NICARAGUA: PROSPECTS OR THE INSURGENCY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00573R000901180001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 28
• Document Creation Date: December 22, 2016
• Document Release Date: July 7, 2011
• Sequence Number: 1
• Publication Date: March 1, 1986
• Content Type: SNIE

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Central
Intelligence
5...._.~_ .._..
~'~ ~'~~T ~D~`E ~~T
Nicaragua: Prospects for
the Insurgency
Special National Intelligence Estimate
Memorandum to Holders
SNIE 83.3-4-85
March 1986
ropy 4 7 0
~y~`"~f L~rector of ~C1ret
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THIS ESTIMATE IS ISSUED BY THE DIRECTOR OF CENTRAL
INTELLIGENCE.
THE NATIONAL FOREIGN INTELLIGENCE BOARD CONCURS.
The following intelligence organizations participated in the preparation of the
Estimate:
The Central Intelligence Agency, the Defense Intelligence Agency, the National Security
Agency, and the intelligence organization of the Department of State.
Also Participating:
The Assistant Chief of Staff for Intelligence, Department of the Army
The Director of Naval Intelligence, Department of the Navy
The Assistant Chief of Staff, Intelligence, Department of the Air Force
The Director of Intelligence, Headquarters, Marine Corps
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Memorandum to Holders of SN I E 83.3-4-85
NICARAGUA: PROSPECTS OF
THE INSURGENCY
Information available as of 27 February 1986 was
used in the preparation of this Estimate, which
was approved by the National Foreign Intelli-
gence Board on that date.
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CONTENTS
Page
SCOPE NOTE ...................................................................................... 1
KEY JUDGMENTS .............................................................................. 3
DISCUSSION .......................................................... . ............................. 7
Status of the Insurgency ................................................................... 7
The Armed Opposition ..................................................................... 7
Insurgent Problems ....................................................................... 8
The Sandinista Counterinsurgency Effort ...................................... 10
Foreign Support ............................................................................ 10
Military Outlook ............................................................................... 10
Increased Support ......................................................................... 10
Regional Impact ............................................................................ 12
Sandinista Response ...................................................................... 12
Soviet and Cuban Support ........................................................... 12
No Increased Support ................................................................... 13
Impact on Sandinista Policy ............................................................. 13
ANNEX A. The Internal Opposition ................................................. 15
ANNEX B. Nicaraguan Insurgent Groups ........................................ 17
ANNEX C. Economic Deterioration and Popular Discontent ........ 19
ANNEX D. Catholic Church Opposition to the Regime ................. 21
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SCOPE NOTE
This Memorandum to Holders updates the Special National Intelli-
gence Estimate, Nicaragua: Prospects for the Insurgency, prepared in
July 1985. It will look first at recent trends in the conflict and the
strengths and weaknesses of both sides. It will also examine the
significance of foreign support to Managua and to the insurgents. It will
then discuss prospects for the insurgency over the next year or so,
depending primarily on alternative scenarios of outside support for the
rebels and the likely Soviet-Cuban response. Finally, it discusses other
key variables likely to affect the outcome, and the prospects for a
negotiated solution to the conflict.
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KEY JUDGMENTS
The armed conflict in Nicaragua has intensified since mid-1985,
but neither side has achieved a decisive advantage. Although the
insurgents reopened and expanded a second front in central Nicaragua
during the latter part of 1985, they have continued to suffer from
serious logistic problems made more acute by inconsistent Honduran
cooperation and the insurgents own inadequate management and
delivery capabilities. This has precluded expansion of the total insurgent
force, forced them to withdraw troops into Honduras and to keep large
numbers there awaiting resupply, and made it difficult to support
forces deep inside Nicaragua. Furthermore, although the insurgents
have received some popular support in rural areas, their inability to
maintain a dominant presence anywhere in Nicaragua or to create an
effective political program has limited their ability to attract more
active support, and they remain unable to operate in urban areas.
Finally, insurgent units now find themselves confronting experienced
and aggressive Sandinista counterinsurgency forces supported by artil-
lery and helicopter gunships.
Insurgent success in obtaining US military aid would have an
immediate positive impact on their morale and would send a clear
message to Nicaragua's neighbors about Washington's commitment to
the struggle. Many Latin countries would fear that the result would be a
prolonged and intensified conflict, but specific reactions within the
region are likely to vary considerably. The Honduran Government, in
particular, would feel reassured by approval of military aid, providing it
remains in covert channels. But it would expect compensation for its
support, and would remain nervous about the US commitment to
Honduran security and the prospect of an indefinitely prolonged
guerrilla presence in Honduras. Costa Rica, for its part, would be
unlikely to change past policy and allow the insurgents more extensive
activities inside Costa Rica.
With increased US support, the armed conflict inside Nicaragua
would likely intensify, and, with better management and delivery
capability, the insurgents would most likely be able to sustain a large
force presence inside Nicaragua. It also may enable the insurgents to ex-
pand their operations and add to their strength-now estimated ~t
about 20,000. Although the insurgents are unlikely to achieve military
victory within the next year, the Sandinistas would increasingly f ace the
prospect of a long and costly conflict with no end in sight. Much would
depend on the type and size of the aid, however, and the degree to
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which the insurgents would respond to US training and guidance. The
rebels still have serious administrative, leadership, tactical, and training
weaknesses that are not susceptible to quick fixes.
A key variable for insurgent prospects will be the ability of the po-
litical leadership to achieve greater unity, develop a more effective
political strategy, and establish better links to the internal opposition in
order to mobilize greater popular support. This has been a major
weakness so far, despite growing popular dissatisfaction with the
Sandinista regime. Increased military success, coupled with a viable
political program, probably would begin to shif t the strategic balance in
the insurgents' favor. We believe, however, such improvements are
unlikely to happen within the next year.
Managua probably will use increased external support for the
insurgents to justify even greater sacrifices from its population and
tighter controls on the internal opposition. The Sandinistas are also
likely to step up diplomatic pressure and, whenever necessary, use
military pressure on Honduras and Costa Rica to deny sanctuary to the
rebels. Finally, Managua would likely continue its support for radical
and subversive groups in neighboring countries and encourage subver-
sive activity in an effort to raise the cost of support to the Nicaraguan
insurgents.
A major factor in Managua's capability to contain the insurgency
will be how much additional military support the Soviet Bloc and Cuba
are willing-and able-to provide. We believe the Soviet Union will
continue to provide substantial military and economic support to
buttress the Sandinista regime. In particular, they or their surrogates are
likely to provide additional helicopters and other material to support
the counterinsurgency effort. The Soviets may provide new air defense
weapon systems, and they may test the levels of US tolerance by
supplying L-39s or comparable aircraft. They will still feel constrained
about providing advanced jet fighter aircraft for fear of provoking a US
response.
Cuba would likely be willing to commit additional military
advisers and trainers. But we do not believe that Castro would be
willing to send ground combat units to Nicaragua for fear of a US
response. And, although he may step up support for neighboring radical
groups, he will be wary of being openly linked to terrorist acts on their
part.
We believe that, should the insurgents fail to obtain military aid
from the United States but continue to receive nonlethal support at
current levels, they are likely to be discouraged, and the incentives for
cooperation among the various factions of the external opposition would
be reduced. The insurgents probably would be unable to obtain
sufficient funds from other sources to purchase necessary transport
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aircraf t or meet other critical military needs. Furthermore, Nicaragua's
neighbors are likely to have greater doubts about the ultimate viability
of the insurgency and the US commitment to oppose Sandinista
consolidation. Honduran military support for the insurgency would
become increasingly problematic. We doubt that the insurgency would
precipitously disintegrate, but, over time, the strategic balance is likely
to shift gradually in Managua's favor from the current stalemate as its
own capabilities continue to improve and the rebels fail to keep pace.
Although increased US military aid to the insurgency probably
would not change the Sandinista negotiating posture in the near term, a
stronger and more viable insurgency would tempt Managua to accept a
less advantageous Contadora Treaty and undertake at least nominal
talks with the internal opposition on national reconciliation. On the
other hand, there is some possibility that no amount of insurgent or
other pressure will induce the Sandinistas to make fundamental
concessions.
The Managua regime remains intent on ultimately consolidating a
Marxist-Leninist, totalitarian state in Nicaragua, and the insurgency has
remained a major obstacle to its success. We believe that, should the in-
surgency be greatly reduced or defeated, the generally weak and
divided internal opposition would present little challenge to the Sandi-
nistas, and Sandinista incentives to make negotiating concessions would
be greatly reduced. Although Managua argues publicly that it cannot
make concessions while subject to external aggression, we do not believe
it would be significantly more conciliatory were the insurgency weak-
ened. Instead, this would improve Nicaragua's chances of obtaining
advantageous bilateral agreements with Cost Rica and Honduras,
thereby undermining the prospects of an effective regional agreement
under Contadora auspices.
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Figure 1
Insurgent Operating Areas, Mid-1985 to February 1986
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DISCUSSION
Status of the Insurgency
1. The level of fighting in Nicaragua intensified
during the last half of 1985 as both sides increased the
scope of their operations considerably. The insurgents
were able to reopen a second front in south-central
Nicaragua with a force of some 5,000 to 6,000 combat-
ants and to sustain operations in the area for over six
months. (See map.) This force apparently has enjoyed
popular support in the area, has been able to threaten
the strategic Rama road on several occasions, has
occupied a few small towns for several hours, and has
caused the Sandinistas to divert more than half of its
counterinsurgency battalions to contain it.
2. In recent months, however, it has become in-
creasingly difficult to keep this force supplied with
adequate ammunition, boots, medicines, and other
supplies from support bases in Honduras. The logistic
problems resulted in part from a shortage of suitable
aircraft and restrictions by the Honduran Govern-
ment. As a result, nearly a fourth of this force was
forced to exfiltrate to Honduras. This, combined with
Sandinista military pressure, has forced the remaining
elements to conserve their supplies and reduce their
level of operations.
3. Meanwhile, in the north-central area near the
Honduran border, the insurgents have been generally
less active than in the past. Insurgent efforts to seize
several towns in early August 1985 were in most
instances repulsed by the rapid arrival of MI-25
gunships, and the insurgents have generally reverted to
small-scale operations since then. Over the last year
the Sandinistas have gradually increased their efforts
to apply military pressure on insurgent supply bases
and infiltration points in the border area. They also
have been willing to conduct small-scale operations
inside Honduras for extended periods, and they re-
cently seized a key supply point at Banco Grande after
a relatively costly effort (see map). Sandinista raids
have caused some Honduran civilian and military
casualties, but, except for a retaliatory airstrike last
September, Honduras has chosen not to respond with
force and has left the fighting to the Nicaraguan
rebels.
The Armed Opposition
4. Most major anti-Sandinista insurgent forces have
been drawn together into a loose political alliance
called the Unified Nicaraguan Opposition (UNO). Its
political leadership consists of Adolfo Calero of the
Nicaraguan Democratic Force (FDN), Alfonso Robelo
of the Democratic Revolutionary Alliance (ARDE),
and Arturo Cruz, an independent who attempted to
run in the 1984 presidential elections as candidate of a
coalition of internal opposition parties (see inset.) All
three have strong democratic and anti-Sandinista cre-
dentials, and UNO issued a political platform in
January 1986 calling for a negotiated solution to the
conflict and new elections in Nicaragua. Nevertheless,
UNO has not developed any grassroots political orga-
nization needed to exploit growing popular discontent.
Nor has it gained widespread international recognition
as a valid opposition political force, probably because
of the FDN's persistent Somosista image and the
perception that UNO and the FDN were put together
by the United States and rely primarily on US support.
5. The FDN remains the largest, best equipped,
and most proficient of the anti-Sandinista insurgent
groups. Its force strength appears to have stabilized at
an estimated 17,000 since mid-1985, primarily as a
result of its inability to deliver supplies to forces inside
Nicaragua and the lack of an adequate infrastructure
to sustain a larger force. The FDN military forces
continue to be commanded by Enrique Bermudez, a
former Somoza National Guard officer, and other
former Guard commanders occupy key positions on
the General Staff. Nevertheless, 75 of 105 field com-
manders are either local volunteers or former Sandi-
nista soldiers. The overwhelming majority of the
troops consists primarily of peasants from the moun-
tainous areas of northern and central Nicaragua
6. There are several Creole, Miskito, and other
Indian groups that also are continuing armed resis-
tance against the Sandinista regime. These groups
operate primarly along the Caribbean coast of Nicara-
gua and have rebelled against harsh repression by the
Sandinistas. Numbering perhaps 1,500 combatants, the
Indians have been sporadically active against the
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Sandinistas in the past six months as a result of supply
shortages and internal disorganization. Nevertheless,
they are fierce fighters who know the terrain well, and
they could probably expand with sufficient support.
The maiority of them are affiliated with UNO under
an organization called Kisan, and others have been
fighting with a group called Misurasata led by Indian
leader Brooklyn Rivera. Virtually all the Indian groups
distrust Spanish-speaking Nicaraguans, including the
anti-Sandinistas, and they have strongly resisted subor-
dination to the UNO.
7. The last maior group of anti-Sandinista resistance
forces continues to be led by former Sandinista com-
mander Eden Pastora and operates primarily in south-
eastern Nicaragua along the Costa Rican border. Pas-
tora's forces have suffered from Sandinista offensives
and his erratic leadership, and most of his key field
commanders have begun to ally themselves with UNO
in order to obtain better logistic support. Although he
claims an overall strength of over 3,000, no more than
1,000 can currently be considered combat effective.
Nevertheless, they continue to conduct small-scale
attacks and harassment operations in the regionC
8. The insurgents rely heavily on the rural popula-
tion for recruits, intelligence, and various kinds of
support. The overall growth of FDN ranks and rebel
commanders' reports of popular backing in the coun-
tryside attest to the considerable discontent with the
Sandinistas. The peasants' resentment of the regime
stems largely from its intrusion into their lives through
agricultural collectivization, control over access to
credit, resettlement programs, military conscription,
and antichurch policies. Developing this base of poten-
tial political support is critical to the insurgents' ability
to expand operations inside Nicaragua.
Insurgent Problems
9. The insurgents' maior weakness over the last six
months has been erratic logistic support and inade-
quate delivery means despite the renewal of US
nonlethal aid assistance last year. The maior bottleneck
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has been Honduras, where the government and mili-
tary have been disturbed by the overt nature of the US
support, the publicity given to early supply flights
from the United States, and what they see as lack of
insurgent progress. They also view as inadequate the
US military and economic aid being provided to
Honduras in compensation for the key role it is
playing in supporting the FDN. As a result, Honduras
suspended supply flights for the insurgents last No-
vember. Although some of these restrictions have
recently been eased, the insurgents suffered heavily in
the interim, and the majority of its forces were kept
tied to forward bases in Honduras awaiting delivery of
supplies. In addition, a shortage of suitable aircraft has
made it difficult to fly sufficient support operations
for forces operating in the interior of Nicaragua,
making it impossible for them to sustain a high level of
operation
10. The insurgents also find themselves outgunned
by Sandinista forces well equipped with machine guns,
mortars, and other heavier weapons. In particular, the
insurgents have suffered from a lack of adequate air
defense weapons to counter the increased use of
Sandinista air assets., Although the insurgents were able
to down a Sandinista MI-8 helicopter in December
1985-with the loss of two Cuban pilots-their small
arsenal of SA-7 missiles has been almost exhausted,
and they have not been able to obtain more reliable
and effective alternatives.)
11. The insurgents also continue to suffer from
problems with command and control of units in the
field, poor planning and target selection, inadequate
training, and uneven leadership. This has forced them
to rely primarily on small unit tactics such as am-
bushes of small Sandinista units, raids on vehicles, and
attacks on coffee cooperatives, collective farms, and
other poorly defended government facilities. Their
destruction of such basic infrastructure as electric grids
and major bridges has been less frequent. They have
attacked some militia units in lightly defended towns,
but have not targeted major garrisons.
12. Finally, the insurgents have yet to develop an
effective political effort inside Nicaragua despite
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growing popular dissatisfaction with the regime. Their
radio propaganda has been ineffective. They have so
far been unable to generate support in heavily popu-
lated western Nicaragua and have confined their
operations to rural areas. Even in these areas, they
have failed to establish a dominant presence or the
political infrastructure necessary to give them a per-
manent support base
The Sandinista Counterinsurgency Effort
13. The Sandinistas have continued to improve
their counterinsurgency capabilities over the past six
months. They are making better use of their 12 to 14
special counterinsurgency battalions, helicopter force,
and signal intercept capabilities to seek out and at-
tempt to engage the guerrillas. Moreover, the Sandinis-
tas have thoroughly penetrated the FDN infrastruc-
ture and operational units and have frequently had
advance notice of FDN operations, although they have
not always been able to act effectively on their
intelligence. The counterinsurgency units are more
experienced and aggressive than the reserve and mili-
tia units they have replaced, and their leadership also
appears somewhat improved. Local militia units are
now used primarily to guard key bridges, agricultural
cooperatives, and other Sandinista facilities. The San-
dinistas also have constructed a large number of
forward artillery and air support bases in insurgent
areas to improve their firepower and rapid response
capabilities. According to guerrilla commanders, the
increased use of armed MI-17 and MI-25 helicopters
has been particularly effective in preventing insurgent
units from concentrating and attacking larger targets.
poor command and control, low morale, and contin-
ued desertions and supply problems in the field.
Although units that have operated in the northwest for
extended periods now know the terrain much better,
this is not true in the central and southern regions
where the insurgents have expanded operations. Their
major successes have come in ambushes along infiltra-
tion routes and in rapid response to insurgent efforts to
seize towns. Finally, while the Sandinista force of
some 25 to 30 Soviet-built helicopters has been put to
good use, it has suffered from poor maintenance and
other problems, and has not been entirely adequate to
counter the more widespread insurgent operations
since mid-1985.
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14. Nevertheless, the war is imposing a heavy fi-
nancial burden on Managua, which, combined with
steadily worsening economy, is resulting in increased
popular dissatisfaction with the regime. Nicaragua
admits it spent about 50 percent of its budget on the
war last year, and the figure reportedly may climb to
nearly 65 percent in 1986. The Sandinistas have
responded to growing economic difficulties with in-
creasingly tough measures to control distribution of
goods and eliminate speculation by private merchants.
Sandinista sources have acknowledged that the regime
has lost much of its support in rural areas as a result of
past economic and political abuses and mistakes. In
response, Managua has stepped up agrarian reform in
an effort to win back greater support from the rural
sector.
15. Furthermore, the Sandinista military continues
to demonstrate some significant weaknesses, including
Foreign Support
16. Soviet Bloc and Cuban military and economic
support has become increasingly critical to the Sandi-
nista regime as Western support has continued to
decline. Soviet Bloc and Cuban economic aid reached
an estimated $400 million in grants and credits last
year and may increase in 1986. Bloc goods now
account for nearly 60 percent of all imports, and
Moscow now provides virtually all of Nicaragua's oil
needs. Although the value of military aid dropped off
last year from the 1984 peak of some $250 million, the
Soviet Bloc provided an increased volume of military-
related goods in 1985 in support of Managua's needs
(see charts). We believe the Soviet Bloc may provide
additional helicopters during the next 12 months and
possibly new air defense weapons as well.
17. The 2,500 to 3,500 Cuban military advisers and
technicians in Nicargua are playing a key role in
assisting the counterinsurgency effort. About 20 Cu-
ban pilots reportedly are helping to fly Sandinista
aircraft, and many
have engaged in combat missions. At least four of these
pilots have been killed in combat operations. Cuban
military advisers are present down to company level in
some counterinsurgency units,
and they reportedly carry Nicaraguan ID cards and
wear Sandinista uniforms to conceal their identity.
Other sources indicate that Cubans play a key role in
helping to operate the eight communications intercept
sites identified in Nicaragua.~~
Military Outlook
Increased Support
18. The military outlook for the insurgency in 25X1
Nicaragua is likely to be significantly affected by
whether the rebels are able to obtain substantial US
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Figure 2
Nicaragua: Economic Indicators, 1978-85
Consumer Price Growth Real Wages
Percent Index: 1978=100
Real average wage
o Real minimum wage
Real Per Capita GDP
Index: 1978=100
0 1978 80
85 30 1978 80
1978 80 85
military aid and training assistance. A decision to
provide the assistance probably would provide an
immediate boost to insurgent morale. US training
assistance, strategic advice, and tactical planning,
along with better intelligence, would lay the ground-
work for substantial improvement in insurgent capa-
bilities over time. With adequate logistic support,
better management, and improved delivery capability
to field commanders, the insurgents will most likely be
able to sustain a large force presence inside Nicaragua.
One important result may be the reactivation of fronts
along the Atlantic Coast and southern Nicaragua,
which would put further strains on Sandinista re-
sources.
19. Although the insurgents would be unlikely to
achieve a decisive military victory within the next
year, the delivery and effective use of increased
assistance would provide the insurgents the where-
withal to expand their forces and to regain and hold
the initiative. Under such circumstances, the level of
fighting probably would intensify considerably, but
insurgent effectiveness would depend on the type and
use of the military assistance package and the degree
to which the insurgents respond to training and guid-
ance. In any case, the conflict is still likely to be
confined primarily to the rural areas of central and
eastern Nicaragua, and the insurgents probably will
still have difficulties controlling large areas or captur-
ing and holding maior towns for more than short
periods.
20. Increased US aid should be a positive factor in
increasing the unity of the insurgency and its political
leadership and helping it to demonstrate its viability to
the general population. With better training and intel-
ligence support, the insurgents should be able to
conduct operations against key targets in the more 25X1
heavily populated areas of western Nicaragua. Never-
theless, they will have to significantly improve their
counterintelligence capabilities if they are to circum-
vent the Sandinistas' efforts to prevent the formation
of urban support networks and avoid compromise of
operational plans.
21. A key variable for the prospects of the insurgen-
cy will remain the ability of the political leadership to
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Figure 3
Nicaragua: Communist Assistance
Military
Economic
achieve greater unity, develop a more effective politi-
cal strategy, and establish better links to the internal
opposition in order to capitalize on growing popular
dissatisfaction with the Sandinista regime. Increased
insurgent military success coupled with a viable and
effective political program probably would begin to
shift the balance from the current stalemate to the
insurgents' favor. We believe this is unlikely to happen
within the next year, however.
Regional Impact
22. A US decision to provide military aid would
send a clear message to Nicaragua's neighbors about
Washington's commitment to the struggle. Many Latin
countries will fear that the result will be an intensified
conflict, but specific reactions are likely to vary
considerably. The new Honduras military leadership
would welcome an increased US commitment to the
FDN but expect to be rewarded for Honduran cooper-
ation. The Azcona government would also feel reas-
sured by approval of military aid, providing it remains
in covert channels, but will likewise expect compensa-
tion and will remain nervous about the US commit-
ment to Honduran security and the prospect of an
indefinitely prolonged large guerrilla presence in Hon-
duras. We see little likelihood that the new Arias
government will change the Monge administration's
policy and allow more extensive insurgent activities in
Costa Rica; indeed, it may become even more restric-
tive. El Salvador would support US military aid, but
we do not see any real chance of greater cooperation
from Guatemala.~~
Sandinista Response
23. Managua would view any US military assistance
as further evidence that it is in for a long tough
struggle with no end in sight. It probably will demand
even greater economic sacrifices from the population,
putting the blame on increased US aggression. It will
almost certainly step up its surveillance and intimida-
tion of the internal opposition, and may arrest key
opposition leaders to avert any possibility of an inter-
nal front. The Sandinistas are likely to continue im-
proving their own capabilities and will cite US mili-
tary aid to the rebels as justification for requesting
greater support from the Soviet Bloc, Cuba, and
radical allies.
24. A key Sandinista priority is likely to be attempts
to pressure Honduras and Costa Rica to deny sanctu-
ary to the rebels through diplomatic and military
means. Managua probably will step up its cross-border
military operations against insurgent base camps and
staging areas in Honduras, even at the risk of provok-
ing retaliation. Although they are likely to continue
hot pursuit into Costa Rica, they may be more cautious
there to avoid endangering the recent rapprochement
with San Jose and efforts to establish international
supervision of the border. Finally, Nicaragua is likely
to continue its covert support to neighboring radical
groups and encourage other subversive acts to raise the
cost of support to their external opponents
Soviet and Cuban Support
25. As in the past, the Soviets, will probably contin-
ue to use Cuba and East European countries as
intermediaries for major weapon system deliveries to
avoid arousing regional fears and to avoid confronta-
tion with the United States. They will probably refrain
from supplying US-proscribed arms such as MIG-21
fighters. The Soviets may, however, provide more
advanced weapon systems such as radar-guided sur-
face-to-air missiles, and they may decide to test the
limits of US tolerance in gray areas such as L-39s or
comparable aircraft if the Sandinistas can make a
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persuasive case for their utility. They will continue
deliveries of military-associated goods most suitable to
a counterinsurgency and to correcting the deficiencies
the Sandinistas have demonstrated in the field
26. The Cubans, for their part, are likely to be
willing to assume an even greater combat role in
support of the Sandinista regime. The number of
Cuban advisers and support personnel may increase
significantly in an effort to assist the Sandinistas with
rapid absorption of additional helicopters, air defense
weaponry, and other combat equipment. At the recent
Cuban Communist Party Conference in Havana, Cas-
tro stated that, in the event the United States augments
aid to the resistance, "Cuba will do everything possible
to increase its support to the people of Nicaragua."
Nevertheless, we doubt that Castro would take the risk
of sending ground combat units to Nicaragua for fear
of US detection and response. And, while he may step
up Cuban support for neighboring radical groups, he
will be wary of being linked openly to any terrorist
acts on their par
No Increased Support
27. Should the insurgents fail to obtain military aid
from the United States and continue to receive nonle-
thal support at current levels, they are likely to be
greatly discouraged, and the incentives for cooperation
among the various factions of the external opposition
would be somewhat reduced. Provision of only nonle-
thal aid would force continued reliance on uncertain
levels of private funding for arms and munitions,
which at a minimum would complicate military plan-
ning. The insurgents probably would be unable to
obtain sufficient financial resources to purchase equip-
ment to meet some critical needs, such as large
transport aircraft and antiaircraft weapons to cope
with the increasing Sandinista air threat
28. Furthermore, Nicaragua's neighbors are likely
to have greater doubts about the ultimate viability of
the insurgency and the US commitment to oppose
Sandinista consolidation. Honduran military support
for the insurgency would become increasingly prob-
lematic, and Tegucigalpa may impose greater restric-
tions over rebel logistic and support bases. We doubt
that the insurgency would precipitously disintegrate,
and the guerrillas probably can sustain their attacks at
reduced levels over the next year or so. Over time,
however, the strategic balance is likely to shift gradu-
ally in Managua's favor as its own counterinsurgency
capabilities continue to improve and the insurgents fail
to make similar progress.
Impact on Sandinista Policy
29. A stronger and more viable insurgency, along
with the higher economic costs involved in fighting it,
would place increased pressure on the Sandinistas to
make negotiating concessions. Although initially Ma-
nagua is likely to continue to take a hard line and
refuse to make any significant concessions either in the
Contadora talks and with the internal opposition, over
time this resolve may weaken. Much will depend on
the ability of the insurgency to increase its political
viability and to bring the war closer to major urban
areas in western Nicaragua. In the event the insurgen-
cy becomes both a greater political and military
threat, Managua may be tempted to accept a less
advantageous Contadora Treaty in an effort to end its
external support. Nevertheless, such a treaty may fall
short of minimal US objectives for a regional peace
settlement, especially on internal reconciliation and
democratization. Finally, there is some possibility that
no amount of guerrilla military pressure will induce
the Sandinistas to make fundamental concessions, and
they may decide to settle the issue on the battlefield.
30. We believe a less effective insurgency would
greatly reduce Sandinista incentives to make any
negotiations concessions in the Contadora context, and
it would improve their ability to reach advantageous
agreements. Although Managua publicly argues that it
cannot make any concessions while subject to external
aggression, we do not believe they would be signifi-
cantly more conciliatory were the insurgency weak-
ened. The Sandinistas may be willing to undertake a
dialogue with the internal opposition to satisfy interna-
tional public opinion, but the terms would essentially
be over what trappings of pluralism, private enter-
prise, and political nonalignment they would allow to
remain. Honduras and Costa Rica, for their part,
would be more likely to conclude bilateral agreements
with Managua, thereby undermining the Contadora
process. Alternatively, Nicaragua may be able to
conclude a much more advantageous Contadora Trea-
ty.
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ANNEX A
THE INTERNAL OPPOSITION
1. The opposition political coalition, Coordinadora
(CDN), plagued by internal disputes and increasingly
hemmed in by the expanded state of emergency
decreed last October, has been reluctant to assume the
political risks entailed in consistently defying the
regime. The coalition lacks charismatic leaders and has
been unable to define a political strategy to put the
Sandinistas on the defensive. Its power to make its
voice heard has been further limited by its absence
from the National Assembly-it fielded no candidates
in the 1984 election-and the resumption of heavy
media censorship. Other opposition parties that are
members of the National Assembly have not been
effective in providing independent views or blocking
FSLN legislation. As a result, constituent members of
the coalition and other opposition parties have pursued
their own strategies for coping with the regime. The
private sector, for example, has held a series of local
meetings of businessmen to discuss government eco-
nomic policies, and several of the political parties are
continuing their local organizing activities, despite
regime restrictions. Further, the coalition parties along
with one of the parties in the National Assembly
circulated a document in early February renewing
their call for a national dialogue. Party chiefs also
continue to travel abroad to meet with potential
backers, and various sources indicate they continue to
meet with political leaders of the armed resistance to
coordinate strategy. Nevertheless, they remain gener-
ally isolated within Nicaragua and lack the extensive
political apparatus necessary to reach Nicaraguans
beyond the maior urban areas
2. We see little likelihood of any sustained chal-
lenge to FSLN policies by the internal political opposi-
tion. Internal disputes and regime intimidation and
maneuvering to sow dissension probably will continue
to preclude the creation of a truly united and effective
political resistance. Although some key leaders almost
certainly will maintain covert contacts with the armed
resistance, they are likely to stop short of openly
supporting the insurgents because they fear retaliation.
We believe politicians and businessmen will assume
more risk only when convinced the insurgency has
established momentum in both urban and rural areas.
Main Opposition Groups
Democratic Coordinating Board
3. The Democratic Coordinating Board (CDN), or
Coordinadora, is composed of moderate and conserva-
tive and anti-Sandinista political parties and business
and labor organizations. Accurate membership figures
for the constituent member groups are elusive, but
rosters are sma110
The Legal Opposition
4. The legal opposition is composed of parties that
participated in the 1984 elections and hold seats in the
National Assembly proportionate to their electoral
performance. Some of the parties strongly support the
Sandinistas, while others are badly split over regime
policies.~~
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ANNEX B
NICARAGUAN INSURGENT GROUPS
Unified Nicaraguan Opposition (UNO)
1. Insurgent leaders from the FDN and ARDE and
exiled opposition leader Arturo Cruz announced the
formation of the new umbrella organization UNO in
June 1985. It replaced an alliance formed in 1984-
the Nicaraguan Unity for Reconciliation (UNIR)-in
which Miskito Indians of the Misura organization also
participated. The Indian insurgents have ties to UNO
and receive arms and other support, but are not
represented in the organization's top leadership.
2. Nicaraguan Democratic Force (FDN).
Formed in 1981, it is the largest and best equipped of
the guerrilla organizations, with an estimated 17,000
armed combatants. Headed by Adolfo Calero, former
president of Nicaragua's largest opposition party, the
FDN operates out of base camps in Honduras into
northwestern and central Nicaragua. The FDN also
has established a presence in southern Nicaragua and
the east coast through ties to semiautonomous groups.
Some 100 men of the Nicaraguan Revolutionary
Armed Forces (UNO/FARN), under Fernando Cha-
morro, operate on the southern border near Lake
Nicaragua, and a reported 300 black Creoles near
Bluefields are allied with the FDNI
3. Democratic Revolutionary Alliance (ARDE).
Alfonso Robelo, a former Sandinista government junta
member and head of a political party that opposed
Somoza, leads this group. Robelo broke his alliance
with Eden Pastora's forces in mid-1984, and ARDE's
small military wing now operates as part of the FDN.
4. Other Political Leaders. Arturo Cruz, the third
principal UNO leader, served on the Sandinista gov-
ernment junta and was the presidential candidate of a
coalition of opposition political parties in the election
in 1984, though he ultimately did not run. Several
other political organizations also signed the UNO unity
document. Most of these are exile wings of Nicaraguan
opposition parties.
Nicaraguan Indian Insurgents
5. Kisan was formed in September 1985 to unify
ethnic insurgents-primarily Miskito Indians, but also
Sumo and Rama Indians and black Creoles-on Nicar-
agua's Caribbean coast. The new organization joins the
Misura Revolutionary Front, dissidents of the Misura-
sata guerrillas, and the Southern Indigenous Creole
Community (Misurasata-SICC). Kisan is led by Wyc-
liffe Diego, replacing longtime rival Indian leaders,
Steadman Fagoth of the Misura and Brooklyn Rivera
of the Misurasata.)
6. Misurasata. A small group of combatants in
central and southern parts of the east coast remains
loyal to Brooklyn Rivera, who refused to join Kisan.
Rivera's attempts last year to negotiate regional auton-
omy with the Sandinistas produced divisions in Misur-
asata's ranks and a rupture in the organization's
alliance with Eden Pastora. In January, however,
Rivera declared his willingness to unify with Kisan
after the Sandinistas launched attacks on his party
traveling in the area south of Puerto Cabezas
Sandino Revolutionary Front (FRS)
7. Eden Pastora, a Sandinista revolutionary hero, is
the most charismatic and best known insurgent leader.
The FRS has suffered battlefield setbacks from gov-
ernment offensives and defections because of Pastora's
erratic leadership and inability to supply his troops.
Nevertheless, his estimated 1,000 troops continue to
mount sporadic small-unit actions in Nicaragua's
southeast. Pastora has refused to loin UNO because of
~tiu~
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desire to be given what other insurgent leaders consid-
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the Southern Opposition Bloc (BOS), conducted unsuc-
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ary, however, three of Pastora's top five commanders
independently agreed to cooperate militarily with the
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ANNEX C
ECONOMIC DETERIORATION AND POPULAR DISCONTENT
1. The costs of the war, as well as regime misman-
agement, have left the Nicaraguan economy in a
shambles, eroding popular support for the govern-
ment. The Sandinistas' military buildup has required
an ever-increasing share of the budget-10 percent in
1980, 25 percent in 1984, 50 percent in 1985, and we
expect it to reach about 65 percent in 1986. At the
same time, we estimate that real GDP fell 5 percent in
1984 and another 7 percent in 1985, while inflation
soared to 300 percent last year. We estimate that
agricultural exports for 1985 amounted to only $250
million, 50 percent less than when the Sandinistas
came to power. Industrial output during 1985 fell
nearly 10 percent. The deteriorating economy has led
to significant declines in per capita consumption and
forced substantial shifts in purchasing patterns. Infla-
tion, for example, has wiped out the savings of many
in the middle class and forced cutbacks in purchases of
imported items. Minimum-wage earners are postpon-
ing purchases of clothing and other basic consumer
goods, and Nicaraguan housewives report sharp deteri-
orations in family diets because of high prices and
chronic shortages. The economic decline and conflict
in the rural areas has sparked large-scale migration to
Managua, contributing to lower food production, un-
employment, and breakdowns in services that have
plagued the capital. Only massive support from the
Soviet Bloc has prevented total economic collapse.
2. The Sandinistas have responded with plans to
expand the agrarian reform program to bolster crop
production and stem migration and with tighter con-
trols over food supplies to cut into black-market
operations. In mid-January, the government revised
the land reform law to facilitate more rapid confisca-
tions of private holdings and promised to step up
distribution of titles this year. To strengthen the
agricultural sector further, as well as discourage migra-
tion, President Ortega has stated that any available
funds for development projects will be assigned to
rural areas. In February, Managua announced a con-
sumer census to eliminate abuses in the ration system,
as well as new retail licensing and market monitoring
procedures to reduce speculation and hoarding. Orte-
ga has also tried to deflect responsibility for the
economic crisis by blaming the insurgency and the US
trade embargo.
3. US Embassy and defense attache reporting points
to widespread dissatisfaction with Sandinista economic
policies, but there have been relatively few instances
of open resistance to the government. Economic pro-
tests have been limited to some strikes and a few
reported incidents of industrial sabotage. There has
also been scattered violence in the markets-one
regime price inspector was killed recently trying to
enforce regulations. Most local and foreign observers
agree that the Nicaraguan public is traditionally pas-
sive and difficult to mobilize. Nonetheless, the Sandi-
nistas apparently are concerned about their eroded
popular base, and areas showing high levels of hostility
are to receive additional economic aid. IJ -~I
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ANNEX D
CATHOLIC CHURCH OPPOSITION TO THE REGIME
1. Cardinal Obando y Bravo is the most effective
voice of opposition to Sandinista policies, and his
elevation from Archbishop last April has buttressed
church militancy. The Nicaraguan church is consid-
ered the strongest national church in Central America,
and the nearly 300,000 faithful who met the new
Cardinal upon his return from Rome testify to Oban-
do's immense popularity. The bishops have con-
demned government repression and strongly resisted
regime efforts to compromise church autonomy and to
impose Marxist indoctrination in the schools. The
hierarchy also has opposed military conscription and
repeatedly called for a national dialogue that would
include the insurgents. Obando has mounted daring
political challenges to the regime by celebrating a mass
in Miami in June attended by insurgent leaders and by
publishing a church newspaper in October in defiance
of press censorship. Although the bishops reappointed
Obando as president of the Episcopal conference last
October to reinforce his position and present a united
front, US Embassy reports indicate several have reser-
vations about Obando's confrontational approach.
2. The Sandinistas have responded to church activ-
ism by detaining clergy and lay activists, launching
harsh press attacks on Obando, and expanding the
state of emergency. The regime seized a new church
newspaper before it could be disseminated, occupied
the Curia office where it was printed, and shut down
the church radio station. The Interior Ministry also
ordered Obando to cancel outdoor masses-a directive
he promptly defied-and the government has used
harassment tactics to obstruct attendance. In addition,
the Sandinistas have increased their efforts to sow
divisions in the church, not only by backing the leftist
"popular church" as a rival to the hierarchy, but also
by attempting to cultivate ties to the other bishops.
3. Although the church does not have formal ties to
opposition parties, we believe that Cardinal Obando
will remain an important symbol to the internal
opposition. The Pope's mid-December letter to the
Nicaraguan bishops' criticizing regime oppression of
the church suggests that Obando will continue to
receive strong Vatican support. The Sandinistas proba-
bly will be unable to discredit him with the Nicara-
guan populace, and his stature will give the prelate the
credibility and personal security that eludes other
opposition leaders.
4. The church's role will, however, continue to be
primarily to lend moral authority to the opposition,
and Obando is unlikely, in our opinion, to move
significantly out in front of his political allies or the
other bishops by calling for antigovernment demon-
strations or openly supporting the insurgents. Never-
theless, heightened government repression is very like-
ly and could reach a point where the bishops would be
emboldened. Obando and the Sandinistas remain on a
collision course even if both sides occasionally tempo-
rize.
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