LATIN AMERICA REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00912A001000010016-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 17
• Document Creation Date: December 21, 2016
• Document Release Date: February 19, 2008
• Sequence Number: 16
• Publication Date: January 18, 1979
• Content Type: REPORT

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Foreign
Assessment
Center
Latin America
Review
State Dept. review completed
Secret
RP LAR 79-003
18 January 1979
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LATIN AMERICA REVIEW
18 January 1979
CONTENTS
Peru: Aftermath of the General Strike 1
The virtual collapse of a leftist-led
general strike has enhanced the author-
ity of the military junta and will aid
its efforts to restore civilian rule.
Underlying problems will, however, con-
tinue to pose intermittent difficulties.
Cuba-Angola: Growing Civilian Assistance
Program F_ 7 . . . . . .
Nearly three dozen new cooperation agree-
ments covering Cuban economic and tech-
nical assistance to Angola for 1979 in-
dicate there will be a substantial boost
in the Cuban civilian presence, although
second thoughts on the part of Angolan
leaders may keep the increase from reach-
ing the levels originally planned.
Jamaica: Opposition Protests
The demonstrations in Jamaica last week
initiated a well-organized opposition
campaign of civil disobedience that could
lead to an early election and a change of
government later this year.
FOR THE RECORD: Brazil; Chile
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Peru: Aftermath of General Strike
The government last week faced its first challenge
of the new year and emerged victorious when a three-day
general strike virtually collapsed. As a result, the
authority of the military junta, which went to some
lengths to blunt the strike effort, has been enhanced,
while the position of the left, which called the strike,
is clearly weaker. This outcome will aid the government
as it continues working to restore civilian rule, but
underlying problems remain and will pose intermittent
difficulties.
Urged on by several other leftist groups, including
the Peruvian Communist Party, the Moscow-line Confedera-
tion of Peruvian Workers (CGTP) issued the strike call
in December, hoping to capitalize on growing discontent
over rising prices. The strike, however, never really
got,off the ground. Relatively few workers stayed off
I' the job, and there was little public support. Strike
leaders formally called off the action on the third
day.
Several factors contributed to the failure of the
strike:
-- Leftist labor leaders disagreed from the out-
set as to the wisdom of a strike.
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-- It was pushed by the smaller, more radical
groups, while officials of the CGTP--Peru's
most influential leftist labor organization--
were reluctant to go along and finally did so
with little hope of success.
-- Moderate labor groups, notably those linked
to the Popular Revolutionary Alliance (APRA),
the country's largest political party, re-
fused to participate. These unions, which
have generally supported the government,
actually reached a separate deal with the
regime and formally denounced the general
strike.
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-- Before the strike got under way, the govern-
ment cracked down on strike leaders, de-
clared a state of emergency, and suspended
certain constitutional. guarantees.
But the key to the strike's failure probably lies
more in the public's attitude toward the economic situa-
tion than in other factors. Last year, a similar strike
call to protest economic austerity measures united Com-
munist and non--Communist unions alike in disruptive dem-
onstrations that resulted in 30 deaths and numerous in-
juries. Since then, however, the austerity program has
been applied more gradually, making it a more difficult
political target. In addition, the government has suc-
ceeded in rescheduling foreign debt, inflation has slowed
slightly, and a positive trade balance was reported for
last year. Apparently, the left badly miscalculated the
degree of economically based discontent among Peru's
workers and failed to perceive the general acceptance--
albeit grudging-.-of current economic policies.
Even if successful, the strike would not necessarily
have threatened the process of restoring civilian rule.
Its failure, however, places the government in a better
position--at least for now--to continue that process.
The firm handling of the situation undoubtedly pleased
those officers who in the past have criticized the gov-
ernment for what they viewed as its indecisive response
to labor unrest. The setback for the left is also bound
to encourage military men who had been apprehensive of
the left's ability to sow dissension. In fact, strains
between the CGTP and the more extreme groups that urged
the strike may inhibit the left's effectiveness for some
time to come.
The nonparticipation of the moderate unions has
strengthened the government's relationship with APRA,
which stands the best chance of winning an open election.
Moreover, having just faced down the most militant unions,
the regime will not soon have to cave in to wage demands
that would have undermined its crucial agreements with
the IMF for debt-service help. Overall, the government's
confidence in its ability to deal with Peru's problems
has undoubtedly risen considerably..
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Cuba-Angola: Growing Civilian Assistance Program
We expect that the Cuban civilian presence in Angola
will increase this year despite a claim to the contrary
reportedly made by the Cuban Ambassador in Luanda. The
Sr increase, however, may not reach the levels originally
planned.
Angola's former Second Deputy Premier Rocha came to
Havana last November and signed 35 cooperation agreements
covering Cuban economic and technical assistance to Angola
for 1979. These agreements call for Cuba to boost its
nonmilitary technical personnel from the present level of
some 7,000 to 10,700. The civilians will be in addition
to the estimated 19,000-20,000 Cuban military personnel
presently stationed in Angola.
On returning to Luanda, however, Rocha was removed
from his government post, allegedly for having agreed to
such a dramatic rise in the Cuban presence. There are
indications that President Neto is planning a trip to
Cuba soon, possibly in an attempt to disentangle Luanda
from the agreements. His visit will probably result in
a compromise rather than in a total rejection of the
agreements.
The Cuban assistance includes construction workers,
teachers, medical personnel, political and economic ad-
visers, and other specialists of various kinds. Cubans
oZ now are stationed throughout the country's 17 provinces
and are assigned to every government ministry.
Cuban construction activity in Angola this year is
expected to emphasize the repairing of war damage to roads
and bridges. Levi Farah, chairman of the State Commit-
tee on Construction and supervisor of Cuban construction
activities in Angola, has said that in 1979 the Cubans
will do two-and-a-half times more construction work than
last year.
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Still, many old difficulties remain, and new ones
could surface. Despite their failure to support the
general strike, the workers are restive in the face of
their eroding purchasing power. If there is another up-
turn in the inflation rate, their frustration could reach
the critical point. The left, weakened or not, will cer-
tainly continue to monitor popular sentiment with a view
toward exploiting discontent when and where possible.
Nor is Peru out of the woods financially; payment of its
massive foreign debt: has merely been postponed, not
eliminated, and the size of foreign exchange earninas is,
heavily dependent on fluctuating world markets.
There is also at least some prospect that President
Morales Bermudez will have to contend with a more as-
sertive military high command. Several officers with
strongly conservative views were recently elevated to
top positions, and they may be less disposed than their
predecessors to tolerate government temporizing. These
officers were probably heartened by the performance of
General Pedro Richter, who orchestrated the regime's
tough approach to last week's strike. Officers of such
'persuasion could complicate Peru's delicate political
situation if they begin to demand greater firmness in
dealing with the political parties that are now drafting
the constitution on which a civilian government will
rest.
Finally, there are potential. problems among the very
political parties on which the success of the return to
civilian government will ultimately rest. Many Peruvians
are worried that the three-way split dividing the demo-
cratic parties, which so far dominate the constituent
assembly, could turn into an unbreakable stalemate. The
US Embassy, which sees only dim prospects for a united
front among these three parties, also notes the absence
of any nationally prestigious figure around whom a cen-
trist political :movement could coalesce. Thus, even
ficulties and problems that could arise.
government is almost certainly aware of further dif-
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Medical aid will also probably increase this year.
Cuban health workers (doctors, nurses and technicians)
are running the Angolan public health system and staff-
ing most hospitals. They concentrate on disease pre-
vention and vaccination programs, but also treat war
casualties. Some of these medical personnel are re-
cently graduated doctors who are serving their two-year
obligatory rural service in Angola rather than at home.
In a November interview, Dr. Narey Ramos, head of Cuban
health personnel in Angola, said that there were more
than 800 Cuban medical persons in Angola at that time.
This is more than double the number serving in Angola
spring, had nearly 800 members. The second group will
also serve in Angola for two years. Although many of
these "teachers" have just graduated from high school,
Education will be another area of increased Cuban
involvement. In December, the Second Che Guevara In-
ternationalist Teaching Brigade was preparing to leave
Cuba. The first brigade, which arrived in Angola last
Havana also sponsors an extensive school program
for Angolan students in Cuba. As of mid-1978, about
1,000 Angolans were studying on Cuba's Isle of Youth,
and the total is expected to reach 2,500 sometime this
they are well educated by Angolan standards.
year. Mozambican, Ethiopian and Tanzanian students also
are enrolled in these wo -C which can
last for several years.
Cuban President Fidel Castro has several reasons
for increasing his technical assistance program in
Angola. For one, Cuba's reputation has been put on the
line by its close identification with the Neto govern-
ment. Cuban military and civilian advisers have been
stationed in Angola for several years, and are intimately
involved in the day-to-day running of the country. More-
over, Cuba receives some economic benefit from its tech-
nical assistance program. For example, it brokers An-
golan coffee on the world market as payment for the
teachers of the Guevara brigade, and earns additional
hard currency from its sale of Angolan fish. Service
in Angola also provides productive employment and on-
the-job training experiences for Havana's young, highly
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Castro seems to regard Angola as the perfect recip-
ient for his foreign policy initiatives and would like
to see it evolve into an example of what Cuba can accom-
plish when carrying out its "internationalist duty."
He knows, however, that this will take many years and
considerable effort to accomplish.
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Jamaica: Opposition Protests
Demonstrations in Jamaica early last week initiated
a well-organized opposition campaign that could lead to
an early election and a change of government later this
year. The moderately inclined opposition Jamaican La-
bor Party will continue its program of civil disobedience
against Prime Minister Michael Manley, although it will
probably not return to the streets in the immediate fu-
ture.
The Demonstrations
The opposition party has shown that it now has the
support needed to shut down the major sectors of Jamaica's
troubled economy. The large-scale but controlled demon-
strations of 8-10 January interrupted urban business ac-
tivity in Kingston, in the key resort city of Montego Bay,
and in the important inland market town of Mandeville.
The protests disrupted tourism at the peak of the season
and led to a sympathy strike by bauxite workers and King-
ston's public utility workers.
The demonstrations stemmed from
widespread disapproval of Manley's
economic mismanagement, but were trig-
gered by press reports of an impend-
ing sharp rise in petroleum prices.
Opposition party leaders claimed that
the government could absorb the recent
(p / OF JAMAIGR percent of the local cost of petroleum
REALLY is attributable to a heavy sales tax.
Kingston Press spoof of rumored
gas price hike
In the past year, Jamaican retail
gasoline prices--now about $1.87 a
gallon--have been among the highest
in the world.
The demonstrations took Manley
by surprise, even though the Jamaican
Labor Party announced its policy of
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civil disobedience last October and called openly for
resistance to the oil-price increase early this month.
Although his moderate advisers opposed violence
and eventually restrained the government's reaction,
Manley had already ordered ruling-party supporters--in
league with thugs from the island's major Communist
ing to press reports, at least seven Jamaicans,
includ- ing several nn1 -i cemen were killed in the nrotestc
Manley's Position
Manley's problems stem largely from his failure to
halt a steady economic decline during his nearly seven
years in office. Although factors beyond his control
have aggravated the deterioration, most Jamaicans blame
his mismanagement. The Prime Minister's leftist incli-
nations and his strong ties to ruling party radicals
have alienated the private sector and have helped drive
out the professionals and technically skilled persons
needed to achieve a turnaround. Since the 1973-74
world oil crisis, the Jamaican economy has experienced
the sharpest sustained decline of any less developed
country.
period of IMF-inspired austerity.
Manley's stock has declined further since last May,
when he agreed to-tighten austerity measures required
to qualify for a three-year IMF loan. A series of sub-
sequent devaluations, sharply rising food prices, chronic
shortages, and continued high unemployment--now about 30
percent of the labor force--have greatly eroded Manley's
working-class power base. The Prime Minister, moreover,
has little chance of recovering support during the long
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7
forms.
The Jamaica Labor Party
The opposition party has apparently overcome its
longstanding leadership and organizational problems.
Its leader, Edward Seaga, has until recently had little
influence with the party's indispensable union affiliate,
which is controlled by a well-liked, but often uneffect-
ive, former prime minister. Since last November, how-
ever, Seaga has increasingly dominated the party, which
has closed ranks and won some important concessions from
Manley--including an aareement for major electoral re-
Opposition Leader Edward Seaga
7
A Harvard-educated sociologist and a sharp econo-
mist, the 48--year-old Seaga has a cold and rigid per-
sonality that. does not project well to an electorate
accustomed to personal politics. He is of white Leba-
nese ancestry, which has identified him with Jamaica's
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unpopular elite and has made him unacceptable to many
.of the island's mostly Afro-Jamaican leaders. In ad-
dition, he has been pursued by lingering rumors of cor-
ruption and ruthlessness and by a well-deserved reputa-
Nevertheless, Seaga's widely acknowledged abilities
as an economist and administrator have greatly enhanced
his political stature in the past year. Although he
would not alter Manley's basic policies of state capital-
ism and nonalignment, most Jamaicans apparently believe
that the former Finance Minister is better equipped than
Manley to implement the IMF agreement and restore the
tion for early radical inclinations.
confidence of the private sector. According to reliable
polls, Seaga would win an election held today.
7
7
opposition demands for early elections.
cause major resignations from the cabinet and stepped-up
Prospects
The trends favoring Seaga's rise and Manley's con-
tinued decline will almost certainly continue. The
Jamaican Labor Party will continue to use civil disobe-
dience selectively to upset Manley's policies but will
act with restraint--as it did last week--to avoid a back-
lash from Jamaica's conservative middle class. As the
Prime Minister implements austerity measures to meet
rigid IMF tests, he will have even less room to maneuver.
If Jamaica cannot meet the next series of tests in March--
which is a strong possibility--the resulting crisis could
Manley's bid for a third successive term would be
unpromising even in better times. Neither, of Jamaica's
two major parties has ever accomplished it, primarily
because their near even balance in popular support re-
quires only a slight swing to change governments, and
because the island's limited resources give the party in
power inadequate funds to deal with high voter expecta-
tions. The times are particularly bad for Manley, how-
ever, and he will have serious and increasing difficulty
just holding on until the end of his second term in 1981.
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BRAZIL:* The government's import substitution drive,
pushed since the 1973-74 oil crisis, has met with con-
siderable success. Manufactured imports (about 60 percent
of total imports) have dropped 24 percent in real terms
in 1976-78--against a 20-percent expansion of real non-
agricultural GDP in this period. A 46-percent fall in
capital goods imports accounted for most of the import
decline. Progress in import substitution is now slowing.
In the case of machinery and equipment, the economy's
ability to produce high-technology goods is still limited,
and the comparatively small size of the Brazilian market
discourages investment in certain equipment lines. In
the case of intermediate goods such as steel and chem-
icals, ongoing investment projects will lead to reduced
import requirements, but the projects will be slow in
coming on stream. Thus, beginning in 1980, Brazil will
have to increase imports of intermediate goods substan-
tially if real economic growth is to be sustained at the
present 5- to 6--percent rate.
CHILE: Chilean labor leaders who are spearheading
the drive for an international trade boycott of the
Pinochet regime have not yet reacted to this week's de-
cision by ORIT, the Inter-American Regional Labor Or-
ganization, once again to defer further action. ORIT
had originally authorized the boycott:--which is to in-
clude Nicaragua and Cuba along with Chile--at a confer-
ence in Lima late last year. ORIT leaders were appar-
ently seriously divided over the issue of whether or not
more time was actually needed to plan an effective boy-
cott. The Chilean Government, encouraged by the inde-
cision displayed by its more vocal international critics,
will proceed with its controversial plans for guiding
the reemergence of trade union activities in Chile.
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