greater financial and
organizational resources of the PNM to win the
election. We doubt that either party would radically
change the course of Trinidad's foreign or domestic
policies over the next few years.
The Opposition
In recent years, the historically weak and fragmented
opposition has enhanced its electoral strength by
joining forces. In the 1981 national elections,
candidates from the United Labor Front (ULF), the
Democratic Action Committee (DAC), and the Tapia
House Movement allied under the National Alliance
for Trinidad and Tobago (NATT) to win 22 percent of
the total vote and 10 of the 36 seats in Parliament
(eight ULF, two DAC). Candidates from the
Organization for National Reconstruction (ONR),
running independently, also received 22 percent of the
vote but not enough in any district to win
parliamentary seats. In late 1985, the ONR and the
NATT united to form the NAR, in anticipation of
national elections mandated by February 1987.
Opposition candidates also have made impressive
gains in recent local elections. In 1983, a "semi-
united" opposition picked up almost half the county,
municipal, and city council seats defended by the
PNM on the island of Trinidad. NAR members now
occupy 66 of the island's 120 total council seats.
Although Chambers campaigned actively in 1984 to
retain the ruling party's 8 to 4 majority in Tobago's
House of Assembly, opposition candidates secured I 1
of the 12 seats.
The NAR's "Platform for Change" published last
July outlines plans to curtail government corruption,
limit a Prime Minister to two terms in office, give
greater independence to local government, and
stimulate private investment by lowering corporate
taxes and dismantling state-owned businesses. In an
effort to diversify Trinidad and Tobago's oil-based
economy, the NAR platform calls for development
emphasizing the agricultural and construction sectors.
The platform also outlines a foreign policy supporting
the principles of the Nonaligned Movement (NAM), a
New International Economic Order, and a more
active Trinidadian role in the Caribbean Community.
The four parties forming the NAR represent a wide
social and political spectrum. Conservative and
moderate businessmen dominate the ONR. The ULF
is made up primarily of East Indian labor groups,
including leftist sugarcane workers. The DAC's
support is limited largely to the small island of
Tobago, and the Tapia party consists of a small group
of leftist intellectuals. In a survey last May by a
respected Trinidadian pollster, 60 percent of the
country's East Indians and 40 percent of blacks and
other ethnic groups support the NAR.'
The opposition's newfound numerical strength is
partly offset by the competing agendas and
personalities of the participants. With half the NAR
candidates for Parliament already selected,
substantive differences and personal rivalries have
intensified as the number of available electoral and
party leadership positions shrinks:
' East Indians and blacks each comprise 43 percent of Trinidad's
population of 1.2 million; the remaining 14 percent are of mixed
race.F____1
Secret
ALA LAR 86-024
10 October 1986
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Trinidad's economy, the largest in the English-
speaking Caribbean, has experienced cumulative
problems since 1982. With oil revenues accounting for
70 percent of Trinidad's export earnings, the
sustained drop in world oil prices has drained the
country's foreign exchange reserves, fueled a foreign
debt that has jumped from $968 million in 1981 to
over $1.9 billion at present, and driven the rate of
unemployment to at least 20 percent. Real GDPfell 8
percent during 1983-85, and the US Embassy predicts
output will drop 2 percent this year. In an effort to
ease the country's foreign payment strains, the
government devalued the currency by 33 percent last
December. To cover afiscal deficit that the Ministry
of Finance expects to reach $600-700 million this
year, the country has stepped up requests for foreign
borrowing, but lending commitments are well below
needs. To compensate, Port-of-Spain drew down
international reserves 20 percent during July and
August to about $600 million, according to US
Embassy estimates.)
The economic contraction has severely pressed
organized labor, whose membership has fallen from
40 percent of the work force in the 1970s to less than
30 percent currently. Despite rising unemployment,
lockouts by businesses, and the erosion of benefits
gained during the oil boom, the US Embassy foresees
no significant shift by major labor unions toward
radical policies or violent tactics. The 1985
reorganization of the state sugar enterprise CARONI
will eliminate 4,500 jobs by 1988, and cuts in
subsidies to other government-owned companies will
bring f urther layoffs. A few unions that traditionally
support the PNM show signs of backing the NAR,
but the Embassy doubts that radical political parties
have gained support. We believe unrest will grow,
however, as the economy sags over the near term.
Trinidad and Tobago's economic bind has prompted
the government to explore expanded ties to Cuba and
the Soviet Union, but it is moving cautiously. In late
1984, the government entered a $15 million
reciprocal trade agreement with the Castro regime.
Havana has tried to take advantage of Port-of-
Spain's economic plight and gain a diplomatic
presence by claiming that, when more "normal"
relations are in place, Cuba would expand its
purchases of Trinidadian products.
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The Ruling Party
In addition to the challenges of opposition unification
and a deteriorating economy, the ruling People's
National Movement is racked by worsening
intraparty disputes. The bickering apparently has
focused on Chambers, who lacks the charisma and
drive of his predecessor, the late Eric Williams. No
overt threat to Chambers's position has been mounted
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George Chambers
Prime Minister, Minister of Finance and Planning since death of Eric Williams in
1981 ... elected PNM head in 1981 ... .. claims
commitment to Caribbean integration but sidetracked from regional issues by
domestic problems ... opposed US-led intervention in Grenada in 1983.. .
studied general education and agriculture at Oxford ... 58 years old.
A. N. R. Robinson
First leader of the opposition National Alliance for Reconstruction (NAR) ...
popular black Tobagonian ... former Cabinet minister during the 1960s ...
resigned from PNM in 1970... formerly led Democratic Action Congress ...
reserved and deliberate ... received law degree in London ... also has degrees in
philosophy, politics, and economics ... 49 years old.
Basdeo Panday
Opposition leader in Parliament ... deputy NAR leader ... formerly head of
United Labor Front ... president of the All Trinidad Sugar and General Workers
Trade Union ... radical activist during the 1960s ... practiced law 1965-76 ...
also has degrees in economics and dramatic art ... ]devout Hindu
... ideologically left of center ... stresses commitment to democracy and peaceful
opposition ... 53 years old.
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so far, but many senior PNM officials privately blame design to wrest political power from certain sections of
him for the party's troubles. the community." Since then he has charged that a
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Popular support for the party apparently is at a record
low. Two-thirds of the respondents to a survey in May
said they want a change in government; only 18
percent preferred the reelection of the PNM. Still,
almost half those polled expect the PNM to retain
power.
Fearing further setbacks before the election, the
ruling party has taken some piecemeal measures to
try to bolster its position. The party in August
indefinitely postponed local Trinidadian elections
originally scheduled for that month. The US Embassy
says the PNM-dominated elections commission
recently gerrymandered 21 voting districts to enhance
the ruling party's chances in the populous corridor
east of the capital, Port-of-Spain. The Embassy also
notes that the PNM is the only party refusing to
participate in forming of an electoral code of conduct
sponsored by an interdenominational church group.
As in the past, PNM campaign strategy reportedly
involves exploiting the country's historical racial
cleavages. In a speech in July that opponents
denounced as racist, Chambers warned of a "grand
Outlook
The Alliance currently appears to hold a slight edge,
but the ruling party's adeptness at exploiting its
inherent advantages and the timing of the election
will influence the outcome. The PNM's redistricting
and access to other government resources, as well as
its established grassroots structure, could at least
partly offset recent NAR gains. Most observers
believe that the longer Chambers waits to call an
election, however, the harder it will be for his party to
win. The weakening economy is draining government
revenues and raising prospects for a highly unpopular
currency devaluation by early 1987. At the same
time, delayed elections would help the NAR to
develop its fledgling organizational apparatus.
The electoral record and the NAR's growing appeal
to black voters suggest that major racial violence is
unlikely, but we believe allegations of massive vote
fraud could spark at least sporadic unrest. This
election will be the first in which blacks have headed
the two major parties.' Although the PNM is likely to
warn of an "Indian takeover" in hopes of
consolidating black support, the NAR's ability to
deflect PNM charges will turn on the Alliance's
presentation of acceptable black candidates. Ten of
the 18 candidates nominated by the NAR thus far are
black, but the Embassy says none are of "star-
quality."
We believe a PNM win would result in many new
Cabinet members but little change in foreign or
domestic policy. Chambers has publicly promised a
fresh slate of candidates. The PNM clearly hopes to
] The PNM has always faced East Indian leaders of the opposition
in national elections, except in 1981, when Hudson-Phillips headed
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counter the NAR's "time for a change" theme by
presenting itself as a revitalized party, but it has not
indicated it is preparing significant changes in
policies. We believe Chambers will continue to
maintain nonaligned foreign policies with occasional
praise and denunciations of the United States. We
doubt that Chambers would attempt to reassert the
country's regional leadership until economic
conditions improve.
An NAR victory would immediately test the unity of
the new alliance. We believe that if ULF-sponsored
candidates win numerous parliamentary seats,
Panday might well challenge Robinson's leadership.
According to Embassy officials, the ULF is virtually
assured of winning at least 8 to 10 seats, and is likely
to be the strongest NAR contingent. It is not clear,
however, to what extent ULF members would support
Panday over Robinson. Relations between the NAR's
business and labor factions would also be severely
tested, because the NAR pledge to "privatize" the
economy-the government controls about 80 percent
of the economy-would inevitably cause layoffs.
Although Robinson apparently favors stronger
relations with the United States, we believe Panday's
influence could be sufficient to block such a tilt.
Regardless of the election outcome, the next
administration will have to cope with major economic
constraints. With or without IMF support, tighter
austerity measures will be necessary to protect the
country's dwindling international reserves. We believe
sharp reductions in government spending and a
second devaluation since late 1985 almost certainly
will face the new government. Selling of or cutting
subsidies for most of the 64 jointly or wholly
government-owned companies will probably continue,
but resistance by labor groups that have already made
major concessions may slow this process. An NAR
victory could heighten labor expectations and raise
the potential for unrest.if, as we expect, the economy
continues to deteriorate over the near term. Given the
economic impetus behind recent contacts with Cuba,
gradual expansion of trade with Havana is likely to
occur no matter which party wins the election.
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Latin America
Briefs
The mounting wave of street crime, juvenile deliquency, and other forms of
antisocial behavior prompted the Castro regime in late September to create a new
office of the Council of State, called the National Social Attention and Prevention
Commission, to try to reverse the tide. Judging from an announcement in the
Cuban media, the commission, rather than dealing with the crime problem
directly, will be primarily a coordination mechanism, charged with managing the
crime prevention and rehabilitation programs of 21 different elements of the
government, party, and mass organizations. Party Politburo member Vilma Espin,
president of the Federation of Cuban Women, was named to preside over the
The Cuban media have focused increasingly on the crime problem. In late August,
for example, a Havana radio station reported the capture of a person implicated in
16 robberies and the arrest of a gang of 14 thieves who were responsible for 20
break-ins at warehouses and other commercial establishments in the capital.
Moncada, the monthly journal of the Interior Ministry, has described in detail
some of the more audacious cases of criminal activity encountered by the National
Revolutionary Police, and has pointed an accusatory finger at one of the party's
mass organizations, the Committees for the Defense of the Revolution (CDRs), for
contributing to the success of criminals through apathy. At the CDRs third
congress in September, the fight against crime was made the organization's top
priority.
Despite the appointment of the single-minded, tenacious Espin to head the new
commission, we doubt that it will amount to much more than yet another layer of
bureaucracy on an already topheavy governmental system. Nevertheless, the
creation of the commission and the naming of a Politburo member to head it
reflect the growing concern at the highest level over the current crime trend. The
leadership appears to have become convinced that, in light of Cuba's deteriorating
economic situation, remedial action must be taken at the national level if the rising
incidence of crime is to be kept from developing into a major domestic political
Secret
ALA LAR 86-024
10 October 1986
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President Sarney's government believes that Brazil's
meat shortage is likely to become a political issue in the campaigns for local
elections next month. Though Brazil is normally a beef exporter, several factors
have contributed to the widespread scarcity:
? Thousands of beef cattle died in a prolonged drought early this year.
? Government price controls have caused ranchers to withhold supplies from the
market.
? Higher real wages under the Cruzado Plan have sharply increased the demand
for meat products.
The shortage is receiving extensive and critical press coverage, according to the
US Embassy in Brasilia. lengthening queues to purchase
beef-a key staple in the Brazilian diet-are drawing the ire of consumers.
management.
To alleviate the shortage and resultant consumer discontent, the government last
month announced a higher producer price for beef and the elimination of value
added tax on beef, poultry, and fish. It also banned beef exports, limited poultry
exports, and increased meat imports. Nevertheless, producers remain dissatisfied
with the new price and continue to withhold cattle from the market, according to
the Embassy. In response, Sarney invoked-on a limited scale-a controversial
law that allows the government to confiscate cattle from private producers to
augment domestic supplies. Even if such seizures cause ranchers to begin to
comply with government demands, we believe beef shortages are likely to persist
for the next two to three months because of delays in the distribution network. In
the interim, consumer dissatisfaction with the scarcity of beef and other basic
products is likely to cost candidates of the government's party some support in the
elections next month, as well as undermine public confidence in Sarney's economic
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