CHILE: DAYS OF PROTEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00302R001101720007-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 21
• Document Creation Date: December 21, 2016
• Document Release Date: February 12, 2009
• Sequence Number: 7
• Publication Date: October 4, 1983
• Content Type: SNIE

vnrecwr ur
Central
Intelligence
Chile:
Days of Protest
Secret l
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SNIE 94-83
4 October 1983
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 CHILE:
DAYS OF PROTEST
Information available as of 27 September 1983 was
used in the preparation of this Estimate.
 THIS ESTIMATE IS ISSUED BY THE DIRECTOR OF CENTRAL
INTELLIGENCE.
THE NATIONAL FOREIGN INTELLIGENCE BOARD CONCURS.
The following intelligence organizations participated in the preparation of the
Estimate:
The Central Intelligence Agency, the Defense Intelligence Agency, the National Security
Agency, and the intelligence organization of the Department of State.
Also Participating:
The Assistant Chief of Staff for Intelligence, Department of the Army
 Page
PREFACE ................................................................................................................... 1
Evolution of the Crisis ............................................................................................ 7
The Balance of Forces: Perspectives and Strategies ............................................. 8
The Democratic Opposition ............................................................................... 8
The Radical Left ................................................................................................. 8
Pinochet ............................................................................................................... 9
The Military ........................................................................................................ 10
Interior Minister Jarpa ....................................................................................... 10
Prospects for the Negotiations ............................................................................... 11
Downside Risks ....................................................................................................... 13
Implications for the United States ......................................................................... 14
Indicators of Serious Political Instability .............................................................. 15
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 The erosion this year of President Pinochet's domestic support and
the growth of a broad-based opposition movement-both fueled to a
large extent by the nation's economic decline since 1981-have placed
Chile irreversibly on the path to political change. Under the present
timetable for transition to civilian rule, Pinochet's term of office is to
end in 1989, and a congress is to be elected in 1990. At that time, Pino-
chet is to have the option of standing for reelection as a civilian to an-
other eight-year term. The protest movement has forced Pinochet-
clearly against his will-to negotiate with the democratic opposition
over these questions, as well as other political and economic policies, in
order to preserve his base of support in the military. The fragility of
these negotiations raises the danger that Pinochet's continuation in
office could become the irreconcilable central issue in the political
crisis. This year will end with the Christmas holidays and the beginning
of the three-month Southern Hemisphere "summer" vacation, a tradi-
tional period of reduced activity that will make the period between now
and the end of December critical for both sides. It is therefore the
appropriate time frame for the primary focus of this Estimate.
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 The pace and outlines of what we regard as irreversible political
change in Chile will be determined over the next three months by the
success, simple persistence, or collapse of negotiations between repre-
sentatives of the government and the democratic opposition. We believe
there is a fair chance (roughly 60 percent) that these negotiations will
progress haltingly through December, erode the cycle of opposition
protests, and result in a tentative agreement for accelerating some
elements of the transition to civilian rule. Differences will remain,
making the dialogue a continuing feature of the political landscape into
next year.
Neither President Pinochet nor leaders of the democratic opposi-
tion would be likely to embrace an agreement enthusiastically. Pino-
chet's preference would be to adhere to the transition formula outlined
in the 1980 Constitution, suppressing dissent vigorously. The armed
forces, however, which are still his chief base of support, and Interior
Minister Jarpa apparently are convinced of the necessity of some
democratic opening and are moving the President in this direction.
Moreover, Pinochet's personal prestige in the military, particularly with
the Air Force and Navy, also has suffered in recent months because of
his loss of public backing and because of revelations that members of his
family have abused their privileged positions. On their part, democratic
opposition leaders want to see Pinochet replaced. They are coming to
realize, however, that insistence on this demand could polarize society
and clear the way for the radical left to dominate the opposition
We estimate that even with a political truce or settlement by
December, the tranquilizing effects could fade steadily, and by late
1984 attention could focus again on the question of Pinochet's term of
office. In an unpredictable atmosphere of political ferment, with new
party leaders searching for issues and goals, five more years of rule for
Pinochet would be increasingly in doubt.
There is a lesser chance (roughly 40 percent) that the dialogue-
which rests on a very fragile base-could collapse over government
intransigence, the eruption of violence, the departure of Jarpa, or some
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 other complication. The protest movement would swell and increasingly
center on the call for Pinochet's resignation-the one issue that comes
close to unifying all opposition elements. Polarization and spiraling
violence would combine with Pinochet's reluctance to grant concessions
and eventually would force the armed forces to choose between
repressing the government's opponents or removing Pinochet. We judge
that the military high command, acting by consensus and with the
subsequent support of the lower ranks, would replace the President with
another officer or some military-civilian body.
Even if this downside scenario were to occur, we see within it only
about one chance in three that the process would culminate in
Pinochet's ouster by yearend; his departure, however, would become a
strong probability by mid-1984. We believe the armed forces would
stand by the President longer if, in the military's view, the dialogue col-
lapsed because of an intransigent opposition demand for Pinochet's
resignation. The armed forces would still eventually replace him rather
than continue to suppress protests. While there would be widespread
disorder under this scenario, we do not foresee open civil war or the col-
lapse of the political system.
Under either scenario, we do not expect that the radical left would
be able to make significant gains in the short term. It may be the left's
recognition of this that has led to the recent reported consensus among
the Communist Party and the Movement of the Revolutionary Left
(MIR) in favor of a strategy of armed struggle. This effort is aimed at
provoking government repression and undermining the dialogue. Al-
though there is a chance that this tactic could succeed, it is more likely
to fail because of the government's awareness of the ploy, the MIR's
heavy losses over the last year and a half, the public's distaste for
violence, and the strength and efficiency of the security forces. Thus,
even though the Soviet Union has an intense interest in seeing Pinochet
ousted, the fact that the anti-Communist military is likely to continue to
broker political power means no significant concrete gains for Moscow.
The same would be the case for Havana, which would continue to
provide-and might accelerate-guerrilla training for the MIR, but
would probably counsel against hasty actions by the left.
Even though the severe two-year downturn in the Chilean econo-
my was largely responsible for catalyzing the opposition movement, at
this point the likelihood of modest economic recovery by yearend will
not reverse the process. Organized labor, which played a key role in the
early protests, has been replaced by political coalition leaders, who have
given the antigovernment movement a primarily political dynamic.
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Thus, according to the US Embassy and our own estimate, the
government's success in sustaining a modest recovery and the probabili-
ty that official unemployment will be reduced to 15 percent by
December will not significantly ease political pressures on the govern-
The United States has various strategic, political, and diplomatic
interests in Chile, and a substantial economic exposure. Since US arms
sales and economic and military assistance programs were suspended in
the late 1970s, however, Washington has had only a limited capacity to
influence events. Pinochet is still interested in obtaining US certification
of improved human rights practices, which would permit resumption of
such programs, but he also has a fairly successful record of resisting for-
eign pressures. A political settlement in Chile would have both positive
and negative effects on US interests. The gains would include more
respect for human and civil rights and probable eventual renewal of
military cooperation. The drawbacks could include greater assertiveness
on the part of leftist and nationalist groups interested in reducing
political, trade, and financial ties with the United States in favor of a
more Third World pattern. These negative risks would be greatly
increased under the downside scenario. The government could come
under the control of highly nationalistic military officers, who might
rescind diplomatic, security, and military exercise cooperation. At the
same time, economic policies could come under the influence of some
business and other civilian or military sectors that are seeking drastic
changes, which could lead to reduction of imports from the United
States and suspension of principal and interest debt servicing payments
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 Evolution of the Crisis
1. By early 1983, the two-year economic recession
and Pinochet's perceived aloofness from popular con-
cerns had combined to undermine his domestic back-
ing, bringing it to its lowest point since he succeeded
President Allende in the military coup of 1973. The
Pinochet government's stubborn refusal to adjust its
economic policies in the face of the world economic
recession was partly responsible for the severity of
Chile's economic crisis, which was manifested last year
in a 14-percent drop in GNP, 25-percent unemploy-
ment, falling real wages, and widespread business
failures. Moreover, when the drying up of foreign
credit forced a policy change, especially a large
devaluation, the government at first handled the
resulting liquidity crunch badly
2. Sensing Pinochet's growing vulnerability, politi-
cal opponents began organizing to press for changes in
government economic and political policies. In Febru-
ary the Christian Democratic-dominated National
Development Project (PRODEN) became the first
broad political-labor coalition to organize and demand
an acceleration of the constitutional timetable, which
delineates the transition to civilian rule in 1989. A
group originally called Multipartidaria and now called
Democratic Alliance-comprising the conservative
Republican Party; the center-left Christian Democrat-
ic and Social Democratic Parties; and the leftist
Radical Party and factions of the Socialist Party-
issued more specific demands in March and a formal
transition plan in August. Other far-left factions of the
Socialist Party formed the Socialist Convergence in
April. Labor coalitions also organized early in the year
to press union demands. The National Workers Com-
mand included unionists from the five largest labor
confederations and was led by Rodolfo Seguel, head of
the Copperworkers Confederation. Several profession-
al groups, lawyers in particular, participated in early
protests as well.
3. Beginning on 11 May, the opposition coalitions
began promoting a "day of national protest" each
month. These were largely peaceful protests urging
Chileans to keep children home from school, boycott
stores and public transportation, and bang pots and
pans in the evening. Labor was instrumental in pro-
moting the early protests, until the government
cracked down on striking copper miners, and an
attempted national strike in June failed to draw
widespread support, thus aggravating divisions within
labor. Since then, the political coalitions, and especial-
ly Chile's largest party, the Christian Democratic
Party (PDC), have seized leadership of the democratic
opposition movement.
4. The government responded to protests through
the summer with selective repression (arresting protest
organizers and firing striking workers) and limited
concessions (granting debt relief to truck owners and
allowing some exiles to return). As 11 August and
another "day of national protest" approached, howev-
er-this one centering for the first time on a call for
Pinochet's resignation-the government reassessed its
strategy. With some of his advisers counseling conces-
sions and uncertain whether the military would toler-
ate a complete crackdown, Pinochet appointed former
Senator Sergio Jarpa as his new Interior Minister.
Jarpa, a well-known conservative politician and diplo-
mat, was authorized to begin negotiations with moder-
ate opposition leaders. When 27 people were killed in
protests immediately after Jarpa took office, the pres-
sure to grant concessions increased. Since that time,
Jarpa has met with opposition political, labor, and
human rights leaders. =
5. The Democratic Alliance has presented a list of
demands that, informally at least, has become the
agenda for negotiations between the government and
the democratic opposition:
- End to the state of emergency.
- End to the application of Article 24 of the 1980
Constitution, which gives the President extraor-
dinary powers to suspend civil liberties.
- Promulgation of an electoral law.
- Recognition of political parties.
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- Return of exiles.
- Free press and free assembly.
- Investigation of deaths during
6. Since the end of August, the government has
lifted the state of emergency (a "state of disturbance"'
remains), allowed another 1,160 exiles to return, elimi-
nated most media censorship, initiated a process that
would legalize political parties by early next year,
promised a plebiscite to allow election of a congress-
in Jarpa's words-"well before 1989," authorized a
protest rally for the first time in years, and announced
concrete measures to stimulate 160,000 new jobs.
These were not enough to head off further national
protests in early September-which left 17 dead-but
they fostered a more constructive atmosphere and
have set the stage for continuing talks in the weeks
The Balance of Forces: Perspectives and
Strategies
The Democratic Opposition
7. The democratic opposition enjoyed remarkable
success through July in maintaining unity and building
momentum. Government concessions, however, and
the posture and activities of the far left have at least
temporarily strained that unity and presented the
moderates with a dilemma. They recognize that their
bargaining leverage with the government has derived
almost solely from their ability to continue staging
protest demonstrations. If in exchange for tentative
government concessions they agree to scale down
protests-or even if against their best efforts, such
concessions reduce public support for the opposition
movement-their bargaining power could be weak-
ened. In either case, the moderates risk losing the
opposition initiative to the far left, which will accuse
them of failing or selling out
' Pinochet retains most of the extraordinary powers under Article
24 to detain and exile persons for threats to national security
dialogue's chances for success. Valdes, however, repre-
sents left-of-center elements in the democratic opposi-
tion that favor demanding Pinochet's resignation. A
second, more moderate opposition faction evidently
prevailed on this issue late last month when the call for
the President's resignation was dropped from the
Democratic Alliance's list of demands. These moder-
ate opposition leaders probably are arguing for shelv-
ing the question of Pinochet's tenure for now, while
concentrating on gaining all of the other concessions
possible.
9. Under these circumstances, the Democratic Alli-
ance probably will continue negotiations with the
government in the weeks ahead, but will also continue
to stage periodic protests. If public support for the
demonstrations begins to wane because of government
concessions or general weariness, the moderates might
increasingly have to work with the radicals, whose
organization and expertise give them a greater capa-
The Radical Left
10. The radical left, including the terrorist Move-
ment of the Revolutionary Left (MIR), factions of the
Socialist Party, and the Communist Party (PCCh), is
beginning to arrive at a consensus strateg
the past several years these organizations, factions
within them, and elements inside and outside the
country have debated the choice between armed
struggle or nonviolent activities designed to win them
acceptance into the broad-based opposition move-
ment. With the Socialists probably irreconcilably split
into semipermanent factions over this question, and
the MIR firmly committed to violence, only the
Communists-the largest and best organized compo-
nent of the far left-were undecided.
11. By late August, however, the beginning of
negotiations between the government and the moder-
ate opposition reportedly alarmed the radicals by
central committee approved a broad program of activ-
ities-including violence and cooperation with the
MIR and the radical Socialists (Almeyda faction)-to
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 12. (follow-
ing the protests in early September some elements of
the Communist Party were reconsidering the strategy
of armed struggle because it threatened to isolate them
politically and reduce their popular standing. Also, the
MIR was said to be scaling back its efforts because of
recent heavy losses. With the Democratic Alliance still
refusing to embrace the far left, however, a strategy of
violence is the only reasonable alternative for the MIR
and probably for most of the PCCh as well. Thus, we
believe that the bulk of the radical left will continue to
promote violence in an effort to thwart any attempts
by the government and the democratic opposition to
provoking a government crackdown.
formed a "Popular Action Coordinator" and planned
violent activities to occur on 30-31 August (on these
dates, terrorists assassinated the military governor of
Santiago and staged several bombings). The goal of
these plans was not to topple the regime but to
undermine chances for a compromise settlement by
democratic opposition.
13. So far, Pinochet has not taken the radicals' bait,
despite his presumed preference for using force to
reestablish control. Although the reports we have
received are far from conclusive, we believe that the
opposition's momentum and military sentiment in
favor of concessions have persuaded him that a crack-
down would be counterproductive at this time. It is
because of his overriding concern to stay in office that
he reportedly acceded to military concerns by ap-
pointing Jarpa and authorizing negotiations with the
14. At this point, we suspect Pinochet still hopes to
yield as little as possible to his opponents in order to
buy time and foster splits in their ranks. At the same
time, he will attempt to persuade the military that he
is negotiating in good faith and will play on its fears of
the politicians, in case conditions in the country
deteriorate and his position is threatened
15. We assume that Pinochet's strategy a so will
reflect concern about sustaining the modest economic
recovery that began earlier this year. This could be
jeopardized by a government crackdown and an ensu-
ing backlash of opposition violence. He may therefore
regard continuing negotiations with his democratic
opponents as the best strategy to rebuild foreign and
domestic confidence in the economy, Retarding capi-
tal flight and encouraging foreign investment will be
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difficult tasks, given Chile's politically uncertain envi-
ronment and the fact that the status of the free market
The Military
16. Both the democratic opposition and Pinochet
recognize that the armed forces will ultimately define
the course and extent of political change in Chile.
leadership of the services-especially the pivotal
army-still support the Constitution of 1980 and
Pinochet's continuation as President, This is not simply
the result of Pinochet's care over the years in hand-
picking loyal subordinates for top military posts. It also
reflects the conviction of most military leaders that the
civilian politicians, especially the Christian Democrats,
bear much of the blame for the Marxists' victory
under Allende in 1970 and for the ensuing chaos.
Because most observers believe the left probably still
retains the support of about a third of the electorate-
a percentage it has historically attracted-the military
is in no hurry to return full power to moderate
civilians, who they believe could again deliver the
country to radicals. The armed forces are also con-
cerned that, once in power, the civilians would engage
in a "witch hunt" for military officers responsible for
Indicates that the armed services
favor an acceleration of some elements of the transi-
tion to civilian rule. Their reasons range from a
general concern over the potential for political polar-
ization and radicalization of the opposition movement
to a distaste for having to control civil disorders and
perform other nonmilitary police functions. We be-
lieve, that top military
commanders have made these views known to Pino-
chet, and, for this reason, the President avoided using
troops during the protests in early September. Pino-
chet also is probably aware that his personal prestige in
the armed forces has declined in recent months be-
cause members of his family have abused their privi-
leged positions
18. We do know that some members of the armed
forces favor Interior Minister Jarpa's efforts to negoti-
ate a political settlement, particularly senior officers in
the Air Force and Navy, where military backing for
Pinochet has always been weakest.
Because
Jarpa reportedly meets several times a week with each
junta member, he probably is aware of this support,
and presumably Pinochet is as well
19. The Chilean military is one of the most unified
and highly professional armed forces in Latin Ameri-
ca, and thus is likely, to act in concert whenever it
commits itself to any new political course. For the
present, it appears to favor keeping Pinochet as Presi-
dent in the context of a limited democratic opening.
Therefore, it will probably throw its weight behind a
continuation of the negotiations. Their failure, howev-
er, and an increase in violence and polarization would
place great strain on armed forces unity, If the high
command came to believe that it must choose between
suppressing broad opposition on Pinochet's behalf and
ultimately preserving military unity, we judge that
Pinochet would be replaced. The armed forces leader-
ship, particularly the Army, might take some months
to reach such a decision, but it would be supported
Interior Minister Jarpa
20. Jarpa has become Pinochet's "superminister"
for political issues, similar to the powerful economic
advisers the President has employed in the past. Jarpa
is close to the regime, having served capably as
Pinochet's ambassador to Argentina until August. Also,
in the 1970s when he was president of the National
Party-once Chile's largest conservative party-he
supported the government's ban on parties. At the
same time, given his background in politics, Jarpa is a
more independent figure than any other Cabinet
member, a position he has buttressed recently by
establishing his own ties to members of the junta, the
Church, the media, and even elements of the opposi-
21. Jarpa's personal motives are unclear. As a pre-
sumably ambitious professional politician, he may
hope to put himself in a position to fill any planned or
unplanned political vacuum that might occur in the
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 therefore genuinely want to accelerate the transition
process. This does not, however, rule out that the two
men might, for different reasons, agree on tactics
aimed at buying time and splitting the opposition. It is
unclear how much license the President has given
Jarpa, and more than once the two have contradicted
each other publicly on the nature of political conces-
sions. In late August, for example, Jarpa proposed a
plebiscite to clear the way for election of a congress
"well before 1990," but Pinochet then spoke of com-
plying with "established deadlines" and only the
"possibility" of a congress by 1988
22. Jarpa is critical to the success of the negotia-
tions, most importantly because he has come to repre-
sent the government's willingness to bargain. Almost
all parties recognize that if he left the job now-
whether because of opposition intransigence, differ-
ences with Pinochet, or general frustration-the atmo-
sphere for negotiation would deteriorate. Even if it
appointed a more skilled and independent replace-
ment, the government would not be able to recapture
the credibility it would lose. Thus if, as it appears,
Jarpa indeed has his own ideas about the transition, he
could have considerable latitude and military backing
to negotiate virtually any issue except Pinochet's resig-
Prospects for the Negotiations
23. Over the next three months, we believe Chile
will be caught up in a cycle of antiregime protests and
government-democratic opposition dialogue, each
with a dynamic of its own but related to and affected
by the other. Neither is entirely under the control of
the contending parties, especially the protests, which
could erupt in major violence because of a government
overreaction, radical left provocation, or both. Thus,
the dialogue aimed at clearing the way to a democrat-
ic opening rests on a very fragile base. Its collapse
almost certainly would make Pinochet's continuation
in office the central issue of the political crisis,
which-though close-is not yet the case.)
24. Talks between the government and the Demo-
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cratic Alliance were suspended in the aftermath of the
protests in early September, but were resumed at the
end of the month for several reasons:
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- Pinochet does not want to make his continuation
in office the key issue.
Chris-
tian Democratic Party leaders were upset at
Valdes's suspension of the dialogue.
- The democratic opposition does not want to
surrender leadership of the protest movement to
the violent left.
Jarpa's efforts to negotiate.
- The Church, the United States, and other influ-
ential outside forces are urging continued dia-
logue.
25. We expect the talks will continue to stall now
and then during periods of protest activity. The
democratic oppositionists are concerned that their
limited control over the protests could lead to major,
counterproductive violence, but they must continue
them to maintain leverage with the government. For
this reason, Democratic Alliance leaders probably
were disappointed that the demonstrations in early
September were not larger, since the 10th anniversary
of Allende's fall was a major opposition target date.
They obviously were relieved, however, that massive
violence did not occur, and they will continue to try to
26. Having apparently accepted for the moment
that Pinochet's ouster is unobtainable, democratic
opposition leaders probably will attempt to agree on a
negotiating strategy that will gain as many of their
other demands as possible by December. Sustaining
the protests after December will be difficult, because
of the onset of good weather and the deeply rooted
tradition of "summer" vacations. Thus, the antigov-
ernment forces are working on a short timetable.
Moreover, the dialogue is still at a fairly informal level
in terms of agenda, schedule, and spokesmen for the
opposition, a situation that benefits the government
because it increases the time required to get down to
hard bargaining. F__~
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27. If the talks survive long enough to focus on the
crucial questions, the timing of the democratic open-
ing probably will become a more contentious issue
than the elements of that opening. With everything
negotiable except Pinochet's departure, both sides
already have implicitly agreed that accelerating the
transition means: (1) legalizing political parties, (2)
holding a plebiscite to amend the Constitution to
permit election of a congress before 1990, (3) allowing
the return of exiles, and (4) restricting the govern-
ment's use of special powers under Article 24 to curtail
civil liberties. The opposition wants these elements in
18 months; the government seeks a much longer time
frame
28. The two sides probably could agree to legalize
parties early next year and hold a plebiscite by mid-to-
late 1984 that would clear the way for election of a
congress. Both processes, however, are potentially rife
with complications that could enable the government
to string out the timing. The legalization of parties will
require National Security Council review and could
lead to some controversial rulings on leftist organiza-
tions. Constitutional provisions may not permit plebi-
scite voting by ID card, as was done in 1980, in which
case time-consuming compilation of electoral registers
may be necessary. Even if this is avoided, the two sides
probably would favor formal voter registration before
congressional elections, since it would buy the govern-
ment more time and give the opposition greater
protection from fraud
29. According to informed government sources, it
would take 18 to 24 months to compile electoral
registers. Recent experience in other countries where
political processes have been suspended for some
years, such as Argentina, suggests that registration
might be completed in a year or so. Transition process-
es currently under way in Brazil and Uruguay, howev-
er, have been more carefully regulated by the govern-
ments and extended over several years. =
30. The government might consider using the ques-
tion of timing to foster differences within the opposi-
tion. Ironically, however, it may no longer be in the
government's best interests to promote the splintering
of the opposition, since this would aggravate polariza-
tion and create a vacuum that might be filled by the
radical left. Thus, we judge that the support of
military leaders, the Church, and the public at large
for Jarpa's efforts will increase pressure on Pinochet in
the next month or so to put aside these tactics and
allow his Interior Minister to negotiate in relatively
good faith=
31. The administration's hope that giving the econ-
omy time to recover could undermine the incentive to
protest is not realistic over the next few months.
recent Chilean econom-
ic measures promise to sustain the modest recovery
and reduce unemployment to 15 percent by yearend,
but probably will not reduce political pressures. Eco-
nomic considerations are not the key focus they were
in the early months of the opposition movement when
labor was heavily involved. Party leaders have given
the protests a primarily political content that promises
to endure. Press reports consistently emphasize eco-
nomic grievances at the root of protests in poor
neighborhoods, the scene of most of the violent dem-
onstrations to date. Communist efforts, however, prob-
ably account for much of this, and, in any event,
improvement in the economy will have a marginal
impact at best in such neighborhoods, according to
most observers.
32. After balancing the pressures on both parties
against the fragility of the dialogue, we believe there is
a fair chance (in the neighborhood of 60 percent) that
negotiations will progress through December, erode
the cycle of opposition protests, and result in a tenta-
tive agreement for accelerating some elements of the
transition to civilian rule. We expect some unsettled
differences and some new issues at that time, which
will make the dialogue a continuing feature of the
political landscape into next year. But the government
probably will take the necessary steps-legalization of
parties and scheduling a plebiscite to permit early
congressional elections-to lead to a resumption of
political activity, into which opposition leaders can
begin to pour their energies.
33. At least one admonition is in order, however,
under this scenario. We believe that the tranquilizing
effects of political concessions could fade steadily and
that, perhaps by late 1984, the air of anticipation
created by the opening would center attention again
on the issue of Pinochet's term of office. It is not so
much a question of whether concessions will mollify
the democratic opposition or whet its appetite-we
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 feel reasonably confident that the former will obtain
in the short term. Rather the question is, "How much
time will political concessions buy for Pinochet?" The
resumption of political activity will set many new
forces in motion, and, while the results are unpredict-
able, 1989 will seem very far off to political leaders
searching for new issues and goals. In such an atmo-
sphere, five more years of rule for Pinochet would be
increasingly in doubt F__1
Downside Risks
34. Any downside scenario, the chances of which
are roughly 40 percent, would begin with the failure
to resume or the subsequent collapse of the negotia-
tions. This could occur as a result of one or more of the
following:
- Obvious intransigence on the part of Pinochet or
a government crackdown.
- The resignation of Jarpa or his assassination.
- The democratic opposition leaders, faced with
the threat of splintering over strategy and negoti-
ating positions, agreeing to demand Pinochet's
resignation in order to preserve their unity.
- Massive and violent leftist-inspired protests.
- An overreaction by troops that results in a large
number of deaths.
- Terrorist actions by rightist paramilitary groups,
one of which was reported to be forming last
June with the help of the notorious former
intelligence chief, Manuel Contreras.
- The assassination of a prominent opposition fig-
35. The coe__o! negotiations before December
would add to the size and probably the frequency of
opposition protests. Increasingly, demonstrations
would center on the call for Pinochet's resignation,
and, in response, the President would be inclined to
crack down on dissidents. The armed forces would
bridle at the prospect of being used to control protests.
According to the US defense attache, however, the
Carabineros (national police), who would be on the
front lines facing protestors, might be the first to break
ranks. In any event, the military probably would soon
urge the President to make the necessary conces-
sions-short of his resignation-to bring the democrat-
ic opposition back to the bargaining table.
36. Assuming this failed, Pinochet presumably
would know when the military began to debate seri-
ously the alternative of replacing him. He would do all
he could to head off such a move, probably even
risking a split in the armed forces. Serious military
divisions could lead in the short term to major political
disorder, violence, and heightened radical activity,
though short of open civil war. In view of the losses
suffered by the MIR over the last year and a half, the
public's distaste for violence, and the strength of the
security forces, the violence-prone radical left would
not be likely to succeed in destabilizing the country.
Confidence in the economy, however, would collapse,
the recovery would be gutted, and economic chaos
would ensue. It is difficult to say how long such
disorder would prevail or what would finally emerge
from it. A military-dominated government would be
more likely to result-since the military factions
would be the best armed of the significant elements-
than a system in which the far left had a major role.
Nonetheless, disorders extending well into 1984 could
enhance the potential for leftist participation in the
opposition movement
37. We do not believe, however, that the situation
would reach this stage. Instead, we judge that the
armed forces would defeat any attempt by Pinochet or
others to divide them. They would, by consensus of
the high command and with the subsequent support of
the lower ranks, replace the President. There is only
about one chance in three that the downside process
would reach this conclusion by yearend, in our view,
but it would become a strong probability by mid-1984.
We believe the armed forces would stand by the
President longer if, in the military's view, the dialogue
collapsed because of an intransigent opposition de-
mand for Pinochet's resignation. The armed forces
would still eventually remove him rather than contin-
ue to suppress protests. In rough order of likelihood,
the successor would probably be another Army officer,
a military junta, an Air Force or Navy commander, a
conservative civilian, a military-civilian coalition, or a
moderate opposition figure.
38. The Soviet Union would welcome the downside
scenario. Since Pinochet overthrew Allende, the first
democratically elected Marxist head of state in Latin
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 America, the USSR has had a special interest in Chile.
The head of the Chilean Communist Party has resided
in Moscow for years, Marxist exiles have been support-
ed by Bloc countries, and Communist Party policy has
reflected major Soviet doctrinal, tactical, and financial
influence. But we do not see the Chilean far left
profiting significantly under a system that would still
be dominated by the anti-Communist military. Mos-
cow would gain little more than the satisfaction of
seeing Pinochet ousted; nonetheless, the Soviets would
portray his departure as an indication of the decay of
Chile's political system and the military's growing
inability to contain popular discontent
39. Havana also would welcome Pinochet's depar-
ture, but would be frustrated by not being able to take
advantage of it because of the weakened state of the
Chilean left. Cuba would continue to urge careful
long-term building of guerrilla and political bases
capable of capitalizing on opportunities, unification of
leftist efforts, and attempts to affiliate with the broad
opposition front. Havana would continue to provide-
and might accelerate-guerrilla training and other
assistance to members of the MIR, but would be likely
Implications for the United States
40. The United States will potentially be affected in
several regards by the course of political change in
Chile, yet it has only limited capacity to influence
events. Pinochet is strongly inclined to resist all inter-
national pressure and has a fairly successful record of
doing so. The absence of significant US economic and
military assistance programs and arms sales with Santi-
ago also limits US leverage. We believe, however, that
Pinochet is still interested in obtaining US certifica-
tion-of improved human rights practices, nonsupport
of international terrorism, and cooperation in the
Letelier assassination case-in order to resume such
programs. Specific US interests that could be affected
include:
- Strategic. Chile controls part of the southern sea
transit between the Atlantic and Pacific Oceans
through the Magellan Straits, which could be
even more important if the Panama Canal were
ever shut down; Chile's long coastline parallels
important South Pacific sea lanes; Chile is a
claimant to part of Antarctica; Chile has impor-
tant mineral reserves, especially copper and
lithium.
- Political. The course of events in Chile, and
Washington's response, will reflect on US policies
of support for democratization and human rights
worldwide and also on US Policy in Central
America; Chile has been a consistent supporter of
US positions in international forums, especially
on East-West issues.
- Diplomatic. Among US allies in Western Eu-
rope, only the United Kingdom consistently sup-
ports Pinochet because Santiago provides impor-
tant benefits in Britain's dispute with Argentina
over the Falklands; only Brazil, among the signif-
icant regional powers, has good ties with Santia-
go; the Pope has publicly called for changes in
Pinochet's political and human rights policies.
- Economic. US banks hold some $6 billion in
Chilean loans and already have witnessed a
disruption in debt repayments; difficulties with
the International Monetary Fund (IMF) program
could quickly translate into further disruptions in
servicing the debt to US banks; US exports to
Chile shrank $800 million, or 40 percent, last
activity.
41. A political settlement in Chile by yearend
would have both positive and negative effects on US
interests. The gains would include more respect for
human and civil rights and probably eventual renewal
of military cooperation. The drawbacks could include
greater assertiveness on the part of leftist and national-
ist groups interested in reducing political, trade, and
financial ties with the United States in favor of a more
Third World pattern. These negative risks would be
greatly increased under the downside scenario. The
government could become dominated by highly na-
tionalistic military officers who resented the refusal of
Washington to certify Chile for a resumption of arms
sales and military and economic assistance. They
might increase arms purchases from West European,
Israeli, and other sources, and might reduce diplomat-
ic, security, and military exercise cooperation. They
might also allow a larger role in economic policy for
some business and other civilian and military sectors
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 that advocate drastic changes, which could lead to
reduction of imports from the United States and
suspension of principal and interest debt servicing
payments to US banks.F__1
Indicators of Serious Political Instability
42. Protests:
- Street demonstrations expand beyond the pattern
to date of protests in poor neighborhoods and by
students to include more middle class Chileans.
- Active and passive protest activities begin to
occur more frequently than on the monthly day
of protest.
- Active and passive protests continue at a high
level despite progress in government-opposition
negotiations.
- Major demonstrations intensify in cities outside
Santiago.
- Protest activities begin to center consistently
around the demand for Pinochet's resignation.
- Protesters begin to destroy property beyond a
few buses and autos.
- Workers agree to participate in strikes despite
the threat of losing their jobs.
- A national strike is successful for more than one
43. The Opposition:
- Political groups begin to rally around one or two
central leaders, such as Christian Democrats
Gabriel Valdes or Andres Zaldivar.
- Zaldivar, president of Christian Democratic In-
ternational, begins to exploit his international
connections.
- Labor and social organizations become formal
partners in the Democratic Alliance.
- Copperworkers Confederation chief Seguel be-
gins receiving support from other unions and
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confederations as the primary spokesman for all
labor.
- Democratic opposition groups begin to cooperate
openly with the Communist Party
44. Government Policies:
- The government reimposes the state of emergen-
cy or state of siege and full censorship.
- Pinochet replaces many of the civilians in his
Cabinet with military officers.
- The government does not continue to reaffirm
standing orders to the security forces to use
restraint in controlling protest demonstrations.
- The government is forced to impose more severe
controls to halt capital flight.
- The government shifts to more expansionary
economic policies in violation of IMF perform-
ance targets.
- Pinochet stops appearing in public
45. The Military:
- Air Force junta member Matthei publicly dis-
agrees with Pinochet's policies on the transition
to civilian rule.
- Some members of the armed forces leadership
begin publicly to question the use of military
forces to control civil disorders.
- A security force unit panics and fires indiscrimi-
nately on demonstrators or conversely refuses an
order to fire.
46. The Media:
- Moderate media outlets cease counseling against
violent opposition to the government.
- Radio stations and newspapers begin to attack
the administration's policies, even at the risk of
25X1
25X1
25X1
25X1
 Inteilgence Assessment, Chile: Prospects for Pinochet
1983, ALA 83-10078.
Latin America Review, "Chile: Evolution of the Opposition"
15 August 1983, ALA LAR 83-016.
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