CONTINGENCIES REPORT # 6 GUATEMALA AND CENTRAL AMERICA S NORTHERN FLANK

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83T00966R000100060009-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 24
• Document Creation Date: December 20, 2016
• Document Release Date: March 5, 2007
• Sequence Number: 9
• Publication Date: June 30, 1982
• Content Type: REPORT

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DDI/NIC #6757-82
A
ell
l
Dr. David M. Abshire, President
The Center for Strategic and International Studies
Georgetown University
1800 K Street, N, W.
Washington, D.C. 20006
Dear Dr. Abshire:
Thank you for sending us your most recent Continge?cy Report on
em-ila. We always w&come receiving thoughtful studies from the
demic community on issues of high-level interest. I have passed
the paper along to the NIO for Latin Atneri ca and working level analysts.
I hop)i you will continue to think of. us when you distribute futures
contingency reports.
Sincerely,
jS/
igence
Int
AIRL
Centra
gency lp
John N. McMahon
Acting Director of Central Intelligence
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'SUBJECT: CSIS Contingency Report on Guatemala (DDI/NIC #6757-82)
NIO/LA:RP:lc (18 Aug 82)
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10 Aug 82 "
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David M eA sident
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George A. Carver. Jr. 55FF L'dDa~`^
Robert Downen EXECUTIVE BOARD: Leonard H. Marks, Chairman/ Anne Armstrong, Vice Chairman/ David M. Abshire IT. Byron Collins, S.J. /Leo Cherne/ Peter F. Krogh/ Morris 1. Leibman/
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Penelope Hertland-Thunberg 3 August 1982
Robert E. Hunter
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R James Woolsey Dear Bill,
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MMoodie CSIS has inaugurated a series of "Contingency Reports" that we hope
Michael icha
Jean Etta S. Pollock will assist senior government officials in planning for tomorrow's
Lea Rogers surprises. Enclosed is the latest study,
Sterling G. Slappey
M J Vdk
.ononrace David A. Wendt
John Yochelson
ADVISORY BOARD .......~.~..b......~ ....t...~ ,, ., . .....~ -_. -------- - --- -------
Anne Armstrong Flank.
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ca Chairmen
en
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W. Glenn Campbell
eney y rePorts to a small grouP of colleagues in the national security community.
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Oscar Dstel
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lt
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a
er
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iarvey L. Silbert
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i1rrw rl K Smith
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I S: mton
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Davfd-M. Abshire
President
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Harriet M. Zimmerman Roberta Wohlstetter / Aharon Yariv
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? O
PREVIOUSLY ISSUED CONTINGENCY REPORTS
IS THE STAGE BEING SET FOR A THIRD ENERGY CRISIS? June 25, 1982
STABILITY AND CHANGE IN SAUDI ARABIA March 22, 1982
CONTINGENCIES IN IRAN. March 9, 1982
CONTINGENCIES IN MAURITIUS AND U.S. ACCESS TO DIEGO GARCIA March 9, 1982
THE NORTHERN TERRITORIES: MOSCOW'S POTENTIAL "JAPANESE CARD " January 12, 1982
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CONTINGENCIES REPORT #6
GUATEMALA AND CENTRAL AMERICA'S NORTHERN FLANK
This report, prepared under the aegis of the
Contingencies Project of Georgetown University's
Center for Strategic and International Studies,
was drafted by Dr. Georges Fauriol, CSIS Fellow
for Caribbean Studies.
June 30, 1982
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EXECUTIVE SUMMARY
TABLE Q CONTENTS
Background .-
U.S. Interests 2
Current Geostrategic Factors . .
Background .
RECENT EVENTS IN GUATEMALA
The Advent of the Montt Regime 6
The Montt Regime's Future Direction
. 7
The U.S. Reaction . 9
CONTINGENCIES
The Longevity of the Montt Regime . 10
Increase in Guerrilla Insurgency . 11
U.S. Foreign Policy 12
Guatemala-Belize Territorial Dispute . 12
International Spillover into Mexico 13
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Current public policy attention has been so narrowly focused
on El Salvador and Nicaragua that potentially more serious con-
tingencies on both the northern and southern flanks of Central
America have been largely overlooked.
In the south lie the growing dangers of terrorism and border
security in Costa Rica, ensuing threats to Panamanian stability,
and, over the long term, growing Colombian political uncertain-
ties.
It is on Central America's northern rim, however, that U.S.
strategic exposure may be the greatest for the following reasons:
o Last year's upsurge in the infiltration of weaponry to
Central American guerrillas from Cuba and elsewhere has
represented a direct threat to El Salvador, to which
the United States is responding.
o But U.S. efforts to reverse the increase in left-wing
activity in Guatemala, spearheaded by approximately
6,000 guerrillas, have so far failed. This suggests
that a protracted guerrilla war in Guatemala, or even
possibly a left-wing takeover, already has a momentum
of its own, regardless of the success or failure of
U.S. Salvadorian policies. Worse, the timing of a
Guatemalan crisis could affect the U.S. margin of poli-
tical and security success in El Salvador over the next
18 months. Phrased differently, U.S. policy in El
Salvador, and most likely in Honduras, would not
survive if Guatemala "fell."
o To complicate matters, the increasing fragility of
Mexico's frontiers could become the most serious
foreign policy problem facing the incoming
administration of Miguel de la Madrid. The flood of
refugees crossing Mexico's southern border is certain
to increase if the crisis in Guatemala deepens, and
Mexico's serious economic problems could give a fresh
impetus to illegal migration to the United States.
There is, however, a positive side. The recent change in
Guatemala's cast of characters presents the United States with
some opportunities, both to reassess the U.S. position vis-a-vis
Guatemala and to maintain an effective Central American policy.
Critics of the administration are thus a bit premature in their
growing condemnation of the still untried Montt government and of
U.S. Central American policy in general.
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THE CARIBBEAN BASIN REGION
Background
The Caribbean Basin is a geopolitical concept that
encompasses 165 million people living in more than 40 nations and
dependent territories. Of these, about 90 million live in the
eight countries from the U.S. border to Panama, the bulk of them
in Mexico. The seven nations of Central America proper (Belize,
Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, and
Panama) have a population of only 22 million, a combined GNP of
about $22 billion (1982), a negative balance of payments of more
than $1.5 billion (1982), an average inflation rate of about 20
percent, and an average illiteracy rate of about 45 percent. In
1981 U.S. concessional assistance to Central America amounted to
$252 million; total U.S. foreign trade with the region stood at
about $4 billion. Under President Reagan's now mangled Caribbean
Basin Initiative (CBI) and the administration's FY 83 foreign aid
proposals, the region is slated to be the beneficiary of several
hundred million dollars, much of it presently directed toward El
Salvador and Honduras.
U.S. Interests
Since the days of the Monroe Doctrine, the Caribbean Basin
has comprised an area of great importance to the security
interests of the United States. Recent events have demonstrated
that this region is one of the two or three most explosive
centers of international, if not superpower, confrontation. The
Caribbean and Central America are part of a security community,
traditionally under the aegis of the United States, where Cuba's
activist postures have been destabilizing and broadly promotive
of Soviet interests.
Successive U.S. governments have undertaken repeated efforts
to ensure that the nations of the Caribbean Basin remain
friendly, moderate, and generally independent of hostile foreign
influence. U.S. toleration of Castro's Communist regime was the
exception that proved the rule. But recent events --
particularly Cuba's pivotal role in the 1979 Grenadian revolu-
tion, in the Nicaraguan revolution, in the 1980 Jamaican elec-
tions, in the present Salvadorian conflict, and most likely in
Central America as a whole -- have severely undercut the tradi-
tional vision of the Caribbean Basin as a community of nations
broadly supportive of U.S. regional and global policies. Given
the sensitivity of the United States to such developments and
the dangerous role that the Castro government has seemed intent
on playing, the Reagan administration early on devoted priority
attention to containing Cuban influence in the region.
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Geostrategic Factors
Although traditional U.S. influence in the region has
weakened, the Caribbean Basin retains an inescapable geostrategic
importance. The region is not only a maritime gateway to the
hemisphere, but also a sphere of political and economic
interplay, human interchange, and military interest. Above all,
the geographical proximity of the Caribbean Basin makes it a
uniquely significant area for the United States for the following
reasons:
1. Shipping Lanes
From 70 to 80 percent of U.S. oil imports flow
through the region, with much of the crude oil refined
and transhipped in Puerto Rico, the U.S. Virgin
Islands, and the Bahamas.
2. Raw Materials
Caribbean exports of bauxite, alumina, and nickel con-
tribute significantly to the economic security of the
United States.
3. Illegal Immigration
The Caribbean and Central American regions constitute
the second largest source of illegal immigration to the
United States, the primary-source being Mexico.
4. Military Force Projection
U.S. military deployment and projection of forces over-
seas is dependent on adequate control of the principal
maritime choke points of the Caribbean, which in turn
control transit through the Panama Canal.
5. oil and Gas Resources
The very large oil and gas reserves in Mexico, most
likely Guatemala, and possibly Belize represent signi-
ficant alternatives to the Organization of Petroleum
Exporting Countries (OPEC), as well as targets of
opportunity for hostile powers. Mexico's proven oil
and gas reserves are estimated to be about 72 billion
barrels. In 1981, oil and gas accounted for 75 percent
of total Mexican merchandise exports. Estimates of
Guatemalan reserves are in the 3 billion barrel range,
with many of Guatemala's oil fields located along the
Mexican border. Development of Belizian on and off-
shore energy potential has also received measured
industry enthusiasm.
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6. Geopolitical Momentum
Political warfare in Central America adverse to U.S.
interests regionally and globally further strengthens
the momentum and power base of local left-wing and pro-
Soviet Marxist groups and diverts important U.S.
resources. El Salvador may be the decisive turning
point in this regard. Victory for the Frente Farabundi
Marti pars la Liberacion Nacional (FMLN) by war, or by
the Revolutionary Democratic Front (FDR) in
negotiations, would strengthen Marxist groups
throughout the region and would possibly lead to major
leftist offensives against Guatemala and perhaps
Honduras and Costa Rica. Sooner or later such a
sequence of events could easily engender a process of
revolutionary destabilization in Mexico. Strife in
Guatemala and Mexico could also develop a momentum of
its own. Terrorism in Guatemala could lead the Mexican
military to play a stronger role in the political
arena. Over the long run, terrorism in Mexico would
have a profound effect on U.S. territorial security.
CENTRAL AMERICA'S NORTHERN FLANK
The fact that the Salvadorian conflict has dominated the
concern of policymakers and the public alike does not mean that
other troublespots in Central America are of marginal
importance. In a tactical sense, the immediate battle lines may
have been drawn in El Salvador, but the long-run dangers in the
region lie in its geopolitical extremities: Guatemala, Belize,
and southern Mexico on the northern flank; and Costa Rica,
Panama, and Colombia in the south. The objective interests of
the United States are thus based on two anchors: the Panama
Canal in the south and Guatemala in the north. At present, it is
in the latter region that the dangers for the United States may
be greatest.
Guatemala is the jewel of any Central American strategy. It
has the largest population and economy in this subregion, an
incipient industrialized base, an established export-oriented
agriculture (coffee, cotton, sugar), significant oil reserves,
hydroelectric power resources and nickel deposits, the most
genuine, if latent, tourism potential in Central America, and it
has traditionally been governed by fiercely, often harsh, anti-
communist governments. In contrast, other U.S. regional
interests may in fact be more modest, even though U.S. political
and economic exposure remains significant throughout Central
America.
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Background
1. Domestic Power Brokers
Central American institutions, including those of
Guatemala, are changing only slowly, grudgingly, and
with considerable violence. Until recently, Guatemala
had a relatively stable oligarchy, although it is fair
to say that this stability had been maintained since
1954 through the use of coercion and electoral fraud.
As in the Salvadorian case, government and
governmental-affiliated private forces have used
violence against opponents to ensure the continuity of
the regime. Thus years of fratricidal slaughter have
led to a sharp polarization of Guatemalan public life.
The military, in its various factions, remains the real
power holder.
2. Pub is Relations Concerns
U.S. options are limited by the generally poor image
Central American regimes, particularly Guatemala, have
in the United States. This is based in part on U.S.
politics, particularly in Congress, in part on poor
public relations by both the Guatemalan government and
its U.S. supporters, and in part on harsh international
reality.
U.S. public reaction to Guatemala is unusually
negative and entrenched, and it has been well culti-
vated by liberal and outright left-wing pressure
groups. Thus, whatever U.S. policy is pursued toward
Guatemala, U.S. public reaction will be strongly
affected by the perceived legitimacy of U.S. actions.
To that extent, the U.S. ability to improve the image
and actual performance of the Guatemalan regime remains
a critical variable.
3. U.S. Policy Leverage
Although less so than in El Salvador, the United States
has publicly identified the Cuban government as provi-
ding guidance to Guatemalan guerrilla groups, including
training of key leaders. By most conventional
measurements, however, the United States has very
limited leverage over the conduct of the Castro regime
in these matters. Thus, Cuba's link to U.S. Guatemalan
policy is only likely to be affected by broader
strategic approaches to U.S.-Cuban relations. On the
other hand, although the U.S. government has had
disappointingly little influence over the conduct of
Guatemala's government since 1977, there is probably a
great deal the United States can do to influence the
conduct and fortunes of the present Guatemalan regime.
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4. Mexico and Belize
On Guatemala's borders, both Mexico and Belize are
uneasy. Threats to the Mexican system should not be
overestimated, but the challenges presently confronting
Mexico's leaders are without precedent. The Mexican
"revolutionary" mythology has employed patronage and
populist rhetoric to obscure a rather retrograde
sociopolitical reality. Although not an immediate
issue, the incoming de la Madrid administration can no
longer ignore this gap between myth and reality.
Belize, at present a bit player, is a new nation
attempting to isolate itself from Central America's
convulsions. But the battle for Belize's allegiance is
intense. In February, a Cuban trade mission visited
the country a week after the United States had signed a
military aid treaty. There is no doubt that Belize
would provide a useful U.S. base of operations were
Guatemala to "fall." But, in the interim, Belize faces
a chain of other problems: serious political divisions
within the present government of Prime Minister George
Price, a difficult economic situation, a serious terri-
torial claim by Guatemala dating back to the nineteenth
century colonial era, a concern regarding Guatemala's
guerrilla insurgency, and a socially complicating
influx of Spanish-speaking refugees from El Salvador.
5. jJ
Central America's northern flank encompasses the oil
fields of Guatemala, Belize, and Mexico's Chiapas. and
Tabasco states. The latter constitute the regions's
most productive fields along with the adjacent off-
shore sites in the Gulf of Campeche. Some of these
fields are fewer than 100 miles from the Guatemalan
border, and increasing violence in Guatemala has not
gone unnoticed by the Mexican leadership. The protec-
tion of Mexican oil fields may ultimately become a
major issue -- and a long-term concern of the United
-States.
RECENT EVENTS IN GUATEMALA
The Advent of the Montt Regime
The coup d'etat of March 23, 1982 ousted from power the
totally discredited government of General Romeo Lucas Garcia as
well as his newly elected successorr- General Angel Anibal
Guevara. In the following months, however, the ensuing
Guatemalan junta has undergone three significant permutations.
Lucas Garcia and Guevara were initially deposed by troops
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led by a small coalition of junior officers, particularly Captain
Carlos Adolfo Munoz. By the first evening of the coup, they were
in turn superceded by what amounted to a three-man military
junta: Brigadier General Efrain Rios Montt, the junta leader;
General Horacio Maldonado Shaad, who became minister of the
interior and, in effect, head of the nation's much maligned
security and para-military forces; and Colonel Francisco Gordillo
Martinez of the Army Command. On June 9, General Montt took over
sole control of the Guatemalan government. In addition to
assuming the presidency and announcing the "resignations" of both
Maldonado Shaad and Gordillo Martinez, Montt also announced that
he would stay in office until the end of 1984.
Montt's background is, by local standards, that of a genuine
moderate and professional military man. His past includes posts
as head of the president's Honor Guard, director of the National
Military Academy, and director of Studies for the Inter-American
Defense College in Washington. He has attended the U.S. Army's
Southern Command training program in the Panama Canal. He was
army chief of staff in the early 1970s, became the presidential
candidate of the Christian and Social Democratic parties in 1974,
won that election but was promptly sent into inactive exile as
military attache in Spain. He returned in 1978, apparently as a
devout born-again Christian. Montt joined the Christian Church
of the World, an evangelical group connected with the Gospel
Outreach of California. His brother is the Catholic bishop of
Escuintla in Guatemala.
The March 23 coup was the culmination of simmering
discontent across a broad spectrum of Guatemalan society and, in
that context, was far from unexpected. Agricultural and
industrial interests blamed Lucas for bringing the nation to the
brink of economic ruin. The private sector and forces within the
military also blamed Lucas for Guatemala's diplomatic isolation.
The bungling of the March elections, which had been looked upon
by Washington as a major test case of Guatemala's eligibility for
renewed U.S. military aid, forced the situation. The coup was
planned and executed by young officers within the army and air
force, with some limited participation from the right-wing
National Liberation Movement (MLN) party. Under pressure from
the military hierarchy, the junior officers chose General Montt
as a figurehead leader. He, in turn, acted swiftly to strengthen
his control over the coup and dispel notions of association with
the MLN. Montt then consolidated his power by dismissing his
junta partners. That move apparently received the support of
Captain Munoz and could thus imply a continuing restructuring of
the political balance in the armed forces away from the older and
more senior officers associated with past military administra-
tions.
The Montt Regime's Future Direction
This continues to be uncertain. The new president has
pleased many critics by removing from influence the most
violence-prone segments of Guatemalan politics, including the
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right-wing death squads. The former president and his brother
(ex-Army Chief of Staff Benedicto Lucas), the former police
director (General German Chupina Barahona), and the former
defense minister (General Rene Mendoza Paloma) are presently all
under house arrest. Also under pressure are the two former heads
of the secret police, Pedro Garcia Arredondo and Manuel de Jesus
Valiente Tellez. The Montt government's crackdown on corruption
has also affected several civilian members of the Lucas adminis-
tration. Several of them have gone underground and others later
reappeared outside Guatemala's borders. Significantly, the call
for civilians to surrender or at least register their weapons has
had a significant pyschological impact. In the weeks following
the coup, life in Guatemala City quickly returned to normal.
The new government has also taken the important step of
declaring an amnesty throughout June for both guerrillas and
members of police and military units. The response from the
major Guatemalan guerrilla organizations, however, and the
disappointing experience of the 1980 and 1981 Salvadorian govern-
ment calls for guerrilla amnesty in that country leave little
reason to be particularly hopeful. On June 30, the amnesty dead-
line was reached with no significant breakthrough. Subsequently,
General Montt declared a 30-day martial law period and underlined
the government's intention to launch a major counterinsurgency
drive.
Ironically, amnesty for members of Guatemala's security
apparatus, particularly in connection with the role of the secret
police and the actions of paramilitary forces in the
countryside, is likely to be a more successful administration
measure. Politically, it could imply that the Montt regime has
decided not to pursue actively the prosecution of the Lucas
administration's generally discredited leaders. This may suggest
a complex quid pro quo, with the previous government unlikely to
delight Montt's more progressive civilian political supporters
among the Christian Democrats.
At this juncture, the Montt regime is viewed as suffering
from another rendition of "plus ca change, plus c'est la meme
chose." Although Montt's actions have established laudable
themes, no clear program except for the ad hoc Fundamental
Governing Statutes has been perceived by either domestic critics
or potential international supporters of the new Guatemalan
government. Meanwhile the economy continues to contract and the
guerrilla war in the countryside continues generally unabated.
From an increase in 1979 and 1980, export revenues plunged
19 percent in 1981. There has been a 50 percent drop in tourism
revenues. Not surprisingly, the commercial trade deficit has
reached an all time Guatemalan high of $489 million. The nature
of the political risk is now evident in two significant economic
developments: on one hand, at least $1 billion of capital has
fled Guatemala in the last two years; but, on the other hand, the
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major inflow of foreign investment is now taking place in the
nation's growing oil and gas interests.
The U.S. Reaction
In the period since the coup, the Reagan administration has
tentatively embraced the Montt regime. In early May, Jeremiah
O'Leary of the National Security Council staff met with General
Montt and senior Guatemalan leaders. The State Department is
lobbying Congress to approve resumption of military aid, suspen-
ded in the Carter years. As a symbolic first step, the adminis-
tration is requesting a $250 thousand military training grant and
$4 million in spare helicopter parts. But, as of June 1982,
there was strong congressional Democratic opposition to any aid
to Guatemala.
In addition to the psychological baggage that the Lucas
regime's reported massacres and government-sponsored violence has
created, future U.S.-Guatemalan relations are complicated by the
attention that has been focused on Guatemala's large Indian
population. Approximately half of the country is Indian, most of
them living a marginal existence, although many are also among
Guatemala's urbanized classes. Since late 1980, after decades of
relative political inactivity, Guatemala's Indians have shown
signs of growing participation in the proliferating guerrilla
forces. U.S. congressional charges that the Montt regime may be
redirecting the insurgency war toward the rural Indians are,
however, a gross misreading of the situation. Conservative
agricultural interests may indeed be waging their own private war
against perceived, guerrilla targets, but this does not mean that
the governments struggle has acquired an ethnic tone. If nothing
else, an overwhelming proportion of Guatemala's armed forces is
itself Indian, as is, to a lesser degree, the government that
backs it.
The key indicators to monitor over the next 18 months are the
following:
the growing, or fading, image of the Montt regime,
the scale of terrorist (right and left-wing) violence,
military successes on the battlefield against guerrilla
groups,
Indian involvement in Guatemala's left-wing politics,
events in El Salvador and U.S.-Cuban relations,
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U.S. congressional responses to the Reagan administration's
tentative overtures toward rehabilitating military
assistance to Guatemala.
1. Longevity of the Montt Regime
The March 23 coup presented considerable risks for the army
command. In the near future, it faces possible divisions from
within, strong political opposition from both the extreme
conservative and left-wing opposition groups, and considerable
reservations about the regime by the U.S. Congress.
The most serious scenario would involve the disintegration
of the army command into three feuding factions, most likely
between the leadership of the current government, the conserva-
tive officer corp backed by agricultural interests, and
reformist-minded junior officers. This would lead to new juntas
and countercoups, all ultimately strengthening the hand of the
guerrillas.
A second scenario could involve a political fight between
General Montt and his centrist backers against the eager young
officers and their conservative MLN supporters. In a successful
showdown, the fall of Montt would lead to quick elections in
which the MLN (probably headed by Mario Sandoval Alarcon) would
probably win an electoral majority. Although MLN government
would seek support from the Reagan administration, it would be
very difficult for Congress and U.S. public opinion to find
any significant differences between a Sandoval and a Lucas regime.
A third possibility is the path presently being pursued by
Montt and closely watched by the Reagan administration. The
creation of a popular, generally reform-minded, or at least
effective, government would provide a conducive context for
positive U.S. involvement in Guatemala. With reasonable backing
from the Army command, and even limited U.S. economic support,
Montt could probably fend off a deepening of the guerrilla
insurgency and the danger of military and economic insolvency.
Montt has also recently alluded to possible negotiations
with the leftist insurgents, presaging a fourth scenario wherein
the precarious balance of forces supporting the regime would
probably be undermined. Specifically, the more conservative
elements would probably not tolerate, and in fact vehemently
reject, any participatory role for leftist factions within the
present political structure. The major outside factor associated
with the third and fourth scenarios remains the likelihood that
the Left will not come to power in El Salvador in the next 24
months.
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2. Increase in Guerrilla Insurgency
The last major army offensive occurred in February in the
department of Quiche, a guerrilla stronghold. After that, army
activity was limited, for a while, to local, though bloody,
holding actions in the countryside. Recently, however, the Montt
government has resumed larger military operations. In the
interim, urban guerrilla activity, at least in Guatemala City,
has clearly declined. In all, there are three key factors at
play for the near future.
First, General Benedicto Lucas Garcia (the previous presi-
dent's brother) has been removed from his position as army chief
of staff. Although brutal, Benedicto Lucas was the army
command's most successful counterinsurgency officer. Highly
professional, he had succeeded in raising the morale of his
troops and had begun to thwart the guerrillas tactics with
aggressive and mobile counteractions. The March 23 coup has
interrupted this process, and problems have been compounded by
the removal of several field officers and the increased but
costly use of ill-trained paramilitary rural forces.
Second, in February 1982, the four leading revolutionary
organizations -- the Guerrilla Army for the Poor (EPG); the
Organization of People in Arms (ORPA); the Rebel Armed Forces
(FAR); and the Guatemalan Labor Party (PGT) -- united, under
Cuban proding, into a single command: the Unidad Revolucionaria
Nacional Guatemalteca (URNG). Unless the army's combat morale
and poor supply problems are addressed, the guerrillas will
retain the military advantage in the foreseeable future, parti-
cularly in the northwestern and western regions. By most
accounts, the extensive rural insurgency has disrupted coffee and
cotton production, and, more significant, exports. Worse, the
guerrilla campaign has dramatically reduced the nation's
available lines of commercial credit.
For their part, the guerrillas are well equipped with
Soviet-made RPG-7 grenade launchers, captured Israeli-made Uzis,
and M-16 rifles. Unless pressure from the United States
increases, guerrilla supplies will continue to arrive through
Mexico, by ship from Cuba, or by land through Honduras and
Nicaragua.
Finally, the stalemate between Congress and the administra-
tion regarding Guatemalan policy will make it very difficult to
respond to a security emergency in Guatemala. If guerrilla
action is stepped up, Guatemalan needs will rise while effective
resistance will decline. These developments will have a serious
impact on the course of U.S. efforts in El Salvador. On balance,
the present Guatemalan regime will be operating on a very thin
political, economic, and security margin over the next 18 months.
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3. U.S. Foreign Policy
Because of its uncertain nature vis-a-vis Guatemala, (for
reasons explained above) U.S. policy constitutes a separate
contingency. Unfortunately, much U.S. policy activity vis-a-vis
Guatemala may remain only a byproduct of Salvadorian policies and
events. As in El Salvador and Honduras, U.S. military aid and
training remains a possibility, but a distant one, unless
congressional perceptions of security threats in northern Central
America change in the next 18 months (particularly with the new
1983 Congress). In the foreseeable future, conventional economic
assistance has a slightly greater chance, although the
administration would have to put in a supplementary budget
request for FY 83 and 84. That would involve a delicate
political move, whose success would largely depend on the image
of the Montt government. Ironically, Montt might benefit from an
increasingly conservative and unpalatable Salvadorian regime, to
the extent that Guatemala in the north and Costa Rica in the
south would become the new anchors of U.S. policy in Central
America.
4. Guatemala-Belize Territorial Dispute
Despite the fact that the Falkland crisis has focused
renewed attention on Latin American territorial disputes and
Guatemala's strong support of the Argentine position, the odds
have not changed that the long simmering Guatemala-Belize terri-
torial dispute will erupt. Obviously, there is some concern
regarding the Montt regime's indication that Guatemala may not
honor any agreements made last year with Great Britain concerning
the independence of Belize. But at this juncture Guatemalan
armed forces are tied down in a costly insurgency war, leaving
little operational margin. In addition, the Falkland crisis
model is not entirely applicable to Belize. As an independent
nation and as a member of the United Nations, Belize commands a
totally different (that is, independent) balance of diplomatic
forces. (Guatemala would have more to learn from the Guyana-
Venezuela dispute.) Furthermore, in the foreseeable future,
Belizean security will most likely be guaranteed through U.S.
assistance with or without a British military presence.
The real danger of this border dispute lies in the fact that
as the insurgency in Guatemala develops, bases may increasingly
be established in the Belizean interior and in the south near
Guatemala's short Caribbean coastline. These would provide an
effective military base for guerrilla activity in the jungle
terrain of Guatemala's Peten and the Lago de Izabal area to the
southeast. Operations in the latter region-would cut off the
nation's vital road and rail lines and the oil pipeline to
Guatemala's only Caribbean port, Puerto Barrios. This would
make counterstrikes tempting to the Guatemala government. In
view of the preexistence of a border dispute, Guatemalan actions
against guerrilla bases in Belize could easily be misconstrued
and develop into a major crisis. The Cuban government would most
likely find it advantageous to support Belize. Such a scenario
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would possibly cause Mexico to intercede in support of one of the
parties in the dispute. With interests and commitments on both
sides of the Belize-Guatemalan border, U.S. reaction to such a
situation would be strained at best.
5. International Spillover into Mexico
Mexico has traditionally perceived a need to pursue a
cooptive strategy toward revolution in the Caribbean Basin. In
practice, this has served as a defensive hedge against both
Mexico's restive domestic radicalism and new revolutionary groups
that are, in the Mexican analysis, bound to capture power
throughout the region. Mexico's somewhat condescending
confidence assumes that radical regimes coming to power in the
Caribbean Basin are most likely going to be modeled in both
spirit and action after the Mexican revolutionary process, rather
than modeled after the Cuban or Soviet example. But with Cuban-
inspired insurgency sprouting throughout the region, the
soundness of the Mexican analysis is debatable.
Within this context, any conversion to the Left by a
Guatemalan regime should be viewed as a possible threat to
Mexico. If this is accompanied by a strengthening of the
Marxist-Leninist wing of the Sandinista regime in Nicaragua and
if the guerrillas were to ultimately win the day in El Salvador,
serious frictions would most likely occur within the Mexican
governing elite. Were a new Guatemalan government to develop
along radical but hypothetically "independent" socialist lines,
or were it to develop from the beginning as a Marxist-oriented
and Soviet-linked regime, U.S. concerns about Mexican political
stability and even regime security would also have to come to the
fore -- particularly if Mexican diplomacy remained committed to a
fashionably radical ideology.
But even without such dramatic changes Mexico will continue
to be faced with serious border problems due to immigration and
refugee crises ensuing from Central American instability,
infiltration of guerrillas into southern Mexico or the
establishment of bases for Guatemalan guerrillas, and
socioeconomic unrest in the oil-producing areas of Chiapas and
Tabasco. _
If the crisis in Guatemala increases, a flood of refugees
will most likely come over the Mexican border. This influx would
come on top of an estimated 125 thousand Salvadorians that have
entered Mexico illegally since 1980. Many of these Salvadorians
have now reached the United States, and one can assume that a
similar trend would be set in motion by a Guatemalan outflow.
Already it is estimated that some 40 thousand Guatemalans have
taken refuge in the Mexican state of Chiapas. Mexico's problems
are compounded by the lack of any clear policy on this issue, and
worse, by the inconsistency Mexicans are now faced with: a mass
expulsion of Guatemalans by Mexico in 1981, which coincided with
Mexican pleas regarding the human rights of illegal immigrants in
the United States. To complicate matters, Mexico's serious
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economic problems give it fresh impetus to encourage both
Mexicans and Central Americans to emigrate to the United States.
Finally, on the issue of oil field security, the Mexican
leadership is generally aware of the danger it faces in the
south. The government views the oil producing zone as a sensi-
tive one from a social and employment policy perspective. The
stationing of troops in the area suggests further Mexican con-
cerns. In 1980, the Mexican Army held extensive maneuvers in the
border state of Chiapas involving some 50 thousand troops (almost
half of Mexico's armed forces). Mexico has also been pushing a
military modernization program, including the creation of a crack
quick-reaction unit. In the last two years Mexican oil fields
have been subjected to supply disruption, with groups of peasants
blockading the roads because of "environmental damage." The
concern of Mexico's leadership has been reflected in its choice
of a military man (General Absalan Castellanos Dominguez) as the
next governor of Chiapas.
But, fundamentally, Mexico's border security problems and
ensuing solutions are tied to the government's ability to assess
developments in Central America realistically. They are also
tied to the ability of Mexico's civilian leadership to upgrade
the nation's military apparatus without fundamentally changing
the balance of the political system.
Recent events in Guatemala suggest substantial changes may
be occurring in the Guatemalan political arena. A generally
discredited, corrupt, and repressive regime has been replaced by
a government that has demonstrated its determination to curtail
corruption, improve its human rights image, and achieve a greater
degree of political, economic, and social stability. Major
structural changes, however, will not occur immediately. It is
therefore probable that Guatemala will remain a source of
difficulty for U.S. policy. The growing leftist insurgency move-
ment in Guatemela will pose a particular problem for U.S. Central
American policy, particularly for the duration of the Salvadorian
conflict.
The following considerations will shape the U.S. policy
response:
1. U.S. Military Action: In 1982, it would clearly be
unrealistic to think of "sending in the Marines" in response to
the current or any likely future situation in Guatemala. Not
only are there many legal restraints and impediments to any such
action, but the congressional and public outcry would be strident
if the administration gave any indication that it was even
considering such a course of action. Politically, as well as
legally, any commitment of U.S. ground forces could only be
justified in the extreme case of direct, large-scale foreign
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military involvement in Guatemala that represented a clear threat
to the territorial security of Mexico and the United States.
2. "Hands-off" Approach: Given the strategic significance of
Central America's northern flank, including Guatemala, a "hands
off" or "ostrich" approach by the United States would be even
more inappropriate.
3. Military Aid: Large-scale U.S. security assistance to
Guatemala could be desirable. This might actually only involve
limited commercial sales of military hardware. But, given cur-
rent U.S. domestic political realities and budget constraints,
U.S. military aid to Guatemala, now essentially nonexistent, is
unlikely to. increase. Guatemala suffers from a shortage of
needed equipment and trained personnel, as demonstrated by the
disappointing military operations against guerrilla installations
along the Mexican border. But as long as current U.S. public and
congressional perceptions of Guatemala and the Caribbean/Central
American region remain negative, the U.S. government will be
limited in the amount of security aid it can provide.
Small scale military assistance is an alternative presently
being sought by the Reagan administration, albeit with consider-
able congressional reservation. In view of Guatemala's immediate
security needs, such limited military aid may be useful to test
the administration's determination in the face of congressional
opposition. Yet the size of the aid may be so small as to have
little practical impact in the conduct of the counterinsurgency
campaign. If no aid is provided, however, Guatemala may be
encouraged to seek other less scrupulous suppliers. No aid at
all could contribute to a total collapse of Guatemala's armed
forces.
4. Economic Aid: A program of large-scale economic assistance
would be very desirable, but it would be subject to the same
budgetary and political pitfalls. Guatemala clearly needs such
an infusion, which could halt the continuing hemorrhage of the
nation's economy. Obviously, the role of the private sector is
crucial in this regard, but given Guatemala's (and Central
America's) present political risk environment, the corporate
community should be viewed as only an adjunct to an effective
U.S. government policy.
5. Reforms: Urging the Montt regime to implement social and
economic reforms and a program of political liberalization, while
highly desirable, may well be opposed by Guatemala's powerful
conservative forces. As in the Salvadoran case, coopting these
interests into moderate or even mildly progressive governing
alignments may prove to be an extremely frustrating task --
especially if the Reagan administration's policy toward this end
is undercut by conflicting congressional action.
6. Interdiction: A sea and air blockade that aimed at cutting
off arms supply routes to the guerrilla insurgents in Guatemala
would be very difficult to implement. A large portion of the
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?
arms traffic into Guatemala comes through Mexico, thus a U.S.
blockade would necessitate a much more forceful U.S. policy
toward Mexico. To be effective, a blockade would have to con-
trol arms that enter Honduras by ship and then travel overland
through El Salvador into Guatemala; in addition, interdiction
would also have to be extended to control arms traffic through
Belize as well as arms entering directly via Guatemalan Pacific
ports. Clearly, such actions could have very grave consequences.
They would complicate U.S. relations with our traditional Euro-
pean allies and with the countries of Latin America. They could
also trigger Cuban or Soviet responses.
7. Negotiations: Until recently it was generally believed that
direct negotiations between the Montt regime and the left-wing
insurgent groups were not likely to occur. However, recent
reports indicate that Rios Montt has taken the initiative and
shown some willingness to negotiate with the Left. Although U.S.
policy probably does not oppose such an initiative, there are
several significant factors involved. The exact tactical objec-
tive of negotiations with the left-wing groups is not clear, nor
are the domestic and international implications of Montt's
initiative. Regardless of the willingness on the part of the
left-wing groups to negotiate, and regardless of the actual
result of the negotiations (if any), the fact that the Montt
regime is willing to negotiate with the leftist groups is signi-
ficant for U.S. policy -- but the considerations involved are
complex. The Guatemalan initiative -- together with recent
reports that Roberto D'Aubuisson, the conservative president of
the Salvadorian constituent assembly, has traveled to Panama to
meet with representatives of the Salvadorian leftist insurgent
groups -- indicates a possible dissatisfaction on the part of
conservative Central American regimes with U.S. policy in the
region, stemming from the failure of the United States to come to
the aid of these governments as they had expected. In addition,
direct negotiations with the left-wing groups, if they take
place, would probably suggest some shifts in Cuban tactics toward
revolutionary change in the Caribbean Basin and elsewhere. The
occurrence of a shift in Cuban policies may have also been
signaled by Havana's recent announcement of a termination of the
U.S.-Cuban dialogue. These developments suggest a changing
geopolitical environment that may give the United States further
opportunity to restructure Central American policy to its
advantage.
A disinterested, low-profile approach regarding bilateral
relations with Guatemala will not enhance U.S. interests in the
region. Instead, an attempt should be made to broaden channels
of communications with the Montt government. By employing
government-to-government contacts (presently inactive), the
United States can develop creative and effective courses of
action. Efforts to reverse the unsettling pattern of increased
guerrilla insurgency and revive increasingly impaired Guatemalan
armed forces capabilities should be considered by the United
States. Effective security assistance would be part of this
agenda. This does not have to imply an overly coercive course of
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action if, regionally, the United States is able both to gauge
Cuban and Nicaraguan objectives and to impress these countries
with the seriousness of U.S. intentions. As a complement to the
expansion of direct U.S. aid, the administration should also
foster greater interaction between Guatemala's political and
economic leadership and the international community. A byproduct
of this process could be renewed political confidence in
Guatemala's economic potential on the part of the multilateral
lending community, Guatemala's own private sector interests, and
the international business community. Guatemala's geostrategic
significance and the need to preclude the expansion and influence
of hostile forces within Central America's northern flank clearly
suggests adopting this mix of active, creative, and effective
policy alternatives.