CENTRAL AMERICAN MONTHLY REPORT #31

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T01017R000707110001-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 22
• Document Creation Date: December 22, 2016
• Document Release Date: April 27, 2011
• Sequence Number: 1
• Publication Date: February 1, 1986
• Content Type: MEMO

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DIRECTORATE OF INTELLIGENCE
FEBRUARY 1986
CENTRAL AMERICAN MONTHLY REPORT #31
Opposition to President Duarte's economic austerity plan is coalescing on both
the left and the right. Public frustration over the economy has grown and extremists
are attempting to exploit it to provoke widespread discontent with the government.
Marxist labor leaders linked to the insurgency continue to organize austerity
protests--some brought out as many as 7,000 participants--and hope to foment a
general strike by spring, They are attempting to
create a national council--
Thus far, however, the lack of widespread popular support and
ineffective coordination in leftist unions, coupled with the government's restrained
response to protests have allowed Duarte to avoid a serious confrontation with labor.
Major democratic labor groups, although generally supportive of Duarte,
nonetheless are demanding changes in the package to soften its impact on urban
workers and peasants. Their media pronouncements have called for guaranteed
prices to both consumers and farmers, increases in minimum salaries, mandatory
salary increases for private sector workers, and effective price-control mechanisms.
This memorandum was prepared by the Central America North and South
Branches, ALA. It was coordinated with the Directorate of Operations. It contains
information available as of 3 March 1986. Questions and comments are welcome and
should be addressed to Chief, Middle America-Caribbean Division, ALA
ALA-M-86-20012C
Copy 1M2?1
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Private sector organizations, meanwhile, are attacking the austerity package for
its lack of production incentives and excessive government interference, according to
the US Embassy. Although they have yet to take any action beyond an extensive
press campaign, businessmen remain highly suspicious of Duarte's populists le and
the perceived anti-business posture of the ruling Christian Democrats.
conservative politicians are considering
establishment of a united opposition front--including rightwing parties, the private
sector, and democratic and Marxist labor unions--to drive Duarte from power.
Conservatives reportedly hope to exploit union protests against austerity and may
even provide funds for marches, demonstrations, and strikes,
While it is unlikely that the right would directly fund guerrilla-backed union activities,
underscores attempts by diverse sectors of society to exploit the austerity
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The full impact of the austerity program--which soon may entail increases in
utility rates and in prices of basic commodities--will not be known until spring. 0
the administration is increasingly concerned
about the potential for labor unrest and public protest, and the US Embassy has
reported recent reversals by Duarte on increases in gasoline prices and some
consumption taxes. Despite pressure from personal advisers and international 25X1
-creditors to hold firm on austerity, the President may backslide again as general
living standards erode and the guerrillas escalate their destruction of economic
resources.
SALVADORAN MILITARY DEVELOPMENTS
Guerrilla military operations declined during the month, although small clashes
continued throughout the country as the Army capitalized on small-unit patrols and more
effective intelligence collection and analysis. After appearing to wind down operation
"Phoenix" on the Guazapa Volcano, the armed forces expanded the campaign into
surrounding areas. The road between Aguilares and Suchitoto was cleared, and for the
first time in several years displaced peasants returned t' the area.
supporters captured. Six additional insurgent base camps were destroyed this month and
sizeable caches of arms, medical supplies, and insurgent documents seized. According to
Rebel activities generally were confined to economic sabotage and harassment of
civilians in the countryside and terrorist tactics in the capital.
Rebel broadcasts claimed responsibility for-the
recent murder of a US citizen, labeling him an undercover military adviser. They also
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announced that other Americans with tourist passports will be targeted for advising the
armed forces and that the FMLN General Command will no longer respect the safety of
Salvadoran Government or military dependents. The threat against family members
allegedly is in response to government arrests and "disappearances" of insurgent
personnel and their supporters.
NICARAGUA
In February, Managua tried to boost support for its cause in apparent anticipation of 25X1
the US Congressional vote on aid to the anti-Sandinista insurgents. The Sandinistas
hosted a conference of anti-imperialist organizations from the Caribbean and Central
America as well as a meeting of Latin American leftist political parties. The US Embassy
reports that Venezuela's ruling Democratic Action Party and Mexico's Institutional
Revolutionary Party--strong backers of the Sandinistas in the past--did not attend. 25X1
Managua fended off private criticism from a visiting Socialist International delegation by
claiming it could not engage in talks with an opposition that is receiving aid from the US,
according to diplomatic reporting.
25X1 some 200 alleged counterrevolutionaries and requests from some 600 more for clemency,
while blaming rebel leader Brooklyn Rivera for several recent atrocities.
the Sandinistas had set a plan in motion to lobby the US
Congress and public directly for a suspension of aid to the insurgents.
Despite the risk of undercutting these image-building efforts in the West, the regime
did not neglect its relations with Communist countries. President Ortega attended the
Cuban Communist Party Congress, and Sandinista ideologue Bayardo Arce headed a
delegation to the Soviet Communist Party Congress.
Meanwhile, the opposition launched its own campaign to influence international
opinion. Six parties--four members of the opposition coalition and two from the National
Assembly--publicly called for a ceasefire, new elections, and an end to the state of
emergency. According to the US Embassy, the opposition believes the Sandinistas will
demonstrate their intransigence by rejecting the proposal out of hand. Following a few
critical remarks, however, Managua has remained silent, probably hoping to minimize
international attention.
At home, the regime responded to the deteriorating economy by tightening its grip.
At mid-month Managua announced more marketing and price controls with new ration
cards for salt, sugar, rice, soap, and cooking oil, administered by the Internal Commerce
Ministry. The government is hiring new market inspectors and asking the mass
organizations to help monitor prices and reduce ration card abuses.
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To improve controls over the industrial sector,) 25X1
the Sandinistas--following Soviet suggestions--are setting up a Center for Small
Industry with the authority to control business licensing, bank credits, and access to raw
materials and foreign markets. The regime hopes the Center, which will report to the 25X1
Nationr l Directorate and provide help only for politically responsive firms, will wean
private business away from the inf.uence of the Supreme Council of Private Enterprise. 25X1
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Fighting inside Nicaragua remained relatively light for the second month in a row.
The insurgents were forced to reduce their activities because of supply difficulties, and
1,200 of the 5,000 who have been operating in central Nicaragua for the past 10 months
HONDURAS
The decision of the Armed Forces to oust Chief Lopez on 1 February without
consulting President Azcona suggests the new administration will be hard pressed to
make the military accountable to civilian authorities. Although Azcona--nominally
commander in chief of the armed forces--approved the appointment of former Navy
Commander Regalado to succeed Lopez, US Embassy reporting suggests he apparently
US Embassy and I
-known as the "Fifth Promotion"--likely
will restrict the flexibility of civilian leaders in national policy.
Military corruption may emerge as the most contentious issue between civilian and
military leaders.
that Fifth Promotion officers are involved in schemes involving millions of dollars, and the
US Embassy reports that officers already are pressing the government to legislate special
GUATEMALA
President Cerezo this month appeared to be mixing pragmatism with populism in an
effort to strengthen his position among diverse sectors of society.
he continued to court the military by pledging full support to the Army's
counterinsurgency and civic action programs. On the political and human rights fronts,
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Cerezo appointed a reformist police chief in an effort to minimize corruption in law
enforcement, enhanced the authority of elected civilian governors over provincial military
commanders, and assigned nine new judges to the Supreme Court. The US Embassy
reports that Cerezo also urged the Congress to elect a human rights ombudsman and
promised a 300-member gathering of the Mutual Support Group--a leftist human rights
organization--that his government will address their concerns.
Meanwhile, despite assurances last month to US and other foreign lenders that he
would quickly implement an economic austerity package, Cerezo procrastinated and even
adopted a number of inflationary measures aimed at winning popular and labor union
support. In late February, congressional
members within his own party began to pressure Cerezo to present a stabilization plan
within 60 days or face preemptive economic legislation. Cerezo's reluctance to reduce
consumer subsidies and his recent salary increases for teachers and other public
employees has polarized his cabinet of technocrats and reformists
Moreover, he rejected his economic team's austerity plan, which Callen
for exchange-rate unification and increases in import taxes and fuel prices. According to
US Embassy sources, this action has heightened concern among private sector leaders,
who probably will adopt a cautious attitude toward future investments.
COSTA RICA
At mid-month, San Jose and Managua announced an exchange of Ambassadors for
the first time since Sandinista troops killed two Costa Rican civil guardsmen in a border
incident last May. Negotiations to resolve the dispute had been underway since late last
year, but were postponed at President Monge's
request until after the Costa Rican presidential election. US Embassy and press reporting
indicates San Jose has requested a Contadora-sponsored border commission to verify the
absence of anti-Sandinista rebels inside Costa Rica and to avert future incidents.
President-elect Arias stated that he opposed US military aid to the insurgents
because it would undermine the Contadora peace talks and hinder a political solution,
according to press reports. One of Arias's close advisers, however, told US Embassy
officials at month's end that the President-elect will back military action if diplomatic and
economic pressures fail to move the Sandinistas toward democracy and an end to the
arms buildup.
PANAMA
Panamanian criticism of US Ambassador-Designate Arthur Davis for alleged
intervention in internal affairs stirred bilateral relations at the end of February. Although
the government party pressured President Delvalle to deny agreement, the administration
stopped short of such action, and we believe that Davis will be able to take his post as
planned in mid-March.
Little progress was made in negotiations with the World Bank for a structural
adjustment loan to reverse Panama's deepening fiscal difficulties, with discussions
centering on plans for various economic reforms. US Embassy banking sot.rces indicate
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that execution of an agreement still depends on Panama's willingness to make changes
required by international bankers. Labor code revisions proposed by Delvalle have been
strongly rejected by labor leaders, despite the military's backing
Furthermore, business and military leaders have refused to
accept industrial tariff reductions to satisfy bankers' demands.
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REGIONAL PEACE NEGOTIATIONS
February saw little progress in regional peace talks. Honduran officials told the US
Embassy that the Contadora mediators--especially Mexico--resisted efforts by Honduras,
El Salvador and Costa Rica to resume discussions of the draft peace treaty, stalled since
last November. the mediators evidently 25X1
believe the document issued at Caraballeda, Venezuela in Janaury could serve as an
interim treaty, with the details on verification and security measures to be established
later. At month's end, the mediators and support group met to decide the next steps. 25X1
According to the US Embassy, the Uruguayans said that one topic under discussion deals
with efforts to press Managua for national reconciliation. In addition,
a proposal to visit Havana to enlist Castro's 25X1
assistance in encouraging Sandinista flexibility remains under consideration.
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NICARAGUAN MILITARY BUILD-UP
Punta Huete Airfield. Spoon Rest D radar
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at Punta Huete for 25X1
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New high frequency radio direction finding site
locates re a units y triangulating intercepted radio
communications, is eighth of its kind in Nicaragua
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5-7 February Daniel Ortega attends Third Cuban Communist Party Congress
in Havana.
7 February
10 February
14 February
14-15 February
26-27 February
Early March
emergency, and new elections.
Six opposition parties present document to President Ortega
which includes calls for ceasefire, suspension of state of
political parties of Latin America.
Nicaragua and Costa Rica announce normalization of relations.
Contadora mediators and Central American Vice Foreign
Ministers meet in Panama to discuss Caraballeda document.
commission.
San Jose sends team to Nicaragua to open discussions with 25X1
Managua on establishment of permanent Contadora border
Contadora Foreign- Ministers meet in Punta del Este, Uruguay.
Contadora mediators and support group Foreign Ministers
tentatively plan to visit Cuba to discuss regional peace
negotiations with President Castro. F_~
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NICARAGUAN HUMAN RIGHTS CHRONOLOGY
During February, Sandinista allegations of guerrilla human rights violations were
down for the second consecutive month. Two private human rights rou s, however,
issued a report critical of the insurgents' human rights record.
For its part, the regime came under increasing
international criticism for human rights abuses, including harsh comments from traditional
sympathizers in Western Europe. Allegations of abuses in major combat zones persisted,
and the Sandinistas developed propaganda programs to improve their image. Two
Sandinista defectors reported that Cuban advisers on several occasions encouraged the
abuse of prisoners and another source claims the regime plans to intensify its campaign
against the Church
Insurgent Human Rights Record
The proregime press reports that members of the Indian insurgent group KISAN
kidnaped and threatened residents of Indian communities returning to their traditional
villages along the Rio Coco. F-7
The proregime press reports that the government, with Cuban assistance, is
producing a film that portrays alleged guerrilla abuses of Nicaraguan women during
combat operations in Jalapa in 1982 and 1983. The film will be distributed in the US,
according to the report.
Amnesty International issued its 1985 human rights report on Nicaragua, accusing
the insurgents of "tortures and murders."
According to proregime press reports, rebels killed five civilians, including a visiting
Swiss agronomist, during a night attack on vehicle traffic traveling near Somotillo in the
north. An FDN spokesman has denied the allegations, asserting that no rebels had been
in the area for two years.
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The proregime press reports that earlier in the month Indian rebels, operating along
the Atlantic coast under the direction of insurgent leader Brooklyn Rivera, stopped a
privately owned boat, robbed the 40 passengers, and raped 15 women. The US Embassy
believes that the regime's unusual delay in printing the story suggests it may have been
fabricated to discredit Rivera, who had abandoned negotiations with the Sandinistas on
regional autonomy.
In their publicized weekly combat report, the Sandinistas allege that Indian guerrillas
operating near Puerto Cabezas halted two trucks and kidnaped two civilians, while Indian
rebels near Bonanza stopped another truck and kidnaped five civilians.
UNO announced the opening of its human rights office in San Jose,
A newsletter was scheduled for publication at the end of the
month. Office staff planned to travel to Honduras to conduct human rights seminars for
Indian rebels and several wanted to travel with Indian and FDN units to observe their
behavior. UNO also intended to send a representative to an international human rights
meeting in Europe.
The Washington Office on Latin America issued its 1985 human rights report on
Nicaragua, in which it accused the rebels of 118 separate human rights abuses.
Sandinista Human Rights Record
The US Embassy, citing the proregime press, reports that 44 persons--all draft
evaders or rebel defectors--received amnesty in Bluefields during January, making a total
of 273 for the region in 1985.
The US Embassy reports that 2,500 former National Guardsmen remain in Sandinista
prisons.
Sandinista troops murdered one child
and wounded another in the town of Dipina in central Zelaya.
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Nicaragua for crimes against national security.
According to a Costa Rican radio broadcast, the Sandinistas, in a goodwill gesture,
intend to ask to the National Assembly to pardon Costa Rican citizens imprisoned in
January fact-finding visit to Nicaragua.
According to US press, the West German Social Democratic Party--one of the
regime's closest West European supporters--released a highly critical report of its
arrest and detention of priests.
The government,
continued Sandinista harassment,
against the Church, which will include the
Most of the local employees of the Venezuelan Embassy have resigned because of
the insurgents.
in early December
1985, the Sandinistas murdered 30 families in a small village because of their support for
Rebel commanders returning to Honduras from combat inside Nicaragua,
report that in early January 1986 Sandinista helicopters
bombed and strafed a village, killing three civilians.
Sandinista troops operating along the
women.
Atlantic coast have been conducting draft roundups of Indian males and harassing Indian
sentences from the popular courts several days after Carter left Managua.
Although the Sandinistas promised visiting former President Carter that they would
release two political prisoners, the Embassy reported that the two received long prison
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10 February
The US Embassy in Managua, citing the proregime press, reports that Sandinista
officials in Rama granted amnesty to 200 rebel defectors and sympathizers. F 25X1
Amnesty International issued a report critical of the Sandinistas' human rights
record, including illegal arrests, and prolonged detentions without due process, the use of
psychological torture, and poor prison facilities. Government personnel were punished for
the abuses in only two cases.
government Army commanders, following the guidance of their Cuban advisers, murdered
wounded draftees rather than be burdened with their care.
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Amnesty International issues a report highly critical of Sandinista political
repression, especially the popular courts. I 25X1
Cuban military advisers sometimes ordered Nicaraguan soldiers to bayonet woun e
insurgents. In several instances the wounded were soaked with gasoline and set afire. F
The Nicaraguan Government released five Social Christian Party activists, but 10 still
remain in custody.
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19 February
Cardinal Obando y Bravo gave a Spanish magazine a list of 285 missing dissidents.
20 February
Sandinista
same village, they burned other homes and raped two women.
troops operating in central Zelaya burned the home of an alleged rebel sympathizer in
mid-February, killing two children, . In the
in late January, Sandinista troops murdered five adults and two children in a central
Zelaya village.
22 February
24 February
peasant anti-Sandinista leader killed in recent weeks, according to the PSC.
The Social Christian Party (PSC) informed the US Embassy that the Sandinistas
murdered a local campesino leader in Leon Department in late January. This is the third
25 February
chemical weapons against them during counterinsurgency campaigns.
An Indian leader, according to press reports, says the Sandinistas have used
25 February
to work on a farm in Rio San Juan.
A Sandinista defector reported that after his arrest in early February, he was forced
27 February
security officials
arrested and imprisoned 12 Catholic lay workers in Nueva Guinea. One died while in
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custody, probably from beatings. I 25X1
the General Directorate of State Security
conducted a series of cross-border raids into Costa Rica during 1984 and 1985 with the
intention of assassinating locals considered supporters of insurgents.
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7 February
9 February
NICARAGUAN TRIPS/VISITS
Socialist International Central American Study Group meets
with Nicaraguan officials, opposition members and church
leaders in Managua.
Former President Jimmy Carter visits Nicaragua and meets with
members of Sandinista National Liberation Front and opposition
leaders.
17 February
24 February
Nicaraguan Opposition Coalition representatives begin tour of
Europe including Portugal, Spain, Italy, France, Belgium and FRG.
Sandinista National Directorate member Bayardo Arce departs
Managua to attend Soviet Communist Party Congress in
Moscow. FI
27 February Minister of the Interior and Sandinista National Directorate
member Tomas Borge visits Peru, Brazil and Uruguay.
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COMING EVENTS IN CENTRAL AMERICA DURING MARCH
March IMF team to Guatemala. = 25X1
17-20 March Guatemalan President Cerezo will travel to Venezuela. 25X1
Mid-March President Duarte to make official visit to Costa Rica, then
Argentina, Brazil, Uruguay, and Peru. F1 25X1
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CENTRAL AMERICAN MONTHLY REPORT #31
Distribution
Copy #
32 - PDB Staff - 7F30
33 & 34 - D/ALA - 3F45
35 - C/DDO/LA - 3C3203
36 - DDO/LA - 3D5309
37 - C/DDO/0 - 3C3203
38 - C/DDO/LA/E::= - 3644
39 - C/LAS - 3B44
40 & 41 - ALA/PS - 3F38
42 - ALA Research Director - 3F44
43 - 46 - CPAS/IMC/CB - 7G07
47 - DDI/CPAS/ISS - 7G40
48 - CPAS/CDPB/CC - GH25
49 - DC/RIG/SOYA - 5E25
50 - C/LE/OCR - 1 H39
31 -
30 - Legislative Liaison - 7B04
20 - Executive Registry - 7E12
21 - DDI - 7E44
22 - DDO - 7E26
23 - IAD/SAG/SOIC - 1E4846
24 - NIO/LA - 7E62
25 - NIC/AG - 2G40
26 Comptroller - 7C21
27 - C/DDI/PES - 7F24
28 - D/OlA - Rm. 3N100, Bldg. 213
29 - Director, Legislative Liaison - 7D43
19 - SA/DCI/IA - 7E12
1 - Vice Admiral John Poindexter
2 - Mr. William Walker
3 - Mr. Donald Gregg
4 - Ambassador Shlaudeman
5 - HPSCI
6 - SSCI
7 - Lt. Gen. Leonard H. Perroots, USA
8 - Mr. Nestor D. Sanchez
9 - Mr. Ray Burghardt
10 - Lt. Gen. William E. Odom, USA
11 - LTG John H. Moellering, USA
12 - Ambassador Morton I. Abramowitz
13 - Ambassador Elliott Abrams
14 - Doug Mulholland
15 - Dr. Darnell Whitt
16 - DCI - 7D60
17 - DDCI - 7D6011
18 - Executive Secretary - 7D60
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