LATIN AMERICA REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00289R000301570001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 35
• Document Creation Date: December 27, 2016
• Document Release Date: July 18, 2011
• Sequence Number: 1
• Publication Date: July 4, 1986
• Content Type: REPORT

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Mhiftt1 F.H.E. IdJPY
OT GIVE UT
L3 ? Ae-iti UN
Directorate of 9 1
Review
Latin America
ALA LAR 86-015
4 July 1986
Copy 4 2 5
157
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Latin America
ReviewF---] 25X1
Articles Brazil's Workers Part : Moving Beyond the
"Party of Overalls"
The Workers Party, which has ties to Brazil's most militant labor
organization, is trying to broaden its geographic base and strengthen
its appeal to young voters.
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Cuba: Keeping the Journalists in LineF---] 7 25X1
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Journalists are unhappy about the regime's efforts to make the press
a more effective tool for motivating the population without loosening
tight restrictions on their freedom to report the news.
Suriname: Limited Democratization I 9 25X1
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Head of State Bouterse is spearheading changes that will give
political parties, organized labor, and business interests a limited
opportunity to participate in the policymaking process.
Barbados: Errol Barrow Returns) 13 25X1
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Newly elected Prime Minister Barrow is expected to be generally
pro-US despite recent statements that reflect a nationalistic,
independent theme.
Bolivia: Struggling for Economic Recovery 17 25X1
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A stabilization program launched last August has persuaded some
foreign lenders to offer Bolivia new credits, but the government's
efforts to sustain the recovery will be hampered by its limited ability
to attract foreign investment, boost exports, and hold down
inflationary wage pressures from leftist unions.
Briefs Cuba: 26 July Celebration
Mexico-Cuba: Suspension of Credit
Secret
ALA LAR 86-015
4 July 1986
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Turks and Caicos Islands: Resisting British RuleL_
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Latin America: Bogota Summit of Coffee Producers
22
Cuba Chronology)
23
Articles have been coordi
within CIA. Comments an
be directed to the Chief, P
nated as appropriate with o
d queries regarding this p
roduction Staff, Office of
ther offices
ublication may
African and
Latin American Analysis,
Secret ii
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Latin America
Review
Brazil's Workers Party:
Moving Beyond
the "Party of Overalls"
The Workers Party (PT), one of two significant leftist
opposition parties in Brazil, is gradually expanding its
political base. Until mayoral elections last November,
support for the party was largely restricted to
organized labor in Sao Paulo, but the PT's improved
electoral performance highlighted its broadened
geographic base and strengthened appeal, especially
to young voters. The PT is also intensifying efforts to
foster foreign contacts, predominantly with Soviet-
aligned governments. With only six representatives in
the 479-member Chamber of Deputies, the party is a
minor actor in congressional politics, but its ties to the
country's most militant labor central and its
accelerated agitation for agrarian reform make the
PT a potentially disruptive force. Moreover, by
projecting an image as a genuinely Brazilian socialist
party that represents the interests of the poor, the PT
is positioning itself to take advantage of popular
reaction if President Sarney's economic policies begin
Building a Power Base
The PT was spawned by the militant labor activism
that erupted in the industrial suburbs of Sao Paulo
during the late 1970s. In 1978, Luis Ignacio (Lula) da
Silva led the metal workers of Sao Bernardo dos
Campos in the first major strike since the military
assumed power in 1964. Their success in pressuring
for negotiated contracts to replace government-
decreed wage settlements that had held down real
wages caused other unions in metropolitan Sao Paulo
to join in protracted strikes in 1979 and again in 1980.
Following the 1980 strike, the government arrested
Lula and removed him from his union position, but by
then he was ready to ride his growing reputation as
Brazil's "Lech Walesa" into the political arena by
forming a party dedicated to working-class interests.
Meneguelli and Lula. Leaders that emerged vela
The PT is an amalgam of four major groups
representing organized labor, the "progressive" wing
of the Catholic Church, various radical leftist
miniparties, and intellectuals. The ideological
perspectives of these groups range from a hardline
Marxist-Leninist position to a relatively moderate
social democratic orientation.
In the six years since its creation the PT has sought to
expand beyond its worker base, but its labor arm-the
Unified Workers Central (CUT)-remains the party's
backbone. Established in 1983, CUT has been
Brazil's fastest growing labor coalition and now
claims to represent 14 million workers and 1,200
syndicates. With the active involvement of PT
members, CUT has weaned several important unions
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ALA LAR 86-015
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away from their previous affiliation with two of the
country's Communist factions. In addition to their
traditional focus on urban workers, CUT organizers
have been increasingly effective in recruiting among
rural workers, according to the US Embassy. Because
of its links to CUT, the PT is the only party with the
ability to challenge the government in the labor field.
CUT President Jair Meneguelli is a trusted Lula
protege, and[ I a
faction known as the workers group represents the
interests of organized labor within party councils. In
February, CUT leaders
promised to support PT candidates in the
gubernatorial and congressional elections scheduled
for 15 November.
The "progressive" wing of the Catholic Church also
has been important in helping the PT build a power
base, especially in Sao Paulo. Because Paulo Cardinal
Evaristo Arns, an influential leader of the Sao Paulo
archdiocese, believes that the party's views on political
and social issues are compatible with his brand of
liberation theology, he has encouraged parish priests
and other grassroots church representatives to
cooperate with the PT. Lula frequently consults with
Arns and PT leaders occasionally attend weekend
religious retreats with priests from the Sao Paulo
area The US
Consulate in Sao Paulo reports that local affiliates of
the church's workers pastorate, which promote the
creation of workers' committees in factories and
neighborhoods, join with the PT in organizing rallies
the majority of the politically active members of the
country's 100,000 ecclesiastic base communities ally
with the PT and the Democratic Workers Party, the
other significant non-Communist leftist group,
Since its inception, the PT has provided an umbrella
for Marxist-Leninist and Trotskyite microparties,
some of whose members participated in the guerrilla
struggle against military rule in the late 1960s and
early 1970s. According to press accounts, the three
Marxist-Leninist and five Trotskyite factions
affiliated with the PT may have as many as 3,000
members, which amounts to less than 10 percent of
the party's total membership. Because members of
these groups are well organized, dedicated, and
ideologically committed, they exercise an influence
disproportionate to their size. Press reports indicate
that the PT has relied on these factions to help it
establish a presence in some states in the northeast.
Although PT moderates criticize the refusal of the
radicals to heed party discipline
party leaders have balked at
expelling radical factions out of fear of exacerbating
internal dissension and because some of these groups
help mobilize voters and attract important labor
support.
Led by Federal Deputy Jose Genoino, the
Revolutionary Communist Party is the largest and
most active Marxist-Leninist splinter group. It advises
its members not to acknowledge publicly their
factional affiliation and urges them to "destabilize"
the Sarney government. The other Marxist-Leninist
groups are the Brazilian Revolutionary Communist
Party, several of whose members were arrested in
April in a widely publicized bank robbery, and the
recently founded Revolutionary Communist
Movement. The Trotskyite miniparties are based
largely in major urban areas, where they have made
inroads among younger workers in important unions
and have small student followings. Socialist
Democracy and Socialist Convergence are the most
significant Trotskyite groups, followed by Liberty and
Struggle, Labor Cause, and the Trotskyite
Revolutionary Workers Party.
The most moderate of the PT factions is the
"intellectual tendency," led by party Secretary
General Francisco Weffort, a political scientist at the
University of Sao Paulo and member of a PT-
affiliated think tank. The faction's members include
other prominent academics, and the majority of the
PT's federal deputies. Convinced that the PT must
attract middle-class support if the party is to prosper
electorally, Weffort has taken the lead in packaging
the party's message in a manner calculated to appeal
to a broader audience. The PT's improved electoral
performance last fall gave a major boost to the
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Secret
Weffort faction, and
remains in the ascendancy.
the group
Improving Electoral Performance
After a disastrous performance in the Sao Paulo
gubernatorial election in 1982 in which Lula finished
fourth, mayoral elections last November represented
an important step forward for the PT. The victory in
Fortaleza-Brazil's fifth-largest city and an area long
dominated by conservative political bosses-was the
highlight, but party candidates also performed well in
Goiania (40 percent), Vitoria (26 percent), and Sao
Paulo (nearly 20 percent).
Weffort argues that the election results vindicated his
faction's strategy by demonstrating that the PT not
only is moving beyond its Sao Paulo heartland but is
also shedding its image of the "party of overalls" by
attracting middle-class voters. The PT's postelection
analysis indicated that the party did not make a major
breakthrough with the middle class but attracted a
substantial number of young voters
leaders are persuaded, however, that the middle class
has a positive image of the PT and is determined to
try to attract its support.
A key to the PT's success in trying to shed its image
as strictly a party of organized labor has been its
ability to field attractive, well-educated candidates,
many of whom have considerable local name
recognition. US Consulate and press reporting
indicates that last November such candidates
strengthened the party's ability to attract a range of
"protest voters" who were determined to use their
ballot to register displeasure with the government. In
Fortaleza, photogenic, Vanderbilt-educated Maria
Luiza Fontenelle relied on assistance from members
of the progressive church and radical leftist activists
to win support from youth and independent voters,
according to press accounts. Like Fontenelle, the PT
candidate in Vitoria came from an established
political family, and the party's mayoral candidate in
Sao Paulo last fall was a scion of a leading Paulista
family.
Mayor Maria Luiza. All types
of problems in Fortaleza F_
According to the US Consulate in Sao Paulo, leaders
of the labor wing resent the growing number of
candidates without a trade union background and
grumble that the PT is becoming the party of radical
chic. Nevertheless, PT candidates selected so far for
the elections in November reflect the trend toward
naming university-educated professionals.
New Foreign Policy Initiatives
As PT leaders attempt to construct a broad-based but
ideologically uncompromising socialist party at home,
they also are expanding foreign contacts, especially
with the Soviet Bloc. They are proceeding cautiously
with these initiatives, however, to preserve the party's
nonaligned image and to avoid damaging relations
with West European groups.
The PT has fostered ties to West European socialist
parties and maintained informal links to the Socialist
International since soon after the party's creation.
Western
European socialist and church organizations have
supported the party by funneling funds to various PT-
affiliated research entities in Brazil. According to the
US Consulate in Sao Paulo, party members
acknowledge that the West German Social
Democratic Party's Frederich Ebert Foundation has
been a significant financial contributor]
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Long an outspoken admirer of Cuba's Fidel Castro,
Lula has intensified his dealings with the Castro
regime over the last year or so in response to overtures
from the Cuban leader. With a view toward
expanding Cuban influence in Brazil following the
transition to civilian rule there, Castro hosted the PT
leader twice in 1985 and again in February 1986
during the Cuban Communist Party's Third
Congress. Also last year, Havana named a member of
the Cuban Communist Party's America Department
as its unofficial representative in Brazil. To
underscore the importance Castro places on
developing ties to the PT, the representative
established his headquarters in Sao Paulo.
The Cubans have also played a role in promoting ties
between the PT and other pro-Soviet governments.
Following initial contacts in Havana a year ago when
Castro introduced Lula to the East German
Ambassador, the PT leader visited East Berlin in
January and established official party relations with
The 1986 Elections and Beyond
The rejuvenated workers party is focusing on
increasing its membership and organizing for the
elections in November, but setbacks in recent months
are likely to hamper its performance. Impressed by
the PT's success last November, Governor of Rio de
Janeiro Leonel Brizola, who heads the Democratic
Workers Party, welcomed a tactical alliance to push
Eduardo Suplicy. Suggesting that the PT define
its ideology F~
campaign film.
for direct presidential elections this year. Lula quickly
scotched prospects for such cooperation when he
declared in December that Brizola would "walk on his
mother's neck" to gain the presidency. The
overwhelmingly positive public response to President
Sarney's economic package, announced on 28
February, assured that opposition efforts to cut short
his term would fail and put the PT on the defensive.
In addition, Fortaleza Mayor Fontenelle has been
widely criticized by the press for her failings as an
adminstrator, and one of the parties in Sarney's
coalition plans to highlight her difficulties in its
Perhaps the most serious blow to the PT's electoral
strategy resulted from a bank robbery in Bahia in
April by a group whose members belong to one of the
party's radical leftist minifactions. The impact on the
party's image was particularly grave because it came
only a few months after Lula had stated publicly that
under certain conditions he would favor armed
popular struggle.
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The most notable casualty of the bank robbery has
been Eduardo Matarazzo Suplicy, the PT candidate
for governor of Sao Paulo. Early polls showed Suplicy
ahead in Metropolitan Sao Paulo thanks to strong
residual support there following his mayoral bid,
although he trailed in the interior. According to press
reports, Sarney was sufficiently concerned about a PT
victory in the country's major industrial hub that he
encouraged respected businessman Antonio Ermirio
de Moraes to enter the race. Early polls also raised
doubts about the voter appeal of the prospective
candidate from the leading party in Sarney's
governing coalition, and by boosting Ermirio the
President apparently hoped to improve prospects that
a centrist would be elected to this key gubernatorial
post.
Suplicy slipped badly in the polls immediately after
the bank robbery, and he continues to be hindered by
the party's lack of a base outside Metropolitan Sao
Lula's Views on Key Issues
? Party ideology. `I believe (the PT) is a Marxist
party in practice ... it is not a Communist party,
but it is not anti-Communist either."
? Party goals. "The PT is a socialist party that seeks
to give Brazilian workers what they have never had:
control over their lives, their jobs, and their
political and economic fortunes. "
? US foreign policy. "The United States is only
interested in Brazil and in the rest of Latin America
as a source of cheap materials and labor in
furtherance of its policy of capitalistic
exploitation."
? The superpowers. "Both superpowers seek to
dominate the world, but US domination of Latin
America is worse than Soviet domination of 25X1
Eastern Europe. " 25X1
Suplicy probably will garner a
sufficiently large percentage of the vote to justify the
PT's middle-class strategy.
Party spokesmen publicly state that after 15
November their representation in Congress will jump
from six to nearly 50 deputies and from zero to four
senators. Both totals appear grossly inflated. PT
leaders probably would view the election of 20
deputies as a major victory, particularly because the
electoral reform law about to be approved by
Congress seems certain to restrict the amount of free
radio and TV time allocated to small parties. F__~
Meanwhile, the PT is slowly recovering from its
surprise over the government's economic package and
appears to have settled on two main tactics. On the
urban labor front, PT and CUT leaders threaten to
carry out a nationwide general strike as the elections
approach. PT spokesmen claim that in nine states the
majority of party members are rural workers, and
press accounts indicate that the PT is accelerating
efforts to organize landless peasants. Against this
background, Lula's recent public commitment to
agitate at the grassroots level for more rapid 25X1
implementation of land reform will further complicate
government attempts to deal with the increasingly
polarized agrarian scene.
Beyond the elections this year, prospects for the PT
depend upon a number of factors, including the
continued success of the government's anti-inflation
plan, the willingness of the PT to ally with other
leftist groups-especially Brizola's party-and the
cohesiveness of the major parties. President Sarney, 25X1
conscious of the potential of the left for rapid political
advances, has strengthened his determination to
ensure that his economic policies succeed. An
electoral alliance between the PT and the Democratic
Workers Party would be significant because it would
unite complementary bases of support, but the
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personal antipathy between Lula and Brizola and PT
disdain for the Rio Governor's populist approach
probably will continue to militate against serious
cooperation. Nevertheless, in a highly fluid party
system where even Brazil's leading parties are not
certain to remain intact after November, the PT
stands out because of its coherent ideology and sense
of purpose. PT leaders are buoyed by what they see as
their potential for exploiting the tremendous
disparities between the country's rich and poor and
are optimistic that over time their efforts at building a
mass-based party will bear fruit.
Secret 6
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Cuba: Keeping the
Journalists in Line
The recent plenum of the Cuban Journalists Union
(UPEC) apparently generated an unusual ideological
battle over the proper role of journalists. As best we
can determine, the controversy centered on the
dilemma inherent in the regime's desire to make the
press a more effective tool for motivating the masses
without loosening the tight restrictions on journalists'
freedom to report the news. President Castro was an
active participant in the marathon session, according
to the Cuban media, and apparently was treated to a
frank assessment of what makes the Cuban press so
dull and unappealing. Despite his presence, the
proceedings seem to have resolved nothing, which
bodes ill for the regime's hopes that the press will play
a key role in restoring vitality to Castro's flagging
revolution as austerity increases.
The Plenum
The UPEC plenum on 26 May dragged on for 18
hours and was described by a contact of the US
Interests Section in Havana as "one long dog-fight."
A draft document on the future of journalism in
Cuba, prepared for the UPEC congress in September,
probably sparked much of the friction. The journalists
at the plenum, apparently chafing under the tight
controls governing their work, engaged in a heated
give-and-take that-on at least one point-directly
challenged official policy. They criticized the failure
of the Cuban media to report on the recent videotape
pornography scandal involving two party officials in
Havana and pointed out that, in the resulting news
vacuum, exaggerated accounts of the affair quickly
swept from one end of the island to the other by word
of mouth. Some of their complaints apparently struck
home because Castro, according to an Interests
Section contact, ordered that various government
officials be brought to the meeting to listen to the
debate.
According to US Interests Section reporting, the
journalists are caught between the party's conflicting
demands on the media. On the one hand, the party
expects UPEC members to produce a more effective
Marxist-Leninist tool to help combat increasing
corruption, apathy, and antisocial behavior and to
reawaken in the Cuban people a sense of
responsibility, dedication, and commitment to
revolutionary ideals. Journalists complain, on the
other hand, that the public finds their product stale
and uninteresting because the regime narrowly limits
what can be printed or aired on radio and television
and, at the same time, requires the publication of
reams of irrelevant material such as the recent week-
long coverage of the Mongolian Party Congress,
according to the US Interests Section. If the media
continue to comply with the latter requirements, they
cannot achieve the goals of the former.
Investigative Journalism
We suspect the UPEC members, having been given
brief tastes of investigative journalism in the early
1980s, are anxious to be allowed again to expose
bureaucratic weaknesses and incompetence that are
currently promoting widespread disillusionment. In
1981, for example, articles in Bohemia, the national
news magazine, described with devastating frankness
the unsatisfactory service of the country's rail system.
Another Bohemia journalist revealed how laborers in
a foundry in Havana were having to work without
safety goggles and appropriate protective clothing
because of bureaucratic squabbling and
administrative inefficency. In 1984, the magazine
revealed that cattle at Cuba's largest livestock
fattening facility were literally drowning in manure
that was not disposed of properly. This modest
experiment in public criticism was short-lived, most
likely-according to the US Interest Section-
because it offended some official who was high
enough in the leadership to exert significant political
clout.
Secret
ALA LAR 86-015
4 July 1986
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many-sided examination of journalism in our
country." Perhaps unconsciously underscoring the
very dilemma the journalists were trying to describe,
Granma called on the press "to reflect popular
problems, concerns, and worries" but also stressed the
need above all to maintain an unshakeable
revolutionary position against anything that damages
the revolution. Such ambivalence indicates that little
Cattle drowning in manure was only one of many
irregularities uncovered by newsmen
investigating conditions in Cuba's largest feed lot
in 1984. Returning six months later in a follow-
up visit, the journalist found many irregularities
still uncorrected.
It is clear, in our judgment, that the journalistic
ferment that boiled over at the UPEC plenum does
not stem from newsmen who challenge the regime's
goals or its basic philosophy. In essence, it results
from their differences with the regime over how
journalists can best contribute to the achievement of
those goals while adhering to that philosophy.
Because the journalists probably see themselves as
having a better appreciation of the reality of every day
life in Cuba than the party's ideologues, they are
frustrated over their inability to help build a better
society by exposing its ever more obvious flaws. The
ideologues, however, almost certainly see the potential
for political disaster in investigative journalism, in
part because they fear that the images of many of the
regime's most revered leaders will be destroyed.
Media Coverage of the Plenum
The sensitivity of the issues raised at the plenum was
reflected in the circumspect treatment the meeting
received in the press. In an unusual delay, the party
newspaper Granma-the only Havana paper to report
on the event-waited five days before providing
coverage and even then made no mention of the
confrontational nature of the debate. While criticizing
"those who impede access to information,"Granma
cautiously described the discussion as "a serious and
was resolved by the plenum.
Outlook
The unusual length of the plenum-18 hours-
suggests Castro was caught off balance by the
journalists' strong reaction to the draft document. His
impromptu summoning of officials to the session and
Granma's subsequent criticism of those who block
access to information suggest he recognized the
validity of at least some of the UPEC members'
arguments and decided to prolong the plenum to give
them the opportunity to plead their case fully. We
believe, however, that is as far as he is likely to go to
appease them. Some criticism will continue to appear
in the press but it will be carefully controlled and
most likely will be directed primarily at the worker or
the low-level manager who does not demand enough
of his employees. High officials and policy will
continue to be out of bounds for critics.
This, of course, is not likely to defuse the journalists'
ire, and further frictions seem sure to surface at the
UPEC congress. As the US Interests Section notes,
the Cuban domestic propaganda apparatus has been
undergoing considerable stress for more than a year.
Since early 1985, many personnel changes have been
made in key posts in both the electrical and printed
media and more are probably in the works. Given the
embarrassment of the plenum, UPEC President
Ernesto Vera may be sacked at the union's congress in
September despite his tenure of 20 years. In the wake
of the plenum, the role of the press is still unresolved
and troublesome. We agree with the Interests Section
assessment that social unrest and the perilous state of
the economy make it unlikely that Castro and his
advisers will allow any new and daring initiatives to
emerge to solve this Marxist "objective
contradiction."
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Democratization
In a series of actions designed to influence potential
aid donors and shore up domestic support, Head of
Government Bouterse is spearheading changes that
will give political parties, organized labor, and
business interests a limited opportunity to participate
in the military's policymaking process. Rather than
signalling any genuine shift towards democratization,
we believe these changes probably reflect Bouterse's
continuing attempts to persuade The Hague and
Washington to renew large-scale economic assistance.
In addition, Bouterse hopes to expand his support base
in the wake of a worsening economic situation and
several recent blows to his domestic and international
prestige. Although the moves will result in a
reshuffling of key government officials, Bouterse most
likely will stop short of reform that would threaten the
military's absolute authority.
Steps Toward Reform
In the past few months, the Surinamese leader has
taken three steps toward political reform. First, in late
May, Bouterse convinced the three major parties to
become full members of the Topberaad, or Supreme
Advisory Council. This marked a change in the
parties' longstanding unwillingness to become closely
linked to the government. The parties probably had
been reluctant to become full members of the council
and bolster Bouterse's legitimacy. We believe party
officials may have agreed to become full members
because they felt such a move would place them in a
better position to work for democratic reforms and
would increase their visibility with the public should
elections occur. One party that had resisted joining
probably gave in because it feared its non-
participation would enable the other parties to gain
popular support at its expense.
Second, Bouterse pressured the cabinet to resign in
mid-June,
For
their part, the parties may gain greater day-to-day
administrative control over various ministries. In
Ruling military junta (from left): Etienne
Boerenveen (awaiting trial in Miami on drug
trafficking charge) Head of Government Desire
Bouterse, Paul Bhagwandas (has resigned), Ivan
Graanoogst, and Arthy Gorre (has resigned).F_
addition, they probably would be in a better position
to assume power should a transition to a civilian
government occur.
Finally, according to a press report, the National
Assembly-with Bouterse's backing-has prepared a
draft constitution that calls for elections. The latest
agreement between the parties and military calls for a
constitution and parliament based on the "true
principles of democracy," a phrase the US Embassy
says the population understands to mean elections.
Bouterse's Motives for Rapprochement
Bouterse's latest push to gain greater participation by
the parties reflects his attempts to bolster the regime's
domestic and international legitimacy in the wake of a
government drug scandal and rapidly deteriorating
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Secret
Boerenveen in Miami on drug trafficking charges.
This incident, has
confirmed suspicions in The Hague and elsewhere of
the unsavory nature of the regime and has raised
speculation that Bouterse is involved in trafficking.
Relations with The Hague suffered another blow
when Suriname's Charge, Marciano Jesserun, was
detained in The Hague and found to be carrying a
concealed weapon. After his release and recall,
Jesserun issued vehemently anti-Dutch statements on
Surinamese television.
Bouterse probably also wants the recent
rapprochement with the parties to strengthen his
domestic support base and deflect blame from the
military for the country's economic state. Suriname is
beginning to experience shortages in consumer goods
and faces a severe foreign exchange shortage.
According to US Embassy reporting, members of the
usually placid Surinamese population recently
demonstrated against the opening of a new tile factory
with cries of "We can't eat tiles." Nevertheless, a US
Embassy official says that the military's murder of 15
opposition leaders in 1982 effectively eliminated any The military's unwillingness to relinquish power
serious, organized opposition to military rule from the stems, in part, from its concern about possible
civilian quarter. F___1 repercussions for the murders in 1982.
Military discontent poses the greatest threat to
Bouterse's rule. growing
dissatisfaction with Bouterse from within the military,
both because of the Boerenveen affair and the
country's failing economy. According to the US
Ambassador, a fast and steep economic decline that
prompted a massive show of popular discontent could
spark a new coup attempt from the military.
Limits to Democratization
Despite the growing dialogue between the parties and
military, the recent changes will give the parties no
real authority in the government, and formidable
barriers remain to any return to democracy. The
parties' full membership on the Topberaad signifies
no genuine shift in power, because this body is merely
advisory and has no enforcement powers. Similarly, According to a US Embassy report, the parties will
according to a US Embassy report, the military cooperate with Bouterse until it becomes clear he does
intends to retain veto power over all cabinet decisions. not intend to hold elections. A US Embassy contact
Moreover, any constitution would be toothless without
the military's willingness to enforce it.
Political party leaders: Henk Arron (National
Party of Suriname), Jaggernath Lachmon
(Progressive Reform Party), and Willy Soemita
a body of US Embassy reporting suggests Bouterse is
trying to circumvent demands for elections by
establishing a system of local administrative
councils-a plan that could delay voting indefinitely.
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says the parties want the Topberaad to draft an
"action platform" that would include an elections
timetable, a political parties law, and a way to update
the voters' registry. if agreement
is not reached quickly on such a plan, the parties will
withdraw support from the government and leave the
Topberaad. Nevertheless, we believe the parties are
prepared to work with Bouterse for as long as possible
before removing their support. According to Western
observers cited in the Embassy report, it would take at
least a year to revise voters' lists. In the meantime,
Bouterse will work to capitalize on his largely
cosmetic democratic reforms.
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Barbados:
Errol Barrow Returns
The change of government in Barbados has led to a
change of style rather than policy, according to the
US Embassy. Newly elected Prime Minister Errol
Barrow is expected to be generally pro-US despite his
recent statements to the press that reflected a
nationalistic, independent theme. Barrow, whose
Democratic Labor Party won a landslide victory over
the ruling Barbados Labor Party on 28 May, favors a
reduced role for Barbados in the Regional Security
System (RSS).' In addition, Barrow is on record
calling for a shift of military resources slated for the
RSS to drug enforcement and other public safety
The Unexpected Victor
According to the Embassy, most political observers,
including Barrow supporters, were surprised by the
magnitude of victory by the Democratic Labor Party,
which garnered 24 of 27 parliamentary seats while
former Prime Minister St. John's party won the
remaining three seats. Barrow's appeal to the voters
after 10 years of Barbados Labor Party rule was
enhanced by his promises of more employment and
tax cuts, and his effective characterization of St.
John's government as corrupt. According to US
officials, most observers believe that a heavy turnout
of new young voters coupled with a massive shift of
uncommitted votes to the opposition produced the
lopsided Barrow victory.
Since assuming power, Barrow has publicly criticized
US policy in the region and characterized leaders of
Jamaica and Dominica as mendicants. According to
the Embassy, however, this is a result of Barrow's
plain-spoken nationalistic style and Barbadian pride
rather than an indication of a shift in foreign policy.
'Antigua, Barbados, Dominica, St. Lucia, and St. Vincent
established a Regional Security System in 1982 because of their
concern about the radical Bishop regime in Grenada. St.
Christo her-Nevis joined in 1984, and Grenada followed in March
1985.1
US officials assess the Prime Minister as similar to
other leading Caribbean politicians-he is given to
rambling rhetoric and oratorical posturing, but also
projects an image of humility and honesty. Given his
landslide, the "Father of Barbadian Independence" is
sure of his popularity and prestige and speaks his
mind without reflecting on the consequences of his
actions.' The Embassy also points out that Barrow
behaved in a similar fashion during his tenure as
Prime Minister from 1961 to 1976, when he
maintained good relations with the United States.
Economic Policy
On the basis of his previous record and recent
economic policy statements, it is apparent that
Barrow, who will function as Minister of Economic
Affairs, will continue to foster private-sector-led
economic development that has raised average living
standards to among the highest in the Caribbean.
Although he has called for tax reform that would ease
the burden on the working poor and the important
' Barrow, a leading advocate of Barbadian independence, was
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tourist industry, any tax cuts probably would be
coupled with reductions in government spending.
Barrow intends to use tax and investment incentives
to encourage growth in light manufacturing,
particularly electronics assembly, furniture
manufacturing, and textiles.
Barrow has announced that he would welcome a
leading role in discussions with the United States and
other Caribbean countries to revise the Caribbean
Basin Initiative. He has criticized other countries for
seeking economic assistance from Washington rather
than concentrating on generating growth. In his view,
Caribbean countries should seek investments designed
to strengthen exports of finished goods.
Although Barrow reportedly
plans to shift personnel from the RSS to the Police,
coast guard, and other domestic security forces,
the shifts would
most likely occur in the reserve Barbados Regiment
rather than in the 500-man active army component.
According to the Embassy, Barrow's position on
defense and the RSS stems from his concern over the
government's limited resources and public perceptions
of military waste. With this in mind, US officials say,
the Prime Minister wants to downplay the defense
duties of the security forces and emphasize their law
enforcement and public safety activities, particularly
narcotics interdiction.
Barrow's promise to increase the size of the coast
guard and marine police is an indication of his desire
to crack down on drug transshipment and use. The
Minister of Finance told Embassy officials that
narcotics control is the government's top priority
because it believes drug activity poses a serious long-
range threat to social stability.
The Embassy says a source close to the Prime
Minister has stated that the government would give
serious consideration to re-establishing a US military
base.' According to US officials, the government
probably believes that a US base could provide the
island with all the security it needs, reduce Barbadian
defense expenditures, generate local revenue, and
appease Washington. No formal discussions have
taken place or are scheduled, however, on this issue.
Foreign Relations
Barrow's stinging public criticism of the conservative
leaders in Jamaica and Dominica and their close ties
to the United States could lead to cooling relations
with those countries. Prime Ministers Seaga and
Charles appear to take Barrow's public scorn at face
value. Seaga told US officials that he believes the
Barbadian Prime Minister is in the same ideological
camp as Jamaican opposition leader Michael Manley,
who is a close friend of Barrow.
On the broader diplomatic front, Barrow reportedly
will consider expanding ties to a wide range of
countries. Chinese diplomats in Bridgetown are
concerned that Barrow's government may attempt to
re-establish relations with Taiwan, according to US
officials. The Embassy says Barrow admires Taiwan,
as well as Israel and Singapore, all of whom he
regards as feisty underdogs.
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Outlook
Barrow is likely to continue making sharp criticisms
of US policy and conservative leaders in the region
without veering appreciably to the left of the previous
government's policies. Nevertheless, the Barbadian
Government may at some point view the
establishment of a Cuban press office in Bridgetown
as a useful gesture of independence from Washington.
We doubt that the Barbadian Government would go
as far as allowing Cuba a resident diplomatic presence
because of the repercussions with Washington, and
the generally negative reaction at home in a basically
conservative society.
Barrow probably will want increased law enforcement
training and equipment from the United States and
the United Kingdom before implementing
reassignments in the Defense Force. Moreover, a
reduced Barbadian role in the RSS may lessen other
members resentment of the Barbadian
coordinator, Brigadier Rudyard Lewis, which would
benefit the organization in the long term. In addition,
the transfer of Defense Force personnel to the coast
guard and other internal security units probably will
enhance Barbadian narcotics inderdiction capabilities.
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Secret
Bolivia: Struggling
for Economic Recovery
The economic stabilization program launched by
President Paz Estenssoro last August to strengthen
the private sector and improve external accounts has
achieved sufficient success to persuade some foreign
lenders to offer new credits. La Paz has obtained a
standby loan with the IMF and has initiated
rescheduling talks with the Paris Club and
commercial banks. We judge, however, that the
government's efforts to sustain an economic recovery
will be constrained by its limited ability to attract
foreign investment, boost exports, and hold down
inflationary wage pressures from leftist labor unions.
Paz Estenssoro's New Economic Program
President Paz Estenssoro's economic plan, designed
to strengthen the private sector and invigorate foreign
trade, took effect last September, when hefroze
public-sector wages for ten months, removed price
and exchange controls, and halted unbacked
monetary emissions. The program produced striking
improvements, according to the US Embassy:
inflation dropped from an annualized rate of 23,447
percent in September to 1900 percent in April; the
peso has stabilized in both official and parallel
markets; and the government has begun to receive
Halting the Economic Tailspin
When Paz Estenssoro took office last August, the
economy was in chaos. Public finances, which had
been deteriorating steadily since 1982, reached a new
low in 1985 when the Central Bank was forced to
finance the rest of the public sector. Inflation was
soaring at an annual rate of over 20,000 percent; the
official exchange rate was pegged at 67,000 pesos per
dollar while the parallel rate pushed past 1 million
pesos per dollar; and arrears on the public external
debt had quintupled since 1982 to over $700 million.
In addition, per capita income had fallen by about 30
percent over the past decade. Almost immediately,
Paz Estenssoro instituted a program designed to
stabilize the economy and to restore government
control over the operations of the Treasury, Central
Bank, and state enterprises.
Although La Paz expected these measures to produce
a modest recovery in the short run, its hopes were
dashed when the prices of key exports declined. In
October, world prices for tin, historically Bolivia's
most important export, fell below domestic production
costs, forcing several mines to close. Natural gas,
which in recent years has eclipsed tin as Bolivia's
largest export earner, also declined in price. We
estimate that export earnings will drop 10 percent and
unemployment will rise by 450,000 this year. A
setback of lesser economic magnitude has been the
revenues from state enterprises.
The Paz Estenssoro government also enacted a series
of administrative measures intended to strengthen the
economy over the longer term. La Paz prepared its
first federal budget in five years, a major step toward
accurate monitoring of the economy and toward
providing the statistics needed to receive foreign aid
and loans. It audited its Central Bank and, according
to the US Embassy, brought charges of graft against
93 former officials. Finally, it passed a
comprehensive tax reform law, crucial to
stabilization because tax revenues have amounted to
less than one percent of GDP-the lowest in the
world. Taxes will be easier to collect and enforce and
are expected eventually to yield ten percent of GDP
per year in revenues, according to the US Embassy.
The last major step of the new economic plan is to
streamline the public sector. According to the US
Embassy, Paz Estenssoro aims to eliminate up to
200,000 excess government positions and to
decentralize large state enterprises in order to lessen
the burden of bureaucracy and enable the private
sector to operate more freely. Enactment of this step
is currently on hold, awaiting approval of the IMF
standby loan and the inflow of funds to be used for
severance payments to those laid 4
Secret
ALA LAR 86-015
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Bolivia: Consumer Price Increase,
1984-86 a
10,000
100 I II III IV I II III IV I IIb IIIb IVb
1984 1985 1986
'Quarterly data annualized.
bEstimated.
flooding of Lake Titicaca and surrounding rivers over
the past eight months, which has left over 83,000
Bolivians homeless and destroyed 30,000 acres of
crops, according to the US Embassy.
To overcome a financial crisis, La Paz approached the
IMF last year to discuss arranging its first standby
loan since 1980. The bungling economic policies and
defaulted debt payments of previous administrations
have caused Bolivia's international sources of credit to
dry up. Because of his personal popularity and de
facto majority in Congress, Paz Estenssoro was able
to break with Bolivia's past refusal to deal with the
Fund. Standby negotiations with the IMF, originally
expected to be completed by the end of January, hit a
snag, however, when La Paz's economic program lost
momentum. Partly in response, Paz Estenssoro
reshuffled his cabinet and directed his new ministers
to revive the program. The government was able to
hold prices steady in February and March, and the
exchange rate stabilized. In April, Congress passed a
major tax reform that the IMF deemed essential, and,
in late May, La Paz and the IMF agreed on a plan to
raise domestic energy prices.
The IMF Standby and Other Financial Inflows
Approval of the $55 million standby loan will trigger
the release of project loans and aid from the World
Bank and foreign governments. According to the
World Bank, if Bolivia covers its external financing
needs of $1.3 billion this year, it can avoid a further
erosion of GDP. Formal talks with the Paris Club to
reschedule some $1 billion in loans and loan
guarantees took place late last month. La Paz hoped
to include an additional $870 million in non-Paris
Club debt in these negotiations and to obtain up to
$143 million in new loans and aid from Paris Club
lenders, according to the US Embassy. Bolivia has
already met once with its commercial bank lenders,
and talks will commence in earnest this summer. The
banks, according to the US Embassy, have proposed
to roll over Bolivia's entire debt of $670 million in
exchange for an $85 million cash payment this year;
privately, bankers indicated that they would accept a
minimum cash payment of $10 million.
Bolivian efforts to comply with the requirements of an
IMF program are likely to be haphazard at best. For
example, demands on the federal coffers will increase
this summer when La Paz removes the public-sector
wage freeze and makes severance payments of an
estimated $50 million to recently dismissed
government employees. We believe that La Paz will
find it politically difficult to deny demands for larger-
than-targeted wage hikes, worsening its chances of
attaining its IMF fiscal deficit target of 6.4 percent of
GDP. In addition, the hikes in wages and
hydrocarbon prices may rekindle hyperinflation.
La Paz's limited potential to attract foreign
investment and boost exports will hamper its efforts to
sustain an economic recovery. Although Paz
Estenssoro's stabilization program has produced
impressive results thus far, Bolivia's record as an
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Bolivia had a GDP of about $3.2 billion in 1985, with
income per capita at about $410. The economy is
concentrated largely on agriculture, manufacturing,
and commerce. The agricultural sector accounts for
20 percent of GDP and 47 percent of total
employment; manufacturing accounts for 15.5 percent
of GDP and 11.6 percent of employment; commerce
produces 15 percent of GDP and accounts for 8
percent of employment. The country's main crops
include potatoes, corn, rice, sugarcane, coca, yucca,
bananas, and coffee; La Paz imports significant
quantities of wheat. Agricultural development in
Bolivia is constrained because the bulk of the
population lives in the unproductive altiplano region,
where the weather is harsh, extremely small holdings
of land predominate, and the infrastructure is
underdeveloped. Major industries include mining,
smelting, petroleum refining, food processing,
textiles, and clothing. Most industries are
concentrated in La Paz, with many plants in Oruro
and Potosi. Dominant exports include natural gas,
tin, and other metals. Falling world prices for these
exports and, until recently, a fixed exchange rate
hurt potential export income by making Bolivian
exports more expensive relative to those of other
countries.
Bolivia has a population of 6.3 million. Its literacy
rate is estimated at 63 percent. Although education is
universal, free, and compulsory until age 14,
enrollment in secondary schools is only 13 percent.
The country's basic infrastructure includes 38,830
kilometers of highway, of which 30,836 are unpaved.
With approximately 70 percent of the population
living in the countryside, Bolivia continues to be one
of the most rural and least densely populated
countries in South America. Indians form the largest
single ethnic group, constituting about 50 to 60
percent of the total population. Of these, the Quechua
and Aymara, both of the highlands, constitute an
overwhelming proportion. Typically, they do not
speak or understand Spanish and lack a sense of
national identity. The majority are engaged primarily
in subsistence farming or illegal coca cultivation.
Bolivia: Balance of Payments, 1984-86
Imports, c.i.f.
-492
-552
-609
Services and transfers
-361
-350
-368
Interest
-334
-317
-267
Capital account
-163
-103
21
Financial gap
-291
-384
-395
Change in official reserves
148
30
-51
impoverished, unstable, and unpredictable nation
continues to discourage foreign investment from
private sources, forcing it to rely solely on foreign
public investment, at least for the near term. La Paz
will use the bulk of these inflows to restructure and
modernize its mining and hydrocarbons industries,
whose inefficiencies were exposed in the recent tin
and oil crashes. It will also continue to look for new
export markets for these products and has already
approached Brazil, Peru, and Chile to try to expand
trade relations.
Political Challenges to Bolivia's Adjustment Program
We believe that the government has at best an even
chance of meeting its economic goals and moving
toward a long-term economic recovery. Although
Bolivia has the potential to develop its agricultural
and mineral resources and to become self-sufficient,
several obstacles remain. Bolivia's Communist-
dominated labor unions, historically a disruptive force
in Bolivian politics, represent the majority of Bolivian
workers. The union movement is currently divided,
but worsening economic conditions, shrinking real
wages, or rising taxes could cause labor to coalesce,
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Real GDP Growth Combined Public-Sector
Deficit a
?As a share of GDP.
bFirst instituted in November 1982.
?Estimated.
Change in Real National
Minimum Salaryb
leading to work stoppages and violence. Should labor
agitation provoke major social unrest, the military
probably would assert its own authority, possibly
intervening once again in the political process.
Should labor unrest or military pressure force Bolivia
to compromise seriously its economic program or
agreements with foreign lenders, disbursements of
IMF funds and foreign aid would be delayed. With
imports already cut to the bone and export
performance weak, La Paz would be unable again to
service its foreign debt obligations, bringing the
country back to the brink of economic chaos.
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Latin America
Briefs
Cuba 26 July Celebration
President Castro will have an opportunity to adopt a more upbeat theme in his
speech at the main 26 July celebration of his 1953 Moncada Barracks attack in
Sancti Spiritus this year, following his criticism of virtually every aspect of Cuban
society over the past six months. Several showcase construction projects in this
provincial capital in central Cuba are close enough to completion to give Castro a
chance to boast of his revolution's achievements rather than bemoan its failures.
According to the Cuban media, these projects include: the new Sancti Spiritus
airport, a new radiobroadcasting facility, a special school for young athletes, a
770-bed hospital, 20 primary schools, a soft drink bottling plant, the first stage of a
water purification plant, and several other public works.
At the same time, Sancti Spiritus Province has had a history of mismanagement,
unemployment, and governmental neglect. The provincial party boss publicly
admitted to unspecified labor problems two years ago. Since then national party
officials, including party Second Secretary Raul Castro, have paid several visits to
the area, apparently in an effort to boost local morale and show that the province
has not been forgotten. The positive impact of these visits, however, is likely to
have been largely discounted by the province's 15,000 private farmers who are still
smarting from Castro's abolition of the lucrative peasants' free markets last May.'
This will be at least the sixth consecutive year the 26 July celebration has been
held in a city in the interior rather than in Revolutionary Square in Havana, which
perhaps reflects in part the regime's concern over exposing the top leadership to
large masses of people when popular attitudes are souring.
Mexico is holding firm on its decision in April to suspend a longstanding credit line
to Cuba, according to the US Embassy. The decision apparently was reiterated to
Cuban Vice President Carlos Rafael Rodriguez when he visited Mexico in early
June. Mexican officials have stated that the credit line will not be reinstated until
Cuba becomes current on its debt payments to Mexico
In our view, Mexico City's action resulted primarily from its own financial
difficulties. The Mexican administration suspended the credit line when Cuba
became delinquent in its payments to BANCOMEX, the government-owned
Mexican bank financing the line. The Mexican cutoff will reverse the current
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trend toward increased trade between the two countries. Mexico City earlier this
year had boosted Cuba's credit line from $100 million to $150 million to promote
Mexican nonpetroleum exports and to finance key Cuban industrial projects.
Chief Minister Nathaniel Francis reportedly is considering a move toward
independence from the United Kingdom, and is seeking US economic assistance.
In a recent meeting with a US diplomat, Minister of Public Works Alden Durham
pressed for a dialogue with the United States on these issues, and stated his belief
that Britain would favor independence for the islands. For its part, however,
London says it is concerned that the territory is not capable of self-rule.
Francis probably views independence as a way of evading a British investigation of
corruption throughout the government. The recent resignation of Development
Commerce and Industry Minister Elliot Missick, and the possible resignation of
Robert Hall, Deputy Chief Minister, are the results of an ongoing British inquiry
investigating alleged arson and payoffs by drug traffickers. According to the US
Embassy in London, the British Foreign and Commonwealth Office fears that it
has not gotten to the bottom of this "dirty barrel" and will not be surprised if more
ministers fall. In London's view, the opposition party is equally corrupt and inept.
Francis would be hard pressed to finance independence legitimately, and a serious
push for separation probably would increase reliance on drug trafficking as a
source of income. The withdrawal of a US Air Force base in 1984 has made the
government even more dependent on its subsidy from London. Currently, the
United Kingdom provides $2 million of the colony's $13 million budget.
Latin America Bogota Summit of Coffee Producers
The delegates from Latin America's major coffee producing countries (Brazil,
Colombia, Mexico, and Central America) met in Bogota recently to prepare for a
meeting in London in September of the International Coffee Agreement, where
producers and consumers will determine world coffee quotas for the next year. In
an unprecedented decision, the Latin American producers agreed to back joint
Brazilian-Colombian efforts to keep prices at or near their current high levels in
the world coffee market. Pricing policies were threatened recently by speculative
buying following Brazil's harvest shortfall early this year. Brazilian Coffee
Institute President Graciano maintained that he would not permit any reduction in
Brazil's quota, despite recent weather-induced crop losses; he backed the
Colombian position that quotas should be based, in part, on stocks held by
producer countries. Colombia is the only producer that will have sizable stocks on
hand next year, and Colombian Federation of Coffee Growers officials believe
these would serve to maintain coffee prices at reasonable levels. All delegates
urged continued US adherence to the International Coffee Agreement.
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Cuba Chronology
Secretary General of the Central Organization of Cuban Trade Unions Roberto
Veiga addresses Havana May Day rally saying that strengthening the economy is
the same as strengthening defense. Fidel Castro also attends the ceremony.
Raul Castro presides over the parade and ceremony commemorating International
Workers' Day in Camaguey.
Cuba's press plays down the Soviet nuclear accident in Chernobyl'.
Isidoro Malmierca meets with Mansour Omar, Foreign Minister of Western
Sahara, in Havana to discuss bilateral relations and the international situation.
Malmierca hosts a reception for Omar.
Fidel Castro, Carlos Rafael Rodriguez, Jose Machado Ventura, Vilma Espin, and
others preside over a ceremony presenting the Third Party Congress banner to
various organizations.
Havana press interviews Luis Alva Castro, Prime Minister of Peru, who conveys
solidarity greetings from President Garcia to Fidel Castro and discusses Cuban
fishing in Peruvian waters. During a meeting with Fidel Castro, Luis Alva Castro
expresses satisfaction over Cuba's donation of a field hospital with 100 beds to
Peru for the areas affected by the earthquake.
Granma reports that Fidel Castro met with a West German Green Party
delegation in Havana to discuss the world economic crisis, the Central American
conflict, and environmental problems.
South African Minister of Foreign Affairs Pik Botha says recent US aid to
UNITA has made the Angolan Government "disinclined" to negotiate a possible
Cuban troop withdrawal.
6 May During the 39th plenary assembly of the World Health Organization in Geneva,
Cuba is elected to the vice presidency of the American region.
AFP Havana reports that Nicaraguan Vice President Sergio Ramirez and Interior
Minister Tomas Borge made an unpublicized visit to Cuba last week.
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At a press conference in Lisbon, Brazilian President Jose Sarney reiterates that his
government is considering resuming diplomatic relations with Cuba, which is
consistent with his line of maintaining links to all the countries of the world.
Cuban nonresident Ambassador Severino Mansur Jorge presents his credentials at
the government house in Nassau. He brings "very cordial greetings from Fidel
Castro" to the people of the Bahamas.
An agreement is signed in Havana at the 11th meeting of the working group for
the application of computer technology in domestic trade during the CEMA
domestic trade ministers conference.
Havana press reports that the two main indicators of manufacturing efficiency in
sugar harvests, yield and recover, were below the level expected during the current
milling process in Camaguey Province.
Havana Prensa Latina reports that Cuba intends to acquire new world markets for
its exports and plans to add new export products to obtain more resources for its
economic development.
Experts from the Cuban State Committee for Statistics begin a study in Luanda to
recommend the creation of a national statistical system. This system will create a
basis for a national network with structures for direction and control.
A Cuban delegation headed by Minister of Fishing Industry Jose Fernandez
Cuervo arrives in Lima and is greeted by Prime Minister Luis Alva Castro. The
delegation will assist Peru in fishing, agriculture, and public health programs.
Ghanaian Ashanti King Otqmfu Opoku Ware II arrives in Cuba and meets with
Isidoro Malmierca to discuss topics of mutual interest and the current
international situation. Fidel Castro hosts a reception in honor of the Ghanaian
leader. Commander of the Revolution Juan Almeida, Armando Hart, Carlos
Rafael Rodriguez, and Jose Ramon Fernandez attend.
Hector Rodriguez Llompart, Minister President of the National Bank of Cuba,
meets with Satochi Sumita, Bank of Japan Governor to discuss the current
financial situation as well as the differences that exist between the two countries.
Fidel Castro visits the construction site of the new Institute of Tropical Medicine,
where he converses at length with Omar Tellez, Construction Chief, and briefly
with the Institute Chief, Dr. Gustavo Curo.
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Jorge Fernandez Cuervo and his Peruvian counterpart Jose Palomino agree to a
six-month extension on the loan of two large Cuban ships at no charge and the
training of crews for Peru's fleet.
13 May Foreign Trade Minister Cabrizas meets with Austrian Finance Minister Franz
Vranitzky to explore possibilities in increasing trade.
Politburo member Jorge Risquet meets in Havana with Ali Hudayri, special envoy
of Libyan President Qadhafi. Hudayri expresses his satisfaction over the position
taken by Cuba toward the recent US attack on Libya. In a press conference, Ali
Hudayri says he came to Cuba to exchange opinions and discuss methods of
confronting US state terrorism. He says Libya supports an international meeting
to discuss the causes of terrorism, but not on President Reagan's terms.
London press reports that following a meeting last week with creditor banks in
Paris, Cuba has reversed a previous decision to halt interest payments due to
creditor banks on 6 May and will make the payment, which totals $6-7 million.
Officials from the Soviet Union's agroindustrial complexes and the Cuban
Agriculture and Sugar Ministries sign documents in Havana to extend
cooperation.
Havana press reports that a Cuban TV signal has been received in Angola since 1
April through a Soviet satellite.
Foreign Minister Malmierca and East Germany's Deputy Minister of Foreign
Affairs Bernhard Neugebauer meet in Havana to discuss bilateral relations, the
international situation, and the continuing tensions in Central America.
Foreign Minister Malmierca meets in Havana with Polish Deputy Foreign
Minister Jan Kinast to discuss international political issues and other matters of
interest.
Carlos Rafael Rodriguez meets in Havana with Javier Moscosco del Prado,
Minister of the Presidency of Spain, to discuss matters related to Cuban economic
and social development.
Foreign Trade Minister Ricardo Cabrizas concludes a visit to Austria. The goal of
his visit was to discuss increased trade relations between the two countries. Austria
signs a commercial line of credit worth more than $6.5 million.
Vice Foreign Minister Ricardo Alarcon tells Prensa Latina that Cuba will
participate in the 3-5 June conference on Latin American democracy which will be
held in Strasbourg, France.
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Havana TV reports that Cienfuegos Province is presenting an unfavorable
situation in conservation of energy, with consumption exceeding 27,000 tons of oil
and cost exceeding 20,000 megawatt hours.
During a ceremony in Havana, Isidoro Malmierca is decorated with the Battle of
Beirut Order, awarded to him by the Central Committee of the Democratic Front
for the Liberation of Palestine.
In Berlin, Gerhard Schuerer, candidate member of the SED Central Committee
Politburo, meets with Central Committee member Jose Lopez Moreno to discuss
expanding economic, scientific, and technological cooperation.
During a meeting in Lima with Peruvian President Alan Garcia, Cuban Fishing
Industry Minister Jorge Fernandez Cuervo discusses the results of the work
carried out by the delegation he heads and cooperation in matters of fishing and
health.
The second national meeting of agricultural livestock production cooperatives is
held in Havana. Fidel Castro calls for a crusade against "every form of
exploitation, sponging, vice, and corruption" because of the damage to the
revolution.
A contract is signed in Havana between Cuba and the USSR on delivery of
equipment for the first stage of the Juragua nuclear power station being built with
Soviet assistance. The Energoimport Association stresses the significance of the
nuclear power station for Cuba.
Fidel Castro decides to abolish the 6-year-old "free markets" leaving behind a
great lesson, many damages, and millionaires. Fidel calls the free markets "a
source of enrichment for neocapitalists and neobourgeois."
Foreign Minister Malmierca meets in Havana with Polish Foreign Minister
Marian Orzechowski to discuss the main aspects of the complex international
situation and matters related to the development of bilateral relations.
Orzechowski meets with Carlos Rafael Rodriguez and Jorge Risquet during his
visit.
Cuban Minister of Basic Industries Marcos Portal is received in Moscow by Ivan
Arkhipov, First Deputy Chairman of the USSR Council of Ministers and Y. P.
Ryabov, Deputy Chairman of the USSR Council of Ministers to discuss
cooperation in industry. Protocols for economic and scientific-technical
cooperation are also signed.
The 18th conference of CEMA trade ministers begins in Sofia, Bulgaria. Cuba
and other representatives attending discuss multilateral cooperation and the
fundamental methods of perfecting labor organizations.
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Uruguayan Foreign Minister Enrique Iglesias meets in Montevideo with the first
Latin American cosmonaut, Arnaldo Tamayo. They agree on the need to use space
technology for peaceful purposes and reject projects on the arms race.
Member of the Politburo of the Central Committee Julio Camacho Aguilera is
appointed as Cuba's Ambassador to the Soviet Union.
The Voice of America celebrates the first anniversary of its Radio Marti
broadcasts to Cuba. VOA says interviews with recent Cuban arrivals and field
surveys show Marti has "great credibility in Cuba and has an extensive listening
audience."
Carlos Rafael Rodriguez arrives in Lima and is welcomed by Prime Minister and
Vice President Luis Alva Castro. Rodriguez meets with President Alan Garcia and
conveys greetings from Fidel Castro. They exchange impressions on Latin
America and discuss bilateral relations. Fidel Castro speaks at the 100th founding
anniversary of the Salvador Allende Hospital (formerly Covadonga) saying he
wants Cuba to have the most complete health service in the world.
The National Electoral Commission is appointed and is presided over by Jose
Ramon Machado Ventura. The Council of State agrees to hold elections on 19
October 1986 to elect delegates to the municipal assemblies of the people's
government.
In a press conference in Peru, Rodriguez says there are many possibilities of
expanding bilateral cooperation between the two countries and reiterates Cuba's
position in favor of a peaceful solution for Central America. He also states that
there was never any incompatibility between Fidel Castro and Alan Garcia,
merely "momentary disagreements," because both "are figures of outstanding
political momentum."
23 May Carlos Rafael Rodriguez, Ricardo Alarcon, and consultant to Rodriguez,
Martinez Salsamendi, visit Argentina.
At the council of GATT representatives in Geneva, Cuban Ambassador Carlos
Lechuga denounces US agricultural law as a new economic aggression to punish
third-party countries that reexport sugar to the US markets, which violates GATT
agreements.
Raif Dizdarevic, Federal Secretary for Foreign Affairs of Yugoslavia, arrives in
Havana and is greeted by Isidoro Malmierca. They discuss international and
bilateral affairs and matters related to the nonaligned countries movement.
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Raul Castro presides over a graduation ceremony of Revolutionary Police
combatants and the incorporation of a FAR Red Berets reservist contingent to
that organization.
Fidel Castro presides over a regular meeting of the Politburo during which new
anticrime measures are approved. An extensive analysis is made of the problems of
crime and antisocial conduct, especially the number of incidents in Havana City.
The Council of State announces the creation of the National Commission of
Economy Management and appoints Gilberto Diaz the commission's vice
president.
Fidel Castro sends messages to Sam Nujoma, President of the South-West African
People's Organization, and to Oliver Tambo, President of the African National
Congress of South Africa, on the occasion of the celebration of solidarity with
Africa.
Cuba and Mexico sign a cultural exchange agreement for 1986-89 in Mexico City.
The agreement includes the assignment of professors and specialists to centers of
higher education and the granting of scholarships for technical/professional
training.
The Council of State agrees to designate Manuel Castillo Rebasa Minister of
Communication. Castillo Rebasa was formerly chief of the Communications
Troops of the FAR and replaces Pedro Guelmes Gonzalez.
Fidel Castro speaks at the closing session of a family doctor forum in Havana. He
says Cuba has become more aware of the importance of social medicine and that
family doctors are the only technicians who graduate with assured housing.
Carlos Rafael Rodriguez arrives in Montevideo and is welcomed by Uruguayan
Vice President Enrique Tarigo and other government officials. Rodriguez stresses
that Latin America's historic needs demand a unity of which Cuba and Uruguay
are a part. Rodriguez says that Cuban military advisers will "immediately" leave
Nicaragua if the general peace agreement for Central America is signed. In
addition, he says that Cuba has never maintained more than 800 members of the
armed forces and the Interior Ministry in Nicaragua. Rodriguez calculates the
number of Cuban civilians in Nicaragua to be between 550 and 650.
27 May Uruguayan President Julio Sanguinetti meets with Carlos Rafael Rodriguez and
Ricardo Alarcon. They discuss the Central American summit at Esquipulas and
Rodriguez delivers a message from Fidel Castro to Sanguinetti. He also meets
with Uruguay's main opposition political leaders and attends an official dinner
hosted by Iglesias.
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Fidel Castro receives the Felix N. Musa decoration that the Union of Cuban
Journalists awards. He calls on the Cuban press to participate in the struggle
against everything that affects or slows the progress of the revolution.
The Council of State creates the National Committee of the Economic
Management and Planning System that will manage, coordinate, promote, and
control activities, economic management methods, and mechanisms.
In an interview with Prensa Latina, the West German ecological party "The
Greens" describes its parliamentary delegation's recent trip to Cuba as valuable
and says bilateral relations will intensify.
The Cuban Chamber of Commerce and the Foreign Trade Commission of the
Uruguayan Chamber of Industry sign a commercial trade agreement in
Montevideo.
On the occasion of Africa Day and the 23rd anniversary of the Organization of
African Unity, Fidel Castro sends a message to Angolan President dos Santos
saying the United States is solely responsible for the tense situation in southern
Africa.
Belgrade press reports that the Yugoslav bus manufacturer Ikarus has delivered
200 buses and a large quantity of spare parts estimated at about $8 million to
Cuba between January and May of this year.
During a press conference in Montevideo, Carlos Rafael Rodriguez, when asked
about the health of Fidel Castro, says Fidel's health is excellent and that he is at
the height of his intellectual abilities. Before departing Montevideo, Carlos Rafael
Rodriguez says Cuba fully supports the Contadora talks, Cuba will not rejoin the
OAS, and in case of a US invasion of Nicaragua, Cuba will have no other recourse
than to protest with all its might. Rodriguez denies that there are 15,000 political
prisioners in Cuba and says those in prison will "be released after they serve their
sentences." There are now no more than 200 "counterrevolutionaries" under
arrest.
A protocol on trade and payments for 1986 is signed in Moscow by Boris Aristov
and Ricardo Cabrizas. Trade between Cuba and the USSR will exceed $9.1 billion
this year.
Deputy Foreign Minister Ricardo Alarcon and Uruguayan acting Foreign
Minister Alberto Rodriguez sign a trade agreement in Montevideo.
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In an interview with TELAM in Buenos Aires, Carlos Rafael Rodriguez says the
aggressive attitude of the Reagan administration is a hindrance for relations with
Latin America and that Fidel Castro maintains the ideals and drive of a
revolutionary. Rodriguez says Cuba is not in a position to break a US air and naval
blockade against Nicaragua because Cuba's forces are defensive. He also informs
TELAM that Cuba will not return to the OAS because that organization does not
play a meaningful role in favor of the real interests of Latin America and that
Cuba will not create an alternative organization.
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