LATIN AMERICA REVIEW
Document Type:
Collection:
Document Number (FOIA) /ESDN (CREST):
CIA-RDP87T00289R000201050001-1
Release Decision:
RIPPUB
Original Classification:
S
Document Page Count:
42
Document Creation Date:
December 27, 2016
Document Release Date:
August 2, 2011
Sequence Number:
1
Case Number:
Publication Date:
March 14, 1986
Content Type:
REPORT
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CIA-RDP87T00289R000201050001-1.pdf | 1.8 MB |
Body:
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Latin America
Review
14 March 1986
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ALA LAR 86-007
14 March 1986
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Latin America
Review
14 March 1986
Page
Articles Nicaragua: Insurgent Political Program and Image
The anti-Sandinista insurgents are trying to improve their image
abroad by supporting democratic principles and trying to curb
human rights abuses by their troops, but they still have political
liabilities that are hampering their quest for international
respectability.
1
Mexico: Domestic Politics and the Debt
Although several influential Cabinet ministers, leftist opposition
parties, and independent union leaders are calling for a debt
moratorium, President de la Madrid is resisting such a radical
approach for now while seeking to exploit popular demands for debt
relief to gain bargaining advantage with Mexico's creditors.
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South America: Soviet Presence, Activities, and Policy
Moscow believes that it can best undercut US influence by
cultivating cultural, trade, and diplomatic relations with most South
American countries, but it remains alert for opportunities to support
the radical left and undermine area governments.
13
Cuba: Composition of the New Politburo
The Politburo remains dominated by white, male guerrilla veterans
from Oriente Province, rather than the younger, more racially and
geographically balanced membership in the Central Committee.
17
Dominican Republic: Presidential Campaign
Chronic economic problems and splits in the ruling party have made
conservative former President Balaguer the front-runner in the
presidential contest scheduled for May.
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Uruguay: Prospects for Sanguinetti and the Colorado Party
President Sanguinetti and his ruling party enjoy strong popular
support, but economic difficulties, opposition in Congress, labor
agitation, and a nervous military make long-term prospects
uncertain for the one-year-old democratic government.
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Guyana: Government Response to Economic Crisis
President Hoyte has been unable to stem a rapid economic decline
thus far, but he is moving to implement much needed economic
reforms and is replacing ideologues associated with the late
President Burnham with technocrats in top government positions.
Briefs
Mexico: Status of GATT Negotiations
El Salvador: Small Coffee Harvest
Peru: Floods Add to Economic Problems
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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 Sad Office of African and Latin American Analysis,
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Articles
Nicaragua: Insurgent Political
Program and Image
The anti-Sandinista insurgents' umbrella
organization?the Unified Nicaraguan Opposition
(UNO)?has heightened its political profile and
reaffirmed its adherence to democratic norms. Recent
activities, such as its announcement of a new
statement of principles and a program to curb
insurgent human rights abuses, probably will help
improve the guerrillas' image abroad. Nonetheless,
the rebels still have political liabilities that will pose
significant obstacles to their quest for full
international respectability.
Background
The anti-Sandinista insurgents have faced an uphill
struggle in their quest for political legitimacy and
international support since the principal guerrilla
group in UNO, the Nicaraguan Democratic Force
(FDN), was founded in late 1981. The chief source of
controversy has been the presence of troops who
served under former President Somoza, especially
among the FDN's top commanders. This issue has
provided a propaganda opening for the Sandinistas
because of the widespread domestic and foreign
revulsion for the brutal tactics used by Somoza's
National Guard during the 1979 revolution.
Allegations of human rights abuses by the insurgents,
some of which are well documented, have
compounded the FDN's image problem. Moreover,
Eden Pastora?the best known and most charismatic
rebel leader?has undermined FDN efforts to
improve its image by refusing to unify his forces
because of the presence of former Guardsmen in the
FDN. These issues do not appear to have inhibited
FDN recruitment significantly or its ability to gain
popular support in its operating areas, but they have
impaired the group's ability to gain foreign
acceptance and aid.
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The insurgents have adopted a number of measures
over the past four years to improve their image and
demonstrate their commitment to democratic rule.
These changes have enabled them to develop alliances
with respected political figures who opposed Somoza
or who were formerly allied with the Sandinistas.
With the formation of UNO last year, the insurgents
could accurately claim to represent a broad spectrum
of democratic opposition: Adolfo Calero had served as
head of Nicaragua's largest opposition party; Alfonso
Robelo leads a social democratic party; and Arturo
Cruz was the presidential candidate of the main
opposition coalition in Nicaragua's election in 1984.
Both Robelo and Cruz had served on the Sandinistas'
governing junta.
UNO has been slow to develop its political
infrastructure, but since last fall it has stepped up the
pace of its activities. In January, UNO leaders
announced a statement of goals and objectives in a
well-publicized visit to Caracas, where they received a
sympathetic hearing from Venezuelan Government
and party leaders, according to the US Embassy.
UNO has also lobbied the Contadora countries, the
OAS, and the Spanish Government to demand that it
not be excluded from any process of "national
reconciliation." UNO established a human rights
office in Costa Rica in December and opened several
other offices in Western Europe over the past year to
publicize the guerrilla cause and identify supporters.
A further development in UNO's favor is that Eden
Pastora apparently has been more willing to cooperate
in recent months.
Commitment to Democracy
Our analysis of UNO's latest statement of goals and
principles reveals that, for the most part, it echoes
earlier commitments to install a broadly
representative democratic government in Nicaragua.
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Insurgent Efforts to Improve Their Image
Late 1981
Several small groups join to form the Nicaraguan
Democratic Force (FDN). Although the Force is
composed largely of former National Guardsmen,
some, known to have committed human rights
violations during the civil war, are excluded when the
new organization is established.
December 1982
The FDN junta is replaced by a new directorate
which includes members who were Somoza opponents
and two former Sandinista supporters.
January 1983
Adolfo Calero, head of Nicaragua's largest
opposition political party, goes into exile and
becomes the seventh member of the FDN directorate
and FDN president. The organization issues a
statement of principles and objectives and a "peace
initiative" defining democratic norms to be restored
to permit an end to the fighting. The FDN general
staff is reorganized, removing ex-Guard Colonel
Ricardo Lau, who has been accused of human rights
abuses during the civil war.
March 1983
A new statement notes that the Sandinistas have
rejected the guerrillas' peace offer and declares its
commitment to install a new democratic government
in Nicaragua.
June 1984
Alfonso Robelo, who led a political party that
opposed Somoza and served on the first
postrevolutionary government junta, leaves his
alliance with Eden Pastora to ally with the FDN. The
new umbrella organization, called the United
Opposition for Reconciliation (UNIR), also includes
Miskito Indians with whom the FDN has had
informal links.
March 1985
A broad coalition of Nicaraguan political exiles,
including former Sandinista junta member Arturo
Cruz and La Prensa editor Pedro Joaquin Chamorro,
join UNIR leaders in signing a document offering a
cease-fire in exchange for a Church-mediated
dialogue with the Sandinistas.
June 1985
Cruz, Robelo, and Calero form a new umbrella
organization to replace UNIR, the Unified
Nicaraguan Opposition (UNO), stating that its goal is
national reconciliation based on democratic
principles.
September 1985
UNO announces formation of a new code of conduct
for FDN troops and an office to discipline troops
accused of human rights abuses.
January 1986
UNO presents a restatement of its principles and
objectives, emphasizing its commitment to
democratic norms.
Both UNO and the FDN have stated publicly that
they have no intention of transforming themselves
into a political party, and, for this reason, the various
documents have emphasized the need to restore
democracy and guarantee human rights rather than
provide a detailed program of government. Recent
statements also have emphasized "national
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reconciliation" by reaffirming previous calls for
dialogue with the regime and by not excluding
Sandinista members from amnesty or future
participation in politics. Nevertheless, UNO's
statement of goals indicates that the insurgents intend
to dismantle most of the Sandinistas' political
institutions.
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Key Points of UNO's Political Program
UNO's statement of principles and goals for a
"Provisional government of national reconciliation"
was announced in Caracas, 24 January 1986:
Political Commitments
? Political pluralism and the right of all citizens to
participate in a representative democracy.
? Establishment of a state of law, with strict
observance of human rights supervised by an
independent judiciary; elimination of special
tribunals.
? Freedom of expression, association, and worship.
? Freedom of organized labor and an irrevocable
right to strike.
? Creation of an autonomous electoral tribunal;
principle of no reelection of the president to
guarantee alternation of power.
? General amnesty, without exception, for political
crimes.
? Demilitarization of society; civilian supremacy over
the military; abolishment of military conscription.
Social and Economic Commitments
? State responsibility for satisfying basic human
needs and protection of the family.
? Establishment of a new social contract that
recognizes the principle of equitable participation in
benefits as well as labor.
? Solidarity with less privileged sectors of society.
? Agrarian reform, taking into account both
efficiency and the desirability that those who work
the land become owners.
? Abolition of state centralism in the economy.
Plan of Government
? Formation of a new "government of reconciliation,"
advised by a "consultative organ" representing
political and social sectors.
? Elections within eight months for a constituent
assembly.
? General elections within 18 months.
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UNO's January pronouncement gave increased
attention to socioeconomic issues, overcoming a
weakness in previous statements. It declared solidarity
with the poor and pledged to employ state resources to
meet basic human needs. UNO's commitment to land
reform and a new "social pact" as the basis for
reconstruction appear to counterbalance other
elements that appeal primarily to the middle class,
such as a call for returning to the private-sector
activities that can be performed more efficiently
there. Several policy goals also address the principal
popular complaints about the Sandinista regime,
including abolishing the military draft, restoring the
right to strike, demilitarizing society, and ending
harassment of the Catholic Church.
UNO points out that its call for a brief transitional
government contrasts with the Sandinistas' five-year
delay in holding elections. The January document
calls for constituent assembly elections within eight
months after a "government of reconciliation" comes
to power and national elections within 18 months.
UNO's statement last June also provided that the
elections would be supervised by the OAS.
Inside Nicaragua,
their program is primarily passed by
word of mouth by FDN guerrillas and their
supporters, sometimes at "armed propaganda"
gatherings of villagers. Pamphlets outlining insurgent
principles?the "Blue and White Book"?have been
widely distributed to guerrilla forces
The FDN formerly distributed
printed propaganda featuring photographs of its
commandos and accounts of clashes with government
forces, but lack of funds apparently forced suspension
of publication. In our view, improved Sandinista air
defense capabilities preclude resumption of
propaganda drops from aircraft over Nicaraguan
cities, as the insurgents did several times in 1983.
suggest a fairly wide familiarity
with the FDN's clandestine Radio 15 September, but
the small number of shortwave receivers in the
country limits the potential audience of regular
listeners.
Preventing Human Rights Abuses
UNO leaders, who have admitted publicly that their
forces have been guilty of human rights abuses, have
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had some success in publicizing steps to curb them.
The human rights office, which monitors violations by
both the insurgents and the government, is directed by
Roberto Ferrey, a former official of the Sandinista
Justice Ministry. UNO leaders have told the press
that a code of conduct will be distributed to each
member of the rebel force. Last October, the FDN
announced that it had informed the International Red
Cross of an offer to exchange 12 government officials
for rebel prisoners, and it proposed the creation of
neutral zones in Nicaragua where civilians could seek
safehaven.
A Diminished Pastora Challenge
Eden Pastora has toned down his criticism of the
FDN in recent months and other factors have acted to
lessen the impact of his aloofness. Several of Pastora's
commanders reportedly agreed in January to
cooperate with UNO in exchange for military
supplies. Pastora reacted to press reports of their
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decision by declaring that the pact was signed under
his direction. Moreover, the Southern Opposition
Bloc, which is loosely allied with Pastora, began unity
talks with UNO in December. Although the talks
were unsuccessful, a Bloc statement, which suggested
that further meetings take place, may act to limit
public attacks on UNO.
We believe that recent defections from Pastora's
forces may reinforce UNO's unwillingness to make
concessions to gain his support. UNO leaders, for
example, have not yielded to Pastora's demand that
he be given equal status with Calero, Robelo, and
Cruz. In our view, despite the decline in Pastora's
military importance, he has retained sufficient
political stature to hurt?or help?the FDN's image.
Although Pastora has not articulated a political
program as detailed as UNO's or assembled as wide a
political coalition, he is widely perceived abroad as an
authentic social democrat and the most acceptable
insurgent leader.
Political Weaknesses and Vulnerabilities
Although the insurgents have taken steps to improve
their image, several factors are likely to limit their
progress in gaining international respectability and
expanding domestic support.
Somocista Influence. The presence of former
National Guardsmen on the FDN military staff
continues to be a political liability, although less so
than in the past, in our judgment. The insurgents have
dealt with the issue indirectly by pointing out that the
importance of the ex-Guardsmen in the officer ranks
has declined, that none have been accused of human
rights abuses, and that their presence has not been an
obstacle for the many former Sandinista fighters and
Somoza political opponents who have joined UNO. In
our view, the insurgents are unlikely to remove
additional former Guardsmen from their leadership
ranks, especially FDN military commander
Bermudez. Aside from the practical matter of the
difficulty replacing their military expertise,
UNO leaders believe they
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have a moral commitment to retain men who have
been fighting the Sandinistas longer than anyone else.
Press reports since last fall of disputes between Cruz
and Calero have focused attention on the related
charge that UNO's political leaders have little
influence over FDN military commanders. Cruz was
said to be distressed by his inability to stop insurgent
human rights abuses and his exclusion from
knowledge about financing and military operations.
Human Rights Abuses. In our view, foreign observers
probably will discount UNO's human rights efforts
unless UNO publicizes its investigations and appears
to be acting firmly to punish abusers. The Sandinistas
probably will retain the upper hand because their
capacity to publicize?and even manufacture?
incidents exceeds UNO's ability to resolve allegations.
Guerrilla defectors to the Sandinistas, such as former
task force commander "Mondragon," give even wild
accusations an air of credibility, in our judgment.
Moreover, international groups reporting on human
rights and journalistic accounts have blamed the
guerrillas more than the government for violations.
Political Conservatism. Foreign reservations about
the insurgents also appear to stem from the fear that a
future government would reverse the social thrust of
the Sandinista revolution. In our opinion, although
UNO's recent statement referring to its concern for
the poor was intended to alleviate concern about its
political stance, the insurgents probably need to make
specific guarantees that their social and economic
policies will not turn back the clock to the Somoza
era. Inside Nicaragua, UNO's lack of emphasis on
socioeconomic concerns probably has not retarded
5
efforts to gain popular support in rural areas, but it
could prove a barrier in persuading urban
Nicaraguans to abandon the regime.
Subservience to the United States. The Sandinista
charge that the insurgents are merely US agents
undoubtedly contributes to UNO's image problem
abroad. Nevertheless, foreign officials seldom surface
this objection in their talks with US
Embassy officers, which supports our judgment that
this liability is not nearly as significant as others. The
regime has gained propaganda support for its
assertions from FDN defectors, including former
FDN directorate member Edgar Chamorro's
statements about CIA manipulation of insurgent
leaders and Mondragon's claim that the insurgents
are mercenaries because they receive salaries.
Managua has used this type of evidence to back its
refusal to negotiate with the insurgents, saying it will
not talk to the "puppets" but must deal with the
"puppeteer."
Lack of Ties to the Domestic Opposition. The internal
opposition has not openly endorsed the insurgents,
which some foreign observers believe reflects a lack of
support. This conclusion, however, is at variance with
how the insurgents and the main opposition groups
view each other. US Embassy reports indicate that
the domestic opposition coalition regards the
insurgency as a primary obstacle to complete
Sandinista consolidation. Despite Sandinista
pressures, the civic opposition has refused to condemn
insurgent attacks and has repeatedly endorsed
"national dialogue" talks that would include the
insurgents. For its part, UNO has publicly endorsed
opposition political positions, which it sees as a
compliment to its armed efforts. In February, for
example, the insurgents welcomed a declaration by
five political parties urging the government to accept
a ceasefire and relax the state of emergency.
Although indirect ties
appear to be growing, closer identification would
almost certainly invite even greater Sandinista
repression of unarmed opposition groups.
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Somocista Influence in the FDN
The assertion that former Somocistas dominate the
FDN has become an article of faith for many foreign
observers, despite FDN efforts to publicize its claim
that relatively few of its commanders served in
Somoza 'S National Guard. In our view, former
Guardsmen remain an influential presence in the
FDN, but the organization has become increasingly
representative of the Nicaraguan people. In total, we
estimate that there are some 300 former Guardsmen
among some 17,000 FDN combatants. To our
knowledge, none of the ex-Guard members now in the
FDN have been accused of human rights abuses
during the revolution, and President Somoza's family
does not maintain contact with any part of UNO.
Civil-Military Command
This group supervises overall FDN operations on a
daily basis, including military strategy and logistics:
Adolfo Calero (FDN President and Commander in
Chief) managed Managua's Coca-Cola bottling plant
and led Nicaragua's largest political party. He was
jailed by Somoza for leading an antigovernment
strike.
Enrique Bermudez (Chief of the military staff) was a
military engineer and former Guard Colonel. He
served as defense attache in Washington from
1976-79.
Indalecio Rodriguez (Chief of civil affairs, including
human rights) was a veterinarian and educator. He
was involved with the Sandinista Front soon after it
was founded and jailed twice by Somoza.
Aristedes Sanchez (Chief of logistics) was a lawyer
and cattleman. Press reports allege that he had
"social ties" to Somoza. He reportedly has served as
head of the military staff during Bermudez's absence.
Military Ste
Four of the six members of the FDN's "strategic
command" served in the National Guard, including
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its chief, Bermudez. Three former Guard lieutenants
serve as heads of personnel, intelligence, and
operations.
Senior officers in other staff positions are also former
Guardsmen. The heads of the FDN air wing and
coastal naval force (yet to be formed) were colonels;
the officer in charge of counterintelligence and
internal front activities was a major; and the recently
appointed head of training was a sergeant. A former
lieutenant colonel heads the medical department?its
only ex-Guard officer?but other sections?finance,
logistics, legal affairs, civil affairs, and
communications?are led by men without military
experience.
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Military Progress and Political Image. We believe
that, to some extent, the guerrillas' perceived lack of
military progress affects foreign assessments of their
political capabilities. Some observers, for example,
equate the insurgents' inability to control territory or
to hold towns with lack of popular support. Although
military momentum does not automatically confer
international respectability on an insurgent group, in
our judgment, foreign governments probably would
give UNO greater political recognition if it scored
greater military victories.
Implications and Outlook
We judge that UNO's problems with its political
image will continue to have a significant impact
abroad. Challenges to the insurgents' political
legitimacy have discouraged foreign material support
for them and probably acted as a brake on
international pressure on the Sandinistas. Another
manifestation of foreign doubts about the insurgents
has been the general reluctance to press the
Sandinistas to open talks with UNO. Managua has
repeatedly asserted that its commitment to "national
reconciliation"?one of the 21 objectives endorsed by
all Contadora participants?does not mean that it
must conduct a dialogue with armed groups.
Although the Contadora group's "Caraballeda
Declaration" restated the commitment in January,
US Embassy reports indicate that only two of the four
mediators interpret it to mean that the Sandinistas
must talk to UNO.
The insurgents probably will be able to improve their
image abroad slowly through their more frequent
foreign travels, and they may also become the
beneficiaries of growing foreign disillusionment with
Sandinista repression. Nevertheless, however
successful UNO leaders are in conveying their
commitment to democratic principles, foreign
reaction is likely to be held hostage to their ability
both to curb human rights abuses and to counter
Sandinista propaganda on the issue. UNO may be
able to make faster progress in improving its image if
it pursues a more aggressive public relations strategy,
including making more frequent policy declarations
that suggest a progressive political orientation. In our
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judgment, Eden Pastora's endorsement of UNO
probably would yield the quickest political gains?
although military cooperation with him almost
certainly would introduce other problems.
Inside Nicaragua, UNO's past growth
suggest that the guerrillas can attract even
greater numbers of combatants with only the broad
outlines of a political program. Nicaraguan refugees
and guerrillas have told US officials that, for many
Nicaraguans, hatred of Sandinista policies is
sufficient reason to support the insurgent cause.
Moreover, the popular support which the insurgents
appear to enjoy in their operating areas suggests that
Nicaraguans are able to verify themselves that FDN
combatants are neither Somocistas nor pawns of the
United States. In our view, however, the ease with
which the FDN has grown also has probably
promoted a sense of complacency about the potential
barrier to further recruitment and cooperation in
urban areas. To make similar gains in these areas of
Sandinista strength, the insurgents probably will have
to emphasize their commitment to the poor, make
clear that they will not retaliate against current
Sandinista supporters, and underline their resolve that
a future government will not return to the patterns of
the past.
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Mexico: Domestic Politics
and the Debt
There is a growing political debate within Mexico
over whether to suspend payments on the country's
$98 billion foreign debt. Several influential Cabinet
members as well as leftist opposition parties and
independent labor unions are calling for a debt
moratorium. Nevertheless, President de la Madrid,
consistent with his own preferences and the advice of
Finance Minister Silva Herzog, for the time being is
resisting a radical approach. The government's
position could change if Mexico City is unable to
reach an accommodation with creditors on a new debt
relief package in coming weeks or if government
retrenchment policies lead to significant social unrest.
More generally, however, the de la Madrid
administration will attempt to lead public opinion on
the debt issue and to exploit it for bargaining
advantage with creditors rather than to have popular
attitudes dictate Mexico City's debt stance.
Present Position on the Debt
Mexico City asserts it will need approximately $6
billion in relief this year if it is to meet payments on
its massive foreign debt. It has informed Washington
and foreign creditors that it would prefer concessions
on interest payments in lieu of new loans, which would
increase the size of the debt. Moreover, the de la
Madrid administration asserts that growing demands
for debt relief within Mexico afford it little room for
compromise. Mexican leaders have suggested they
will be unable to impose additional austerity measures
unless they can point out to the Mexican people that
creditors also are making visible sacrifices and doing
more to share the debt burden.
Up to this point, the de la Madrid administration has
consistently rejected radical and confrontational
positions on the issue. It sent no official representation
to the Havana debt conference last summer, for
example, and has shown little interest in forming a
debtors' cartel. Mexico City apparently reasons that it
has more to lose economically than to gain
politically?either at home or abroad?from
repudiating its external debt obligations or taking
9
Secret
radical action in concert with other Third World
debtors.
Domestic Pressures for Debt Relief
Despite the administration's generally moderate
stance, a number of domestic forces are urging a more
confrontational policy. As important as any are the
deep divisions in the Cabinet on this issue.
Leftist political parties, independent labor unions, and
a number of intellectuals have taken a militant stand,
in some cases calling on the government to repudiate
the foreign debt either unilaterally or jointly with
other debtors. The largest promoratorium
demonstration organized to date attracted as many as
50,000 people, a reasonably good turnout by Mexican
standards.
Pressures for a more radical stance on the debt issue
also have come from influential sectors within the
Institutional Revolutionary Party (PRI). Economic
and political nationalists within the ruling party
oppose Mexico City's current debt strategy, arguing
that it enables outside forces to dictate the country's
internal policies. Even Fidel Velazquez, the powerful
head of the progovernment Mexican Confederation of
Workers, has announced that the foreign debt is
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"unpayable" and, for that reason, must be
renegotiated. While not going so far as to endorse a
moratorium, Velazquez has asserted that present debt
arrangements impose an unbearable burden on
Mexicans and that the "sacrifice of the Mexican
worker cannot last forever."
Business groups and the conservative National Action
Party, the country's strongest opposition force, have
avoided extremist positions on the debt issue. Business
leaders generally favor renegotiation of the debt,
believing a default would seriously damage the
economy by drying up future sources of credit for the
public and private sectors alike. Political conservatives
ascribe Mexico's present financial predicament to
what they view as the misguided and inconsistent
policies of de la Madrid and his immediate
predecessor, Lopez Portillo.
De la Madrid's Views
The President has not provided firm direction to
Mexican debt policy, a fact that has enhanced the
influence of those around him and allowed greater
sway to public opinion than normally would be the
case.
Capitalizing on the Debt Issue
Domestic support for a moratorium nonetheless poses
opportunities for the government in talks with
creditors. Mexico City is attempting to use such
sentiment to create a crisis atmosphere and, in this
way, to increase its leverage with Washington and the
banks. For this reason, it has encouraged some media
coverage of the issue, tolerated political
demonstrations in support of a moratorium, and
participated in Cartegena Group meetings.
At the same time, Mexico City's assertion that it must
adopt a tough stance in debt negotiations is more than
simply a bargaining posture. In our judgment, the de
la Madrid administration is seriously concerned about
Secret
the prospect of social unrest if the debt burden is not
eased.
The view of de la Madrid and other
Mexican leaders that major unrest could occur this
year unless Mexico receives substantial debt relief
almost certainly will condition the decisions they
make on the debt issue in the future.
Prospects
In the months ahead, de la Madrid will attempt to
avoid a radical solution to the debt issue, in our
judgment. The longer negotiations drag on, however,
the more likely he will be to sharpen his rhetoric and
act to dramatize the seriousness of Mexico's plight.
We believe there is a better-than-even chance that
Mexico City, even while pursuing a settlement with
creditors, will suspend some interest payments during
the period when negotiations are being conducted. If
this occurs, de la Madrid probably will assert that the
interruptions in payments are temporary and due to
circumstances beyond Mexico City's control. He is
unlikely, in our judgment, to repudiate the foreign
debt or to join with other debtors in a regional
moratorium.
To obtain a combination of new money and other debt
concessions, Mexico City will commit itself to
additional cuts in public spending and structural
reforms. The de la Madrid administration
is
unlikely to permit the standard of living of Mexicans
to fall much below present levels, in our judgment.
Moreover, most of the reforms Mexico City adopts
will be implemented in the next 12 to 18 months. At
that time, the government is likely to restimulate the
economy in advance of the presidential elections in
1988 and to postpone politically unpopular measures.
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In the less likely event that de la Madrid chooses to
take more radical action on the debt, he may cite
domestic imperatives as necessitating such a move. In
our judgment, he would be most likely to do so if
creditors failed to grant new debt relief on terms
satisfactory to Mexico City, if the country
experienced significant new oil price or other external
shocks, or if government retrenchment measures led
to major social unrest. Under such circumstances,
Mexico City probably would pursue more populist
and nationalistic policies, some of which, while
proving popular domestically, would strain relations
with Washington and Mexico's creditors.
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South America: Soviet Presence,
Activities, and Policy
The USSR is not optimistic about the short-term
prospects for revolutionary change in South America,
but it remains alert for opportunities for the radical
left and is backing local attempts to undermine area
governments, especially in Chile. The Soviets have
provided limited aid to revolutionary groups and
continued their longstanding financial support of area
Communist parties. Nevertheless, Moscow believes
that it can best undercut US influence by cultivating
cultural, trade, and diplomatic relations with most
South American countries.
The Soviets did not achieve normal diplomatic and
commercial relations with most South American
states until the late 1960s. Before World War II, the
USSR had relations with only two Latin American
governments, Mexico (1924-30) and Uruguay (1934-
35). Several South American countries established
relations with Moscow by the end of World War II,
but most broke ties by the early 1950s. Only Mexico,
Uruguay, and Argentina sustained relations with
Moscow throughout the postwar period.
During this time, Soviet involvement in South
America was limited largely to providing financial
assistance to the local Communist parties, which in
return were expected to support Moscow's position at
Communist international gatherings. At the same
time, the Soviets discouraged these parties from
engaging in violence and were reluctant to support
leftist groups advocating revolution. Presumably, the
Communist parties also provided intelligence to
Moscow.
Despite its growing ties to Cuba during the 1960s and
early 1970s, the USSR did not directly challenge US
dominance in South America, although it did
vigorously pursue active measures intended to
undercut US influence. Moscow provided no large-
scale military or economic assistance to any South
American country. Soviet policy emphasized the more
pragmatic concerns of building diplomatic,
commercial, and even military relations with existing
13
governments. This included the beginning of its
extensive arms-sales relationship with Peru. Moscow
apparently hoped that stronger bilateral ties would
place it in a better position to profit from growing
nationalism and its accompanying anti-Americanism.
Even in the case of Chile, Moscow held back from
wholly embracing the regime of Salvador Allende
between 1970 and 1973. The USSR tried to aid
Allende, but only within the framework of its
traditional foreign economic policies. Most of this
assistance took the form of lines of credit and
technical cooperation in fishing, construction,
vehicles, and mining. Allende welcomed Soviet moral
and financial support, but Moscow contributed little
to help him solve his economic and political problems.
Since 1981
Private comments by Soviet diplomats and Soviet
media commentary suggest that Moscow remains
pessimistic about the prospects for revolutionary
change in South America during the 1980s. While the
Soviets continue to back local leftists' attempts to
undermine pro-US regimes, they remain prepared to
discard local Communists when expedient. On the
other hand, the Soviets and their regional allies, Cuba
and Nicaragua, are alert for potential opportunities
for the left, especially in Chile and Colombia.
Since 1981, Moscow has exploited the increasing
willingness of South American states?largely
induced by severely troubled local economies and
large debts to Western countries?to deal with the
USSR and its allies. Moscow's hopes for expanded
influence center on the new civilian governments in
South America.
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Overt Measures. On the whole, Moscow believes that
it can most increase its influence by cultivating
cultural, trade, and diplomatic relations with most
South American countries. Since 1981 the USSR has
sought, with some success, to expand relations on the
cultural front. Moscow concluded a new cultural
agreement with Lima early last year, and, by late
1985, both Brasilia and Buenos Aires were discussing
similar arrangements. Moscow has also established
friendship societies in most South American
countries, which provide Russian-language instruction
as well as low-cost Soviet books and lay the basis for
South Americans to pursue studies in the USSR.
The USSR also continues to push for expansion of its
commercial and trade relations in the area, especially
with Brazil and Argentina. Moscow has been willing
to accept an extremely unfavorable balance of trade
with these countries to obtain needed South American
exports, such as grain and industrial products. The
Soviets also have been pressuring Venezuela,
Uruguay, and Bolivia to grant landing rights to
Aeroflot in an attempt to expand that airline's service
within the hemisphere.
Moscow remains especially interested in Peru. Since
1981 the USSR has worked on the base established
through its extensive arms sales during the previous
decade and has attempted to ingratiate itself with the
Peruvian Government. Despite the pro-Western
orientation of President Belaunde's government
(1980-85), Moscow maintained its role in Lima as
arms supplier and commercial partner. The Soviets
believe that their influence in Peru will significantly
increase during President Garcia's term, although this
has yet to occur. To this end, Moscow has reportedly
made promises of significant new military and
economic assistance and offered to rebuild bilateral
intelligence cooperation. The Soviets have worked to
establish a model supply and assistance relationship
with the Peruvian military in hopes of seducing other
South American countries?such as Argentina?into
similar arrangements. Moscow has also gained credit
in Peru for its willingness to reschedule Lima's $1.5
billion debt and accept payment largely in
nontraditional commodities.
Secret
With the exception of Peru, Soviet advances in
commercial and cultural ties have generally not been
matched on the political front despite Moscow's effort
to generate regional good will by supporting
Argentina in the 1982 Falklands war. Some political
entree has come with the establishment of civilian
regimes in South America. In December, Brazil's
Foreign Minister visited Moscow, and President
Sarney is scheduled to visit during the first half of this
year. Argentine Foreign Minister Caputo visited
Moscow in late January. Nevertheless, the
democracies remain suspicious of Moscow. The
administrations in Ecuador, Venezuela, and Bolivia
maintain formal relations with the USSR but are
essentially unfriendly?Quito has restricted travel by
Soviet diplomats, and Caracas has put on hold an
agreement to exchange military attaches with
Moscow. The governments of Argentina, Uruguay,
Colombia, and Brazil are suspicious of Soviet motives
and activities, although they pursue commercial and
other ties that provide concrete benefits.
Soviet influence with South American political parties
remains generally limited to the local Communist
parties, which?except in Peru and Uruguay, where
they belong to leftist coalitions?are too small to have
much electoral appeal. Consequently, Moscow's best
short-term hope for exerting political influence in the
region is probably in penetrating and manipulating
organized labor, rather than in promoting
revolutionary movements, courting governments, or
influencing domestic politics. In Uruguay, Bolivia,
Peru, and Colombia the local Communist parties have
significant weight in organized labor, although
Communist strength in unions in most of the other
countries is small.
Chile is the one state in South America where the
Soviets see real revolutionary potential and have
called for violent struggle?largely because other
options are unavailable. Moscow has provided exiled
leaders of the Chilean Communist Party (PCCh) with
a public forum to call for armed revolution.
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At a meeting in Stockholm last May with leaders of
the main Chilean moderate political coalition, exiled
PCCh Secretary General Luis Corvalan rejected an
appeal from moderates for his party to renounce
armed opposition to Pinochet. Corvalan said it would
violate Soviet global strategy to abandon the violent
ath for overthrowin Pinochet.
Covert Measures. Moscow has probably provided
support to other revolutionary groups in South
America as welll
the Soviets may be involved in
providing material support to groups such as the
Revolutionary Armed Forces of Colombia. The
USSR provides funds to most South American
Communist parties and is encouraging them to
become more active, particularly in organizing broad
coalitions of the left.
The Soviets have also stepped up their propaganda
activities in the area over the last several years. These
efforts aim both to discredit US policy in the
hemisphere and to strengthen leftist elements.
Moscow, for example, directed its representatives in
South America to spread false accusations about the
reasons for Washington's tilt toward Britain in the
Falklands dispute. The Soviets have used front
organizations such as the World Peace Council, the
World Federation of Democratic Youth, and the
World Federation of Trade Unions to mobilize
support for Central American and Caribbean
15
revolutionary groups. Moreover, Moscow relays
Spanish-language radiobroadcasts to South America
through Cuba.
The Soviets are also educating numerous South
American students in the USSR. Moscow reportedly
offers hundreds of scholarships per year to students
from countries such as Brazil, Colombia, and Peru.
Soviet interest in cultivating organized labor in the
area has also increased. For example, during the
1980s the USSR has established an educational
program for trade unionists from Colombia.
Outlook
As long as South American nations have at least some
success in using traditional Western financial
institutions and procedures to cope with their chronic
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economic problems, we believe they will remain
interested in only limited relations with the Soviet
Union. Area governments will continue to regard
Moscow as a customer for exports of primary
products, but will have relatively little interest in
buying Soviet industrial goods or accepting Soviet
participation in development projects. Even under
these conditions, the Soviets are likely to continue
their present concentration on correct state-to-state
relations because of the lack of attractive covert
opportunities in most countries.
The most notable exception is Chile, where the
transition to a post-Pinochet government will offer the
Soviets their best chance to promote radical change.
Moscow and its surrogates will continue to funnel
limited assistance to the Chilean left, in our view,
until conditions indicate that more massive help can
be translated into an effective, violent challenge to the
Pinochet regime or its designated successor.
If area countries experience significantly more severe
economic problems or the South Americans decide to
move to confrontation with the international banks
and creditor countries, developments we regard as
unlikely, area governments may have greater interest
in expanding economic and political ties to the Soviet
Union. The Soviets would probably attempt to
encourage closer bilateral ties to the affected states,
perhaps through limited offers of trade or military
assistance. Moscow would be likely to attempt to
exploit the propaganda value of South American
difficulties to embarrass the West and claim a role for
itself as a representative of the Third World. We
doubt, however, that Moscow will be prepared to offer
the sort of massive assistance or endure the
unfavorable trade balances over the long term that the
South Americans would need.
Under either case the Soviets, we believe, will rely
primarily on Cuba and Nicaragua to lobby the South
Americans to take more anti-US positions on the debt
and other international questions. Managua and
Havana are also likely to step up their attempts to
woo leftist opposition groups or even provide direct
assistance to guerrillas and terrorists.
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Cuba: Composition of the
New Politburo'
The Cuban Politburo, unlike the new Central
Committee as a whole, shows few signs of becoming
more representative of the Cuban population. At the
national level, the Central Committee is theoretically
the highest policymaking body, but in practice the
party is governed by its 24-member executive, the
Politburo. The Central Committee normally convenes
only twice a year. Despite the relatively large turnover
in the Politburo last month, the body remains
dominated by white male guerrilla veterans from
Oriente Province, rather than the younger, more
racially and geographically balanced membership in
the Central Committee.
Revolutionary Affiliation. Profiles of the Politburos
formed between 1965 and 1986 underscore the
dominance of individuals who participated with the
Castro brothers in the guerrilla arm of the 26th of
July Movement. Members of the other major
revolutionary groups, the Partido Socialista Popular
(PSP), or "Old Communists," and the urban
underground arm of the 26th of July Movement?are
not nearly as well represented.' The only major
decline in guerrilla membership occurred between
1965 and 1975, when the proportion of the so-called
Old Communists increased by 25 percentage points.
the infusion of the
Old Communists into the 1975 Politburo was a result
of pressure from Moscow.
The apparent decline in guerrilla membership?full
and alternate?on the 1986 Politburo may be
misleading. Looking only at full members, who hold
the real power, we see no change between 1980 and
1986 in the proportion of those with guerrilla
backgrounds. The big losers were the Old
This article focuses on the
Politburo which had nine of its 24 members replaced.
= The PSP was a pro-Moscow Communist party that existed before
the advent of the Castro regime. It generally opposed the tactics of
armed insurrection until mid-I958, when it became obvious the
Castro forces were winning.
17
Communists, an inevitable trend given the fact that
they generally are much older than their colleagues in
the leadership. Several of them, who formerly held top
party positions, have already died. It is the Old
Communists who are being replaced by individuals
with no significant revolutionary affiliation.
Composition by Sex. As is the case on the Central
Committee as a whole, female representation on the
Politburo has fallen far short of true socialist equality.
There were no women on the Politburo until 1980,
when Vilma Espin was given the clearly secondary
position of Politburo alternate. In 1986, Espin moved
up to full membership, and two women were added as
alternate members. Although the number had tripled,
the porportion of women on the Politburo is still only
an unimpressive 12.5 percent.
Racial Composition. The proportion of blacks and
mulattoes has been similarly unrepresentative of the
Cuban population. Black and mulatto representation
reached its highest point in 1975, declining to
7.4 percent in 1980. By 1986, black and mulatto
membership had risen by 5.1 percentage points, to the
same level of representation as on the first Central
Committee. In contrast, black and mulatto
membership on the Central Committee increased by
8.3 percentage points between 1980 and 1986.
Provincial Origins. When the first Politburo was
formed in 1965, 37.5 percent of the members were
from President Castro's home province of Oriente, the
province where much of the guerrilla struggle against
Batista was waged. This figure is remarkable in that
Oriente representation was the same as that of
Havana, despite the fact that Havana is far more
populous. In 1975 and 1980, the percentage of
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members from Oriente rose to 41.7 percent and 48.1
percent, respectively. The percentage of members
from Oriente on the 1986 Politburo, however, has
fallen to the 1965 level of 37.5. Despite this decline,
the proportion of members from Oriente still exceeds
that of Havana by 16.7 percentage points. The
continued dominance of "Orientales" differs sharply
from that of the Central Committee as a whole, where
non-Oriente representation appears to be about 77
percent.
Conclusions
The composition of the Politburo indicates that
Castro has no intention of allowing any erosion of the
guerrilla elite's domination of the policymaking
process. We expect the Cuban leader will most likely
continue to lean heavily on his colleagues from the
guerrilla struggle when faced with critical decisions.
He is apparently not yet willing to introduce some of
the "new blood" evident in the Central Committee
into the Politburo where real power resides. With the
guerrilla clique holding the reins of power, it is
unlikely that Castro will experience significant
pressures from within the party hierarchy for new
policy directions.
Table 2
Composition by Sex of All Members
Percent
1965
1975
1980
1986
Male
100
100
96.3
87.5
Female
0
0
3.7
12.5
Table 3
Racial Makeup of All Members
Percent
1965
1975
1980
1986
White
87.5
75.0
92.6
87.5
Black/mulatto
12.5
25.0
7.4
12.5
Table 4
Provincial Background of All Members
Percent
Table 1
Revolutionary Background
Percent
1965
1975
1980
1986
Oriente
37.5
41.7
48.1
37.5
Havana
37.5
16.7
18.5
20.8
Other
25.0
33.3
25.9
25.0
1965
1975
1980
1986
Unknown
0.0
8.3
7.4
16.5
All members
26 July Movement
87.5
58.3
63.0
54.2
Guerrilla
75.0
50.0
55.6
45.8
Urban
12.5
8.3
7.4
8.3
PSP
0.0
25.0
18.5
12.5
None/unknown
12.5
16.7
18.5
33.3
1980
1986
Full members only
26 July Movement
62.5
64.3
Guerrilla
50.0
50.0
Urban
12.5
14.3
PSP
25.0
14.3
None/unknown
12.5
21.4
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Dominican Republic: Presidential
Campaign
Chronic economic problems and intense divisiveness
in the ruling Dominican Revolutionary Party (PRD)
have made 78-year-old Joaquin Balaguer, a
conservative former President with authoritarian
credentials, the presidential front-runner in national
elections scheduled for May. We believe the volatility
of Dominican politics and the ability of the Jorge
Blanco administration to manipulate important
electoral institutions, nonetheless, will enable the
ruling party candidate, Senate President Jacobo
Majluta, to mount a strong campaign. In addition to
Balaguer's Social Christian Reformist Party (PRSC),
the pro-Cuban Dominican Liberation Party (PLD) of
Juan Bosch stands to gain from the ruling party's
troubles. The far left?the Dominican Communist
Party (PCD) and the umbrella Dominican Leftist
Front (FID)?remains fragmented despite a veil of
unity and, in our view, will have little electoral
impact. The armed forces appear committed to
remaining on the sidelines to allow the democratic
process to proceed, but if campaign violence escalates
or Juan Bosch's party does much better than expected
the military might be tempted to intervene.
The Ruling Party: Contending Personalities and
Factions
The two-month party crisis, precipitated by a violent
interruption in vote counting in the party's primary
last November, has left Majluta scrambling to regain
lost ground. The count was halted by shootings at
PRD headquarters in which one person was killed as
preliminary results showed Majluta leading his
archrival, Santo Domingo Mayor Jose Francisco Pena
Gomez, the candidate backed by President Jorge
Blanco. Both candidates claimed victory, and a
special PRD commission was set up to count the
disputed ballots.
The primary was the first occasion in which the
party's 700,000 members were allowed to select the
presidential candidate through direct ballots, but,
according to the Embassy, party officials clearly were
not prepared to carry out the task. Party factionalism
and jockeying for power have plagued the PRD since
19
the early days of the Jorge Blanco administration.
The party's wide range of ideologies?from the
center-right (represented by Majluta) to the center-
left (the Pena Gomez faction)?have compounded this
disunity. To enhance his electoral prospects, Majluta
has consistently criticized Jorge Blanco, particularly
for his handling of the economy. As Senate President,
Majluta often has stymied implementation of Jorge
Blanco's economic policies. Even Jorge Blanco's
choice as his successor, Pena Gomez, has found it
expedient to criticize the government to bolster his
electoral support.
By last January a split in the party seemed imminent,
with neither candidate giving ground and Jorge
Blanco behaving increasingly like a candidate.
Widespread rumors of Majluta's looming ouster and
his possible alliance with PRSC leader Balaguer took
on new life, according to US Embassy reporting. De-
termined to bid for the presidency, Majluta,
nonetheless, launched his campaign as the ruling
party candidate on 19 January. The crisis came to a
head in late January as Pena Gomez gave an
inflammatory speech describing any reelection bid by
Jorge Blanco as "dangerous," a statement confirming
the tenuous nature of their alliance.
In an abrupt move, Jorge Blanco on 27 January
drafted a "unity pact" that handed the party's
nomination to Majluta, a tacit recognition on Jorge
Blanco's part that Majluta had the support of a
majority in the aborted primary.
Jorge Blanco sought to
placate Pena and his supporters by allowing him to
assume the party's presidency and to choose the
party's senatorial candidate from the National
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District, most likely himself. The "unity pact,"
however, has not resolved the outstanding issues that
have long undercut party cohesiveness. Since its
conclusion, according to the US Embassy, the
Majluta and Jorge Blanco factions have been sharing
the party spoils, thus freezing out Pena's disgruntled
supporters.
We believe the party crisis has badly handicapped
Majluta in the campaign, especially because public
opinion polls even before these events showed each of
the potential PRD candidates trailin Bala uer.
Balaguer, nonetheless, has faced dissension in his own
party. He has had to contend, for example, with
opposition from a minority who believe that he should
step aside in favor of a oun er leader.
Majluta, however, seems
unwilling to be closely identified with the unpopular
government, according to US Embassy reporting.
Moreover, Pena
Gomez, whose supporters comprise a significant
sector of the PRD, has been lukewarm in his support
for Majluta's campaign.
Despite these obstacles, we believe the ruling party's
electoral prospects may improve in the coming weeks.
The President already has successfully forced the
Chamber of Deputies and the Central Electoral Board
to extend the voter registration period for 10 days,
thereby helping his party to make up for time lost in
registering new members during the primary crisis.
This move demonstrated both the PRD's willingness
to use its congressional majority to advance its
electoral chances and the weakness of the Central
Electoral Board, an organization crucial to holding
free and fair elections.
Balaguer's Potential Return
Former President Balaguer remains the early favorite,
largely because of public dissatisfaction with eight
years of PRD rule and infi htin
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Bosch's Party: Reaping Benefits
US Embassy reports indicate that polls showing
Bosch's leftist Dominican Liberation Party gaining
strength during the PRD party crisis have encouraged
Bosch to continue emphasizing the electoral path at
least for now. The party has traditional strength in the
capital and has expanded its su ort amon unionized
labor and peasant groups.
To attract mainstream voters, Bosch recently has
moderated his public statements on economic,
political, and foreign policy issues. According to the
US Embassy, he recently stated that, if elected, he
would not break relations with the IMF and that the
country is obligated to repay its external debt. On
both issues he differs publicly with other leaders from
his party as well as the extreme leftist parties.
Bosch and the PLD remain at arm's length from the
Dominican Communist Party and the radical
umbrella organization, the Dominican Leftist Front.
Personal animosity between Bosch and PCD leader
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Presidential Candidates in the Dominican Republic
Joaquin Amparo Balaguer Ricardo . . . Social
Christian Reformist Party. . . 78 . . .
former Trujillo lieutenant. . . President during
period of significant economic growth, 1966-78.
Jacobo Ma]! uta Azar . . . Dominican Revolutionary
Party . . . 51 . . . Vice President under Antonio
Guzman, 1978-82 . . . served as President for 42 days
in 1982 following Guzman's suicide . . . hard-driving
populist . . . favors expanded role for private sector
and increased US investment.
Juan Emilio Bosch Gavino . . . Dominican Liberation
Party . . . 76 . . . Marxist. . . President for seven
months in 1963 . . . vocal supporter of Cuba's Castro
and the Sandinistas in Nicaragua.
Narciso Isa Conde . . . Dominican Communist
Party. . . 43 . . . toes the Soviet Communist Party
line. . .
Narciso Isa Conde, more than ideological differences,
has prevented the PLD from joining the FID. In
addition, Bosch apparently believes that an alliance
with the PCD would do little to enhance his party's
electoral prospects. The Communists received less
than 1 percent of the vote in 1982.
21
We expect opposition to government belt tightening
and overall dissatisfaction with the Jorge Blanco
administration, especially among the hard hit lower
classes, would make it possible for the PLD to double
its showing in the national elections of 1982, when it
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Election Results, 1966-82
1966
1970
1974
1978
1982
No. of Percent
Votes
No. of
Votes
Percent
No. of
Votes
Percent
No. of
Votes
Percent
No. of Percent
Votes
Dominican Revolutionary
Party (Bosch, Guzman
Blanco)
494,570 36.8
DNP b
DNP b
856,084 ,
51.7
839,092 a 46.7
Reformist Party (Balaguer)
759,887 a 56.5
653,565
52.8
942,726
84.66
698,273
42.2
656,672 36.6
Dominican Liberation Party
(Bosch)
18,375
1.1
173,896 9.7
Qusiqueyano Democratic
Party
168,751
13.6
33,991 1.9
Popular Democratic Party
170,963
15.4
All others
6.7
33.6
5.0
5.1
a Election winner.
DNP: did not participate.
polled 10 percent of the vote. The seven seats in the
Chamber of Deputies (out of a total of 120) won by
the PLD in 1982 constituted the first Marxist
congressional representation in the nation's history.
Such a showing, however, still would bring only a
slight increase in the party's legislative representation.
Nonetheless, even a marginal increase could have a
disruptive impact. In addition to providing a forum
for leftist spokesmen, we believe increased legislative
representation would afford leftists opportunities to
sabotage economic adjustment measures, despite
Bosch's statements to the contrary.
The Far Left: Fragmented and Stalemated
The Dominican Communist Party, under the tutelage
of Isa Conde, is forsaking radical campaign rhetoric
in hopes of improving its electoral showing in 1982.
The party has long advocated breaking relations with
the IMF, suspending external debt payments, and
nationalization of the banking industry. More
recently, however, it has emphasized such bread-and-
butter issues as improved social services, reduced costs
? of basic foodstuffs, and wage increases. The
international globe-trotting of PCD leaders to attend
leftist conclaves in Cuba, Nicaragua, and the USSR,
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however, have left the PCD leadership with little time
to conduct an election campaign
We believe that organizational, personal, and
ideological differences within the three-year-old FID
will greatly weaken its impact on the elections. Each
group continues to retain its own party structure.
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Outlook
While most opinion polls and informed observers show
Balaguer in the lead, we believe that many variables
could decisively affect the outcome. Much depends on
the amount of support that Jorge Blanco and Pena
Gomez provide to Majluta, how willing Majluta is to
accept this support, and whether his close identity
with an unpopular government will damage his
chances. In addition, Balaguer's choice of a running
mate may well affect his support, depending on
whether his selection is perceived as someone capable
of grasping the mantle of power when necessary or as
a lackey with no power base of his own. How the
military would respond to a higher than expected
increase in votes for Bosch or to campaign violence
could pose a wild card in the campaign. Thus far,
however, military attache reporting indicates that the
military is committed to remaining on the sidelines.
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Uruguay: Prospects for Sanguinetti
and the Colorado Party
President Sanguinetti's centrist Colorado Party enjoys
strong popular support one year after Uruguay's
return to democracy. As winner of the elections in
1984, the Colorados reasserted their traditional role
as the country's governing party, defeating their
historical rival, the Blanco Party, and the leftist
Broad Front coalition. We expect Sanguinetti to
govern effectively over the next year, capitalizing on
the electorate's preference for orderly reform and
politics by consensus. Long-term prospects, however,
are less certain, as the government faces a bleak
economic picture, strong opposition in Congress,
persistent labor agitation, and a nervous military.
The Military and the Transition to Civilian Rule
Sanguinetti and the Colorados played an active role in
Uruguay's transition to democracy last year, after
more than a decade of military rule. The party helped
negotiate an agreement with the armed forces that
provided a face-saving way for the military to
relinquish power by allowing it limited participation
in the government during the first year of civilian
rule.
the US Embassy reports that Sanguinetti assiduously
cultivated good relations with Armed Forces
Commander in Chief Hugo Medina to ensure a
smooth transition to democracy.
Moderation and Compromise
We believe the Colorado victory demonstrated the
Uruguayan electorate's desire for moderate reform
and political stability. Sanguinetti won the
presidential contest with 41 percent of the vote,
although the combined Broad Front and Blancos
gained enough votes to obtain a majority in Congress,
presenting the new government with the delicate task
of governing with an opposition-controlled legislature.
25
Julio Maria Sanguinetti
50 years old. . . dynamic, articulate . . . Minister of
Industry and Commerce, 1969-71 . . . Minister of
Education and Culture, 1972. . . has also practiced
law, journalism . . . married to prominent Uruguayan
art historian, has two children.
The Colorado platform rejected radical change and
risky economic experiments, tasking a serious
business-type approach in favor of long-term solutions
instead of quick fixes. Sanguinetti himself adopted a
statesmanlike attitude, urging cooperation among all
Uruguayans and focusing on the need to reestablish
democratic institutions and enhance economic
productivity.
Since the elections, the Colorados have walked a fine
line between meeting demands from the left and
appeasing a still apprehensive military. The party has
been especially careful, for example, in its handling of
the controversial human rights issue. Broad Front
politicians are advocating thorough investigations and
trials of officers accused of human rights violations
during military rule. The Supreme Court will decide
in early March whether these cases will be tried in
civilian or military courts. The armed forces are
extremely sensitive about possible trials
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ALA LAR 86-007
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The Colorados have also taken careful steps in foreign
policy. Sanguinetti values good relations with the
West and Uruguay's South American neighbors, but
he has also strengthened contacts with the Soviet
Bloc. Uruguay recently reestablished diplomatic
relations with Cuba and has expanded cultural and
commercial ties to the Soviet Union.
Relations between Uruguay and the United States are
friendly and cooperative, although Sanguinetti has
been more critical of US policy than previous military
rulers. The Colorados have had little positive to say
regarding the US role in Central America, and were
particularly harsh in criticizing Washington's
embargo of Nicaragua last year. US import
restrictions on Uruguayan textile exports have also
been a point of friction. Nevertheless, the President
has taken care not to let specific policy disputes blunt
the pro-Western thrust of his government. Uruguay
looks to the United States to support its new
democracy
Party Leadership and Factions
We view Sanguinetti as a typical Colorado Party
leader. He associates himself with the legacy of
former President Jose Batlle y Ordonez, who built the
modern Colorado Party as a representative of the
urban middle and lower middle class. "Batllismo"?
which the US Embassy sees as similar to European
social democracy?is still strong in Uruguay today.
Many Uruguayans view Sanguinetti as the
embodiment of Batllismo, and this, combined with his
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leadership of the largest Colorado faction, has given
him firm control over Uruguay's best organized
political force.
Although the Colorados are much more unified than
the Blancos or the Broad Front, the party contains
various factions. The differences, however, are based
more on personalities than ideology, and have so far
not hampered the President's authority, either within
the party or the government
Several Colorado leaders have contributed to the
party's relative unity and popularity. Vice President
Enrique Tango, for example, heads the Liberty and
Change faction, which is slightly to the left of
Sanguinetti's Unity and Reform faction. In our view,
Tango has shown impressive leadership capability in
his role as president of the Senate and has gained
public attention through his tactful handling of a
number of controversial debates. As Sanguinetti's
representative to international conferences and
meetings in other countries, Tango is also increasing
his regional exposure and foreign policy expertise.
Several senators have also assumed key roles in the
party but without undercutting Sanguinetti's power.
Senator Jorge Batlle, from Sanguinetti's own faction,
is the son of the former President and a seasoned
politician with excellent contacts.
Outlook
Although Sanguinetti's centrist policies have been
relatively successful over the past year, the
administration will face serious economic and political
challenges throughout 1986. Uruguay is beset by high
inflation and unemployment and a foreign debt of
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$5 billion?the highest per capita debt in the Third
World. At the same time, the aggressive, leftist-
dominated labor movement is agitating for a
moratorium on foreign debt payments, for widespread
nationalizations, for increased social welfare
expenditures, and for wage hikes that would go
beyond increases in productivity. Labor agitation has
disrupted industrial production and the service sector,
and, in our view, has been the main cause of the
current tense political and social atmosphere.
Moreover, the military is still not fully convinced that
the government can control the left as well as protect
the armed forces from prosecution for human rights
abuses.
We believe that Colorado Party unity and
Sanguinetti's sagacity will enable the government to
tackle at least some of the challenges of the coming
year. The President has already demonstrated his
leadership by negotiating an initially unpopular IMF
agreement and taking a firm stance against labor
unrest. He commands strong public support:
according to polls, the electorate is disenchanted with
the social and economic disorder that has disrupted
the country since the return to civilian rule and is
eager for the government to take active measures to
ensure political stability. We also expect the
government to preserve its military support as
Sanguinetti deals carefully with the armed forces over
sensitive issues such as human rights trials. Moreover,
we believe the Colorados may be able to count on
Blanco Party help to counter leftist inroads in
Congress and support an economic revitalization
program. Government and Blanco leaders are
currently discussing a "national accord" which, if
implemented, would enable Sanguinetti to muster
more congressional support for his policies.
27
While Sanguinetti is likely to manage these
immediate obstacles, we view long-term prospects for
democracy as uncertain at best. Depressed prices for
traditional agricultural exports will continue to hinder
economic growth despite strict belt-tightening
measures and some diversification of exports. A
decline in economy and controversial austerity
measures will probably erode the Colorado Party's
strong public support and cause labor tensions to
escalate over time. The Blancos will be the likely
beneficiary of any serious Colorado missteps, but
there is an outside chance that Uruguayans might
shun both traditional parties and turn to the leftist
Broad Front in future elections. Any attempt to
transfer power to the left would probably risk an
immediate military response to overturn Uruguay's
democracy.
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Guyana: Government Response
to Economic Crisis
President Hoyte has begun to move away from the
rigid economic policies of the late President Burnham
since his election last December. Hoyte has
implemented much-needed economic reforms, and
other changes are expected. Moreover, recent Cabinet
appointments have indicated a shift from party
ideologues, many of whom were Burnham's trusted
allies, to nonideological technocrats in top government
positions. Hoyte also has said that the ruling People's
National Congress must place party discipline over
personal loyalties and warned that new strategies and
attitudes would be required to revive Guyana's
battered economy. Nonetheless, Guyana's economy
continues to deteriorate rapidly.
In a significant deviation from the policies of his
predecessor, Hoyte has outlined plans to open up the
state-dominated economy to foreign and private
investment, emphasizing the Caribbean Community
(CARICOM). Guyana's trade with CARICOM has
declined sharply in recent years, largely because of its
inability to pay its debts. A Guyanese trade delegation
visited several neighboring countries last month to
discuss improved relations. Missions also were sent to
the United States and Western Europe to gauge
international interest in possible joint ventures and to
seek development aid. According to press reports, the
government has held discussions with the World Bank
and the European Community on funding to revitalize
Guyana's bauxite industry and reorganize its
unprofitable sugar industry.
Despite these promising longer term adjustments, the
foreign financial bind has noticeably worsened in
recent months. Trinidad's decision to require cash in
advance for petroleum exports to Guyana has caused
severe oil shortages and prompted rationing. Hoyte's
recent decision to import wheat flour, lifting a four-
year ban imposed by Burnham to encourage domestic
food production, has caused dissent with Burnham
loyalists in ruling party circles. Although the action
will worsen the country's trade balance, the US
Embassy says the decision is popular with the public
29
and speculates that the announcement is intended to
renew public confidence in the face of growing oil
shortages.
No quick economic remedies are apparent. Chronic
shortages of marketable export commodities will
continue to limit earnings until new investment occurs
in such potentially profitable areas as gold mining and
nontraditional agriculture. Meanwhile, large
arrearages?particularly to the IMF?will continue
to choke capital inflows.
Hoyte also appears to be adopting a more balanced
foreign policy with an eye toward widening the
country's sources of economic aid.
Guyana's relations with its Communist
allies remain friendly, in keeping with Hoyte's belief
that he cannot afford to alienate any possible donor.
Cuba continues to supply technical aid for
infrastructure projects, and a Soviet trade delegation
signed a long-term bauxite agreement during a visit in
January.
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ALA LAR 86-007
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Latin America
Briefs
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ALA LAR 86-007
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Mexico Status of GATT Negotiations
the negotiating process is likely to
take at least six months. The harder line taken by members suggests Mexico may
not be able to obtain as sweet a basket of concessions as that offered in 1979, when
it rejected GATT membership. The actual implementation of any agreement will
take several years. We believe the de la Madrid administration will push for an
eight-year time limit to phase out trade restrictions, but it probably would settle
for four years.
GATT membership would improve Mexico's trade prospects over the long term
and mark a political victory for de la Madrid and Finance Minister Silva
Herzog?both strong advocates of entry. The issue will remain controversial,
however, since domestic opposition is widespread. Much of the private sector
favors continued protectionism, and leftists view GATT as a threat to national
sovereignty. Moreover, according to a recent poll, only 25 percent of Mexicans
favor GATT membership and 88 percent believe Mexico would be a net loser in
the agreement. Nevertheless, we believe de la Madrid will proceed with the
negotiations.
El Salvador Small Coffee Harvest
The 1985-86 coffee crop is only 200 million pounds, almost 30 percent below last
year, according to US Embassy sources. The harvest?that may end up as the
lowest in 30 years?has suffered because of continued depressed internal prices
paid to producers, poor weather, and increased guerrilla destruction of crops. The
Embassy reports that existing stocks and high world coffee prices should allow El
Salvador to equal or slightly increase 1985 export revenues, but low production
will substantially eliminate any windfall that might have been realized from the
price increases. The poor harvest further weakens President Duarte's austerity
program, which is already under attack from leftist labor leaders and from
conservatives. The program imposed additional taxes on coffee this year hoping to
benefit from increased export earnings.
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Peru Floods Add to Economic Problems
Flooding in the mountains around Lake Titicaca has cost nearly $3 million in crop
and livestock losses and displaced at least 90,000 peasants, according to Peruvian
and Bolivian civil defense officials. Food shortages already exist in Lima, and this
disaster will boost domestic prices and require more imports, thus eroding a
planned $800 million trade surplus. President Garcia is seeking credits from
Argentina and Uruguay to cope with Peru's worst food crisis in 40 years.
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