NICARAGUA: PROSPECTS FOR SANDINISTA CONSOLIDATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00495R001201350002-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 42
• Document Creation Date: December 22, 2016
• Document Release Date: July 14, 2010
• Sequence Number: 2
• Publication Date: February 1, 1985
• Content Type: NIE

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Secret
NIE 83.3-85
February 1985
Copy 2 4 6
Directgm m . Secret
Centra
Nicaragua: Prospects for
Sandinista Consolidation
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RP 0
N I E 83.3-85
NICARAGUA: PROSPECTS FOR
SANDINISTA CONSOLIDATION
Information available as of 31 January 1985
was used in the preparation of this Estimate,
which was approved by the National Foreign
Intelligence Board on that date.
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0, ------ V
THIS ESTIMATE IS ISSUED BY THE DIRECTOR OF CENTRAL
INTELLIGENCE.
THE NATIONAL FOREIGN INTELLIGENCE BOARD CONCURS.
The following intelligence organizations participated in the preparation of the
Estimate:
The Central Intelligence Agency, the Defense Intelligence Agency, the National Security
Agency, and the intelligence organizations of the Departments of State and
the Treasury.
Also Participating:
The Assistant Chief of Staff for Intelligence, Department of the Army
The Director of Naval Intelligence, Department of the Navy
The Assistant Chief of Staff, Intelligence, Department of the Air Force
The Director of Intelligence, Headquarters, Marine Corps
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CONTENTS
Page
KEY JUDGMENTS .............................................................................. 1
DISCUSSION ........................................................................................ 7
The Consolidation Process to Date .................................................. 7
Political, Economic, and Military Trends ................................... 7
The 1984 Elections ....................................................................... 11
Sandinista Political Strategy for Building Socialism ....................... 11
Squeezing the Opposition ............................................................. 11
Building Sandinista Institutions and a Single-Party State.......... 12
Further Socialization of the Economy ............................................ 17
Current Problems in the Domestic Economy ............................. 17
Changing Trade and Aid Patterns ............................................... 17
Strangulation of the Private Sector .............................................. 18
Continuation of the Military Buildup ............................................. 48
Improving Conventional Capabilities ......................................... 18
Foreign Military Presence ............................................................ 19
Counterinsurgency Capabilities ................................................... 21
Risk of Hostilities .......................................................................... 21
Obstacles to Sandinista Consolidation ............................................. 21
The Internal Opposition ............................................................... 21
Prospects for the Insurgency ........................................................ 23
Sandinista Foreign Policy Goals ...................................................... 26
Nicaraguan Objectives in Regional Negotiations ....................... 26
Closer Alignment With Moscow and Havana ............................ 26
Continuing Export of the Revolution .......................................... 27
Implications for the United States ................................................... 28
Basic Nature of the Sandinista State ........................................... 28
ANNEX: Nicaragua's Development as a Marxist-Leninist State ...... 29
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KEY JUDGMENTS
We judge that the Sandinistas are intent on creating a Marxist-
Leninist one-party state in Nicaragua, closely patterned on that of Cuba
and aligned with the Soviet Union, that would continue to challenge US
political and security interests in Central America. The Sandinista
leadership has been remarkably united in pursuit of this goal despite
some differences over the tactics and pace of consolidation. The
principal impediments to full consolidation are a persistent insurgency,
popular discontent, the internal political opposition, the Catholic
Church hierarchy, a worsening economy, the need for Western political
and economic support, and fear of US intervention.
None of these factors, however, have prevented the Sandinistas
from pursuing a gradual consolidation of a system that retains little
more than symbolic remnants of political pluralism and an increasingly
shrinking and beleaguered private economic sector. The Sandinistas
have exploited divisions and mistrust within the internal political
opposition, which has been unable to decide upon an effective or united
course of action to defend itself. Managua's international position, its
support for insurgencies in El Salvador and elsewhere, and growing
Soviet Bloc ties reflect its increasingly pro-Soviet course and depend-
ence-as does the integral Cuban and other Soviet Bloc role in almost
all facets of its development. The consolidation process thus far has been
managed skillfully enough to avoid an open break with sympathetic
Western governments and political entities, though even many of these
are increasingly dubious about the Sandinistas' ultimate goals.
The Sandinista consolidation of power has closely followed the
pattern of other Marxist-Leninist regimes in the Third World, with a
small core of dedicated revolutionaries providing direction with the
assistance of Cuban and other Soviet Bloc advisers. Most of the elements
of the Sandinista plan to build a Marxist-Leninist state were in place
within the first two years. (See annex, "Nicaragua's Development as a
Marxist-Leninist State.") These included party control of the military,
security services, and government bureaucracy; the use of Sandinista
mass organizations; and domination of the media. The regime also
proceeded with its plans to reduce the private sector by increasing state
ownership and market controls. The Sandinistas tightened control after
1982, using insurgent attacks to justify a ban on most opposition party
activities and suspension of civil liberties.
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Until recently, the Sandinistas faced growing pressures to slow their
consolidation or alter their policies, but the balance now appears to have
shifted. The 1984 election was an important turning point for the
Sandinistas, and, according to Sandinista leader Bayardo Arce, they
regarded it as "using an instrument claimed by the bourgeoisie ... to
move ahead in matters that for us are strategic." The strategy of
engineering a substantial victory successfully achieved the minimum
goal of providing the Sandinistas with an alleged mandate to further
consolidate their control, although it failed to give them the' clear-cut
legitimacy they desired because of the boycott by the main opposition
parties and the government's harassment tactics during the campaign.F-
Since the election, the government has taken a number of steps
indicative of a tougher line with the main opposition parties, including
ending the National Dialogue talks and imposing travel restrictions. The
Sandinistas probably will continue to deny these parties opportunities to
organize public support and are likely to renew emergency control
measures through the year. We believe, however, that the Sandinistas
are unlikely over the next few years to abandon altogether the fig leaf of
political pluralism. They will probably continue to portray the small
parties participating in the new Constituent Assembly as the legitimate
opposition. They also are likely to make heavy use of mass organiza-
tions-including the militia, civil defense committees, Sandinista youth,
and labor federations-to assist their political consolidation and help
give the impression of widespread popular support
The Sandinistas will easily dominate the Assembly and use it to
institutionalize their control by writing their own constitution within
two years. We expect the constitution, while honoring civil liberties in
the abstract, to provide the legal basis for restricting them, as well as for
dominating the mass media, promoting state intervention in the
economy, and establishing the irreversibility of the revolution and the
special role of the Sandinista National Liberation Front (FSLN). We
believe the regime will continue its efforts to develop the FSLN into a
disciplined Marxist-Leninist party, with Cuban and other Soviet Bloc
advice and assistance. Tactical disagreements and personality conflicts
would appear to make a leadership shakeup likely over the long run,
but we doubt that the leadership will experience a significant change in
membership or structure within the next year or so.
In the economic arena, the increase in state controls-the govern-
ment now directly produces over 45 percent of GDP-has been
accompanied by a steady deterioration in output and growing consumer
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shortages. Declining Western financial support, reduced private invest-
ment, and public sector mismanagement-together with a general
worsening of the terms of trade-will continue to depress living
standards. The Sandinistas probably will try to utilize growing consumer
problems and business disruptions to justify further state control of the
economy over the next year. The government is likely to target private
sector leaders in particular in an effort to intimidate them and reduce
their opposition political role.
Internationally, Managua has shifted its foreign trade away from
the United States and toward the Soviet Bloc and radical Arab states
over the past five years, and it probably will rely increasingly on Soviet
Bloc and radical Arab economic support to offset declining private
investment and Western aid. While the Soviet Bloc appears unwilling to
meet Nicaragua's hard currency needs, it appears ready to shoulder a
heavier economic burden to support Sandinista consolidation. Such aid,
however, probably would not be sufficient to assure growth and
overcome the burdens of the Sandinista-run economy
Meanwhile, popular discontent has risen and become more open
because of economic problems and harsh government policies-most
significant, forced military conscription. But the domestic opposition is
weak and fragmented and remains unable to capitalize on this vulnera-
bility. The Catholic Church probably will continue to be the strongest
nonmilitary obstacle to consolidation. However, its hierarchy fears that
the regime's restrictions on foreign priests and efforts to control Catholic
education will undermine the church's long-term ability to resist.
We believe Nicaragua will continue to strengthen its armed forces,
further upsetting the regional military balance. Additional Communist
military advisers, principally Cubans, are likely to arrive to support an
increasingly sophisticated inventory of military equipment and assist
the counterinsurgency effort. At least 50 Cubans reportedly died as a re-
sult of fighting last year, and the number is likely to grow as a result of
their close involvement with Sandinista forces in the field. Development
of air defenses will probably receive special attention, possibly including
delivery of medium- and high-altitude surface-to-air missiles. We
believe that Moscow will not risk delivery of MIG-21 fighters this year,
but we cannot rule out the possibility the Soviets will approve the
delivery of less sophisticated L-39 jet trainer/attack aircraft. Managua is
unlikely to use its forces to initiate a border war with its neighbors
because of a potential US response, but may use them to increase the
scale of raids on insurgent camps in Honduras.
The 12,000- to 15,000-man insurgency has been a major obstacle to
the Sandinistas' consolidation, forcing them to increase defense expendi-
tures and exacerbating their economic difficulties. The continued
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insurgency also undermines public confidence in the regime and
challenges its claim of political legitimacy. In other ways, however, the
insurgents have aided the Sandinistas by assisting Managua's efforts to
elicit international sympathy and support, cast the United States in the
role of the aggressor, and justify the increasing military buildup and
economic deprivations.
The guerrillas still are providing strong military resistance to the
Sandinistas despite the cutoff in US aid last year. Their strength
probably would continue to grow if they could obtain sufficient external
funding, although it would not grow enough to threaten the overthrow
of the regime in the next year or so. Popular sympathy for the
insurgents appears to be on the rise generally. In addition, active
support has increased in their areas of operation, and new recruits have
continued to join up. Nonetheless, serious logistic shortages have forced
the insurgents to scale down their activities, and they are unlikely to
raise sufficient aid from private sources or other foreign governments
over the next several months to prevent a further decline in their
effectiveness. The Sandinistas have begun a major push, assisted by an
expansion in their own counterinsurgency capabilities, to exploit grow-
ing guerrilla weaknesses and reduce guerrilla numbers significantly by
the end of the year.
Insurgent morale would be damaged by a US failure to renew
support, and guerrilla capabilities would be further degraded, although
we doubt that they would precipitously disintegrate. Nevertheless, there
is some chance that the insurgency will decline drastically if US aid is
not renewed, and particularly if Honduras decides the effort is a lost
cause and reduces its support significantly. In any case, significant
numbers of guerrillas probably would have to be demobilized-perhaps
one-third to one-half of the current 12,000- to 15,000-man force over
the next 12 to 18 months-and they and their supporters would be
likely to seek refuge in Honduras and Costa Rica in increasing numbers
as insurgent fortunes declined and operations were reduced. This, in
turn, would be likely to cause major problems for those countries,
particularly Honduras.
We believe the insurgency drove the Sandinistas to the negotiating
table, and its persistence and growth have been key factors in shaping
Sandinista objectives and strategy in the Contadora process and in
bilateral talks with the United States. Without a viable insurgency,
Sandinista incentives to make negotiating concessions would be re-
duced, and the domestic opposition would be weakened significantly. F
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We believe that the Sandinistas' main objectives in regional
negotiations are:
- To buy time for consolidation of the regime.
- To ease external pressure by demonstrating "reasonableness" to
outside observers in order to consolidate their internal control.
- To obtain an explicit or implicit guarantee that the United
States will not overthrow the regime.
The Sandinistas have indicated their willingness to give assurances on
key US and regional concerns, including withdrawal of support to
insurgents in other Central American countries, ending the presence of
foreign military advisers, and limiting the acquisition of arms. Despite
these assurances, we believe that the Sandinistas will attempt to evade
compliance on these points, and that it will be difficult to establish
effective verification measures. In fact, they are already attempting to
lay the groundwork for circumventing potential restrictions. While they
have expressed agreement with Contadora's democratic principles, they
continue to resist any meaningful provisions for internal democratiza-
tion in a draft treaty.
We doubt that Sandinista leaders would abide by their suggestions
that they would stop support for the Salvadoran guerrillas if all foreign
support to the anti-Sandinista insurgents also were ended. The construc-
tion of a new training center for Salvadoran guerrillas last year and the
presence of the headquarters of all five guerrilla factions in Nicaragua
indicate the continuing Sandinista commitment. While the flow of arms
to El Salvador appears to have dropped off, other material continues to
be sent, and the guerrillas probably rely on the Sandinistas for almost all
their ammunition needs. Although Managua might temporarily suspend
the flow if necessary in the context of a peace agreement, it probably
believes it can circumvent restrictions and continue to supply covert
support. I_
We believe that Managua will continue to develop political,
economic, military, and cultural links to Communist states, and its
dependence on Moscow and Havana is likely to grow. The Sandinistas
also regard support for foreign revolutionaries as a basic tenet of
Marxist-Leninist ideology and as necessary for their long-term survival.
Thus, the unimpeded consolidation of such a regime would imply the
following threats to US strategic interests over time:
- Nicaragua's acquisition of additional weapons and other mili-
tary equipment, which would further upset the regional mili-
tary balance and complicate US force planning.
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- Increased Soviet and Cuban military presence, including access
to port and air facilities and enhanced intelligence gathering,
particularly in the Panama Canal area and along the Pacific and
Caribbean coasts.
- A more secure base for support of radical insurgent and terrorist
groups aimed at destabilizing other governments in the region
and elsewhere in the Western Hemisphere.
- A sharp increase in the number of refugees from Nicaragua,
thereby creating further potential for instability in neighboring
countries.
US acquiescence in the consolidation of another interventionist
Marxist-Leninist regime in the hemisphere would produce a definite
change in Latin American geopolitical assumptions, affecting other
regional governments' postures toward Nicaragua, demoralizing vulner-
able democratic parties, and encouraging other pro-Soviet and pro-
Cuban revolutionary movements.
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DISCUSSION
including militia and reserve forces, is nearly 120,000.
Political, Economic, and Military Trends
1. Since coming to power in Nicaragua in July
1979, the Sandinistas have followed a gradualist strate-
gy for the establishment of a Marxist-Leninist state
closely patterned on the Cuban model. Most of the
elements of the regime's plan to build a Communist
state were in place within the first two years, although
the regime still proclaims a commitment to political
pluralism, a mixed economy, and nonalignment. (See
annex, "Nicaragua's Development as a Marxist-Lenin-
ist State.") The Sandinistas have moved incrementally
to limit a domestic backlash, avoid a harsh US re-
sponse, and attempt to retain the cooperation of
Western governments and Nicaragua's own private
sector to rebuild the war-shattered economy.
2. The Sandinistas announced in 1980 that elections
would be held in five years, allowing them to concen-
trate on establishing the means for effective control.
These included party control of the military, security
services, and government bureaucracy, development
of Sandinista mass organizations, domination of the
media, and reorientation of the educational system-
all under the guidance of hundreds of Cuban advisers.
3. Nicaragua's substantial military buildup has been
keyed to maintaining internal control, defending the
regime from external threats, and providing a shield
behind which the Sandinistas can consolidate their
control and support other regional revolutionaries. The
buildup has also upset the regional military balance,
and it represents a growing potential offensive threat
to Nicaragua's immediate neighbors. The Sandinistas'
effort has been supported by arms agreements worth
about $500 million with Cuba and other Soviet Bloc
countries. This aid and the growing presence of mili-
tary advisers enabled the regime to transform a 5,000-
man guerrilla army into the largest and best equipped
force in Central America, with an active-duty strength
of nearly 60,000.' Total strength when mobilized,
4. The buildup dates from the Sandinistas' victory
in 1979, before there was any significant insurgent
activity. By the fall of 1981 the regular Army had
acquired heavy artillery, its first battalion of T-55
tanks, and some 800 trucks. In 1982 the regime began
construction of the largest military airbase in Central
America at Punta Huete. Nicaragua's acquisition of
additional armor, artillery, and air defense assets
during 1982-83 further upset the regional military
balance and gave Nicaragua a growing offensive capa-
bility. The arms buildup accelerated in 1984, includ-
ing more than a doubling of Nicaragua's tank and
armored vehicle inventory, the acquisition of a basic
air defense radar system, and the delivery of MI-24/25
attack helicopters.
5. Sandinista leaders had established firm ties to
Cuba and some links to the Soviet Union well before
coming to power, and over the last five years steadily
growing Communist military and economic aid has
played a key role in helping the Sandinistas to consoli-
date. In the fall of 1979, about 200 Cuban military
advisers were assigned to the Sandinista Army, and
some 2,000 teachers had arrived by late 1980. By
1984, an estimated 7,500-9,500 Cubans were serving
in Nicaragua-including 2,500-3,500 military and se-
curity advisers-as well as several hundred Soviet and
Bloc military and civilian personnel. Managua has also
joined the Nonaligned Movement to increase its inter-
national support in the Third World. Nevertheless, the
Sandinistas have increasingly endorsed Soviet foreign
policy positions. The regime has pursued gradual
economic integration into the Soviet Bloc by develop-
ing trade ties, seeking membership in CEMA, and
sending growing numbers of Nicaraguans to train in
6. The Sandinistas became a source of regional
subversion soon after the revolution because of their
Marxist-Leninist ideology, the debt owed Cuba and
other regional radicals for participating in the over-
throw of the Somoza government, and their belief that
the revolution would not survive in the long run
without the support of radical leftist regimes or groups
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in neighboring states. By mid-1980, Nicaragua had
become the principal conduit for supply of the Salva-
doran insurgents and the site of their military and
political headquarters
7. In the economic arena, there has been a parallel
steady increase in state economic control since the
Sandinista takeover, accompanied by a deterioration
in economic activity and living standards (see chart
n economic indicators).
in 1979 clearly laid out the Sandinistas'
ultimate intention of sharply reducing the role of the
private sector after an indefinite period of tactical
alliance and establishing state control of the economy.
Early government takeovers of farms, industries, and
services-largely Somoza controlled-increased public
sector participation in economic activity from 12
percent before the revolution to nearly 40 percent by
1981. Since then, nationalizations have slowed, but the
Sandinistas have continued to expand their economic
role through indirect controls, including discrimina-
tory allocations of credit, foreign exchange, and im-
ports; wage and price controls; and commercial regula-
tions. Since bank nationalization, for example, private
concerns that formerly received three-fourths of all
domestic credits now receive just one-tenth of new
bank credits. The Sandinistas have also attempted to
gain control of organized labor via regulations on
union activities, the formation of new pro-Sandinista
labor coalitions, and the repression of the few inde-
pendent unions that remain
8. The small economic rebound the Sandinistas
enjoyed following the revolution proved short lived.
The early expansion resulted from generous foreign
financial aid that supported a sharp increase in im-
ports needed to offset war damages. We estimate that
the economy has declined each year since 1981 be-
cause of a worsening of terms of trade, a leveling off in
foreign aid receipts and, most important, because
hostile antibusiness policies have eroded business con-
fidence and sharply curtailed private investment. The
insurgency has also added to economic problems,
especially since early 1983. By 1984 the output of
goods and services was 25 percent below average 1975-
77 levels. More significant, unprecedented inflation,
high unemployment, and growing consumer short-
ages-despite government rationing-are increasing
public discontent. Some of the early social advances of
the revolution-increased educational opportunities,
better health care and housing, and consumer subsidies
for staples-have been offset for many Nicaraguans by
the increased regimentation of society and the de-
pressed economy.F___1
9. Even substantial foreign financial support over
the past five years, including $2 billion in aid and
another $1 billion in debt relief, has not been enough
to keep living standards from falling. Concessional 25X1
government-to-government loans for nonmilitary pur-
chases skyrocketed under the Sandinistas, jumping
from an average $42 million per year during 1975-77
to over $400 million per year during 1980-84 (see table
1). In 1980 and 1981 the Sandinistas rescheduled, on
highly favorable terms, most bank and bilateral debt.
While initially living up to the easy rescheduled
conditions, Managua has virtually ignored obligations
since 1982, steadily rebuffing efforts by commercial
banks, the IMF, the World Bank, and many gov-
ernments to collect backdue interest and, principal.
Managua's medium- and long-term debt has jumped
from $1.1 billion at the end of 1979 to $4.3 billion at
the end of 1984, and total debt now approaches $5
billion
10. These economic difficulties, coupled with the
Sandinistas' increasingly repressive tactics, gradually
eroded the overwhelming popularity they enjoyed
when they came to power and swelled the ranks of the
anti-Sandinista insurgents. Non-Sandinistas who had
been appointed to the government junta resigned to
protest their lack of influence, and by 1982 even
several prominent Sandinistas had joined the exile
ranks.
11. The Sandinistas have taken advantage of the
insurgency not only to rationalize Nicaragua's eco-
nomic problems but to expand greatly their control
over the domestic opposition. This clampdown became
particularly severe after March 1982, when, in re-
sponse to the initiation of organized insurgent attacks,
the government declared a state of emergency that
banned most opposition political party activities, es-
tablished censorship of the press, and suspended civil
liberties. Although some of the restrictions were eased
during the 1984 election campaign, the state of emer-
gency has never been lifted. Intimidation and violence
against political, business, and labor members of the
opposition have generally increased, and the Sandinis-
tas also have had a number of sharp clashes with the
Catholic Church. Meanwhile, the government has
used periodic charges of an imminent US invasion to
organize and mobilize greater numbers of the Nicara-
guan people in defense of the regime, including a
significant expansion of the militia and neighborhood
civil defense committees.
12. The insurgency continued to grow despite in-
creased Sandinista efforts to suppress it. In late 1981
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Figure 1
Nicaragua: Economic Indicators a
Real GDP Growth Consumer Price Inflation
Percent Percent
Central Government Budget
Deficit as a Share of GDP
60
50
40
30
20
10
Public Sector Production as
a Share of GDP
0
-5
=I-0-
= 1-5
- 20
=2-5
Share of Bank Credit Provided
Private Sector
r]
External Public Debt (yearend,
medium, and long term)
Million US $ 5000
1000
0
120
90
60
30
150
0 1975-77 78 79 80 81 82 83 84
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Table 1
Nicaragua: The Foreign Financial Gap
Million US $
(except as indicated)
Net short-term capital (includes errors
and omissions)
-9
11 -
72
5
External debt (yearend, medium and long term)
703
2,800 3,5
00
4,300
Commercial bank debt
368
964 1,0
30
1,120
Net international reserves a
31
-431 -4
50
-470
Debt service due b (percent)
15.1
90.4
82.9
98.6
Debt service paid (percent)
15.1
45.1
35.0
27.4
a Foreign exchange reserves minus short-term liabilities.
b Debt interest and principal due as percent of merchandise exports.
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the anti-Sandinistas numbered some 500 personnel-
largely former members of Somoza's National
Guard-and their attacks were confined to the imme-
diate Honduran border area. By early this year,
however, guerrilla forces had grown to 12,000-15,000,
their ranks enlarged by peasants, Indians, and former
Sandinista supporters, and their reconstituted leader-
ship drawn largely from recognized opponents of
Somoza
13. We believe the Sandinistas organized the 4
November 1984 election of a president, vice president,
and a constituent assembly not as an open and demo-
cratic competition, but as part of a carefully controlled
process to consolidate their power and legitimize their
rule. Sandinista leader Bayardo Arce said during a
secret May 1984 speech to local Communists, "We are
using an instrument claimed by the bourgeoisie which
disarms the international bourgeoisie, in order to move
ahead in matters that for us are strategic." The regime
hoped that an ostensibly free election would generate
international pressure on the United States to reduce
its pressure for democratic pluralism. In addition, it
would allow the Sandinistas to claim popular backing
for the drafting of a new constitution aimed at
establishing the basis for a "socialist" state.
14. The regime weighted election campaign rules in
its favor in order to reduce the chances of effective
opposition participation, and allowed 16-year-olds to
vote in an effort to expand the electorate in its favor.
When the main opposition parties threatened to boy-
cott, the government made a series of minimal conces-
sions on campaign rules, both to give the appearance
of flexibility and to maintain the participation of the
minor parties. During the party registration period,
the regime also organized a series of attacks on
opposition campaign rallies to discourage popular par-
ticipation. When the candidate of the major democrat-
ic opposition coalition appeared to have reached an
agreement to participate in the balloting if the date
was postponed, the Sandinistas abruptly broke off the
talks. As the election neared, the regime used coercive
tactics to keep two moderate opposition parties in the
race, and refused to recognize the decision of one of
them to withdraw.
15. The election failed to give the Sandinistas the
clear-cut legitimacy and international recognition they
hoped for because of the boycott by the major opposi-
tion coalition and the regime's harassment tactics
against the remaining parties. Nevertheless, junta
members Daniel Ortega and Sergio Ramirez received
some 67 percent of the vote for president and vice
president, and the Sandinistas claimed an 82-percent
turnout. Although many foreign statements welcoming
the elections regretted that the conditions for full
participation did not exist, few explicitly criticized the
regime, and none alleged voter fraud. The Sandinistas
were unable, however, to attract many high-ranking
foreign dignitaries (except Fidel Castro) to President
Ortega's inauguration ceremony despite strenuous ef-
forts
Sandinista Political Strategy for
Building Socialism
16. The 1984 election appears to have been an
important turning point for the Sandinistas that proba-
bly will give them a freer hand in extending and
consolidating their control. The regime, claiming a
popular mandate, is likely to move forcefully to
strengthen party and state institutions, to proceed with
its plans to reduce the private sector, and to be much
tougher with its principal political opponents. Never-
theless, within this framework, the regime over the
next year will probably not abandon its pattern of
incremental change-because of its concern over a
backlash, chiefly from abroad. As in the past, the
Sandinistas are likely to make gestures of flexibility to
retain international support and ease internal and
external pressures. The regime probably judges it
would be too costly to abandon altogether the fig leaf
of political pluralism, a mixed economy, or nonalign-
ment.
Squeezing the Opposition
17. The government has already taken a number of
steps since the election that indicate it will now take a
tougher line with the opposition. First, the Sandinistas
responded to a boycott of recent "National Dialogue"
talks by some of the main opposition sectors by
canceling the discussions. Second, in November and
December 1984 the Sandinistas restricted over a score
of major opposition leaders from traveling abroad-an
action designed not only to intimidate but perhaps to
encourage them to go into self-imposed exile when the
ban was removed. Third, the regime rescinded some
concessions it made during the election campaign by
renewing censorship of the archbishop's radio sermons
and resuming heavy censorship of the opposition
newspaper. The Sandinistas also made some well-
publicized gestures of flexibility during the period
before the inauguration, including new discussions
with Miskito insurgent leader Brooklyn Rivera con-
cerning limited Indian autonomy and the initiation of
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18. The Sandinistas will probably continue to deny
the main opposition coalition meaningful opportuni-
ties to organize public support. The regime now has
two legal weapons to restrict the coalition parties:
denial of legal status. and extension of the state of
emergency. Opposition parties that boycotted the elec-
tion lost their legal status-their rights to hold meet-
ings, to publish newsletters, and to issue political
statements. The state of emergency-which imposes
censorship and bans public meetings or marches by all
opposition parties-expires on 20 April, and the Sandi-
nistas are likely to renew it. Even if it were relaxed,
the concession would probably apply only to legal
parties. The relative absence of international criticism
has made it easy to maintain the law. Socialist Interna-
tional leaders, for example, did not speak out when the
Sandinistas broke their promise to suspend the law
during the election campaign.
19. The government is likely to target private-sector
leaders in particular over the next year in an effort to
further intimidate and control the major opposition
coalition. Business leaders are the most intransigent
among the civil opposition, and the insurgents have
drawn such important leaders as Alfonso Robelo and
Adolfo Calero from the private sector. As the economy
further deteriorates, the regime probably will also
continue to use the private sector as a domestic
scapegoat.
20. The Sandinistas will attempt to distract atten-
tion from more aggressive actions against the major
opposition coalition-the Democratic Coordinating
Board-by portraying the small parties participating
in the new Assembly as the legitimate opposition. (See
table 2.) The Assembly is likely to include in its own
rules the provision in the election law calling for the
replacement of delegates who refuse to occupy their
seats, permitting the Sandinistas to undermine an
opposition protest by installing proregime party mem-
bers. The Sandinistas probably will ignore two of the
three small Communist parties in the Assembly, but
are likely to maintain some ties to the Moscow-line
Nicaraguan Socialist Party
21. The Sandinistas have established almost total
control over the flow of information in Nicaragua
since imposing the state of emergency, and probably
will seek to institutionalize their dominance through a
repressive media law. Both television stations have
been under Sandinista control since 1979, and only a
few independent radio stations remain. The govern-
ment's most influential critic, the opposition daily La
Prensa, has been so hobbled by censorship, arrests, and
restrictions that its symbolic importance probably now
outweighs its actual impact. The Sandinistas are also
likely to have the Assembly approve a draconian
media law that would set the legal basis for state
control over all means of communication and compen-
sate for lifting state-of-emergency controls. The law
probably would be similar to a draft withdrawn from
the Council of State last year that banned news serving
the interests of "imperialism," disrespectful use of
national symbols, and "false news" that could lead to
price speculation.
22. The Sandinistas recognize that the Catholic
Church is one of the most influential obstacles to
further consolidation, and they probably will take
additional steps to counter its influence. The regime
may make offers to "guarantee" church autonomy in
specified areas, but, in our view, fundamental differ-
ences on basic values make further clashes inevitable
and will undermine even limited agreements. Over
the last year, Sandinista pressures against the church
have included attempts at entrapment, detention of
one priest for alleged counterrevolutionary activity,
expulsion of 10 others, denial of entry to foreign
priests, delays in renewing visas for 100 foreign priests
serving in Nicaragua, and press attacks on the hier-
archy.
23. The government will continue its support of
sympathetic clergy-the loosely organized "popular
church"-to undermine the hierarchy and help legiti-
mize the idea that Marxism and Christianity are
compatible. The state's encroachment on Catholic
education, by attempting to impose curriculum
changes and appoint school officials, has caused clash-
es in the past, and the government is likely to attempt
to impose further changes. Nevertheless, the govern-
ment's recent offer of dialogue with the hierarchy
indicates that it will continue to employ the tactic of
making occasional gestures of accommodation.
Building Sandinista Institutions and a
Single-Party State
24. We expect the regime to continue its efforts to
develop the Sandinista National Liberation Front
(FSLN) into a disciplined Marxist-Leninist party, even
as it remains unwilling to proclaim this objective
openly. Sandinista statements (see page 14) have pub-
licly acknowledged a relationship between Marxism
and "Sandinism," and they have also spoken favorably
of the ultimate goal of progressing toward "socialism."
Such statements of ideological affinity will probably
continue to increase, along with Sandinista willingness
to identify more openly with Communist states. The
FSLN's tactical perspective, however, was reflected in
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Table 2
Nicaraguan Political Parties
Percentage of Total Votes in
November 1984 Election
Sandinista National Liberation Nine-member National Ruling party; Marxist-Leninist 62.8 (61 seats)
Front (FSLN) Directorate
Nicaraguan Socialist Party Luis Domingo Sanchez Moscow-line Communist party; allied 1.2 (2 seats)
(PSN) Sancho with FSLN since 1980; broadly
supportive of FSLN programs.
Communist Party of Eli Altamirano Perez Hardline Communist party founded by 1.4 (2 seats)
Nicaragua (PCDEN) radicals who left PSN; criticizes
Sandinistas for moving too slowly
toward consolidation.
Popular Action Movement Isidro Tellez Tiny ultraleftist Communist party; 0.96 (2 seats)
Marxist-Leninist (MAP-ML) criticizes the FSLN for moving too
slowly toward Communism.
Independent Liberal Party Virgilio Godoy Left-of-center democratic party allied 9.6 (9 seats)
(PLI) with the Sandinistas from 1980 until
February 1984; increasingly critical of
FSLN; currently experiencing internal
differences over role in postelection
Nicaragua.
Democratic Conservative Eduardo Molina Small faction of opposition. 13.2 (14 seats)
Party (PCD) Conservatives that broke away in late
1983 over leadership dispute; has been
critical of Sandinistas but benefits from
official favoritism (a PCD member
participated in the recently dissolved
government junta); currently on the
verge of a split over participation in the
National Assembly.
Popular Social Christian Party Mauricio Diaz Left-of-center democratic party allied 5.2 (6 seats)
(PPSC) with the Sandinistas but troubled by
their policies; sharply critical of the
regime during the campaign.
Democratic Coordinating Eduardo Rivas Gasteazoro Coalition of moderate and conservative Boycotted elections
Board (CDN) democratic political parties, business
and labor organizations; opposed to
Sandinista policies.
Democratic Conservative
Party of Nicaragua (PCDN)
Mario Rappaccioli
Largest opposition party.
Social Democratic Party (PSD)
Luis Rivas Leiva
Seeking membership in Socialist
International; strong ties to opposition
newspaper La Prensa.
Agustin Jarquin
Has strong ties to International
Christian Democrats.
Constitutionalist Liberal Party
(PLC)
Alfredo Reyes Duque
Estrada
Smallest and least influential member
of coalition.
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Sandinista Policy Statements
In May 1984 Bayardo Arce, a member of the FSLN's
nine-member Directorate and Coordinator of its Policy
Committee, addressed leaders of the Moscow-line Nica-
raguan Socialist Party (PSN) on the basic goals of the
Sandinista leadership. The speech was not originally
intended for publication, but an unauthorized tape
recording was used for a verbatim account in the
Spanish newspaper La Vanguardia. Only then did
FSLN presidential candidate Daniel Ortega claim pub-
licly-and, in our view, falsely-that Arce's presenta-
tion did not represent official FSLN policy
Arce affirmed that "Sandinism is ... Marxism." He
referred to the leaders of the two parties as "we
Communists," and the parties themselves as "a single
force," and predicted that eventually they would "drop
the fiction of a Marxist-Leninist Socialist Party on the
one side and those of the Sandinista Front on the other"
and "gradually form a single party." He explained that
for the present, however, "we have not declared our-
selves Marxist-Leninists publicly and officially," be-
cause "our strategic allies tell us not to declare ourselves
Marxist-Leninist, not to declare socialism." To do so
would jeopardize the prospects of further Western
economic aid to Nicaragua-a paradox Arce described
as "the first experience of building socialism with
capitalist dollars."
Arce conceded that the FSLN had promised the
Organization of American States in June 1979 to guar-
antee "nonalignment abroad, a mixed economy, and
political pluralism" for reasons of expediency. The
promise was designed to keep "the international com-
munity" from supporting a US proposal that might have
kept the Sandinistas from victory in July 1979. More-
over, clearly referring to the impact of the insurgency,
Arce notes that "if we did not have the US-imposed
state of war, the electoral problem would be totally
outdated in terms of its usefulness." For these reasons
the Sandinistas had to endure the "nuisance" of elec-
tions and other "bourgeois formalities" impeding the
"dictatorship of the proletariat."
Once the elections were past, however, "we" could
proceed with drafting a "new constitution" which "will
allow ... for the construction of socialism in Nicara-
gua." That socialism would be radical in domestic and
foreign policies: "Agrarian reform ... confiscations,
nationalization of the banks and foreign trade ... the
Soviet-Cuban military advisers, the internationalism of
the revolution ... are the facts of the revolution and
everything we have done has that dynamic behind it."
Underscoring the FSLN's determination to support like-
minded revolutionaries elsewhere and remain allied
with the Soviets and Cubans, Arce said that "imperial-
ism asks ... us to abandon interventionism, to abandon
our strategic ties to the Soviet Union and the socialist
community." But the Sandinistas "cannot" do either
"unless we cease being revolutionaries."
None of the other comandantes have been as candid
in describing the Sandinistas' basic goals. Occasionally,
however, they have made statements either publicly or
privately that are consistent with points raised in the
Arce speech. For example:
- Daniel Ortega, much like Arce, stressed that "we"
were holding elections in order to "go beyond the
notions of traditional bourgeois democracy" and
"to consolidate the revolutionary government."
(June 1984 interview with a Soviet journalist)
- Ortega's brother, Humberto, like Arce, equated
Sandinism with Marxism. "Marxism-Leninism is
the scientific doctrine that guides our revolution."
He maintained "without Marxism-Leninism, San-
dinism cannot be revolutionary. Thus they are
indissolubly linked." (Address to Nicaraguan mili-
tary specialists, 25 August 1981)
- Tomas Borge, the last surviving member of the
trio who founded the FSLN in 1961, stressed, like
Arce, the FSLN's commitment to establishing a
non-Western political and economic order in Nic-
aragua. "There cannot be a mixed economy here
identical to the one in Venezuela or a political
pluralism identical to Mexico's ... we are Marx-
ists." (Interview published in Le Monde Diplo-
matique, Mexico City, September 1984)
- Several comandantes have echoed Arce's identifi-
cation of the FSLN's purposes and prospects with
those of the Soviets and their allies. Even Jaime
Wheelock, generally considered the least ideologi-
cal of the nine, stressed that "when Lenin led the
Bolsheviks to the seizure of power ... socialism
triumphed.... The Soviet Union ... has helped
the revolutions on all continents, particularly in
small countries, to have their path better cleared."
(America Latina, Moscow, October 1983)
Finally, the depth of the Sandinista leaders' com-
mitments to these objectives, implicit throughout Arce's
presentation to his fellow Marxists, was reflected in a
private comment several months ago by another
comandante, Henry Ruiz, to a Nicaraguan of long
acquaintance: "We will go back to the mountains and
eat [excrement] for six more years, if necessary, to
preserve the purity of the revolution."
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Sandinista Directorate member Arce's secret May
1984 speech, when he said that, "our strategic allies
tell us not to declare ourselves Marxist-Leninist, not to
declare socialism." The Sandinistas probably will con-
tinue to heed such advice, allowing other political
parties to exist until the regime is fully consolidated.
25. Soviet and other Bloc involvement in party
affairs is likely to continue to increase
membership probably has grown to several thousand,
but the FSLN by design is likely to remain a relatively
small organization of highly dedicated and well-disci-
plined militants.
26. The top Sandinista leaders have maintained a
public unity extraordinary for any government. Effec-
tive power over party and state has resided with the
nine-man Sandinista National Directorate, which has
remained intact since 1979. There have been recurrent
reports-generally fragmentary and often contradic-
tory-of policy differences, with one faction prefer-
ring tactical moderation and the other more inclined
toward radicalization. The frequent reverses in policy
since 1979 suggest the ups and downs of factional
debate, but we do not believe there is disagreement
over basic goals and directions. (See page 16 on
decisionmaking by comandantes.)
27. The Sandinistas have publicly stated that colle-
gial decisionmaking by the National Directorate will
continue in the new presidential system. Daniel Orte-
ga's presidential status may marginally enhance his
personal authority, but it probably will not upset
factional balance. Indeed, eight of the nine coman-
dantes traveled abroad recently, suggesting a con-
scious attempt to remain evenhanded in handling
leadership perquisites. Furthermore, Ortega has ap-
pointed some 44 Sandinista officials to the ministerial
level, creating a large collegial decisionmaking body in
the new government. Although tactical disagreements
and personality conflicts would appear to make a
leadership shakeup likely in the long run, we currently
have no indicators that the leadership will experience
a significant change in membership or structure in the
next year or so.
28. In our view, the new Assembly will become
another tool for the Sandinistas to legitimize their rule.
The Assembly's primary function will be to write a
constitution within two years. We expect the docu-
ment to provide the legal basis for restricting civil
liberties, promoting state intervention in the economy,
and establishing the irreversibility of the revolution
and the special role of the Sandinista Front. The
Nicaraguans may go through the motions of studying
the constitutions of other countries, but they are most
likely to draw inspiration from Cuba's 1976 document.
Although the Assembly replaces the quasi-legislative
Council of State, the Sandinistas have already indicat-
ed that it will have only limited legislative powers.
President Ortega also has confirmed that the Sandinis-
ta National Directorate will continue to define nation-
al policy, which the government will then apply. In
addition, the Sandinistas are likely to attempt to make
the judiciary-currently pro-Sandinista, but jealous of
its autonomy-more responsive to extralegal consider-
ations through new appointments and continuation of
popular tribunals outside the regular court system.C
29. In our assessment, the regime firmly believes
that, for its revolution to survive, popular participa-
tion-even if coerced-is necessary. Consequently, it
will continue efforts to organize public support
through Sandinista mass organizations. Sandinista De-
fense Committees-some 500,000 strong by the re-
gime's count-are modeled on Cuban block commit-
tees and play. a key role in political education,
mobilization, and social control. They are used as
vehicles to disseminate propaganda, garner support for
civil defense and the militia, distribute ration cards,
organize community development activities, intimi-
date the government's opponents, and monitor anti-
regime activities and attitudes. The Sandinistas proba-
bly will concentrate on giving the members greater
ideological training, developing greater cooperation
with government agencies, and overcoming substantial
public resistance to the committees' intrusiveness. The
regime's policies seem to have been effective in devel-
oping support among youth, and the Sandinista youth
organization will continue to play a useful role for
organizing them and identifying future leaders. The
Sandinista Front also will attempt to strengthen sec-
toral organizations for women, peasants, culture, and
labor in order to consolidate its control.
30. The Sandinistas have used social welfare pro-
grams to reward their supporters and give others a
tangible stake in the revolution, but their record has
been mixed and future prospects are limited by
growing constraints on economic resources. Significant
progress has been made in the provision of low-cost
housing, mass education, and health care. Neverthe-
less, each of these successes has been partial, and last
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The Comandantes: Nicaragua's Decisionmakers
Formed in March 1979, the National Directorate of
the FSLN, which has ruled Nicaragua since the Sandi-
nistas toppled the Somoza regime in July of that year,
has remained remarkably unified. Because the Direc-
torate's nine members led the insurrection that over-
threw Somoza, they are known as comandantes de la
revolution (commanders of the revolution), the highest
honorary rank in Nicaragua. The Directorate is the
supreme decisionmaking body for the FSLN and the
Government of National Reconstruction (GRN); coman-
dantes hold key Cabinet posts, running the Ministries of
Defense, Interior, External Cooperation, and Agricul-
tural-Livestock Development and Agrarian Reform.
Daniel Ortega held the post of coordinator of the GRN
junta, from which he communicated Directorate deci-
sions to the government, until he was inaugurated
President in January 1985.
We believe that the comandantes, as committed
Marxists, view the world almost solely in political terms.
Most of their decisions, therefore, are aimed at further-
ing the political power of the FSLN. For example,
Nicaraguan officials have told that
the FSLN/GRN has no long-term or coordinated eco-
nomic planning procedures and that government econo-
mists have criticized the efficacy of some Directorate
decisions. Economic managers have not participated in
shaping land reform policy and have criticized the
agrarian reform program, among others, as being ma-
nipulated to increase rural support for the FSLN at the
expense of farm production.
The closed political environment and consistent pub-
lic display of unity make it difficult to assess how the
decisionmaking process works. We believe the Director-
ate generally operates as a collegial body, making
decisions based on consensus.
speculate that, when disagreements emerge, there may
be an informal reckoning of strength rather than a
formal vote. In fast-breaking situations, the more pow-
erful among the nine (Tomas Borge, Humberto Ortega,
and Daniel Ortega, for example) tend to decide alone or
with partial consultation. Because public unity is the
cardinal rule of the Directorate, individual coman-
dantes invariably refrain from public dissent from any
Several factors seem to influence decisionmakin in
the Directorate.
temporarily.
decision after it is reached; those linked with an
unpopular decision tend to keep a low public profile
to ensure the viability of the regime
Certainly there have been abrupt later modifica-
tions of decisions-for example, those on electoral
procedures and censorship. Borge, Bayardo Arce, and
Henry Ruiz seem to hold relatively hardline views on
the direction of the revolution, advocating further
militarization, greater control of the opposition, and a
totalitarian Marxist-Leninist system. Victor Tirado, too,
has recently shown a relatively firm commitment to
orthodox Marxism-Leninism, at least publicly. In con-
trast, the Ortega brothers-supported by Carlos Nunez,
Jaime Wheelock, and Luis Carrion-sometimes appear
to take a more pragmatic approach, as if willing to
temper some Marxist goals at home and abroad in order
since 1983 the Ortegas
appear to have at least temporarily gained the upper
hand among the comandantes. To that extent the
ideological orientation of the regime may have been less
rigidly orthodox Marxist than it would have been if the
Borge line had been dominant. These putative diff er-
ences in ideology should not be overemphasized, how-
that the regime at least partly
a
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year the government announced that it would reduce
social expenditures. The Marxist content of education
has generated parental opposition, and the war has
had a disruptive effect. Advances in preventive medi-
cine have been accompanied by severe shortages of
medicines.
31. The only program going forward is agrarian
reform, which the government sees as an important
political tool in defeating the insurgents. Government
grants of land-use titles have greatly increased in the
last two years-some 10.8 million acres, or 20 percent
of the cultivated land, has now been distributed-and
we expect this trend to continue. We have little
information on the political effectiveness of the
program, but we believe that the accumulation of
economic difficulties probably has limited its success.
Further Socialization of the Economy
Current Problems in the Domestic Economy
32. The economy is a shambles and has almost no
prospect of improvement during the next few years.
Sandinista financial mismanagement has depleted for-
eign exchange reserves, and expected receipts from
this year's harvests have already been spent. Produc-
tion continues to contract because of public sector mis-
management, growing harassment of private business,
and lack of foreign exchange for imported inputs.
Huge budget deficits and growing shortages have sent
consumer price inflation climbing to at least 60 per-
cent. Unemployment is estimated to be at 30 percent
and growing.
33. I I recent
food shortages in urban areas have been the worst in
living Nicaraguan memories, and ongoing Sandinista
price, credit, and commercial policies will only com-
pound the problem. During 1984, for example, milk's
controlled price was just a fraction of producers' costs,
causing milk to largely disappear from traditional
markets. The Sandinistas reacted to such shortages by
announcing new state controls over food wholesale and
retail marketing. Consumer supplies are likely to
tighten further because of .a lower import trend and
the likelihood that government policies will continue
to disrupt production for the domestic market. Despite
growing consumer distress, organized economic pro-
tests are not likely to be tolerated, and Managua will
probably continue trying to deflect grassroots criticism
by increasingly excoriating the insurgents and "US
economic aggression."
Changing Trade and Aid Patterns
34. The structure and pattern of Nicaragua's for-
eign trade have been fundamentally changed under
the Sandinistas. Exports are off dramatically, and,
although imports have generally risen, we believe that
lower financial support from Western sources will
soon begin to erode import levels. The US share of
trade with Nicaragua (see table 3) has dropped consid-
erably, to 16 percent of imports and 13 percent of
exports, and the slack has been taken up primarily by
the Soviet Bloc and Mexico. The Sandinistas have sent
numerous commercial missions to Bloc and radical
Arab countries, and they have had considerable suc-
cess in promoting sales. Since the revolution, exports to
Soviet Bloc countries have grown to about 13 percent
of total foreign sales, and radical Arab states take 10
percent of the total. Nevertheless, the Soviet Bloc's
economic problems and inability to provide sophisti-
cated products is likely to limit Sandinista ability to
offset completely a continued erosion of Western
trade.
35. Export volume has been halved since the revo-
lution, and the Sandinistas are unlikely to be able to
boost exports much during the next few years. Al-
though some showcase agricultural projects are sched-
uled to come on stream soon, major delays in construc-
tion and crop plantings probably will prevent any
substantial increase in exports for some time. Punitive
exchange policies and regulated export prices-which
have not been adjusted to reflect higher domestic
costs-are further undermining production incentives
for private exporters. Moreover, many of the export-
oriented farms and industries have been taken over by
Table 3
Nicaraguan Exports to
the United States
Annual Average 1984 a
1975-77
Other
Total
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an inefficient state apparatus. The Sandinistas' mana-
gerial skills are extremely limited, and even with
priority training efforts it probably will take years for
them to be able to manage efficiently the export
operations they now have.
36. While Nicaragua's imports have increased sig-
nificantly, the pattern has been changing and we
expect a decline as Managua's deteriorating credit
rating further erodes import capacity. As a result,
shortages of spare parts and raw materials will worsen
and further undercut dwindling local supplies of
consumer goods. Sandinista refusal to live up to debt
obligations has caused even sympathetic countries such
as Mexico to toughen terms for new loans. Critical
debt arrearage problems will only worsen as debt
rescheduled soon after July 1979 begins to come due
this year. The Sandinistas will almost surely limit any
debt service payments to bilateral donors still provid-
ing funds and continue to string others along with
empty promises. Even so, because prospects for attach-
ing assets are so poor, commercial creditors will have
little option but to continue writing off Nicaraguan
debt and hoping that new rescheduling exercises get
them some return in the long run.
37. Nicaragua's apparent failure to obtain any sig-
nificant increase in current financial support, despite
numerous aid missions to the Soviet Bloc in 1984,
suggests that the Communists will continue to be
reluctant to offset completely further aid declines
from the West. Furthermore, the Soviets appear un-
willing to provide the hard currency needed to meet
Nicaragua's financial needs. Nevertheless, the Soviet
decision to make up for a Mexican shortfall and meet
Nicaragua's oil needs indicates that Moscow is pre-
pared to shoulder a heavier economic burden, if
necessary, to support Sandinista consolidation. The
result is likely to be greater Nicaraguan dependence
on the Soviet Bloc for economic assistance over the
next several years.
Strangulation of the Private Sector
38. Despite the worsening economic situation, the
Sandinistas are unlikely to try to improve relations
with the private sector. Rather, we expect them to
channel economic and financial dislocations toward
the consolidation of Sandinista power. The govern-
ment, for example, will probably take advantage of
bankruptcies to take over businesses. To undermine
the political opposition further, Managua will target
and harass private-sector organizations, which may
further encourage emigration of key business leaders,
many of whom have been affected b the regime's
economic policies a growing
sense of private-sector hopelessness an notes that
virtually all leading businessmen have sent at least
some family members and much of their money out of
the country. Nevertheless, much of the private sector
appears determined to remain, at least over the short
term.
39. While Nicaragua's private sector is largely con-
vinced that nationalizations will resume as soon as
Managua can reallocate managerial resources from the
war effort, Sandinista expansion in state ownership
over the next year or so will probably continue to be
gradual. Scarce Sandinista managerial skills make
more rapid nationalizations at this time economically
impractical. Moreover, Managua will want to avoid
large or dramatic new takeovers because of its concern
about maintaining a mixed-economy facade to avoid
unnecessary alienation of Western creditors and world
opinion. Nevertheless, the Sandinistas now hold all
banks as well as all enterprises dealing with insurance,
mining, and forestry. They also control one-fourth of
all agriculture and almost one-half of industry, and
now provide more than half of all services.
Continuation of the Military Buildup
Improving Conventional Capabilities
40. The continuing inflow of armaments reflects
the publicly stated Sandinista goal of creating a mod-
ern military organization capable of defending Nica-
ragua against any regional threat, as well as imposing
high costs on the United States in the event of a
military intervention. Nicaragua's acquisition of 113
T-55 medium tanks and over 200 other armored
vehicles gives Nicaragua an offensive capability as
well. Managua has concentrated on developing mobile
forces through the acquisition of nearly 4,000 trucks
and jeeps and about a dozen MI-8 helicopters. Nicara-
gua's growing firepower strength includes 24 BM-21
multiple rocket launchers, 24 152-mm heavy artillery
pieces, 28 PT-76 light amphibious tanks, and the T-55s.
The Sandinistas have made rapid strides in the last
year in developing their air defense system, which
now includes new radars, a limited ground-controlled
intercept capability, some heavier caliber (57 mm)
antiaircraft guns with fire-control radar, and wide-
spread deployment of portable SA-7 missiles (SAMs).
This system already represents a threat to insurgent
resupply aircraft, and no neighboring countries have
air defense systems even remotely comparable. The
Sandinistas' close-air-support capability has improved
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through their acquisition of the MI-24/25 and more
MI-8 helicopters, but the absence of fighter aircraft
remains the principal gap in their air defense system.
41. We believe that Nicaragua's inventory is likely
to improve quantitatively and qualitatively over the
next several years. Development of air defenses will
probably receive special attention, with deployment of
more radars and antiaircraft guns, and possible deliv-
ery of more sophisticated SAMs, such as the high-
altitude SA-2, medium-altitude SA-3, or mobile low-
altitude SA-9 systems. The new airbase at Punta Huete
may become operational this year, and the regime has
already begun deployment of air defenses there. The
Sandinista Navy, which has acquired nearly a dozen
patrol craft over the past 18 months, is likely to
expand further, and may eventually add torpedo and
guided-missile patrol boats capable of attacking larger
ships.
42. The Sandinistas appear determined to acquire
jet fighter aircraft, but the ultimate decision will be
made in Moscow. Although the Soviets will continue to
probe the limits of US tolerance, we believe they take
US warnings about sophisticated aircraft seriously and
will not risk delivering MIG-21s this year. The Soviets,
however, may consider less sophisticated jet aircraft
such as the L-39 a gray area. (See map, figure 2.)
While Moscow may not want to exacerbate US-Soviet
relations at present, we cannot rule out a Soviet-
approved delivery of L-39s in the coming year. Libya,
moreover, has tried at least twice to deliver the
Czechoslovak-made L-39 trainer/ground attack air-
craft to Nicaragua, first directly by air in 1983 and
then via Bulgaria by ship in 1984. The Bulgarians
apparently have balked at making the delivery, how-
ever, and it remains to be seen if Nicaragua will
receive the L-39 from some other country. Czecho-
slovakia, for example, has hinted that it may deliver
L-39s itself.
Foreign Military Presence
43. We believe that the number of foreign military
and security advisers-currently estimated at 2,500-
3,500 Cubans (see table 4) and perhaps 200 others,
including Soviets, East Europeans, North Koreans,
Libyans, and a few PLO members-is likely to in-
crease slightly should the Sandinistas acquire more
sophisticated weaponry
?
Cubans pilot some of Nicaragua's MI-8 helicopters in
combat areas, and that
they are accompanying. MI-24/25 crews on combat
missions. Reportedly, some 50 Cuban military men
were killed in combat last year. Although there is no
evidence to indicate that integral Cuban combat units
are present, we believe that deaths among Cubans will
continue to grow as a result of their increasingly close
involvement with Nicaraguan troops in the field. Last
year, moreover, the Cuban civilian presence in Nica-
ragua of some 5,000 to 6,000 personnel became in-
creasingly geared to meeting military contingencies.
The Cubans have replaced most females and older
male civilian advisers with military-age males, all of
whom were required to have had some military
training.
44. Some members o the Soviet military mission-
estimated to number 50 to 75 men-are acting as
advisers to the Nicaraguan General Staff, and others
have been sent to areas of insurgent activity to evalu-
ate Sandinista performance, but we believe that the
Soviets will continue to maintain a low profile. Other,
Table 4
Cuban Military and Civilian Personnel
Estimated To Be in Nicaragua, January 1985
Military and security personnel
General Staff (including 120-man VIP
security company)
High command reserve 120-200
Military zones 20-25
Military regions 80-100
Operating brigades (15) 80-125
Active battalions (70-80) 700-900
Inactive battalions (50) 60-100
Air Force and air defense 100-200
Navy 40-50
Ministry of Interior and special troops 700-900
Total military and security (rounded) 2,500-3,500
Civilian personnel
Construction workers 2,000
Government advisers 1,000-1,500
Medical personnel 300
Teachers Oa
Total civilian (rounded) 3,500-4,000
Total of all Cubans (rounded) 6,000-7,500
a About 1,500 Cuban civilian teachers stationed in Nicaragua
returned home as part of their annual rotation in November 1984 It
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MIG-21- and L-39-capable airfield
L-39-capable airfield
Offensive radii (and flight profile)
MIG-21 (Hi-Lo-Hi)
MIG-21 (Lo-Lo-Hi)
L-39
Figure 2
Radii of MIG-21 and L-39 in Offensive Role
?
2 Nicaragua
Corinto 1
Punta Huete
T
u Ma ang
'~ *Spsa rdino
Montelimar lt~
North
Pacific
Ocean
4 Puerto
Cabezas
Bluefields
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Boundary representation is
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Guantanamo
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'suggest an expanding presence by
other Soviet allies in recent months, including a North
Korean naval mission and Libyans.
the continuing Soviet interest in diversifying Nicara-
gua's Communist military ties.
Counterinsurgency Capabilities
45. The Sandinistas have substantially increased
their counterinsurgency capabilities in the last year,
relying less on militia and reserve forces to fight the
insurgents and more on regular Army units and special
troops. They also have used artillery, tanks, and
aircraft in an effort to bring greater firepower to bear
on the insurgents and prevent the concentration of
forces. The new MI-24/25 helicopter gunships will
add greatly to these capabilities, and the Sandinistas
reportedly have begun to employ them with Cuban
assistance. The Sandinistas also appear to have better
intelligence about insurgent plans and operations. De-
spite these improvements, problems with command
and control, logistic shortcomings, and poor troop
morale have limited the effectiveness of Sandinista
counterinsurgency operations, and we doubt that they
will improve significantly over the next six months or
so. Nevertheless, the Sandinistas appear determined to
bring all their assets to bear in an attempt to weaken
the insurgent threat significantly by the end of this
year.
46. The most immediate threat posed to Nicara-
gua's neighbors by its military buildup is the Sandinis-
ta capability to support reizional behind a
strong conventional shield Although
Honduras-and, to a lesser extent, Costa Rica-pro-
vides safehaven to anti-Sandinista insurgents, there is
little likelihood of a Nicaraguan conventional attack
on either neighbor because of Sandinista fears of a US
military response. Border incursions have taken place
in the past with varying frequency and are likely to
continue, at least sporadically. These include aggres-
sive patrolling, hot pursuit of fleeing guerrillas, mortar
or artillery exchanges, mining of Honduran roads,
military reconnaisance overflights, firing on aircraft
along the border, and maritime patrols resulting in
naval incidents or seizure of fishing vessels. In the last
18 months, the Sandinistas have staged two raids and
one rocket attack on the largest insurgent base in
Honduras. The Nicaraguans may decide to escalate by
repeating these attacks, possibly with helicopter gun-
ships. Managua may feel that Honduras would be
unable to protest such an attack effectively without
acknowledging the sizable insurgent presence on its
Obstacles to Sandinista Consolidation
The Internal Opposition
47. The main opposition parties (see table 2, at
paragraph 20) of the Democratic Coordinating
Board-the umbrella organization that also includes
business and labor groups-appear to have fewer
options to pressure the Sandinistas in the postelection
period than previously. Although the Board intends to
carry on its activities much as it did before, it will be
increasingly difficult to make its voice heard because
of continuing censorship, its absence from the Assem-
bly, and the reduced willingness of the regime to even
deal with it. Many opposition organizations have
atrophied under state-of-emergency restrictions and
their leaders are few in number and lack personal
followings. Further, differences over such issues as the
degree to which the opposition should engage the
regime in dialogue have weakened opposition unity
and produced divisions that the Sandinistas have
skillfully exploited.
48. The strategy of the opposition to challenge the
Sandinistas and increase its maneuvering room relies
primarily on gaining international support to pressure
the regime. the opposi-
tion plans to carry out an intensive public relations
campaign abroad, as demonstrated by Board leader
Arturo Cruz's recent visits to the heads of government
in Costa Rica, Colombia, Venezuela, and Spain. The
opposition's call for government-insurgent talks, as
well as Cruz's joint appearance with insurgent leaders
abroad and his call for renewed US aid to the guerril-
las, acts to pressure the regime by increasing the
insurgents' political stature. Nevertheless, the opposi-
tion probably will not directly defy the regime
through activities such as organizing protest marches
or calling strikes. Independent labor unions, which are
weak and subject to regime pressures, appear incapa-
ble of mounting serious resistance.
49. A postelection climate in which the opposition is
ignored or repressed creates a major dilemma for
opposition leaders. By remaining in Nicaragua as an
obstacle to consolidation, they also lend credibility to
Sandinista claims of pluralism. By leaving, they aban-
don the political field to the Sandinistas but enhance
the image of the insurgents as the only viable opposi-
tion force. In any case, at the present pace of Sandinis-
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to consolidation, we believe the prospects that the
internal political opposition alone can significantly
modify regime policies are diminishing.
50. The three small democratic parties in the new
Assembly are in a poor position to challenge the
regime. They will probably oppose many of the
Sandinista moves to produce a "Socialist" constitution,
but they generally support the broad thrust of the
revolution's social programs and have only 29 of the 96
seats in the Assembly. Furthermore, their leadership is
generally divided, and many members fear that, if
they attempt to withdraw from the Assembly in
protest, they will be replaced by other individuals
more subservient to Sandinista influence.
51. The Catholic Church will be a major internal
rallying point for Sandinista opposition, despite its own
internal divisions. Archbishop Obando y Bravo re-
mains popular with the vast majority of Catholics, has
close friendships with political and religious leaders in
the region, and probably cannot be intimidated de-
spite regime pressures. Furthermore he hasF-
pub ic-
y called on the regime to negotiate with the armed
opposition. The government continues to undermine
the archbishop through its contacts with the small
proregime "popular church," which commands dis-
proportionate attention because of its press contacts
and foreign friends. Some of the religious orders in
Nicaragua-where two-thirds of the priests are for-
eign-also oppose Obando y Bravo. The hierarchy
itself is divided, and the failure of the Episcopal
Conference to issue a pastoral letter on the elections
indicates resistance to taking controversial stands on
political issues
52. The Sandinistas' increasing difficulty in retain-
ing popular support is a significant obstacle to the
consolidation of the regime. Discontent probably will
increase significantly this year as a result of the
deteriorating economic situation and the need to
divert scarce resources to the counterinsurgency effort.
President Ortega has announced that over 40 percent
of the government budget in 1985 will go to defense
needs, as compared with 25 percent in 1984. Popular
discontent already has risen because of the decline in
living standards, the constant demands for sacrifices
with no promise of improvement, the politicization of
every aspect of society, reaction to repression of the
church, and anti-Cuban sentiment. Military conscrip-
tion has hee nrofoundly unpopular, and
a noticeable decrease in enthusiasm
at government rallies. Nevertheless, with the exception
of widespread draft dodging and increasing resistance
of parents to government roundups of draft-age youth,
we do not detect a significant increase in taking risks
to defy the regime. There have been relatively few
wildcat strikes and spontaneous demonstrations, and
no increase in opposition party strength. Despite this
passivity, the Sandinistas cannot count on active mass
support, particularly if the insurgency continues to
remain a major problem.
Prospects for the Insurgency
53. The insurgency (see map, figure 3) is a major
obstacle to consolidation in that it encourages the
erosion of active support for the Sandinistas by creat-
ing uncertainties about the future of the regime and
challenging its claims of political legitimacy. The
insurgent groups (see table 6)-totaling 12,000 to
15,000 men-also give hope to the leaders of the civic
opposition, who have resisted government pressures to
condemn them. Sandinista leader Bayardo Arce has
credited the insurgents with being a princi- 25X1 t
election plans. Sandinista efforts to combat the insur-
gency have been counterproductive in developing
popular support for the government and accentuated
the regime's underlying vulnerabilities. Finally, the
insurgency has put international pressure on the Sandi-
nistas and driven them to the negotiating table, and its
persistence and growth have been key factors in
shaping Sandinista objectives and strategy in the Con-
tadora process and bilateral negotiations with the
54. Nevertheless in other respects the insurgency
has worked to the benefit of the Sandinistas. It has
given the regime an excuse for accelerating the mili-
tarizaton of Nicaraguan society, including the state of
emergency, the acquisition of sophisticated weapons,
and the expansion of the armed forces. It has provided
them a scapegoat for their economic difficulties and
an excuse for nonpayment of foreign debts. It has also
aided the Sandinistas by eliciting international sympa-
thy and support and allowing them to cast the United
States in the role of aggressor. The Sandinistas also
make periodic allegations of insurgent atrocities which
they use as a propaganda tool. This tactic appears to
have more impact internationally than domestically in
their attempts to discredit the insurgents.
55. Over the last three years, the guerrillas have
made substantial military progress, inflicting thou-
sands of casualties on the Sandinistas and significant
economic damage. The largest group, the Nicaraguan
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Figure 3
Areas of Heaviest Insurgent Activity
Nicaraguan Democratic Force (FDN)
Adolfo Calero
Misura Revolutionary Front
Steadman Fagoth
Democratic Revolutionary Alliance (ARDE)8
? Sandino Revolutionary Front (FRS)
Eden Pastora
Misurasata
Brooklyn Rivera
a Both Alfonso Robelo's and Pastora's groups claim the
name ARDE Robelo transferred his military assets to
UNIR and continues to maintain an ARDE political action
group under UNIR. Pastora's faction has agreed only
to coordinate activities with UNIR.
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Table 6
Nicaraguan Insurgent Groups
Nicaraguan Unity for
Reconciliation (UNIR)
Nicaraguan Democratic Headed by Adolfo Calero, the FDN
Force (FDN) operates out of base camps in
Honduras into northwestern and
central Nicaragua. With up to
12,500 armed combatants, it is the
largest and best equipped of the
guerrilla organizations.
Misura Revolutionary Front Steadman Fagoth leads this group
of Indian insurgents. Its 700
members operate on Nicaragua's
Caribbean coast.
Democratic Revolutionary Alfonso Robelo's small organization
Alliance (ARDE) a discontinued its alliance with Eden
Pastora's forces last year. Its 150-
man military wing, which formerly
operated along the Costa Rican
border, will strike at targets on the
Pacific coast under UNIR auspices
while Robelo concentrates on
political activity.
Democratic Revolutionary
Alliance (ARDE) a
Sandino Revolutionary Eden Pastora, the well-known ex-
Front (FRS) Sandinista commander, has agreed
to coordinate activities with the
FDN but steadfastly refuses to
merge with the larger group.
Although battered by government
forces last year, his force of some
700 combatants continues to stage
ambushes and small-unit actions in
the southeast.
This Indian organization, which
operates on the Caribbean coast,
has about 800 armed militants. It is
divided because of leader Brooklyn
Rivera's negotiations with the
regime for regional automony.
a Both Robelo's and Pastora's factions claim the name of ARDE.
Robelo's faction has joined UNIR while Pastora's has agreed only to
coordinate activities with UNIR.
Democratic Force (FDN), has proved to be a relatively
proficient and well-organized fighting force, with
considerable staying power. Since late 1981, the FDN
has greatly enlarged its operating zones, threatened
several departmental capitals, and grown to over
11,000 armed men. The three main insurgent
groups-the FDN, Eden Pastora's forces in the south-
east, and Miskito guerrillas on the Caribbean coast-
have gained substantial popular support in their
operating areas, and they have had more volunteers
than they are capable of equipping. Furthermore,
popular sympathy for the insurgency appears to be on
the rise generally.
56. Despite these successes, the insurgents have
been constrained by uncertain and now seriously
declining external support, an inability to develop an
urban infrastructure, and the lack of an integrated
political-military strategy. Furthermore, the guerrillas
have failed at several attempts to achieve greater
unity, although it has not prevented tactical
cooperation between differing groups in those few
areas where zones are adjacent. The guerrillas have
made some political gains inside and outside
Nicaragua, but their record is mixed. The FDN has
been largely successful locally in shedding its image of
domination by former members of Somoza's National
Guard, but it still faces an uphill struggle combating
Sandinista propaganda worldwide. Although Eden
Pastora recently was publicly received by 'Spanish
Prime Minister Gonzalez, foreign governments
generally are wary of publicly embracing the
insurgents
57. The FDN has adapted relatively well to the US
aid cutoff in May 1984, but the other groups have had
to cut back their operations severely. The FDN has
raised substantial funds from private sources and has
received greater cooperation from Honduras and
Guatemala, although we estimate that it is now
receiving less than one-third of previous aid. Shortages
of ammunition have forced it to scale back objectives
and adopt new tactics to conserve resources, especially
because its ranks have been swollen by another several
thousand recruits since the cutoff in US assistance.
Meanwhile, the Miskito Indians of the Misura
organization have fared less well, and their strength-
about 700 men inside Nicaragua-reportedly is now
one-half the size it was about a year ago. There also
has been a substantial drop in the size and activities of
Pastora's forces, which we estimate now number no
more than 1,500 men and, like the other factions, have
had to reduce their operating area substantially. =
58. Despite increasing Sandinista counterinsur-
gency capabilities, we believe that the insurgent
military threat would grow substantially with a steady
source of external funding, perhaps rising to some
20,000 combatants within a year. Guerrilla ranks
would be likely to swell as a result of the deteriorating
economy and increased Sandinista repression. An
active insurgency would be likely to pressure Managua
to continue negotiations to reach a modus vivendi with
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the United States and Nicaragua's neighbors, but
would probably not, at least in the next year or so,
become a force capable of threatening the overthrow
of the Sandinista regime
59. Without regular external aid, insurgent pros-
pects are likely to decline over time, especially as the
Sandinistas are already mounting a major push to
exploit their growing vulnerabilities. Morale would be
damaged by a US failure to renew support, and we
doubt the insurgents can obtain enough funds to
compensate from other private and government
sources. While the insurgency probably would not
precipitously disintegrate, there is some chance that
key foreign supporters, particularly Honduras, will
decide the conflict is a lost cause and drastically
reduce their support. In any case, the FDN would
have to reduce its operations considerably. Significant
numbers of insurgents probably would be demobi-
lized-perhaps between one-third and one-half over
the next 12 to 18 months-and they and their support-
ers would be likely to seek refuge in Honduras. Still,
the FDN's demonstrated tactical flexibility, its ability
to obtain external financing, and continuing popular
resentment against the Sandinistas should enable the
FDN to maintain at least 5,000 men over the next
year. The other factions may shrink more rapidly,
however, and by the end of the year are likely to have
little capability to offer effective resistance without a
new source of external support.
Sandinista Foreign Policy Goals
Nicaraguan Objectives in Regional Negotiations
60. We believe the Sandinistas' main objectives in
regional negotiations are: to buy time for consolidation
of the regime; to ease external pressure by demonstrat-
ing "reasonableness" to outside observers, in order to
consolidate their internal control; and to obtain an
explicit or implicit guarantee that the United States
will not overthrow the regime. Sandinista leader
Bayardo Arce reportedly has stated that such delay has
enabled them to build their military strength and
squeeze their domestic opponents. To achieve a US
guarantee, the Sandinistas have indicated a willingness
to give assurances on some key US and regional
concerns, including support of insurgents in other
Central American countries, assignment of foreign
military advisers, and the acquisition of arms. Despite
these assurances, we believe the Sandinistas will at-
tempt to evade compliance on these points. The
Sandinistas have rejected what they term unwarranted
interference in their internal affairs and will continue
concerning democratization.
61. Nicaragua scored propaganda gains by offering
to sign the draft Contadora treaty of 7 September,
which would have greatly reduced the US military
presence in the region but would have cost Managua
little. This draft imposes no real obligations to democ-
ratize, defers agreement on arms control, and has
verification provisions that are sufficient to handicap
the anti-Sandinista insurgents but too weak to preclude
aid to the Salvadoran guerrillas. The Sandinistas'
acceptance of this draft, combined with their declara-
tion that no amendments would be approved, was
clearly prompted by their recognition of the draft's
weaknesses from the US point of view and was an
abrupt reversal of their earlier resistance to Contadora
draft texts. The changes to the 7 September Contadora
draft requested by Costa Rica, Honduras, and El
Salvador have thus far been rejected by Nicaragua.
The Contadora Group is attempting to come up with a
new version, but prospects for a draft acceptable to all
sides appear poor, at least in the near term. The
Sandinistas probably will continue to participate in the
Contadora process to avert resumption of US support
for the insurgency and to maintain a favorable inter-
national image.
62. We believe Managua has little incentive to
make significant concessions as long as it believes it
can eliminate the insurgents gradually on its own. If
the Contadora talks should falter, Nicaragua would be
likely to increase its efforts to reach bilateral accords
with its neighbors and the United States in order to
eliminate support for the guerrillas, secure its borders,
and deny the insurgents a secure rear base from which
they could funnel logistic support. In this event,
Honduras and Costa Rica would be under consider-
able pressure from Managua to reach an accommoda-
tion.
Closer Alignment With Moscow and Havana
63. Managua probably will continue to develop
political, economic, military, and cultural links to
Communist states, and its dependence on Moscow and
Havana is likely to grow. High-level travel to the
Soviet Union and the Bloc appears to be increasing,
and six of the nine comandantes made visits last year.
The regime probably believes that it can deflect
foreign concern over its greater willingness to openly
associate with Communist states by blaming this trend
on US hostility. Cuba, the
Soviet Union, and Bulgaria are helping train the
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Nicaragua's limited capability for central planning
suggests the need for more foreign assistance in that
area. The Soviets probably will seek to limit their
economic and military advisory presence, but the
number of Bloc advisers is likely to increase slowly to
reflect Nicaragua's growing trade, development, and
military ties.
64. There are some indications that Cuba's civilian
presence may decline in 1985. Several hundred medi-
cal personnel were withdrawn recently, and Nicara-
guan and Cuban leaders have stated that the 1,500
teachers may not return. Even these departures would
not appreciably reduce the Cuban role. The visits of
six Cuban vice ministers and the Minister of Culture in
one month alone last year suggests the extent of Cuban
influence in economic and social affairs. Moreover, the
65. The Sandinistas have said that arms control and
restrictions on the number of foreign advisers are the
only aspects of their relations with Communist states
that are negotiable, but they are already attempting to
lay the groundwork for evading potential restrictions.
The presence of Cuban civilian workers in Nicaragua
is currently not included in the Contadora negotia-
tions, and Managua's continued claim of only several
hundred Cuban military advisers suggests that it
would attempt to cloak their presence. In addition,
Although the
Sandinistas derive great benefits from the Cuban
military presence, even their complete removal would
be highly unlikely to reverse the totalitarian direction
of the revolution. The Sandinistas would suffer most in
areas where managerial and technical skills are neces-
sary-command and control, communications, and
maintenance-but in most other areas the regime
ely on increased training in Cuba.
66. From the Soviet perspective, Nicaragua's revo-
lutionary regime diverts US resources and attention
from other critical areas and provides a base for covert
support for regional leftists. The Soviets have publicly
characterized Nicaragua to be "a country of socialist
orientation" since 1982-differing from the USSR in
that it continues to have a mixed economy and its
vanguard party still needs to reflect multiclass inter-
ests. he Soviets are 25X1
generally sa is a wi a an m as' strategy for
consolidating power. Moscow's decision to begin oil
deliveries to Nicaragua in late 1983 demonstrates a
willingness to help the Sandinistas address near-term
shortfalls without extending a major commitment as it
has in Cuba. Moscow's direct delivery of MI-24/25
helicopter gunships-the major weapon system most
appropriate to counter the insurgency-demonstrated
a more overt Soviet role in the Sandinista military
buildup.
vention.
however, the Soviets have informed the Nicaraguans
that they would not accept the risk of military con-
frontation with the United States in the event of a US
intervention. Similarly, the Cubans have advised the
Nicaraguans not to commit acts that would provide
the United States with justification for military inter-
Continuing Export of the Revolution
67. The Sandinistas hold the export of their revolu-
tion as a basic precept of their Marxist-Leninist ideolo-
gy. Managua's efforts to spread the revolution have
grown since 1979 and encompass military training,
financial support, and safehaven to a variety of Latin
American and other radicals. The establishment of a
major training facility for Salvadoran guerrillas on the
Cosiguina Peninsula in 1984 and presence of the
headquarters of all five insurgent factions in Nicara-
gua indicate the continuing Sandinista commitment.
Arms infiltration into El Salvador appears to have
dropped off substantially from the levels of earlier
years because of substantial reserve of weapons that
apparently has accumulated and the leveling off of
insurgent force levels. Nevertheless, reporting contin-
ues to indicate that ammunition, communications
equipment, and other material are being sent to the
guerrillas from Nicaragua, and they probably rely on
the Sandinistas for almost all their ammunition needs.
68. Although its support to the Salvadoran rebels
best illustrates its export of the revolution, Nicaragua
has increasingly employed this strategy elsewhere. The
Sandinistas helped to infiltrate nearly 200 Nicaraguan-
and Cuban-trained guerrillas into Honduras during
the past two years, although over half were later
captured or died. Managua also provides military
training and support to leftist radicals from Guatema-
la, Costa Rica, Colombia, Chile, and elsewhere, re-
gardless, in many cases, of the current status of official
relations. Some of these individuals reportedly assist
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the regime by fighting the anti-Sandinista insurgents
and are given the option of joining resistance move-
mPni in nthar on?ntriP
with Sandinista policy to create tension in countries
with different political orientations and to keep other
nations off balance.
69. We doubt that Sandinista leaders would abide
by their suggestions that they would stop support to
the Salvadoran guerrillas if the foreign assistance to
the anti-Sandinista insurgents were also ended. Al-
though Managua might temporarily suspend the flow
if necessary in the context of a peace agreement, the
regime has been largely successful in disguising its aid
to the insurgents thus far, and it probably believes it
can circumvent any restrictions and continue to supply
clandestine aid. The Sandinistas probably would elimi-
nate obvious-and more easily monitored-aspects,
such as Salvadoran insurgent communications, but
would be unlikely to cut off all forms of assistance.
Implications for the United States
Basic Nature of the Sandinista State
70. We believe that the Sandinistas are intent on
creating a Marxist-Leninist state closely aligned with
Cuba and the Soviet Union, that their behavior to date
clearly marks this course, and that effective obstacles
to this trend are few and diminishing. A consolidated
Sandinista government is likely to be far more imita-
tive of its political mentor and adviser-Cuba-than
of the Mexican system, for example. Managua's inter-
national stance, the export of its revolution, and its
growing Bloc ties and influence cast it in Havana's
mold. A firmly implanted Sandinista regime probably
will become a second Cuba on the Central American
mainland, even if there were a few internal differ-
ences such as the continued opposition of the Catholic
Church or a few small opposition parties to symbolize
continued political pluralism.
71. The unimpeded consolidation of such a regime
would imply the following threats to US strategic
interests over time:
ing additional offensive and defensive weaponry.
This would further upset the regional military
balance, and the United States would be faced
with the choice of providing new arms and
defense commitments to Nicaragua's neighbors,
or risk losing influence throughout the area.
Furthermore, should Nicaragua acquire ad-
vanced fighter aircraft, this would complicate US
force planning in the region.
Soviet-Cuban Military Access. Sandinista con-
solidation would open up opportunities for an
increased Soviet and Cuban military presence,
including access to port and air facilities and
enhanced intelligence gathering. With such ac-
cess, the Soviets and Cubans would be able to
conduct better surveillance of US military activi-
ties in the Panama Canal area and along the
Pacific and Caribbean coasts, as well as monitor
key sea lines of communication in the region.
Export of the Revolution. A firmly established
Sandinista government would become a more
secure base for regional revolutionaries aimed at
the destabilization of other governments, not just
in the immediate region but in South America as
Refugee Movements. Over 100,000 refugees
have left Nicaragua in the past five years. This
outflow could increase substantially, particularly
to Honduras and Costa Rica. Among these would
be anti-Sandinista insurgents and their support-
ers. Such an outflow would represent a potential
threat to internal stability of countries in the
region.
Impact on US Allies. US acquiescence in the
consolidation of another Marxist-Leninist regime
in the hemisphere would produce a definite
change in Latin American geopolitical assump-
tions. Regional states, feeling a heightened sense
of vulnerability, would probably move to accom-
modate Managua on a wider range of issues.
Moreover, vulnerable democratic parties would
be demoralized, and Cuban- and Soviet-support-
ed revolutionary movements would be encour-
- Fortress Nicaragua. Nicaragua probably will
continue to receive military equipment, includ-
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Nicaragua's Development as a Marxist-Leninist State 2
A detailed comparison of five Third World Marxist-
Leninist states-Cuba, South Yemen, Ethiopia, Ango-
la, and, before October 1983, Grenada-demonstrates
a common pattern in the consolidation of power and
development of ties to the USSR and its surrogates.
When viewed in the context of this established pat-
tern, the Nicaraguan revolution is clearly following a
Marxist-Leninist path; the Sandinistas have taken most
of the same steps taken by the five other Marxist-
Leninist regimes early in their stages of power consoli-
dation. In particular, Managua has completed its
control over the military and security services. Howev-
er, the Sandinistas lag in establishing complete single-
party control and in eliminating vestiges of indepen-
dent labor, media, and professional groups. Moreover,
the Catholic Church has deep roots in Nicaragua and
remains the regime's strongest nonmilitary opponent.
Judging from the patterns established by the five
Marxist-Leninist regimes, we would expect the Sandi-
nistas to continue to tighten their control over opposi-
tion parties, independent trade unions, professional
organizations, and the remaining opposition press.
Like some of the regimes we examined, the Sandinis-
tas may follow a more measured path in centralizing
control over the economy and increasing control over
private education. On the international front, we
expect the regime to continue to support regional
revolutionary causes and seek additional Soviet and
Soviet-surrogate ties.
The Indicators
Our analysis of the Nicaraguan revolution is based
on the application of 47 indicators (see table 7,
appended) that measure both general progress in
consolidating power and the extent to which this
consolidation will lead to a Marxist-Leninist regime
strongly influenced by the USSR and its surrogates.
Five Marxist-Leninist regimes were examined-Cuba,
Grenada, Angola, Ethiopia, and South Yemen. To
ensure the broader applicability of the indicators,
regime selection was influenced by varied geographic
2 This comparative analysis is intended to examine the Marxist-
Leninist dynamics of the Nicaraguan revolution and the role of the
USSR and its allies, as well as to suggest policies the Sandinistas are
likely to adopt in the future.
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location, length of revolutionary process, method of
gaining power, and sociological and political charac-
teristics.
To help differentiate between revolutionary dy-
namics per se and those uniquely associated with a
Marxist-Leninist movement, we applied our indicators
to Iran. The parallel is interesting: Iran mirrors many
of the steps the Marxist regimes have taken while
adopting an Islamic rather than a Marxist ideology.
The similarities in tactics used to consolidate internal
control demonstrate the powerful revolutionary dy-
namics driving all of these regimes, including Nicara-
gua; the differences, in turn, highlight Marxist-Lenin-
ist strategy and the role of the USSR and its surrogates.
The indicators were developed out of an iterative
proces
They were arranged
under 10 major categories of steps that each of the
regimes has taken to consolidate power and firm its
relationship with the Soviet Bloc. These identified
categories are:
- Developing a strong centrally controlled single-
party government.
- Taking control of and expanding the military as
well as seeking to quell whatever internal or
external armed opposition might exist.
- Taking control of and strengthening the security
and intelligence services.
- Gaining control of the private sector and devel-
oping a centrally controlled and planned
economy.
- Forming a new or taking over the existing labor
movement and mass organizations aimed at
groups such as youth, students, and women.
- Developing a monopoly of the country's media.
- Increasing control of educational systems and
using them to promote ideology.
- Exerting control over the population through
restriction of civil liberties and intimidation.
- Curbing influence of religious institutions.
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- Aligning with the Soviet Bloc through interna-
tional forums and other means and through
support to other leftist or revolutionary causes.
Move to One-Party Government
Internal Activities. In each of the Marxist-Leninist
governments studied, the regimes first came to power
as part of a broad-based opposition to a previous'
government. In the case of Nicaragua, Cuba, Grenada,
Ethiopia, and Iran, the government was viewed as
repressive and out of touch; in Angola and South
Yemen, the struggle was against colonial rule, as well
as competing nationalist organizations. The more mod-
erate or dissident members of the new government,
however, were soon neutralized-in some cases, they
became disillusioned and left on their own; in others,
they were forced out. Only in Nicaragua, in Grenada,
and in the early days of the Cuban regime were there
attempts to develop any semblance of coalition gov-
ernments before casting off the moderates. Most of the
regimes fairly quickly established one-party systems.
Nicaragua has not done so but is moving in that
direction. While the Sandinistas have privately pro-
fessed their belief in Marxism, they have not yet
adopted it as the official state ideology. Iran provides
an interesting parallel here: it soon established an
official ideology, but it was Islam rather than
Marxism.
External Activities. In most cases Moscow's role
was small, played either directly or through a pro-
Soviet Communist party, before the establishment of
these regimes. In Cuba and South Yemen, there were
Communist parties but neither played a significant
role in the revolution; only afterward were they
integrated into the regime. In Ethiopia, the existing
Communist movement has been co-opted and neutral-
ized. Grenada did not have a Communist party, and
the pro-Soviet party in Nicaragua was largely by-
passed by Havana. In Nicaragua, however, Cuba had
long-term ties to Sandinista leaders and played a major
role in arming them in the last year of their struggle to
attain power. Only in Angola did the USSR provide
significant support to the regime before the regime
gained power.
In every case, nonetheless, ruling party ties to the
Soviet Bloc increased after the regime came to power;
these ties included training of cadres and assistance in
reorganizing and strengthening party and bureaucratic
structures. In South Yemen, for instance, Moscow
helped establish a party school. Another important
indicator is how Moscow classifies foreign revolution-
ary movements-it currently regards the ruling parties
in Nicaragua, South Yemen, Ethiopia, and Angola (and
Grenada before the intervention) as "revolutionary
democratic parties"-considered by the USSR as the
last stage in a party's development before it becomes a
true Communist party. Only Cuba has an officially
recognized ruling Communist party.
Control of Military and Security Services
Internal Activities. Each of the regimes studied
either established new or reorganized old military and
security services, and moved quickly to strengthen
these institutions and put them under firm control,
frequently by an extensive purge of personnel. To
keep the military in line, extensive political/ideologi-
cal training programs were developed and political
cadres or commissars were assigned. With the excep-
tion of Ethiopia (which is basically a military govern-
ment), they have brought the military under the
control of the ruling party..As an additional check on
the regular military forces, many of these regimes also
established popular militias.
External Activities. Each of the Marxist regimes
turned to the Soviet Bloc to fulfill its needs for military
equipment, training, and advisers. While they may
obtain weapons from other sources, the USSR and
Eastern Europe have become the major suppliers.
Soviet and Cuban advisers often play key support
roles-providing training, assisting in military plan-
ning, and piloting aircraft. The Angolan and Ethiopian
regimes rely on thousands of Cuban troops to assist in
defending against internal or external threats. The
East Germans have been the most active in helping
regimes train intelligence/security officers and
strengthening their security organizations-frequently
reorganizing them along the lines of the Soviet and
East German services, and East German advisers
frequently hold key positions within the services,
particularly in communications security
East German security and intelligence advisers are
reported to be in Nicaragua.
Exert Economic Controls
Internal Activities. Each of the regimes has taken
steps to control the country's economy, but the extent
and pace of this activity have varied widely, reflecting
a number of factors such as the need to consolidate
political power, the preexisting economic structure of
the country, and-in most cases-the need to rely on
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the West for economic and technical assistance. Al-
though there were plans for additional nationalization
and land redistribution, Grenada nationalized only a
few companies. Angola, while nationalizing farms and
businesses that had been abandoned by the Portu-
guese, set up joint ownerships with a number of
foreign companies, particularly in the vital oil indus-
try. Ethiopia and South Yemen conducted major
nationalization programs-particularly of foreign
businesses-and land redistribution; a number of state
farms and cooperatives have also been formed. Nica-
ragua has nationalized a large share of its industry,
banking, and investing as part of its efforts to gain
greater control of the economy. It also redistributed
more than a fifth of its agricultural land, most of it to
state farms and cooperatives. Cuba, by comparison,
fairly quickly gained control of the private sector but
has had difficulties with central planning.
External Activities. While all of the Marxist re-
gimes have moved to develop closer economic ties to
the Soviet Bloc-including trade, credits, technicians,
and minor economic aid-all except Cuba still rely
heavily on the West for economic trade and assistance.
This reliance is due partly to the inability and unwill-
ingness of Moscow and its allies to provide to other
countries the high level of economic assistance it
provides Cuba.
Mass Organizations and the Media
Internal Activities. All of the regimes made efforts
to take over existing labor organizations or develop
new ones under strict party control. Similarly, these
regimes have either penetrated existing mass organiza-
tions or formed new ones aimed at such societal groups
as women, youth, and students. Only Nicaragua has
not completely eliminated or outlawed independent
mass groups (neither had Grenada during its short
tenure). All of the regimes established monopoly con-
trol of the media, and Nicaragua is close to this point
now.
External Activities. Each of the regimes surveyed
established closer ties to the Communist Bloc nations
in the areas of labor, mass organizations, and the
media. East Germany has been particularly active in
training journalists and providing equipment, but the
USSR and (especially in Latin America) Cuba have
also been active.
Education and Religion Control
Internal Activities. The Sandinistas, like the Marx-
ist-Leninist regimes we examined, have increased the
level of ideological content in the educational system
and have conducted literacy campaigns along the lines
of Cuba's as a means of indoctrinating adults and
youths. In Nicaragua, however, efforts to control the
educational curriculum and increase Marxist ideology
have been impeded as the Catholic Church has fought
to preserve the autonomy of church-run schools. In
fact, only Cuba and Ethiopia have been successful in
closing all private schools.
The extent of efforts to control religious institutions
has depended to some degree on whether they consti-
tute a viable political opposition. In Angola and South
Yemen-and to some extent in Ethiopia-religious
institutions did not constitute a major obstacle to the
regime. While some controls were taken, such as
banning religious broadcasts, confiscating property, or
restricting foreign ties, religion-except for some fun-
damentalist groups-was not attacked as it has been in
Cuba. The Nicaraguan regime, on the other hand, is
faced with a politically active church that-although
it supported the revolution-is now considered a
major obstacle to consolidation; accordingly, the San-
dinistas are actively trying to discredit and split the
church hierarchy. Nicaragua's promotion of a prore-
gime faction of the church is unique among the cases
studied, as is its assertion that Marxism and Christian-
ity are compatible.
External Activities. All of the Marxist regimes
have sent large numbers of students to the Communist
Bloc for academic training. While many go to the
USSR and Eastern Europe, Cuba also hosts large
numbers of African and Latin American students.
There are, for example, four high schools in Cuba
specifically set up for some 2,400 Ethiopian students.
In addition, Cuban teachers have been sent to Nicara-
gua, and Communist Bloc educational materials and
equipment are used there. There is little evidence of
Communist Bloc involvement in domestic religious
problems, although Cuban advisers in Grenada closely
monitored the situation and suggested that the regime
seek advice from Nicaragua in handling church re-
sistance problems.
All of the regimes surveyed restricted civil liberties
and used intimidation and harassment tactics to dis-
courage opposition. A favorite tool has been the devel-
opment of revolutionary defense committees-groups
organized in neighborhoods, workplaces, and so forth-
aimed at both spreading the revolutionary ideals and
monitoring citizens for signs of antirevolutionary be-
havior. In some cases-particularly in Ethiopia-such
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groups have gotten out of hand and caused widespread
terror. Police and security forces have also played a
major role suppressing opposition.
International Alignment
In the international arena, all of the Marxist regimes
have aligned themselves more closely with Soviet
foreign policy positions, and have supported them-
and generally opposed the United States-in the inter-
national arena; all have actively participated in inter-
national Communist-front organizations such as the
World Peace Council and the World Federation of
Democratic Youth. All of the revolutionary regimes
along with Iran have supported foreign revolutionary
causes-particularly in neighboring countries-to
varying degrees. Cuba has been the most active in this
area, particularly in the early days of its own revolu-
tion. Angola has supported liberation groups in south-
ern Africa; South Yemen has in the past supported
insurgents in North Yemen and elsewhere; Ethiopia
has supported liberation groups, particularly in Africa;
Grenada was helping to support leftists in the Carib-
bean; and Nicaragua has been active in supporting
revolutionary groups in neigboring countries. The
USSR and many of the other Bloc countries have
signed friendship treaties with Angola, Ethiopia, and
South Yemen. While the Soviets have refrained from
signing such treaties in the three Latin country cases,
East Germany signed one with Cuba in 1980, and
Cuba is the only one of the
three Latin American countries where the Soviets have
access to naval, air, and/or military facilities in
country.
Implications
The observed pattern of developments for those
Marxist-Leninist states that have been in existence
longer than Nicaragua suggest a number of steps that
the Sandinista government will attempt to undertake
in the future. The pace and vigor of each of the
following activities, however, are likely to depend on a
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number of factors, including domestic resistance, con-
cern over international reaction (principally from the
United States), and the degree of external support
from the USSR and Cuba. Expected initiatives
include:
- Continued consolidation of political control, in
large measure by making it increasingly difficult
for opposition groups and parties to operate and
co-opting those that participate in the loyal
opposition.
- Over the longer haul, establishing a one-party
regime with Marxism-Leninism as the official
ideology.
- Tighter controls over independent trade unions
and professional organizations.
- Efforts to gain total control over communications
media, by such means as adopting more restric-
tive media laws.
Initiatives to increase control over business while
stopping far short of complete abolition of the
private sector.
Additional attempts to control the ideological
content of education, such as imposing curricu-
lum changes in Catholic schools and discrediting
outspoken clergy.
Efforts to increase ties to the USSR, Cuba, and
other Communist countries-particularly in the
military area-as a way of increasing the re-
gime's chances of survival. For instance, after the
regime consolidates control, we would expect the
Sandinistas to seek friendship treaties with Bloc
states.
- Continued military and diplomatic support to
Marxist-Leninist revolutionary movements-par-
ticularly in the region-by providing training,
sanctuary, logistics, and political support.
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Table 7
Consolidation of Power by Marxist-Leninist Regimes:
An Indicators Approach s
(Plus signs indicate steps taken by regimes, minus signs steps not completed)
? Take power as a broad-based
opposition to previous government.
+ + + +
+ + +
? Neutralize or eliminate moderate
or dissident factions.
+ + + +
+ + +
? Enhance central party control of
government.
+ + + +
+ + +
? Suppress, harass, or co-opt other
political parties.
+ + + +
+ + +
? Adopt Marxism-Leninism as official
ideology.
? Communist Bloc party ties, training + + + + + +
of cadres.
? Communist Bloc assistance in
reorganizing and advising
party/government.
? Soviet designation as vanguard, + + + + + +
revolutionary democratic party.
? Soviet acceptance as Communist - +
party.
? Establish new or reorganize and + + + + + + +
expand old military services.
? Conduct political training, assign + + + + + + +
political commissars.
? Receive major military equipment, + + + + + +
advisers, training from Communist
Bloc.
? Have large number of foreign
Communist combat troops in
country.
? Establish new or reorganize and + + + + + + +
expand old security and intelligence
services.
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Table 7 (Continued)
Consolidation of Power by Marxist-Leninist Regimes:
An Indicators Approach a
(Plus signs indicate steps taken by regimes, minus signs steps not completed)
? Receive equipment, training, and + + + + +
assistance in organizing/managing
+
intelligence/security services from East
Germany or other Communist country.
? Develop closer security/intelligence + + + + +
relations (liaison) with Bloc services.
+
? Nationalize some key companies (such as + + + + +
utilities), initiate land
reform/redistribution.
+ +
? Major nationalization and/or joint
ownership of industries.
+ + + + +
? Major land redistribution; formation
of co-ops and state-controlled farms.
+ + + + +
? Centralize control and planning of all
significant means of production.
? Increase economic ties with
Communist Bloc (trade, credits,
technicians).
+ + + + +
+ +
? Become reliant on USSR for economic
survival.
- +
Form or Take Over Labor/Mass
Organizations
? Penetrate existing or form new labor
and other mass organizations (youth,
women, etc.).
+ + + + +
+ +
? Tighten party control.
+ + + + +
+ +
? Prohibit independent mass
organizations.
? Increase ties with mass organizations
in Bloc countries (exchanges, training).
+ + + + +
+
? Censor, harass, and/or close
newspapers and other independent
media.
+ + + + +
+ +
? Put all media under central party/
government control.
? Receive Communist Bloc journalist
training, equipment, news services.
+ + + + +
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Table 7 (Continued)
Consolidation of Power by Marxist-Leninist Regimes:
An Indicators Approach a
(Plus signs indicate steps taken by regimes, minus signs steps not completed)
? Increase ideological content and + + + + + + +
political control of education through
curriculum, literacy campaigns, and
teachers.
? Close private schools and put all
schools systems under direct
party/government control.
? Receive Communist Bloc
academic/political training, teachers,
materials, equipment.
+ +
+ +
+ +
? Use intimidation, harassment to
discourage opposition (through defen
committees, police, etc.).
+ +
se
+ +
+ + +
? Restrict civil liberties (right to strike,
freedom of speech, assembly).
+ +
+ +
+ + +
? Use large-scale terror tactics to thwart
internal opposition (torture, executions).
? Reduce influence of religion through
control or co-optation.
+ +
+ +
+
? Harass clergy and laity, including
removing religious leaders.
+ +
? Gain effective control (major church
closings, expulsions, discrimination
against churchgoers) of religious
institutions.
? Conduct high-level + + + + + +
exchanges/meetings with Communist
Bloc leaders.
? Participate in international
Communist-front organizations.
? Support the Soviet Union against the + + + + + +
United States in international forums.
? Provide support to other leftist or + + + + + + +
revolutionary groups.
? Sign friendship treaty with USSR or -C + + +
other Bloc country.
? Allow Soviet access to - +
naval/air/military facilities.
a Iran was examined as a means of differentiating general
totalitarian traits from those unique to Marxist-Leninist movements.
b Immediately after Castro came to power, however, there were as
many as 2,000 executions of people judged to have committed
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 Sanitized Copy Approved for Release 2010/07/14: CIA-RDP87T00495R001201350002-7
0 SECRET ?
1. This document was disseminated by the Directorate of Intelligence. Because of the
sensitive nature of some source material reflected herein, this copy is for the exclusive
information and use of the recipient only.
2. This document may be retained, or destroyed by burning in accordance with applicable
security regulations, or returned to the Directorate of Intelligence.
3. When this document is disseminated overseas, the overseas recipients may retain it for a
period not in excess of one year. At the end of this period, the document should be destroyed
or returned to the forwarding agency, or permission should be requested of the forwarding
agency to retain it in accordance with IAC-D-69/2, 22 June 1953.
4. The title of this document when used separately from the text is unclassified.
Sanitized Copy Approved for Release 2010/07/14: CIA-RDP87T00495R001201350002-7
 Secret
Secret
Sanitized Copy Approved for Release 2010/07/14: CIA-RDP87T00495R001201350002-7
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Sanitized Copy Approved for Release 2010/07/14: CIA-RDP87T00495R001201350002-7