LATIN AMERICA REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00289R000200940001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 44
• Document Creation Date: December 27, 2016
• Document Release Date: August 16, 2011
• Sequence Number: 1
• Publication Date: November 22, 1985
• Content Type: REPORT

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Latin America
Review
22 November 1985
ALA LAR LAR 85-025
22 November 1985
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Latin America
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Review
22 November 1985
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Articles
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Cuba: Reindoctrinatmg the Masses
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Concern over increasingly negative popular attitudes has
Castro regime to overhaul the official media in an effort
led the
to
overcome popular apathy and revive dedication to revolutionary
ideals.
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Cuba: Church-State Relations
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he is willing
seems
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President Castro has tried to make it appear as though
to improve relations with the Cuban church, but he still
prepared to suppress religious freedom.
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Cuba?Southern Africa: Castro Pressing the Attack 9
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President Castro is increasing his rhetoric against South
US policy in southern Africa, while reportedly planning
Africa and
to give
greater support to insurgents who are battling the Pretoria
government.
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Suriname: Prospects for Democratization
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Head of Government Bouterse, sensitive to pressure from the
military, may backslide on recent moves that had raised hopes of an
eventual return to a civilian democratic government.
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Haiti: Domestic Political Opposition
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Opponents of the Duvalier regime have become more active in
response to the regime's agreement to legalize political parties, but
they remain too weak to make a serious bid for power.
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Paraguay: Stroessner's Economic Blindspot
President Stroessner's unwillingness to accept a devaluation is
leading to an increasingly unmanageable foreign payments situation
that is jeopardizing economic progress made over the last three
years.
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Briefs Argentina: Labor Restraint
Panama: Financial Breathing Space
Mexico: Position on Debt
Mexico-Israel: Counterterrorist Trainings
Cuba?Sri Lanka: Jayewardene's Visit
Suriname: Impending Layoffs
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Cuba Chronology
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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 25X1
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Articles
Cuba:
Reindoctrinating the Masse
The Castro regime is engaged in an extensive
ideological campaign to overcome popular apathy and
revive flagging dedication to revolutionary ideals.
This effort involves new investment in the Cuban
media, as well as the replacement of key personnel in
this field, and a thorough inspection of the party's
indoctrination apparatus to find out how to make it
more effective. The regime seems most concerned
with increasingly negative popular attitudes?
especially among Cuban youth?toward military
service and civilian and military duty overseas. The
receptivity of the population to broadcasts from Radio
Marti also has Havana worried. The fate of the
ideological campaign is certain to have an important
impact on the regime's ability to achieve significant
economic recovery during the next five-year plan.
Barring some major external threat that wakens
patriotic sentiment, we believe the Cuban
population?disillusioned by unfulfilled promises and
prolonged austerity?will remain largely immune to
the regime's prodding.
The 4 February Report
The first overt indication of official concern about
popular attitudes surfaced in July 1984 when the
ninth Central Committee plenum ordered a full report
"on the party's ideological work" to be presented at
the next plenum in December. The report was
presented to and approved by the tenth plenum but
was not made public until 4 February 1985, four days
after a rare special plenum of the Central Committee
had removed the party's Secretary for Ideology from
his seats on the Politburo and Secretariat "for
repeated errors and insufficiencies." Ousted at the
same time was the chief of the party's Revolutionary
Orientation Department, the office that oversees
Cuba's ideological indoctrination apparatus
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The 4 February report found serious fault with the
performance of the mechanisms of indoctrination and
focused special attention on the gap that had
developed between the populace and the Armed
Forces. Admitting that there was not yet "sufficient
social recognition and appreciation of military life,"
the report complained that "in not a few instances,
families that have a revolutionary attitude toward
different tasks and missions nonetheless make the
serious mistake of: harboring deserters from the
Armed Forces, covering up violations by family
members or friends in the military, expressing
negative feelings about the accomplishments of the
military, or regarding military service not as an honor
and a patriotic duty but rather a means of punishment
or correction of defects and deviancy."
The report also indicated there was some resistance in
the military establishment to the regime's
wholehearted embrace?with the creation of the
Territorial Militia?of the concept of a Vietnam-style
"war of all the people," and hinted at friction between
the regular Armed Forces and the new militia. This
tension presumably stems from the fact that the
militia has access to its own arms and is subordinate
to the Cuban Communist Party rather than the
Armed Forces Ministry. Moreover, the report
acknowledged that poor organization of militia
activities had caused public irritation and was sapping
popular enthusiasm?a development subsequently
confirmed by Armed Forces Minister Raul Castro in
an interview last May. To achieve the regime's
objectives, the report insisted that "an effective,
integral, and practical ideological campaign must be
carried out in an increasingly creative manner,
making skillful use of the various forms and methods
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of propaganda and agitation and organizing the
actions of various educational and cultural institutions
and other entities...
The May Symposium
Last year, while the 4 February report was being
drafted, more than 300 papers on various aspects of
ideological work were prepared for a symposium held
at the party's Nico Lopez National School for Cadres
in early May 1985. According to the party's
theoretical journal, Cuba Socialista, 60 of these
papers were chosen for presentation at the
symposium, which had as its theme "The Patriotic
and Internationalist System of Education in the
Ideological Work of the Party." In addition to the 200
Cuban delegates and guests, the affair was attended
by delegations from Bulgaria, East Germany, and the
USSR.
The symposium was divided into six commissions,
each of which discussed specific areas of ideological
work. It was evident from the discussion topics that
the party is concerned about waning patriotism,
popular ambivalence toward the policy of
internationalism, and competition from the Western
media. One commission, for example, had as a topic
"Patriotism and Internationalism in the System of
Political Education of the Party, the Party's Youth
Arm, and the Mass Organizations." One of the
commission's papers?lauded for its timeliness?
assessed "the internationalist principle of the Cuban
Revolution and the subversive and defamatory
content of bourgeois criticism." Several papers
addressed the special problem of instilling a spirit of
patriotism and internationalism in the younger
generation.
the post-Revolution generation is the most
disenchanted segment of the Cuban population.)
Judging from Cuba Socialista's description of the
symposium and its findings, the Cuban indoctrination
apparatus has been ineffective in a number of
important areas. It was found wanting, for example,
in its task of "educating the Cuban people, and
especially the new generations, in socialist patriotism
and proletarian internationalism." According to the
report, it has not used the mass media most
effectively, and has not sufficiently exploited
extrascholastic activities "as a means of elevating the
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patriotic and internationalist conscience of students."
The report also stated that it must recognize "the
correctness and necessity of extolling the role of the
Armed Forces" in the political education of the
population, "and the new generations in particular."
In addition, it must address "the undeferable need to
study the enemy's main diversionist theses that are
aimed at discrediting the foreign policy of the Cuban
Revolution and its classist and internationalist
essence" in order to be able to "show scientifically the
hollowness of these theories and reveal the true
reactionary aims of the so-called Cubanologists."
Corrective Measures
Measures to remedy some of these problems had
already been initiated well before the symposium took
place. In September 1984, for example, the University
of Havana inaugurated a new Faculty of Journalism,
established "to improve the information effectiveness
of the media," according to the Cuban press. In early
1985, Gustavo Robreno, who had headed the regime's
international news agency, Prensa Latina, for over a
decade, was removed. Shortly thereafter, Nivaldo
Herrera, president of the Cuban Radio and Television
Institute since 1974, was replaced by Ismael
Gonzalez, an obscure official on President Fidel
Castro's staff who apparently has had no experience
in the field of broadcasting.
President Castro, himself, has become personally
involved. In a meeting last July of the party's 14
provincial secretaries of propaganda, he announced
his intention to improve the performance and working
conditions of Prensa Latina and the other elements of
the Cuban media
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The US Interests Section in Havana reported in
September that an extraordinary effort had been
made by the Castro regime to provide better-than-
average television programming last summer. This
effort included direct satellite coverage of the opening
and closing ceremonies of the Youth Festival in
Moscow and live coverage of the amateur baseball
championships in Edmonton, Canada (which was won
by the Cuban team). In addition, good quality movies
were offered nearly every weeknight?replacing the
usual dreary films about how the Soviets won World
War II or overfulfilled their agricultural production
goals. Cuban television also produced several adult-
style soap operas and dramas, and also broadcast the
US-produced series "Roots," which apparently
captured a large audience.
The US Interests Section reported the most
interesting new dramatic series is one produced by the
Central Political Directorate of the Armed Forces
Ministry. The series depicts the successful
revolutionary integration of four youths from
strikingly different class backgrounds, thanks to the
common bond of military service. The four
protagonists include the son of a high party official,
the son of a midlevel functionary, a poor urban youth,
and a peasant youth. The US Interests Section noted
that Cubans have been struck by the frank manner in
which the relative affluence of the party leader is
portrayed?a luxurious home, two cars, and other
perquisites?as well as by one of the dramatic
sequences involving a white youth falling in love with
a black girl over the objections of his family.
The party's official newspaper Grantna, the daily with
the largest circulation in Cuba, also is getting its
share of improvements. One of its editors told the
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chief of the US Interests Section in October that the
paper expects to receive a new press from East
Germany next year that will enable it to produce a
clearer product (by offset) at a higher speed.
According to the editor, Granma intends to use
facsimile transmission to speed distribution of the
newspaper to parts of eastern Cuba, starting with
Santiago de Cuba some 900 kilometers from Havana.
To improve performance, some elements of the media
have sought help from abroad. The party's youth arm,
which publishes Rebel Youth, the country's second
most important daily newspaper, arranged last
September to strengthen cooperation with its
Hungarian counterpart in the field of "youth press,"
according to a Hungarian press announcement. In
June, the Czechoslovak news agency CTK reported
that the new head of Prensa Latina, Pedro Margolies,
and CTK Director Gen. Otakar Svercina had signed a
protocol on technical-economic cooperation.
According to the public announcement, "the two news
agencies will implement an extensive program of the
exchange and application of the latest knowledge on
news agency activities," and said that "this new type
of cooperation of a higher quality, being implemented
in the spirit of internationalism, significantly
contributes to increased ideological influence of the
media."
The Bogomolov Dispatch
These extensive remedial efforts prompted the Pravda
correspondent in Havana, P. Bogomolov, to write a
dispatch in October 1985 entitled: "Getting Through
to Everyone: Cuban Communists Improve Ideological
Education Work Among the Masses." According to
his report, "the political enlightenment network has
been expanded; party schools, seminars, and courses
are working increasingly actively; and an increasing
amount of diverse literature on questions of the
building of socialism and on international life is being
published." Bogomolov also reflected on the
continuing dilemma Cuba is experiencing with
disenchanted youth and popular resistance to service
overseas, noting that "political study groups discuss
problems concerning the moral education of young
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people, the work of Cuban internationalists abroad,
the prices and incomes policy, and the struggle
against antisocial phenomena."
Bogomolov also acknowledged some of the problems
that exist in the Cuban media. He wrote that
"important resolutions on the work of the mass media
and on the development everywhere of criticism and
self-criticism have recently been adopted" and he
went on to describe a meeting of editors of a
provincial newspaper in eastern Cuba in which
criticism was made of the topicality and effectiveness
of the newspaper's articles. This resulted in the
creation of a network of correspondents in factories
and rural areas of the province and generated
campaigns to improve local transportation and other
consumer services.
In addition, Bogomolov confirmed the Castro regime's
concern over the impact of Radio Marti. He
interviewed a provincial party official in central Cuba
who admitted that sociological surveys had been
carried out to probe the receptivity of young Cubans
to the US broadcasts. The official claimed that the
surveys showed most young men and women to be
"unreceptive to the standards of the American way of
life and style of behavior," but he frankly
acknowledged that "in certain of our country's port
cities there are still groups?albeit negligible in size?
of adolescents who blindly ape models which are alien
to us."
Conclusions
The Castro regime, in our estimation, is justifiably
concerned about negative popular attitudes. Cubans
seem fed up with the policy of internationalism that
indefinitely requires large numbers of "volunteers" to
serve hardship tours abroad without reward. Young
Cubans especially seem disenchanted with the policy
and with the need to perform military service. This is
an ill omen for the regime as it enters an extended
period of austerity during which it will have to rely
heavily on the public's good will to achieve critical
economic goals.
A number of the remedial measures adopted so far
almost certainly will increase the appeal of
entertainment on the Cuban media and thus stiffen
the competition for Radio Marti, particularly during
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evening hours. Given the ideological convictions of the
Cuban leadership and the rigidity of the Cuban
political system, however, we believe there is little
chance that Havana's indoctrination apparatus will be
able to increase its effectiveness sufficiently to
overcome popular apathy. Unless some external
stimulus arouses patriotic and nationalistic sentiments
and convinces the Cuban people that there is a
genuine military threat, the propaganda mill is likely
to enjoy only minimal success in motivating the
population.
We believe it is significant that the regime, rather
than modifying its policies to accommodate popular
sentiment, is sticking doggedly to its commitment to
internationalism and is placing hope in its ability to
motivate the masses and change popular attitudes.
The risks are high. The regime's unwillingness to
compromise could result in further alienation of
Cuban youth, increased popular frustration, and
hardened apathy. This could leave the leadership
vulnerable to external events?a bad defeat of Cuban
forces in Angola, for example?that could make its
policy of inflexibility costly in terms of popular
support.
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Cuba: Church-State Relations
President Castro's increasing efforts to exploit
religion appear to reflect a new awareness of the
church's potential for political influence in the United
States and Latin America. US presidential candidate
Jesse Jackson's trip to Cuba in the summer of 1984
marked the beginning of Castro's public campaign to
portray himself as a friend of religion, thereby
opening the way for strengthened ties to politicized
elements of the church throughout Latin America and
the world. More recently, Castro has tried to make it
appear as though he is engaging in dialogue with
Cuban church leaders and is willing to improve the
status of the domestic church. To date, however, these
much publicized changes have had little real impact.
Castro seems prepared to continue suppressing
religion in Cuba while expanding contacts with left-
leaning religious figures in Latin America and
elsewhere.
Historical Background
When Castro came to power in 1959, many of the
church's leaders were favorably disposed toward the
new regime. Nevertheless, the new Cuban leader was
determined to destroy all institutions that could
threaten the consolidation of his revolution, and he
viewed the church as a prime target. As the new
government's policies became radicalized and its links
to Communism apparent, the church began openly to
oppose the revolution's leftward bent. Castro reacted
by labeling Catholics as reactionaries and denying
Catholic organizations a voice in the print and
broadcast media. In early 1961, the regime took over
the church's 250 schools and expelled 500 of its 700
priests. The government also forced all but 200 of
3,000 nuns and brothers to leave the country.
Probably because their smaller numbers made them
less threatening to the regime, established Protestant
denominations such as the Episcopalians, Methodists,
and Presbyterians did not come under such direct
attack. Evangelical sects such as the Jehovah's
Witnesses have not fared so well, however. The small,
semiprivate meetings that characterize the worship of
these sects have aroused the government's suspicions,
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as have their aggressive efforts to gain converts. The
refusal of some sects to perform obligatory military
service brought direct conflict with the government.
During a repressive campaign that lasted from 1965
to mid-1968, members of various evangelical groups
were thrown into military labor units with a host of
other recalcitrants who were considered "social
deviants." The regime reserved the harshest
treatment, sometimes including death, for militant
evangelicals.
In addition, the revolution served to all but decimate
the Jewish community. In 1959, there were 15,000
Jews in Cuba, but in the years following, Zionism was
outlawed and many of the community's wealthiest
and strongest supporters fled the country. Today only
about 1,200 mostly elderly Cuban Jews remain, trying
to keep their faith alive despite the lack of a local
rabbi. According to a recent Western press report,
these Jews do not complain of persecution, but the
government's permissive attitude is probably due to
their small numbers.
Several African-influenced sects and cults also have
adherents in Cuba. Santeria, one of the most widely
practiced of these, blends Catholicism and voodoo.
The secret cult of Abakua is sometimes likened to an
African-style Free Masonry. The regime has recently
sought to portray these groups as a valuable part of
Cuba's cultural heritage. As much as 10 percent of
the Cuban population reportedly practices Santeria.
Castro's policies toward religion have guaranteed that
the church will never pose a serious political threat to
his regime. In a country that once was 85 percent
Catholic, only 30 to 40 percent of the people still
consider themselves believers. Of that number,
according to a source of undetermined reliability, less
than 10 percent regularly attend mass. Less than 5
percent of the population is estimated to belong to or
be associated with Protestant denominations.
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Although these numbers indicate that Castro has
been very successful in eliminating any potential
threat from the church, he still has seen fit to
perpetuate a number of measures designed to
discourage the practice of religion. Known believers
are barred from party membership, from good jobs,
and from university educations. The government
limits the number of church services held each week
and requires permission for each service. Outdoor
religious services are forbidden, although exceptions
are made for pilgrimages on the feasts of St. Lazarus
and Our Lady of El Cobre the patron saint of Clibc-
these pilgrimages draw crowds of over 200,000.
According to a US Interests Section report, members
of neighborhood Committees for the Defense of the
Revolution monitor church attendance, causing
conscientious churchgoers to attend services in
churches far from their homes where they are not
likely to be recognized. The government also strictly
controls the importation of religious materials such as
bibles and Christmas articles. Most of the churches on
the island are in an extreme state of disrepair, since
the government has made it difficult for them to
obtain the supplies and repair parts needed for
upkeep.
In the face of such policies, Cuban church leaders
realize that their only hope for survival lies in a policy
of accommodation. At least one Havana priest has
issued statements that minimize the differences
between Christianity and Marxism. In 1969, church
leaders signed a pastoral letter denouncing the US
economic blockade and urging Catholics to cooperate
fully in the construction of a new society in Cuba.
Castro Campaigns as a Friend of Religion
Castro's effort to improve his image among religious
leaders began with Jesse Jackson's visit to Cuba.
Castro used this opportunity to launch a campaign
aimed at strengthening ties to the international
church. Accounts of the visit in Cuban media
included statements indicating an appreciation for
religion by the Cuban leader. For example, a Martin
Luther King ecumenical conference at which both
Castro and Jackson presided was heralded in an
official Cuban publication as signaling "greater
rapprochement between Cuban cchurches and the
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Castro used the Jackson visit to kick off
the campaign to improve his image on the
issue of religion.
Var
Cuba Internacional
Black church of the United States." The same article
praised the conference for its "solidarity with the
peoples who are struggling with their liberation and
with others who require a climate for peace."
Last January, at the invitation of their Cuban
counterparts, representatives of the US Catholic
bishops' conference were allowed to visit Cuba.
During their stay, the bishops visited sites of religious
interest and were allowed to celebrate mass at a
Cuban church. More significantly, however, the
bishops met with Castro, who agreed to consider a
petition for the release of a group of Cuban political
prisoners and to open a dialogue with the domestic
church. Like the Jackson visit, the visit of the
American churchmen received wide publicity in the
Cuban media.
In September, for the first time in 26 years, Cuban
bishops visited the United States to attend a US
bishops' conference. While in the United States, they
met with US officials, as well as their American
colleagues. To appear as though he had kept his
promise for a dialogue, Castro met with the Cuban
delegation on the eve of its visit and revealed his
intention to release a group of political prisoners as
requested by the US bishops. In their meetings with
US officials and in press reports, the bishops aided
Castro's objectives by appearing supportive of his
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President Castro with delegation
of priests from the United States
Cuba Internacional
policies and optimistic about a perceived improvement
in church-state affairs. The bishops even chided US
officials for naming Radio Marti after the Cuban
patriot, parroting the standard Cuban line that it is
the name, not the station itself, that is most
objectionable.
Earlier this month, at the invitation of the Cuban
Ecumenical Council, a US interdenominational
delegation representing Protestant and Catholic peace
groups visited Cuba. According to a Prensa Latina
report, the group met with Castro for several hours,
discussing their experiences in the antiwar and
antinuclear movements, as well as the "delicate"
situations in Central America and South Africa. In
his talks with the visitors, according to a US Interests
Section report, Castro admitted that he had "lost a lot
of time" in improving relations with the church and
indicated he would continue to develop dialogue with
Cuban religious figures.
These visits have helped Castro to portray Cuba as a
country moving toward moderation in dealing with
religion. According to a Cuban press report, for
example, a minister who visited with Jackson claimed
that religious groups in Cuba enjoyed the same
freedom as groups in the United States. In a similar
vein, in defiance of a US ban on visits by Communist
Party officials, the National Council of Churches
invited Jose Felipe Carneado, Castro's chief religious
spokesman, to a meeting this month in New York.
Castro's campaign is receiving another boost with the
publication of "Fidel y Religion," a book based on
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Brazilian liberation theologian Frei Betto's interviews
with Castro. In the interviews, Castro makes much of
the formative influence of his Jesuit education, and
states he should have been quicker to mend relations
with the church. The apparent purpose of the book is
to establish Castro's credentials as a friend of
liberation theology and to change his antireligion
image. In one interview, Castro calls liberation
theology "one of the most significant happenings of
our time." Betto, long a Castro admirer, carried his
radical religious beliefs from theory to practice by
aiding Brazilian terrorist groups during the 1960s.
In the book, Castro even praises Pope John Paul II,
calling him a notable politician "because of his
mobility and contact with the masses." According to
the papal nuncio in Havana, Castro's efforts to
regularize church-state relations will result in a papal
visit to Cuba in 1986 or early 1987. Such a visit would
be a significant boost for Castro's campaign to
establish himself as a friend of religion and promote
his image as a responsible statesman.
Implications for the Cuban Church
Castro's overtures to religious leaders do not seem to
have translated into better operating conditions for
the Cuban church. In recent months, Castro has
adopted a number of measures that would seem to
signal better times ahead for believers. In reality,
however, these are symbolic gestures designed to
generate optimism among an oppressed domestic
clergy longing for any sign of improvement in church-
state relations. Probably not coincidentally, much
publicized meetings between Castro and Catholic
leaders have been timed to maximize public
perceptions rather than following a schedule of steady
substantive improvements in church-state relations.
Most recently, Castro finally met with the Cuban
bishops just days before the Bishop of Camaguey
traveled to Rome for a special synod to discuss
Vatican Council II. Although the bishops, in their
talks with US officials, cited with optimism the
creation of a new religious affairs office in the Cuban
Communist Party, the action amounts to little more
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than a bureaucratic shuffle. The head of the "new"
office, Jose Felipe Carneado, had been responsible for
religious affairs in the Ministry of Interior since the
early 1960s. In this position, he was directly
responsible for implementing Castro's policy of
suppressing religion in Cuba. Moreover, even though
the regime has promised to authorize much-needed
church repairs and permit foreign-born clergy to live
and work in Cuba, there has been little evidence so far
that such changes have actually occurred.
What improvements have occurred seem to be sharply
restricted. For example, Christmas may be a more
public event in Cuba this year.
the
government will permit Christmas to be celebrated in
some churches this year, and will allow the
importation of "everything from audio systems to
traditional Christmas decorations from Canada and
Panama." however, the
government will continue to forbid private Christmas
celebrations in the home. In addition, on at least one
Sunday in November, according to a US Interests
Section report, the goverment did not attempt to jam
Radio Marti while Mass was being broadcast. This
last concession may be a two-edged sword, however,
since Cuban prelates have criticized broadcasts of
church services, apparently fearing a decrease in
church attendance. Most importantly, restrictions
against party members joining the church remain
unaltered.
In our view, Castro's motivation clearly is to project
an image of moderation in Latin America, as well as
to build new constituencies in the United States. His
actions also are bringing him political dividends in
other areas. For example, members of the Cuban
bishops' conference attended the July debt
extravaganza in Havana, lending legitimacy to
Castro's Third World debt campaign. Given the
success that Castro has experienced so far, he
probably will continue his overtures to the church.
Nevertheless, we do not expect a significant change in
the treatment of the church in Cuba. Castro probably
will restrict his actions to largely symbolic measures,
while ensuring that the church remains harmless as a
political or social force.
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Cuba?Southern Africa:
Castro Pressing the Attack
Cuban President Castro, apparently encouraged by
recent developments in southern Africa and buoyed
by the visits to Havana by leaders of African
Frontline States, believes the time is right for
reasserting a hardline stance on a Cuban troop
withdrawal from Angola and for pursuing a more
vigorous offensive against Pretoria. The Cuban leader
has used South Africa's internal turmoil and Angola's
recent military successes against UNITA insurgents
to increase his rhetoric against South Africa and the
United States during the current stall in the US-
mediated regional negotiations. Castro reportedly
plans to increase Cuba's support to insurgent forces
battling Pretoria and is promoting a new unity among
the Frontline States to support his strategy in the
region.
Visit Diplomacy
A parade of visiting leaders from the Frontline States
and other Third World countries last month allowed
Castro to capitalize further on the heightened
international interest in South Africa and the
Namibian issue to push Cuban views. During a visit to
Havana, Tanzanian President Nyerere publicly
thanked Castro for his contribution to the survival of
the Luanda regime and requested that Havana
continue its aid to Africa.
In October Castro also hosted Zimbabwean President
Mugabe, President Kaunda of Zambia, and Angolan
leader dos Santos. Following the Angolan President's
visit, Castro publicly reiterated that the new strength
of Angolan and Cuban forces coincided with the
"irreversible" and doomed crisis of apartheid in South
Africa. Shortly after dos Santos's departure, Kaunda
arrived and expressed support for Castro's position
that Cuban troops were needed in Angola until a
regional settlement was reachedj
9
Mugabe, who will become Nonaligned Movement
Chairman next year, added further fuel to Castro's
fire, with tough talk denouncing South Africa.
Castro's hosting of Indian President Gandhi and Sri
Lankan President Jayewardene was no doubt
motivated by the United Nations General Assembly
session and the upcoming Nonaligned summit in
Harare, where Cuban delegations will push their
views on South Africa and the Third World debt,
Although Embassy reporting suggests little effort was
expended on courting Jayewardene,' Havana pulled
out all the stops for Gandhi. Castro spent an unusual
amount of time personally escorting the Indian leader
around the island and ensuring that he received the
red carpet treatment.
Support for Insurgents
Castro is backing his tough diplomatic stance on
South Africa with increased support for the
insurgents.
The US Interests Section reports that Cuba recently
demonstrated its support for the ANC by burying an
ANC official in Havana, until he can rest in a "free
and democratic" Namibia. The high-level Cuban
attendance and considerable media attention given
the funeral symbolically underscored Havana's
solidarity with the insurgents and served to draw
attention to the situation in southern Africa.
Havana's assessment of SWAPO's capabilities was
less optimistic than its estimate of ANC capabilities.
The Cubans cited tribalism as the major problem and
concluded that SWAPO lacked sufficient dedication,
' See Cuba?Sri Lanka piece in Brief section of this issue.
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Nevertheless, Havana reportedly hopes that the
increased guerrilla activity inside South Africa will
force Pretoria to divert military forces from Namibia
and allow SWAPO fi hters to operate more freely in
their homeland.
Outlook
Castro probably will have considerable success in his
efforts to take advantage of the surge of antipathy
toward South Africa among African countries and
other nations, and he will undoubtedly intensify his
propaganda campaign in the months leading to the
Nonaligned summit in Zimbabwe next year. We
believe Castro will back up his hardline rhetoric by
urging dos Santos not to resume negotiations with
South Africa and to consider carefully the regional
implications of a Cuban troop withdrawal from
Angola for Namibia and for the eradication of
apartheid.
The Cuban leader probably will be less successful in
instigating greater insurgent pressure against Pretoria
because of the problems plaguing insurgent groups
that are opposing South African security forces.
Despite Havana's low regard for SWAPO's
capabilities, however, Castro probably will provide
more help for the insurgents to regroup and encourage
them to prepare for increased operations.
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Suriname:
Prospects for Democratization
Suriname celebrates the 10th anniversary of its
independence from the Netherlands this month amid
growing evidence that Head of Government Desire
Bouterse may backslide on recent moves toward
democratization. In an effort to secure desperately
needed Western economic aid, Bouterse has
encouraged an ongoing dialogue with the leaders of
the proscribed political parties by allowing party
meetings?illegal since the revolution in 1980?thus
raising hopes among many Surinamers for an
eventual return to civilian rule. We believe any
meaningful progress toward democratization,
however, depends on the consent of the military.
Bouterse is keenly sensitive to strong
pressure from the military to keep its concerns in the
forefront. Moreover, assuming Suriname's relations
with Libya continue to improve?albeit haltingly?
the prospects for a return to Western-style democracy
would dim further.
Background
Since parliamentary government was overthrown by
the military in February 1980, the Constitution has
been suspended, political parties have been banned,
and absolute power has resided with the leaders of the
revolution and the armed forces Commander,
Lieutenant Colonel Bouterse. In December 1982, 15
civilian opponents of the regime were murdered by the
military, an event that shocked the public into
submission and precipitated the cutoff of vital Dutch
economic aid.
The international condemnation that followed the
1982 murders, as well as the US-led intervention in
Grenada a year later, led Bouterse to realize that he
was increasingly isolated in the region. Suriname
downgraded relations with Cuba following the
Grenada intervention, expelling the Cuban
Ambassador.
In addition, it became apparent that the military was
poorly prepared to govern the country. Last year,
labor strikes in the vital bauxite industry?the
11
Wide World ?
Head of Government
Bouterse
country's major source of foreign exchange?
represented the stiffest challenge to Bouterse's
authority so far. Compelled to negotiate with the
labor unions and aluminum companies, he avoided, at
least temporarily, a pullout of the US- and Dutch-
owned firms.
Unable to ease Suriname's acute economic and
political problems and frustrated over the lack of
international support, the military sought to include
organized labor and business interests in the
policymaking process. Last January, a new cabinet
consisting of military, labor, and business
representatives was formed and mandated to govern
until 31 March 1987, when a transition is slated to a
democratic government. A National Assembly
stocked with Bouterse supporters has been tasked to
write a new Constitution. The assembly formally
decreed in August that the present government is led
by a five-man military authority and a council of
ministers (Topberrad) and officially named Bouterse
as Head of Government and chairman of the military
authority.
Furthermore, Bouterse in recent months has met
frequently with the leaders of two traditional political
parties?Jaggernath Lachmon of the Progressive
Reform Party and Henck Arron of the National Party
of Suriname?in an attempt to broaden his support by
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Suriname on the Rise ?
Jaggernath Lachmon,
Progressive Reform Party
leader
co-opting them into his government.
both leaders have
refused to support the regime unless the military
guarantees democratization and allows them to
consult legally with their party members
Military Concessions and Reaction
Recent events initially raised hopes for an eventual
return to civilian rule:
? The regime in October announced that the dialogue
between Bourtese and leaders of the traditional
parties is entering a new phase and promised that
party leaders will be allowed to consult their party
members nationwide.
? The three major parties have held small meetings of
party officials to pass resolutions approving talks
with the military.
? According to the Embassy, Bouterse has invited the
parties and his own 25 February Movement to join
the Topberrad, which already consists of
representatives of the military, business, and three
of the country's four labor federations. Lachmon
reportedly has indicated he will accept the offer.
? The parties agreed to join Bouterse in the 25
November independence celebrations if a new
constitution and a democratization plan could be
agreed upon by then, according to the Embassy. In
an effort to reach such an agreement, Bouterse and
the party leaders have met weekly since October.
Secret
Henck Arron,
National Party of Suriname
leader
Despite these positive developments, Surinamese
political leaders realize that Bouterse could abruptly
backtrack if he is pushed too hard.
Relations With the Hague and Washington
We believe Bouterse's tentative accommodation
toward the political parties is motivated largely by his
efforts to secure Dutch and US aid. Recent events
have demonstrated his desire to improve relations
with the Dutch, in particular:
? Surinamese and Dutch human rights groups have
met in New York to discuss the new Commission on
the Rights and Duties of Surinamese Citizens.
According to the Embassy, Suriname has accepted
Dutch suggestions to improve the Commission's
charter.
? Bouterse has refused to extradite three suspected
murderers to The Hague, apparently believing that
to do so would hurt relations with the Dutch even
more than his refusal.
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? The Surinamese Government reacted only mildly
after the Dutch refused to accept its new charge to
The Hague because of his alleged involvement in
the 1983 deaths of two prominent members of the
military who fell from Bouterse's favor.
In addition to sidestepping crises with the Dutch,
Suriname has probed Washington for increased
assistance. According to Embassy reporting,
Surinamese officials asked St. Vincent's Prime
Minister Mitchell to intervene on their government's
behalf with US officials. Suriname's United Nations
representative expressed to US officials his
embarrassment at the Surinamese Foreign Minister's
General Assembly speech in which he criticized US
foreign policies.
also was upset with the
speech and toned down his own speech delivered in
October. Moreover, in recent conversations with US
officials, Surinamese authorities have asked for a
resumption of US aid, pointing to the newly
commissioned human rights organization as an
example of the government's willingness to meet
international expectations.
Obstacles to Democratization
Formidable barriers remain to any return to
democratic government in Suriname. According to
the proposed Lachmon plan, Bouterse and the
military would return to the barracks, from where
they could moderate any potential conflicts among the
political parties, safeguard the Constitution, and
provide security.
Without a guarantee of protection, Bouterse is highly
unlikely to relinquish any real power
13
Any further warming in Suriname's relations with
Libya could also hinder the democratization process.
Civilian political leaders have voiced opposition to the
year-old relationship with Libya, which includes
promises of substantial economic assistance and a
secret military pact.
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Bouterse would have to downgrade relations with
Libya to ensure participation by the political parties
in the government, a step he probably is unwilling to
take.
dialogue with the political parties, as well as with his
civilian advisers. Battalion Commander Paul
Bhagwandas reportedly spoke for the military when
he vowed that the Army would never return to the
barracks unless an amnesty for the 1982 murders was
guaranteed. Bhagwandas has accused Bouterse of not
consulting sufficiently with the military on the
dialogue
leading military figures would welcome a
return to the barracks, middle- to low-level officers
would be hurt financially if they had to relinquish
their higher paying civil service jobs. We believe this
factor and the lack of assurances on amnesty would
fuel military opposition to returning power to the
parties.
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Although Bouterse, Bhagwandas, and Gorre
apparently have no major policy differences, we
believe that, among the three, Bouterse is most
inclined to build civilian support for the regime. We
doubt, nonetheless, that Bhagwandas or Gorre aspires
to replace Bouterse and that neither could command
as much loyalty from the military.
We believe that, in light of the military's concerns,
Bouterse has reassessed the dialogue with party
leaders.
The US Embassy confirms that the military has
instructed the parties to limit their meetings to 25
members.
Secret
Outlook
We believe the democratization process over the next
few years will be slow, tentative, and subject to
reverses at Bouterse's whim. Despite the opportunity
afforded by this month's independence celebrations,
we judge that Bouterse will do little more than realign
his cabinet again and, if possible, try to convince
Lachmon and Arron to join the government. We
believe that Bouterse wants the political parties to
merge and to join him on the Topberrad, but that this
will be rejected by the party leaders. Because they
insist on negotiating a formula that will satisfy Dutch
demands and restore development aid, they probably
are unwilling to join without a clear framework for a
return to civilan rule. At the same time, we believe
Bouterse will not accept any formula that carries a
risk of putting any member of the military on trial. As
a result, Bouterse will continue to tilt toward the
military in trying to balance its demands with those of
the parties.
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Haiti:
Domestic Political Opposition
Domestic discontent in Haiti is increasing, but the
internal political opposition?dominated by a handful
of personalities with little popular support or vision of
political alternatives?remains too weak to pose a
serious challenge to the 14-year-old regime of
President-for-life Jean-Claude Duvalier.' After a 13-
month ban on political activity, the Duvalier regime's
agreement last summer to legalize political parties
created a flurry of interest and activity not seen in
Haiti for the past three decades. Opposition leaders
have refused to form officially recognized parties,
however, objecting to requirements to affirm the
concept of the presidency-for-life and to deposit the
names and addresses of party supporters with the
government.
By compromising with one of the parties, the regime
apparently broke the stalemate recently. According to
the Embassy, opposition leader Gregoire Eugene
announced this month that he has applied to register
his party?the Haitian Social Christian Party
(PSCH)?under the political parties law. Eugene
apparently received pledges from Haitian officials to
waive certain requirements, allowing him merely to
pledge his party's allegiance to the constitution in
effect at the time of the PSCH's formation in 1979. In
effect, the government has sidestepped temporarily
the issue that had deadlocked Duvalier's plan for
democratization and has put pressure on other
opposition leaders to follow suit.
Stop-and-Go Liberalization
The rise of an organized opposition under the rule of
President-for-life Francois Duvalier (1957-71) was
effectively suppressed through a combination of exile,
arrest, and execution. In Jean-Claude's early years as
President, he also stifled critics, albeit with less
draconian measures than his father. As the younger
Duvalier gained confidence in the late 1970s,
15
however, he permitted the return of some exiles, many
of whom had been educated abroad. Two fledgling
political parties subsequently existed until Duvalier's
sudden crackdown in 1980. A number of opposition
leaders, journalists, and trade unionists were then
exiled or imprisoned. This cycle of moderation and
repression was repeated by allowing the return of
some exiles in early 1984, and then banning political
party activity in May 1984.
Recent government actions have repeated the pattern:
? In June, the government denied opposition leader
Hubert DeRonceray's request to hold a youth
march in Port-au-Prince, claiming in an official
communique that the march actually intended to
protest the institution of the presidency-for-life.
? In July and August, opposition leaders issued joint
statements through the Haitian press criticizing the
constraints of the new law on parties. Unlike the
short-lived press freedom in 1980 and 1984,
Duvalier has not yet reacted with a crackdown.
? In September, DeRonceray, who planned to address
a rally in the southern city of Petit-Goave, was
taken into custody. According to the Embassy,
Haitian officials hinted that his detention was
designed to show that the government would reject
leniency as long as the opposition refused to operate
under the new law.
? The same month, nonetheless, the government
invited opposition leaders to participate individually
in direct discussions to regain the momentum on
democratization; all opposition leaders initially
rejected the offer.
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We believe that Duvalier's fledgling political changes
reflect his perception that continued foreign aid?
especially from the United States?is contingent on
political reforms. For example, former Defense
Minister Roger Lafontant stated last July that a
nominal political opposition is an important element
in Duvalier's plan to improve Haiti's international
image, as proof that the country has embarked on a
course of political liberalization
. We doubt, however, that
Duvalier intends to relinquish any real control. Not
only has the regime hindered the development of
aspiring opposition groups, but also it has created its
own party, the Parti National Progressiste. The new
party is unlikely to experience many of the obstacles
faced by genuine opponents of the regime. For
example, immediately after its creation last August,
opposition leaders charged that the party had failed to
follow required legal procedures in registering its
formation.
Potential Domestic Challengers
The extended domination of Haitian political life by
the Duvaliers has left little room for the development
of independent parties. Current political groups in
Haiti only vaguely resemble formal parties. A number
of dissidents claim to head groups of anti-Duvalier
activists, but these include only a small number of
supporters loosely attached to a dominant personality.
Unlike the Catholic Church, none of the opposition
groups has a nationwide structure.'
In our judgment, a potential challenge to Duvalier's
rule comes from the right. Former supporters of
Francois Duvalier, known as Old Guard Duvalierists,
have deplored the black elite's loss of prestige and
power since Jean-Claude's marriage to Michele
Bennett, the daughter of a wealthy mulatto family. As
the Bennett family has increased its influence on
Duvalier's decisionmaking, the Old Guard's
alienation has increased. Some of these individuals?
such as Clovis Desinor, who served in Francois
Duvalier's cabinet?have called publicly for a return
to pre-1971 politics, but few retain the political power
needed to turn back the clock. The Embassy doubts
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that the Old Guard would openly support Desinor
because Jean-Claude has the backing of the armed
forces, the militia, and the bureaucracy. Moreover, we
believe there is consensus within the regime that the
Duvalier name is the glue that holds the political
system together. This belief could change, however, if
it seemed that democratization was getting out of
hand.
Another potential source of opposition is represented
by a number of moderates who emerged in the late
1970s. The best known are Sylvio Claude and Eugene,
who took advantage of the political opening in 1979 to
form the Haitian Christian Democratic Party and the
Haitian Social Christian Party, respectively. Since
their inception, however, neither party has offered
candidates for election. Press and Embassy reports
indicate that Claude seems more interested in
replacing Duvalier than building a viable opposition
force, and his party has little demonstrable support.
The Embassy characterizes Claude as erratic, with a
history of antagonizing the government through
wildly intemperate remarks.
Although
Claude issued a rambling statement the same month
detailing his desire for political change in Haiti, the
Embassy doubts that he is an avowed democrat.
Claude reportedly criticized Duvalier more than the
institution of the presidency-for-life, apparently
offering himself as Duvalier's replacement.
A leading figure in the moderate opposition is
DeRonceray, who served as Haiti's representative to
UNESCO in the early 1980s. The Embassy, however,
describes DeRonceray as lacking the political skills of
compromise and consensus-building as well as a viable
strategy to lead opposition against an entrenched
regime. Nevertheless, the Embassy says that
DeRonceray has the political savvy to move ahead
only in periods of liberalization, in contrast to
Claude's record of randomly provoking the
government.
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Table 1
Major Haitian Opposition Leaders
Opposition Leader
Name of Movement Comment
Sylvio Claude
Haitian Christian Democratic
Party (PDCH) (founded in 1979;
inactive since 1980)
Defying the legal requirement to register in advance to form a
political party, Claude has begun to sign up new PDCH members.
Although Duvalier has yet to crack down on Claude's resumption of
political activity, the latter's personal ambition would make him
difficult to control should the government decide to negotiate the
same type of deal made with Eugene.
Hubert DeRonceray
DeRonceray, a former government minister under Francois
Duvalier, has told Embassy officials that his goal is to abolish the
presidency-for-life. Despite his increased visibility, he maintains
that he has no plans to organize a party, adding that it is "not his
style." Although government measures prevented DeRonceray
from delivering speeches in September, the Embassy believes that
such actions by Duvalier are strengthening the quiet and well-
spoken DeRonceray's reputation as an opposition leader.
Clovis Desinor
Gregoire Eugene Haitian Social Christian Party
(PSCH) (founded in 1979)
Desinor, a former Minister of Finance under Francois Duvalier,
announced in February his intention to form a political party. This
marked the first time that a member of the Old Guard had publicly
opposed a Duvalier. In May 1985, however, Desinor declared his
decision to refrain from organizing a party, stating that the new law
was too restrictive.
Eugene, a former law professor, was exiled in 1980, but was
permitted to return in 1984, probably because of his greater
willingness to work within the narrow constraints of the Duvalier
regime. In a 1984 interview with US journalists, Eugene claimed to
have wide popular support in Haiti, although he admitted that,
before his party newspaper was shut down in 1980, its circulation
was only about 200. His signature was noticeably absent from a
joint declaration issued in April by opposition leaders objecting to
the legal restrictions of the proposed political parties law.
Gerard Gourgue Haitian League of Human Rights
Although Gourgue strongly criticized government abuses, he has
acted since August as an intermediary between Haiti's opposition
and the government. Though he doubts that Duvalier will make
substantive changes to the political parties law, Gourgue's media-
tion keeps a channel of communication open.
Alexandre Lerouge Haitian Democratic Action (ADH)
(founded in May 1984)
As the only leading opposition figure to have held elected office,
Lerouge's position as Cap Haitien's legislative representative from
1979-83 gives him experience in dealing within the system. Lerouge
announced the formation of ADH just days before Duvalier banned
all political activity. Although Lerouge claimed in July that ADH
has 150,000 supporters, that figure probably represents votes he
received in the 1979 election, in which he won by a large majority.
Constant Pognon
National Rallying Democratic Pognon's position as editor of the daily Coquerico was a principal
Party (PADRANA) (founded in reason for his inclusion in a crackdown on dissidents in December
1984) 1980, but he returned to the scene to found PADRANA. Although
Pognon has been an inactive opposition leader in the past year, his
reputation has earned him a place among "the Band of Five"
(Eugene, DeRonceray, Lerouge, Claude, and Pognon).
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The Elites. The record of internal stability under
Francois Duvalier engendered tentative support for
his regime among the country's business and
professional elites. Although many members of the
elite fled Haiti after 1957, those who remained traded
their tacit support of the regime for minimal
government interference in the private sector.
The cautious liberalization of the late 1970s that
prompted some elites to return to Haiti was short
lived. The reform-minded business sector established
a number of organizations, including the Haitian
American Chamber of Commerce and the Haitian
Association of Industrialists, to promote cooperation
between the government and business. Jean-Claude
Duvalier even appointed several progressive
probusiness technocrats to ministerial positions. A
foreign exchange crisis and a sharp recession
beginning in 1981, however, quickly spoiled relations.
Businessmen, particularly the younger mulatto elite,
charged the regime with economic mismanagement
and pushed for a more technocratic style of
government. The rift widened in 1982, when Duvalier
fired popular Finance Minister Marc Bazin and then
enacted a value-added tax.
Despite these setbacks, the private sector shows no
signs of open dissent. The Embassy reports that
potential opponents within the business sector remain
unorganized and, thus far, have not formed alliances
with factions of the political opposition. Moreover,
according to the Embassy, the business community is
satisfied with Duvalier's law on political parties. They
reportedly had feared that a more lenient version
would encourage destabilizing political activities that
Duvalier could not control.
The Media. The press and radio continue to operate
under close constraints, but government tolerance has
been greater this year than in any other period during
the past three decades. In recent months, the
independent press has published articles criticizing
the regime and reported opposition views on
Duvalier's political opening, as well as government
rebuttals to the opposition.
Even with this new openness, there are clear limits to
the government's tolerance. In July the regime
temporarily shut down Radio Soleil, the Catholic
Secret
Table 2
Haiti: The Election Process
Government Entity
Comment
National Assembly
Legislative elections for the unicameral
assembly, constitutionally scheduled for
every six years, have been moved up from
1990 to 1987, in another of Duvalier's
efforts to stem international criticism of
his regime. The Embassy reported that,
despite government interference in the vot-
ing process during the 1984 elections, two-
thirds of all incumbents were defeated.
Nevertheless, the assembly remains a rub-
berstamp entity and is virtually powerless.
Municipal Councils
Voter turnout was moderate in the 1983
balloting for municipal officials, including
mayors, the first such local contests since
1946. Although Duvalier packed the coun-
cils with loyalists through registration ir-
regularities and electoral fraud, recent
council actions show a fledgling autonomy
previously unknown.
Church's radio station, which had broadcast charges
of widespread voter fraud in the July 1985 national
referendum on political reform. Although Radio
Soceil resumed operations after a three-week hiatus,
we believe that the expulsion of the station's news
director and two other Belgian priests was designed to
silence those ?nests who have become increasingly
outspoken.
Outlook
With National Assembly and municipal elections
scheduled for 1987, the recent stalemate between the
government' and the domestic opposition apparently
has prompted Duvalier to modify the constraints of
the political parties law rather than to continue trying
to create the bogus "loyal opposition" that some
Haitian officials had suggested in recent
conversations with Embassy personnel. Duvalier
probably will be reluctant, however, to extend the
waiver of requirements to other opposition leaders,
fearing that this would generate pressure for
additional concessions. Short of the compromise
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obtained by Eugene's party, we doubt that other
opposition leaders will move quickly to legalize their
political activities. In such cases, Duvalier probably
will view any political activities by the unregistered
parties as illegal, cracking down increasingly on
media freedoms, oppositionist travels, and private
gatherings.
We concur with the Embassy that the regime's
tolerance of the media, in particular, could end
suddenly. According to the Embassy, the government
informed DeRonceray during his detention in
September that his plan to address a rally was
considered as an illegal political gathering of an
unregistered party. If Duvalier is unable to secure the
participation of opposition parties on his terms, we
believe he might move similarly against the media by
claiming that they were organs of unregistered
parties. In any event, we judge that, because the
recent liberalization has its limits, the scenario most
likely to provoke an immediate crackdown on the
media would be a personal attack on Duvalier or other
high-level officials.
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Paraguay: Stroessner's
Economic Blindspot
The economic progress made by Paraguay over the
past three years is, in our view, jeopardized by the
administration's current exchange rate policy.
President Stroessner's unwillingness to devalue the
currency has led to a weakening trade balance, capital
flight, and a loss of reserves. Unless he relents, we
believe that Paraguay will face an increasingly
unmanageable foreign payments situation.
Pressure for Devaluation
Multilateral financial institutions and Paraguay's
chief trading partners are showing heightened concern
over the gap between the multiple official and parallel
market exchange rates of the Paraguayan currency,
the guarani. Currently, the guarani is fixed at 160 to
the dollar for public-sector overseas debt service, 240
for imports of major agricultural and industrial items,
and 320 for all export deals. During the past six
months, however, the currency has become greatly
overvalued, rising to over 800 guaranies to the dollar
on the parallel market. This summer, the World Bank
recommended that Asuncion abolish multiple
exchange rates and peg the guarani at 400 to the
dollar.
In August, the IMF?concerned that Paraguay's
deteriorating payments posture would soon force a
rescheduling of its $1.7 billion foreign debt?
proposed a thorough adjustment of the national
economy, including a tighter monetary policy, a
revised income tax system, and a devaluation of the
guarani. Asuncion, however, has opted to establish a
study commission instead of acting on the Fund's
recommendations.
Argentina and Brazil also have been pressuring
Stroessner to devalue. Both countries trade heavily
with Paraguay and collaborate with Asuncion on
several hydroelectric projects along the Parana River.
According to the US Embassy, Buenos Aires and
Brasilia are unhappy with the unremunerative
exchange rate for payments on these projects. On the
already financially troubled Yacyreta dam project,
25
Ultima Hora
President Stroessner
for example, one Argentine official estimates that the
overvalued guarani has escalated costs by 13 percent.
Unless Paraguay reduces the value of the guarani, we
expect further delays in Yacyreta's construction and
substantial revenue losses for both countries.
Stroessner Will Not Budge
According to the US Embassy, President Stroessner
has rejected all proposals for currency reform.
Stroessner's grasp of economics has never matched his
political savvy, in our view, and apparently his
unbending refusal to devalue is based partially on his
reported belief that political stability is directly
related to the stability of the currency. According to
the US Embassy, the President fears a devaluation
might unleash a spiral of inflation, leading to further
devaluations, severe economic difficulties, and
political discontent. Stroessner also recognizes that a
devaluation would raise the cost of servicing the
foreign debt. Rather than increase taxes to boost
revenues, he prefers to keep the exchange rate low and
tax exports.
Although many high-level Paraguayan officials seem
to recognize the net costs of the overvalued guarani,
none have managed to get Stroessner's ear. He flatly
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Paraguayans watch flight of
US dollars.
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refused a recent recommendation by the President of
the Central Bank to devalue in order to slow the drain
of Asuncion's foreign reserves. Stroessner, according
to the US Embassy, pays more attention to a group of
economically unsophisticated advisers who only
reinforce his views.
A final factor bolstering the current exchange rate
policy is the corruption that permeates the
government. According to the US Embassy, well-
informed Paraguayan businessmen believe that many
government officials personally profit from the
guaranies artifically low rate. For example, the
Central Bank uncovered a number of falsified import
cases this year, accounting for losses of over $40
million. Dollars were purchased at the rate of 240
guaranies for import transactions that were never
completed. Instead, the dollars were sold on the black
market at triple that rate.
Implications
Failure to adjust the exchange rate also is
undermining domestic confidence in the guarani,
spurring large dollar withdrawals from banks, and
increasing capital flight. This skittishness was
dramatically demonstrated in July, when, according
to the US Embassy, rumors that the government
might nationalize dollar deposits precipitated a $50
million run on the banks.
a number of prominent
businessmen and political leaders had transferred
substantial sums of money out of the country. We
believe such capital flight will accelerate as long as
the exchange rate remains unchanged, putting
pressure on Asuncion's already depleted-$500
million as of August-stock of foreign reserves.
The current value of the guarani also is reducing
Asuncion's trade surplus, discouraging foreign
investment, and making it more difficult for Paraguay
to manage its foreign debt payments. Although export
volume increased this year, revenues dropped, in part
because of the decline in world prices for cotton and
soybeans, Paraguay's chief exports. Without an
exchange rate adjustment, we expect that both gross
export value and the trade surplus will continue to
shrink, aggravating the existing problem with
27
Paraguay Balance of Payments
Million US $
1982
1983
1984
Trade balance
-315.1
-225.4
-287.8
Exports, f.o.b.
396.2
326.0
361.3
Imports, f.o.b.
-711.3
-551.4
-649.1
Service balance and transfers
-72.6
-22.0
-25.4
Current account
-387.7
-247.4
-313.2
Capital account
322.7
191.1
294.2
Direct investment
36.6
4.9
5.2
Other long-term capital
228.1
284.3
209.8
Short-term capital
65.7
-35.9
81.7
Other
-7.7
-62.2
-2.5
Reserve changes (positive numbers
indicate drawdowns in reserves)
65.0
56.3
19.0
arrearages in debt servicing. Paraguay's repeated
failure to meet debt payments already has made
foreign creditors reluctant to lend new money.
We believe the government will be hard pressed to
tackle current economic problems without
undertaking some major monetary adjustments,
preferably as part of a wider economic stabilization
program. We doubt, however, that Stroessner will
bend to pressure for devaluation in the short term.
Under these circumstances, we expect that the
payments position eventually will become so
untenable that Paraguay may have little choice in the
long run but to abandon its current policy mix and
seek a debt rescheduling.
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Latin America
Briefs
Argentina Labor Restraint
The Peronist-dominated General Confederation of Workers (CGT)?Argentina's
largest labor organization?is preparing for wide-ranging substantive talks with
President Alfonsin's administration now that the political climate has cooled after
last month's congressional election, according to the US Embassy. During the
campaign the CGT largely refrained from harsh public criticism of the
government's economic policies because of the substantial popular support for the
President's austerity measures. Instead, recently elected CGT Secretary General
Ubaldini stressed the program's negative impact on workers?higher
unemployment and declining real wages?while acknowledging its success in
curbing inflation.
Press reports indicate that labor's talks with the government will center on
demands for wage increases, expansionary economic measures, resumption of
unrestricted collective bargaining, and the return to the CGT of social-welfare
funds?important sources of patronage and influence stripped from union control
under military rule. We believe that Alfonsin may make some concessions
regarding bargaining or the funds, but that he is unlikely to grant inflationary
wage hikes that could jeopardize his austerity program's one clear achievement.
We doubt, however, that the CGT will resort to concerted strike activity or
massive rallies to pressure Alfonsin in the near term. His election victory has
underlined the continued public backing for austerity and the political dangers of
appearing openly to obstruct the program. Moreover, the CGT is scheduled to hold
its first congress in nearly a decade in December and will be preoccupied with
internal organizational affairs. Finally, the onset of the Argentine summer?
during which the nation's political life virtually grinds to a halt?militates against
strong action by labor, in our view.
Panama Financial Breathing Space
The government signed a $850 million agreement with international commercial
banks on 31 October, after months of delay. The deal provides a $60 million long-
term loan and $80 million in trade credits, and refinances $580 million in 1985-86
debt obligations. In addition, the banks promise to maintain $130 million in
deposits with local subsidiaries. While the first $20 million tranche of the new loan
is scheduled to be disbursed by yearend, further drawings are tied to economic
policy changes that the new Delvalle government is unlikely to be able to
implement. Even though Panamanian financial authorities are telling bankers that
labor, industrial, and agricultural reforms required by the World Bank will be
made soon, Delvalle?according to US Embassy reporting?has not formulated an
economic program and, like his predecessor, almost certainly lacks the authority to
push through tough reforms. Meanwhile, Panama City is trying to meet
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international reserve requirements of a two-year IMF standby agreement signed
last July by taking a loan on the transisthmian oil pipeline in which it has 40-
percent equity.
Mexico Position on Debt
Mexican Foreign Minister Sepulveda recently
asserted that
under the US proposal Mexico still would be unable to service its foreign debt
President de la Madrid probably sent Sepulveda to relay Mexico's
disappointment with the recent US proposal and to indicate Mexico expects a
more comprehensive solution. The Mexicans have publicly taken a wait-and-see
attitude until now, but probably have private misgivings about whether it will
facilitate their getting the $9 billion in new loans they think they will need in 1986.
The statements also reflect Mexico City's growing concern about domestic
pressures for a debt moratorium and meeting its debt obligations.
Mexico?Israel Counter Terrorist Training
The course is scheduled to begin on 5 January and will
accommodate 60 students. Instruction is to include: terrorist and antiterrorist
tactics, VIP security, hostage rescue techniques, antiterrorist intelligence
collection and analysis, and weapons familiarizationd
have obtained modest amounts of arms and equipment, including
submachineguns, artillery pieces, ammunition, and communications gear, along
with limited in the past. It does, however, reflect
the MarineCorps' continuing determination to enhance its capabilities and
stature. In this instance, the Marines may be honing their qualifications in hopes
of assuming a key antiterrorism role when Mexico hosts the World Cup games
next spring.
Cuba?Sri Lanka Jayewardene's Visit
Secret
Sri Lankan President Jayewardene's visit to Havana last month following the
Commonwealth meeting in neighboring Barbados was one of show rather than
substance, indicating Cuban disinterest in expanding ties, according to Embassy
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reporting. The delegation reportedly was treated coolly and left Havana without
signing any cooperation accords. Havana's ties to Colombo presently are limited to
a tiny embassy presence, and US Embassy reporting suggests that the Cuban
Government has only kept it open because of repeated Sri Lankan promises to
reciprocate by opening an embassy in Havana.
It is unlikely that Cuba would find Sri Lanka an opportune target for meddling.
Havana has little hope of gaining influence with the Sri Lankan Government
because Cuba cannot match the levels of economic and technical assistance
provided by Western donors. Moreover, the Castro regime is unlikely to
complicate its own or Soviet relations with India by providing military aid to
Colombo. Reflecting this concern, Havana assured the Indians that the Sri
Lankan visit had been perfunctory, according to US Embassy reporting. Finally,
Cuba is even less likely to offer support to Tamil insurgents when the Soviet Union
has so far declined virtually all Tamil requests for aid. Although Cuba's interest in
Sri Lanka is low, it will continue to maintain contact in the hope of gaining
Colombo's support in international forums.
Suriname Impending Layoffs
Plans by two large Surinamese companies to implement large-scale layoffs present
a serious economic dilemma to the Bouterse regime. Suralco, a US-owned
aluminum company and Suriname's largest foreign exchange earner, has
announced plans to eliminate at least 500 jobs, while the Kersten Company, a local
retailing conglomerate, intends to lay off over 800 workers. Aware of the
precarious financial condition of both companies, the government?which, by law,
must approve any layoffs?probably will try to reach a compromise. By allowing
sizable job losses, however, the government faces the prospect of rising
unemployment?estimated by the Embassy to be 30 percent currently?and
increased labor unrest. Moreover, if the two companies successfully trim their
work forces, other firms are also likely to press the government to agree to layoffs.
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Cuba Chronology
October 1985
1 October
Tanzanian President Julius Nyerere receives the honoris causa doctorate in
political science from the University of Havana. Fidel Castro attends the ceremony
and Carlos Rafael Rodriguez speaks.
Nyerere and Fidel visit the Isle of Youth and tour areas of historic, economic, and
social interest, including Modelo Prison and industrial sites in Nueva Gerona.
2 October During a press conference, Nyerere thanks Cuba for the help given to Africa and
says violence is inevitable in the fight against apartheid in South Africa.
Nyerere also says it is clear that the foreign debt of the underdeveloped countries
cannot be paid and Africa should join the rest of the Third World in a search for
solutions.
Mexican press reports the signing of an agreement between Medicuba, the Cuban
Enterprise for the Import and Export of Medical Products, and the Mexican firm
Serinter, S.A.
3 October At the United Nations, South Africa calls on the Security Council to demand the
withdrawal of Cuban and other foreign troops from Angola.
6 October
7 October
Cuba condemns the United States for its cynicism in supporting the Israeli air
attack against PLO headquarters in Tunis, saying that such an attitude constitutes
an exaltation of terrorism as an international practice.
Western Sahara's Minister of Public Health, Naama Said Yumani and his
delegation arrive in Cuba to attend the second session of the intergovernmental
commission for economic and scientific-technical cooperation.
At a press conference in Barcelona, Uruguayan President Sanguinetti announces
that Uruguay will resume diplomatic relations with Cuba this month.
Fidel Castro greets Zimbabwean Prime Minister Robert Mugabe at Jose Marti
Airport. Mugabe's delegation includes the Minister of Community Development
and Women's Affairs, Teurai Nhongo.
Fidel and Mugabe discuss bilateral relations and international matters during
their first round of talks.
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8 October
9 October
10 October
In a speech, Jorge Risquet praises Mugabe, says Cuba opposes apartheid in
southern Africa, and condemns US support for Israel's air raid against the PLO in
Tunisia.
President Reagan suspends the entry into the United States of Cuban Government
and Communist Party officials not involved in activities with the United Nations
or Cuba's diplomatic mission in Washington:
Western diplomats in Islamabad report that Cuba's charge d'affaires in Kabul has
been shot and killed apparently accidentally, by one of his staff.
Mugabe and Castro visit the Henry Whitboy School on the Isle of Youth. Mugabe
thanks Fidel for having afforded developing countries the opportunity to have their
youth educated in Cuba.
In an interview on Colombian TV, Fidel Castro praises President Betancur's
efforts to achieve peace with the guerrillas and says Betancur is "a man of good
will and good faith."
Castro asserts that his government avoids meddling in the affairs of other
countries and explains that "when we agree to do so it is because we are asked."
President of the National Assembly Flavio Bravo meets with Argentine Foreign
Minister Caputo to discuss matters of bilateral interest related to the assembly of
the Latin American Parliament that begins 10 October in Montevideo.
Isidoro Malmierca and Zimbabwe's Minister of Foreign Affairs, Witness
Mangwende, sign an agreement to create a joint commission for economic,
scientific, and technical cooperation.
President of the National Assembly Flavio Bravo, addressing the Latin American
Parliament meeting in Montevideo, says Cuba believes the foreign debt cannot be
paid.
11 October North Korea's President Kim Il-song receives a visiting delegation of the
Communist Tarty of Cuba headed by Armando Acosta.
12 October
A Soviet naval detachment composed of four warships under the command of Rear
Admiral Putintsev visits the port of Havana. Putintsev is greeted by Abelardo
Colome Ibarra and F. Me11.
Cuban Charge d'Affaires in Bolivia Rafael Salas meets with Interior Minister
Barthelemy regarding the raid and ransacking of two Cuban diplomatic residences
by Bolivian Interior Ministry personnel.
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13 October Zambian President Kenneth Kaunda arrives in Havana. In official talks with Fidel
Castro, various international matters and bilaterial ties are discussed.
Fidel Castro hosts a reception for Kaunda. At the reception, Castro discusses the
reestablishment of relations between Ecuador and Nicaragua with Ecuadoran
Ambassador Hidalgo.
14 October Fidel Castro accompanies Kaunda on a tour of the Isle of Youth and speaks to
students at the Henry Whitboy School.
15 October
The Cuban Foreign Ministry says the decision of the US administration to suspend
the granting of visas to Cuban officials to visit the United States is a continuation
"of the policy of hostilities toward Cuba."
Secretary of the Central Committee of the Communist Party of Cuba, Jose
Ramon Valadera, addresses the Fifth Congress of the People's Revolutionary
Party of Cambodia.
17 October The Uruguayan Foreign Ministry announces that Uruguay is reopening
diplomatic relations with Cuba, 21 years after it severed them.
19 October
Sri Lankan President Janius Jayewardene arrives in Havana and is greeted by
Fidel Castro. They discuss the world economy, international issues, and the
Nonaligned Movement.
In an interview with Business Week, Fidel Castro says a political solution cannot
be found in El Salvador or Nicaragua while the United States is committed to a
military solution.
The Angolan-Cuban Joint Commission for economic, technical, and scientific
cooperation meets in Havana. A bilateral cooperation protocol is signed.
21 October Indian Prime Minister Rajiv Gandhi and his wife, Sonia, arrive in Havana. They
are greeted by Fidel Castro and Vilma Espin at the airport.
22 October
Gandhi and Fidel Castro discuss bilateral and international issues, especially the
Commonwealth Conference, the situation in Central America, and the Nonaligned
Movement.
Gandhi receives the Order Jose Marti awarded posthumously to the late Prime
Minister Indira Gandhi. He says India and Cuba are committed to working
together.
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23 October
The 29th meeting of the Council of Constructors of Electronic Minicomputers is
held in Havana. Specialists from Bulgaria, Hungary, East Germany, Cuba,
Poland, Romania, the USSR, and the CSSR attend.
On Havana television, Trade Union official Roberto Veiga declares 23 October a day
of action against foreign debt and calls for a 10-minute work stoppage at the end of
the day in every work center.
Central Committee member and President of the National Bank of Cuba, Raul Leon
Torras, dies of a sudden illness at age 50.
Granma announces that Regino 0. Farinas Cantero has been named Cuban
Ambassador to Afghanistan.
24 October Angolan President Jose Eduardo dos Santos arrives in Havana and is greeted by
Fidel Castro at Jose International Airport.
Castro and dos Santos discuss matters of bilateral interest, the South African
situation, foreign debt, and the Nonaligned Movement.
25 October A cooperation agreement in agriculture, industrial development, education, and
health is signed between Cuba and Seychelles during a joint meeting in Victoria.
26 October
Two planes carrying 96 Salvadoran guerrillas and three of the 22 political prisioners
released Thursday in exchange for President Duarte's kidnaped daughter arrive in
Havana and are greeted by Manuel Pineiro.
Choe Chong-kun, Korean Workers Party Central Committee member arrives in
Cuba to sign documents regulating Cuban?North Korean trade for the next five
years and a 1986 trade protocol.
27 October Soviet Foreign Minister Shevardnadze arrives in Havana and is greeted by Fidel
Castro, Isidoro Malmierca, Jesus Montane, and Lionel Soto at Jose Marti Airport.
28 October
Federic Assogba Affo and Vincent Montsi Makhele, Foreign Ministers of Benin and
Lesotho, arrive in Havana. Affo tells the press that the Namibian people should gain
independence without delay.
Uruguayan Foreign Minister Enrique Iglesias says that his country wants to establish
cordial, mutually beneficial relations with Cuba in all spheres, particularly in the
field of trade.
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29 October Castro and Shevardnadze discuss bilateral and international issues, and Fidel gives
his firm backing to Soviet arms proposals for the Geneva summit.
During his meeting with Shevardnadze, Fidel condemns US policies in Central
America and calls for radical restructuring of economic relations to solve the
international debt problem.
Minister of Justice of Sao Tome and Principe Dr. Francisco Pires arrives at Jose
Marti Airport and is greeted by Justice Minister Juan Escalona.
Press reports from Moscow say that a Soviet factory in Leningrad has just sent
Cuba the first parts for an atomic reactor that will be installed at the nuclear
power plant in Juragua.
30 October Armando Hart presents busts of Beninese leaders Akpo Bodco and Abdoulaye Issa
to Beninese Foreign Minister Affo, who says this ceremony strengthens solidarity.
31 October
Carlos Rafael Rodriguez and Isidoro Malmierca meet with Foreign Minister
Makhele of Lesotho to discuss bilateral relations and the international situation,
especially in southern Africa.
Granma reports that Fidel Castro thinks Ronald Reagan's speech at the 40th
anniversary of the UN General Assembly was "a disaster" and "disappointed the
entire world."
Soviet Foreign Trade Minister B. I. Aristov receives Amado Blanco, First Vice
Minister of Foreign Trade, to discuss trade relations for 1986-90.
Minister of Overseas Construction Levi Farah arrives in Baghdad to represent
Cuba at the Iraqi-Cuban joint committee for economic and technical cooperation.
The National Bank of Cuba and the National Institute of Tourism report a new
foreign exchange system for tourists and foreigners residing in Cuba to facilitate
sales.
Irish Justice Ministry officials report that an unidentified Cuban man has been
granted asylum in Ireland after leaving an Aeroflot flight at Shannon Airport.
Levi Farah and Muhammad Fadil Husayn sign a trade cooperation agreement to
expand trade, promote economic, industrial, and agricultural cooperation, medical
assistance, and training of cadres.
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Declassified in Part - Sanitized Copy Approved for Release 2012/03/02 : CIA-RDP87T00289R000200940001-4
Declassified in Part - Sanitized Copy Approved for Release 2012/03/02 : CIA-RDP87T00289R000200940001-4
Declassified in Part - Sanitized Copy Approved for Release 2012/03/02 : CIA-RDP87T00289R000200940001-4
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Declassified in Part - Sanitized Copy Approved for Release 2012/03/02 : CIA-RDP87T00289R000200940001-4
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Declassified in Part - Sanitized Copy Approved for Release 2012/03/02 : CIA-RDP87T00289R000200940001-4
Declassified in Part - Sanitized Copy Approved for Release 2012/03/02 : CIA-RDP87T00289R000200940001-4
Declassified in Part - Sanitized Copy Approved for Release 2012/03/02 : CIA-RDP87T00289R000200940001-4
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Declassified in Part - Sanitized Copy Approved for Release 2012/03/02 : CIA-RDP87T00289R000200940001-4
Declassified in Part - Sanitized Copy Approved for Release 2012/03/02 : CIA-RDP87T00289R000200940001-4
Secret
Secret
Declassified in Part - Sanitized Copy Approved for Release 2012/03/02 : CIA-RDP87T00289R000200940001-4