LATIN AMERICAN TRENDS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A002100250002-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 16
• Document Creation Date: December 12, 2016
• Document Release Date: June 1, 2001
• Sequence Number: 2
• Publication Date: November 12, 1975
• Content Type: NOTES

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ecret
NoroRN
PCB
Latin American Trends
25X1A
Secret
November .L2, 1975
I~RL,Ill`J.'1'. ltlY~~'OFtI) No. 0535/75
PL~,Abl~ it,.. u!.!V 7~J
AGENCY AP~C~~IVLS,
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Warning Notice
Sensitive Intelligence Sources and Methods Involved
(WNINTEL)
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
DISSEMINATION CONTROL ABBREVIATIONS
NOFORN- Not Releasable to Foreign Nationals
NOCONTRACT- Not Releasable to Contractors or
Contractor/Consu ttants
PROPIN?- Caution-Proprietary Information Involved
USIBONLY- USIB Departments Only
ORCON-~ Dissemination and Extraction of Information
Controlled by Originator
REL ... - This Information has been Authorized for
Release to .. .
ClassHbd by 010725
Eaampt from general declessHkatbn sehedub
of E.O. 11662, axamptbn catagnry:
f 68(11. (2), and (8)
Automatkaly dsclesalfled on:
Date Impossible to Determine
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This publication is prepared for regional specialists in the Washington com-
munity by the Western Hemisphere Division, Office of Current Intelligence,
with occasional contributions from other offices within the Directorate of
Intelligence. Comments and queries are welcome. They should be directed to
the authors of the individual articles.
CUNTEN'I".S
November 12, 1975
Argentina's Deteriorating Relations
with China
3
Peru: Political Activity on the
Upswing
5
Venezuela and Ecuador Pleigh Regional
Oil Alignment
7
Haiti Experiments with Reform
9
Nicaragua: State of Siege Rolls On .
11
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Panama: Other Problems with the US
SeveY?al bilateral US - Panamanian problems not
directly related to the canal talks could sour the
~f ~ atmosphere: surrounding the negotiations and complicate
f' the negotiators' tasks. One problem is an injunction
issued by a US court against further construction on
the Tnter-American Highway through the Darien Gap
between Panama and Colombia. The injunction, issued
on October 17 by a District of Columbia court, resulted
from a suit brought by the Sierra Club and other environ-
mental groups which fear that opening a road through
the now impenetrable Colombian-Panamanian border area
would lead to environmental damage and the spread of
aftosa, hoof-and-mouth disease. The injunction comes
(~ just: as the dry season is a~~proaching in Panama, when
~'~/ con>tructi.on was expected to move into high gear and
help alleviate economic problems. The Panamanians
have been astounded to find that a domestic court
cou]_d. halt. implementation of an international agreement
signed in 1971 and reportedly are considering filing a
protest.
The Panamanians, like several other Latin American
countries, are also chafing under their 1975 voluntary
~~ ~ agreement to limit meat exports to the US to 2.5 mil-
lion paunds. Panamanian officials want a 40-percent
incs-ease this _year through reallocation of shortfalls
from other countries and a doubling of the limit for
1976. To circumvent present limitations, Panama has
arranged t.o import five million pounds of Australian
beef' in the belief that this will not fall under the
restraint program and can be reexported to the US.
Panamanian. expectations, however, may be unduly opti-
mistic.
The Panama Canal Company has meanwhile decided to
raise the rates charged Panama City for water from the
/ Canal Zone distribution system. The US ambassador
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expects the Torrijos government to turn the increase
into a political issue unless some offsetting benefits
are offered.
Finally, US action on a half-million--dollar FMS
credit now under consideration could be interpreted in
~~~ Panama as indicative of how the US views Panama's
future role in canal defense.
The Panamanians are not likely to pass up the op-
portunity to tie bilateral issues to the canal talks
if they believe this could force a more forthcoming US
position. Machiavellism aside, the Panamanians do not
appreciate the lack of complete US executive control
over the many issues affecting bilateral relations,
and they might read a series of decisions disappointing
to Panama as a US response to Panamanian treaty aspira-
tions. Having recognized that any real breakthrough
in the canal negotiations will have to wait until after
the 1976 elections in the US, the Torrijos government
is looking for US moves in the interim which will demon-
strate the success of its "wait it out' tactics. In
this situation, negative actions would be doubly dis-
appointing. (CONFIDENTIAL/NOFORN)
November 12, 1975
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Argentina's Deteriorating Relations With China
The departure of New China News Agency repre-
sentatives from Argentina on October 29 marks a sig-
3 nif:icant decline in the already strained diplomatic
.~ ~/ relations between President Peron's government and
the Peoples Republic of China.
The action occurred when the Argentine foreign
min:is try failed to respond 'to complaints that the
Chinese and representatives of other Communist coun-
tries werE; being harassed by special regulations re-
quiring them to renew their visas every three months
and to request 48-hour advance approval for travel
out:~i.de tl-ie capital. According to one report the
govE~r.nment: not only intends to continue these require-
meni:s, but now plans to prohibit Communist Chinese
publications from entering the country.
The relationship has been anomalous from the be-
ginxii.ng. Although Argentina closed its embassy in
Taipei soon after relations were established with
China in February 1972, it has allowed the Republic
of China t:o retain a commercial mission in Buenos
Aires. Then-President Lanusse reportedly did not
wani~ to offend high-ranking army officers who were
sympathetic to the Republic of China.
Meanwhile, efforts to develop closer economic
tier with the Peoples Republic have not been very suc-
cessful. Although the Chinese agreed last year to
purchase Argentine corn and wheat, they have been dis-
satisfied both with the quality of the grain and with
Argentina's inability to supply as much as it had pro-
mised..
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Other problems will probably cause relations to
deteriorate further--Army Commander General Videla,
who is heading the campaign against internal subversion,
recently said publicly that local terrorism is receiving
external support from Communist sympathizers, including
Peking. The government that succeeds President Peron's
administration promises to be at least as conservative
in outlook and may well be more susceptible to manipula-
tion by anti-Peking military leaders. (SECRET/NOFORN)
November 12, 1975
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Peru:_ Political Activity on_the_Upswing
For the first time since the armed forces took
over the government in 1968, an organized political
challenge to government policies may be developing
as leftist peasant and labor groups rally behind two
:radical generals ousted by PY?esident P~orales Bermudez
earlier this month. Although one of the cashiered
generals apparently has little civilian political sup-
port, the other, General Rodriguez, has maintained
relatively strong ties to a number of leftist groups
and h.e may very well become involved politically with
them. Rodriguez is an ambitious general, and his
early retirement, while forcing him to alter his plans,
almost certainly has not diminished his desire to be-
come president.
Under former president Velasco, who headed the
military government from 1968 until his ouster by
Plorales Bermudez last August, the armed forces were
unable to develop any significant base of civilian
support for their socialistic policies. At the same
time, government censorship and intimidation of civilian
critics prevented the growth of any coherent opposition
movement. Since assuming power, Morales Bermudez has
loosened press restraints significantly, eased restric-
tions on political parties, and repeatedly alluded to
still-vague plans for popular "participation" in the
revolutionary process. All this has tended to raise
the level of political activity and to increase specu-
lation that significant civilian involvement in the
governing process is in the offing.
Leftist groups, which supported many of Velasco's
policies, a:re still circumspect in criticizing Presi-~
dent .Morale:s Bermudez, but they are becoming bolder in
questioning whether his government backs some of the
~~~?~ more radical reform programs. These groups apparently
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view the fate of the radical generals as confirma-
tion that Morales Bermudez intends to pursue a more
moderate political-course than his predecessor.
~.~General Rodriguez, as a high-ranking former official
associated with radical causes, is an attractive and
logical leader for this sector.
The traditional political parties are also be-
ginning to stir in response to the government's hints
at popular participation and to defend themselves
against charges by leftists that they are subverting
the revolutionary process. Both the widely popular
American Popular Revolutionary Alliance and the Popular
~/ ~, Alliance party of former civilian President Belaunde
will become more active in the coming weeks, to sup-
port at least some of Morales Bermudez'policies, and
to strengthen their own constituencies. Belaunde him-
self may return to Peru early in December to take over
the reins of the organization that elected him Peru's
last civilian leader over twelve years ago. (CONFIDEN-
TIAL)
November 12, 1975
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Venezuela and Ecuador Weigh Regional Oil Alignment
Venezuela and Ecuador have discussed the possible
format:ion of an organization of Latin American petro-
leum exporters to coordinate policies within the region.
Prospects appear bleak, however, because Mexico--whose
participation would be essential--is unlikely to enter
into any ax-rangement that would limit its freedom of
action.
Caracas, increasingly cool towardmahebeacasting
American Energy Organization (GLADE), y
about for another regional organization more responsive
to its leadership aspirations. Dissension evident in
the establishment of GLADE had highlighted the diffi-
culties in forming a consensus in a group of countries
comprising both oil exporters and importers, despite
general lisp service to the ideal of regional solidarity.
'President Perez of Venezuela reportedly suggested
the idea of a new organization to President Rodriguez
of Ecuador as a means of gaining control of markets in
Latin America. Rodriguez is interested in anything
that: he thinks would strengthen the position of his
government vis-a-vis the oi]_ companies in Ecuador.
Venezuelan. interest stems at least. partly from concern
over- the emergence of D4exico as a serious potential
competitor. Mexico, with crude production already up
to 750,000 barrels per day, could export 1.3 million
barrels per day by 1980. It is thus in Caracas'
intE~z'est t:o form a close alignment. as quickly as pos-
sible.
The ~~resent Mexican government has chosen not to
join OPEC, preferring to retain its independence in
setting oil policy. The same reasoning would militate
against participation in a regional organization. The
next pres:~dent may seek closer cooperation with Venezuela
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in some aspects of oil policy but is unlikely to forgo
any options with regard to marketing of Mexican oil.
Even if Venezuela and Ecuador should succeed in
forming an organization with Mexico, the new group
would not substantially further Venezuela's interests.
In a wider context, such a group would not appreciably
increase Latin American influence in OPEC, as their
total crude production amounts to only about eleven
percent of the OPEC total. As Mexican production in-
creased, it would little more than offset Venezuela's
declining position.(SECRET/NOFORN)
November 12, 1975
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and the embarrassment caused to still-active old-line
Duval:ierists demonstrated his apparent confidence in
the s~treng~th of his own government and underlined his
desire to improve the standards of public administration.
The government also proved willing to allow a de-
gree of freedom of the press in the coverage of the trial.
The iconoclastic editor of a leftist weekly repeatedly
criticized the moral climate under Papa Doc, the past
administration of Haitian ]ustice, and the absence of
civic responsibility. He was cautioned by the interior
minister several times and was perilously close to
having his journal shut down, but the fact remains that
a certain independence of expression was tolerated.
Duvalier's purported actions regarding the trial
reflect his own uncertainties and the clear limits to
the amount: of liberalization he will allow.
the minis er
o ]izstice reporte y c acme t at a one point he was
instructed by the president to have the presiding judge
deliver a guilty verdict against rourcand. Duvalier
later countermanded this order when he learned of his
mother's apparent involvement in the scandal and some
testimony threatened to make it public. Duvalier re-
portedly ordered the commander of the presidential
guard to end the trial rapidly. This was done, and
~t_~ the verdict rendered several weeks later. The President
~" then rewarded the judge and prosecutor by giving them
new automobiles.
After long years of unrelieved tyranny under Papa
Doc, the stamp fraud trial--even with its obvious limit-
at:ions--is a positive step and. a sign that the regime
f is willing to experiment with reform. How the govern-
ment: deals with other recently incarcerated individuals
--:including businessmen arrested in a customs scandal,
ai.rr_raft hijackers, and plotters against a prominent
member of the Duvalier entourage---will give more con~-
clusive :indications of the regime's commitment to open
court trials and even-handed justice. (SECRET/NOFORN)
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Haiti Experiments with Reform
The outcome of the postage stamp fraud trial
which has been a major focus of public attention in
Haiti for the past eight months, is both a sign of
cautious movement toward reform and a reminder that
Haiti remains a personalist dictatorship with the
palace deterrnining when and for what purposes the
legal process will be used.
Last spring the Haitian government uncovered a
scheme to sell several million dollars worth of un-
authorized Haitian stamps. The most important figure
charged was Secretary of Commerce and Industry Serge
Fourcand, leader of a new breed of young technocrats.
President Jean Claude Duvalier felt personally betray-
ed by Fourcand since the minister had been his trusted
adviser and confidant.
As the trial began the old-guard Duvalierists
seemed .ready to take advantage of the situation to dis-
credit the technocrats who had begun to challenge them.
/ ~ The trial took on another coloration, however, when the
~ culprits instead turned out to be officials of the pre-
ceding regime of Francois Duvalier.
In some respects the outcome of the trial substan-
tiates the view that President Duvalier is cautiously_
adopting a more reformist approach. Confronted with
convincing evidence of Fourcand's innocence of anything
but administrative negligence, the prosecution did not
press its case and accepted his acquittal without pro-
test. The televised trial resulted in a public airing
~~ ~? of the climate of official corruption and lack of publi'~
ethics that prevailed during the presidency of Papa Doc.
The young president's willingness to permit these reve-
lations despite the smudging of his father's reputation
November 12, 1975
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Nicaragua: State of Siege Rolls On
President Somoza appears to have found a con-
venient political tool in the state of siege he in-
voked following the terrorist attack last December
by the Sandinist National Liberation Front (FSLN).
The censorship permitted under the statute has been
?~/ ~ especially useful, and it could become a permanent
~1' part of the political scene. Somewhat paradoxically,
the resulting popular frustration heightens the appeal
of the guerrilla F5LN in contrast to the apparently
impotent political opposition.
The state of siege has two principal benefits for
Somoza. First, it enables him to muzzle principal op-
position leader Pedro Joaquin Chamorro, owner of the
major daily La Prensa. By shutting off this opposition
outlet, he prevents dissemination of any criticism by
the co:ngress?--infrequent though it has been given the
timid character of the legislative bloc. The state of
siege also allows Somoza to submit suspected terrorists
and supporters to military rather than civilian courts.
According to an announcement on October 25, some 80
suspected FSLN adherents are to appear before the mili-
tary courts. With Somoza and other high Nicaraguan of-
ficials admitting that snuffing out the recurrent FSLN
threat this 1=ime may require years, the prospects of a
long-term state of siege and continuing censorship is
real.
The FSLN's fortunes have been cyclical, and the
guerrilla group is presently more active than at any
time since 1967-68, when it was probably at its apogee.
The guer?rillas probably have about 80 activists in the
3 country, and a support network twice that large.
They h