THE POLITICAL INSTABILITY QUARTERLY

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• Collection: General CIA Records
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• Document Page Count: 64
• Document Creation Date: December 22, 2016
• Document Release Date: March 28, 2011
• Sequence Number: 1
• Publication Date: November 1, 1986
• Content Type: REPORT

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Secret
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The Political Instability: Quarterly
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The Political Instability Quarterly
This quarterly was produced by and coordinated
within the Directorate of Intelligence. Comments and
suggestions are welcome and may be directed to
~,Et Er Directorate of
Secret
GI IPI 86-004
November 1986
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Secret
Contents
Summary: Levels of Concern
Sudan: Sadiq Government Shaky After First Six Months
Part 1. Countries With Developments of Special Interest 1
Chile: General Pinochet in Trouble 1
Honduras: President Azcona Seen as Powerless LeaderF 9
Sri Lanka: Talks Fail, Fighting IntensifiesLF
Office of Near Eastern and South Asian Analysis
Part 2. Developments and Trends L-]
The Prospects for instability in 30 Countries
Special Annexl
The Middle East: The Impact of an Iranian Victory on Regional
Stability office of Near East and South Asian Analysis
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The Political Instability Quarterly
Preface The main objective of this quarterly is to provide timely warning of
significant instability in countries of key importance to the United States.
Significant instability, in our definition, may include any one or a
combination of the following-irregular regime change, coup d'etat,
breakdown of order, major civil war, revolutionary upheaval, or major
policy reorientation toward a radical anti-US stance.
A select group of 30 countries is covered regularly in the quarterly. The
countries have been selected because they are key US friends or allies,
located near strategic choke points, major oil producers or debtors,
geographically close to the United States, or especially salient or influential
in the Third World. (With this issue we are beginning a new practice of
occasionally also examining certain countries that are not in the group of
30, but in which unfolding developments related to instability are of
interest to the United States. See the essay on Sri Lanka on page 12.)
The time frame: This issue of the quarterly is based on an analysis of issues
and developments in the third quarter-for our purposes this is the August-
September-October time frame-and it also projects our concerns about
the prospects for instability in the forthcoming fourth quarter-November-
December-January-as well. In addition, we include projections of our
general levels of concern over the middle and longer term for the select
group of 30 countries.
This quarterly includes four parts:
? Part 1: Special essays on selected countries in which there have been
developments of particular interest. Each assessment ends with specula-
tive, forward-looking "Most Likely" and "Alternative" scenarios, and
lists of indicators to be watched with reference to those scenarios.
? Part 2: Brief assessments of the 30 selected countries, including prospects
for instability in the basic set of countries, levels of concern regarding a
list of 24 instability indicators, and country-specific tables tracing
significant political and economic changes during the past two years
? Part 4: special annex assessing a topic related to instablity in the
Middle East.
Secret
GI IPI 86-004
November 1986
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The Political Instability Quarterly
Summary:
Levels of Concern
In Latin America Colombia has moved up into the group of countries
about which we have the most substantial and serious instability concerns.
The new government of President Barco is trying hard to work out an
effective truce with the country's largest insurgent group, but guerrilla
violence is increasing throughout the country. In El Salvador the US
Embassy reports that President Duarte appears to be in firm control in the
aftermath of the earthquakes, but the armed forces' counterinsurgency
efforts may suffer as a result of the diversion of financial resources and
manpower to reconstruction. Tensions in Peru between President Garcia
and the military have eased since the summer, although Sendero Luminoso
assassins increasingly are targeting members of Garcia's ruling party.
One of the most significant instability scenarios in Latin America, in our
judgment, is unfolding in Chile, where President Pinochet is attempting to
exploit politically the recent discovery of huge dissident arms caches and
an attempt on his life (see part 1 essay for a discussion of Pinochet's
growing isolation). In Honduras President Azcona does not appear to face
an imminent threat, but we are concerned that his political credibility may
be strained if the Nicaraguan rebels do not make significant gains-and
reduce their presence on Honduran territory
(see part 1 essay).
We remain most concerned about Egypt, Sudan, Pakistan, and the Iran-
Iraq war in the Near East-South Asian region. In Cairo, President
Mubarak is still under pressure to impose economic austerity measures of a
kind that have provoked serious civil unrest and helped to bring down
Egyptian governments in the past. President Sadiq's six-month old civilian
regime in Khartoum remains shaky as he fails to grapple with daunting
problems, including a full-scale insurgency in the south (see part 1 essay).
In Islamabad, Prime Minister Junejo is struggling with continuing security
problems in the wake of the violent clashes with opposition activists in
August which left dozens dead.
Most worrisome of all in the region is the Iran-Iraq war, which threatens to
erupt with greater intensity in the coming months. Tehran is gathering
men and material for a new offensive, with potentially far-reaching
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consequences for the stability of neighboring countries (see part 4 for a
special annex on this subject). In South Asia the bitter ethnic conflict in
Sri Lanka is intensifying as negotiations fail to progress. (see part 1 essay).
In Africa Nigeria's President Babangida has strengthened his position-if
only for the moment-by placing loyalists in key commands and initiating
some economic reforms. The US Embassy in South Africa reports that
blacks are regrouping for additional protest campaigns, but the efforts are
not likely to become regime threatening in the near term.
Despite her successful visit to the United States, President Aquino
continues to be hampered in her efforts to consolidate control in the
Philippines-most significantly by critics in the military who oppose her
cease-fire talks with the Communist insurgents. Elsewhere in East Asia,
opposition leaders in South Korea are resuming a more confrontational
strategy to promote a directly elected presidency, which could bring the
issue to a head before the end of the year.
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Part 1. Countries With
Developments of Special
Interest)-1
Chile:
General Pinochet
in Trouble
? With his immediate political prospects bolstered by
the 7 September assassination attempt and the
discovery of huge Communist-controlled arms
caches, President Pinochet is maneuvering to re-
main in power beyond 1989.
? The respite is likely to be brief, however. We believe
that Pinochet will face increasing terrorism and
growing resistance to his harsh measures and his
refusal to initiate a democratic transition.
? In our view, Pinochet's intransigence will signifi-
cantly increase the potential for a confrontation
with military sectors already worried that his poli-
cies are tarnishing the armed forces' reputation and
undermining political stability.
? The assassination of Pinochet probably would lead
to the selection of a senior Army officer to succeed
him. The military most likely would choose a rela-
tive moderate, thereby improving the chances for a
transition to civilian rule in 1989.
The Backdrop
President Pinochet has been able to stay in power for
13 years in Chile in large part because, in our
judgment, he has had the support of the powerful and
respected Chilean armed forces, which have backed
his strong anti-Communist policy; the repressive mea-
sures he has employed against his opponents have
been harsh, but often effective; and the Chilean
economy performed well for a number of years, up
until 1981. In addition, and perhaps most important,
many in Chile's large middle class-despite a long
tradition of democratic political participation-have
been immobilized by their recollections of the chaos
and violence in the country before and during the
1973 coup against Marxist President Allende.)
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The recent assassination attempt and the discoveries
of huge arms caches under the control of the Commu-
nist party and its affiliate, the Manuel Rodriguez
Patriotic Front (FPMR), have-for the moment-
played into Pinochet's hand. These events have bol-
stered his standing with the armed forces. Senior
military officials and conservative politicians have
rallied behind the President, denouncing the attack
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and the radical left. His critics on the military junta,
who had blocked several attempts by Pinochet earlier
this year to reimpose a state of siege, felt it necessary
to acquiesce this time, even though the government
does not need the extra authority to combat terrorism.
And the concerns of many middle-class Chileans have
been heightened by these reminders of the threat of
radical leftist violence.F-1
The rallying of support for Pinochet, however, is likely
to be short lived, in our judgment. The US Embassy
reports that a significant number of Chileans, even in
traditionally pro-Pinochet areas, are skeptical of his
motives and fear that it is his repression that is
polarizing the country. As he persists in his obduracy,
politicians on the right-supportive immediately after
the assassination attempt-probably will renew calls
made in recent months for movement on the transi-
tion. Moreover, Chile's economy and the church's
increasingly critical stance almost certainly will pose
more serious problems for Pinochet. And, in our view,
most Chilean military officers-despite longstanding
support for Pinochet-are committed to the restora-
tion of democracy in 1989, and they are likely to
increase their contacts with the moderate opposition.
Pinochet Temporarily Reinvigorated
For now, Pinochet is using the assassination attempt
to crack down on both moderate and radical oppo
nents. The government is drafting a harsh counterter-
rorism law, while the security forces have conducted
dragnets in slum areas and arrested numerous opposi-
tion politicians. According to the US Embassy, death
squads have killed at least four government adversar-
ies. We expect Pinochet to continue this approach at
least until the Chilean summer-traditionally a time
of political inactivity-begins in mid-December.
Armed with a new antiterrorist law, Pinochet may
well accede to military and papal pressure to ease
repression-the Vatican has warned the Pope will
cancel plans to visit Chile in April if a state of siege is
still in effect.
In our view, Pinochet also will continue his maneuver-
ing to remain in power after 1989. He recently
manipulated the promotion and retirement process to
shore up Army backing and replaced the Army
representative on the junta with a more activist
general to counter critics there. He will persist in
portraying his regime as the only alternative to leftist-
inspired chaos and will continue attempts to sabotage
the political prospects of any civilian rivals. To give
the appearance of flexibility, Pinochet may promul-
gate a political parties' law, but will try to ensure that
the law is highly restrictive so that the moderate
opposition parties will reject it-thereby allowing him
to depict them as unreasonable and pro-Communist.
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The Radical Left: Upping the Ante
Leftist-inspired terrorism and political violence have
risen significantly in the past two years. Following a
series of university protests in April 1986, terrorism
intensified, protests became more violent, and shoot-
outs between terrorists, the police and the Army have
occurred. The stepped-up violence appears to stem
largely from the Chilean Communists' belief that
1986 is crucial-if Pinochet is not ousted this year he
will be able to outmaneuver his opponents and stay on
until 1989. In our view, the Chilean Communist Party
has made considerable headway in its campaign to
stage frequent antiregime demonstrations, harass the
security forces, and gain recognition as the country's
most active opposition force.F___1
The discovery of the arms caches-of dimensions
unprecedented in Latin America-and the attempt on
Pinochet's life highlight the upward shift in violence.
In August and September, Chilean security services
stumbled upon huge (70 to 100 ton) weapons caches in
northern Chile. The weapons, almost certainly sup-
plied by Cuba, included over 3,000 rifles, numerous
antitank weapons, and tons of explosives. There seems
little doubt that they were intended for the Commu-
nist Party and the FPMR. Moreover, we believe that
the frustration generated in terrorist ranks by the
foiled murder attempt leaves open the possibility that
the FPMR or another group will try more high-profile
attacks, perhaps including another assault on
Pinochet.l
The Democratic Opposition Off Balance
The democratic parties have registered considerable
progress over the past year in establishing themselves
as a cohesive opposition force. They have drawn
increased support from various sectors for the
National Accord-the proposals for a democratic
transition drawn up in August 1985. Even though
bickering among the disparate moderates continues,
opposition leaders have prevented the regime from
exploiting the dissension significantly. In mid-April,
under pressure from labor and professional groups
that wanted a political voice, the moderates broad-
ened their base by founding the National Civic As-
sembly-an organization composed of 18 leading
professional, labor, academic and social groups of
varying political hues.
We believe that in Chile's increasingly polarized
environment, however, the moderates have temporar-
ily lost the initiative to the far left and the regime.
Plans for a national strike and an antiregime rally in
September fell through in the wake of the arms cache
discovery and the government's declaration of a state
of siege. In the ensuing months the moderates will
have to arrive at a formula for navigating in the rough
waters between Pinochet and the far left. In our view,
they will continue to prod the military to agree to a
dialogue and will refrain from collaboration with the
Communists. Instead, they probably will seek to
mount alternative peaceful actions-such as rallies
and marches-to avoid losing supporters to the radi-
cal left and maintain their standing as a worthwhile
opposition movement. We judge, however, that the
moderates are likely to resume collaboration in stag-
ing protests with the Communists beginning in the
first half of next year, if only on the sly, if they prove
unable to budge the regime.
Pinochet in Control, But Increasingly Isolated
We also expect to see a resumption of the military
criticism which emerged so clearly earlier this year.
Two of the junta members have stated publicly their
intentions to work for direct elections in 1989. In-
creased violence and broad-based antiregime protests
probably will accentuate the sentiment among a sub-
stantial number of senior officers that Pinochet's
policies are isolating Chile internationally and threat-
ening domestic stability, prompting them to renew
their efforts to press him to accede to a serious
dialogue with the moderate opposition. If Pinochet
remains obdurate, his credibility with the military
probably will erode, setting the stage for a
confrontation.
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Key Indicators To Watch
Most Likely Scenario: Pinochet continues to repress
his opponents and maneuvers to remain in power past
1989, significantly reducing his standing with the
critically important armed forces. This attitude
prompts a substantial number of senior officers to
begin planning a confrontation to force Pinochet to
take tangible steps toward a transition:
? Pinochet continues to portray himself as the only
alternative to political chaos.
? The President promulgates a highly restrictive polit-
ical parties' law and attempts to label the democrat-
ic opposition as irresponsible.
? Radical leftist violence intensifies and continues
even during the summer vacations.
? Junta members push Pinochet to be more flexible
and military officers increase contacts with the
moderate opposition.
? A political crisis develops, pitting Pinochet against
senior Chilean officers.
Alternative Scenarios: Pinochet outmaneuvers his
critics in the military and openly affirms his intention
not to step down in 1989:
? Pinochet refuses to enact the political party laws or
any other measures moving toward a transition.
? Pinochet intimidates his junta critics into accepting
his plans to remain in power.
? Terrorism reaches epidemic proportions and former-
ly nonviolent leftist and center-left elements of the
democratic opposition promote violent protests and
take up arms alongside the radical left.
? Widespread Communist-inspired violence causes
the conservative elements in the democratic opposi-
tion to break with the moderates and support
Pinochet.
? The armed forces-especially the Army-rally
around him despite spiraling violence, external and
domestic pressure, accelerating political polariza-
tion, and unrest verging on civil war.
Assassination Scenario: If Pinochet were assassinated
we expect that the Army, as the dominant military
service, would replace him with a senior general. Most
officers, in our view, favor a return to civilian rule in
1989, and Pinochet's successor is likely to come from
this group.)
Secret 4
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Secret
Sudan: Sadiq Government
Shaky After First
Six Months
? The odds are about even, in our judgment, that the
government of Prime Minister Sadiq al-Mahdi will
survive the year; Sadiq almost certainly will face
stiffening opposition in the months ahead.
? A critically important liability is Sadiq's failure to
show progress in ending the southern rebellion,
which reportedly is costing Khartoum about $15
million a month and raising serious questions about
Sadiq's leadership.
? Sadiq's inaction on this and other problems-in-
cluding Sudan's crippled economy-may become
potentially explosive because he is failing to meet
the basic needs and expectations of Sudanese in
Khartoum and the northern provinces, as well as in
the south.
? Sadiq's backing in the Armed Forces is tenuous
already, and his popular support will dwindle if the
country's economic hardships are accompanied by
continuing government inertia and more serious
military setbacks. F__1
The Overriding Problem
When Prime Minister Sadiq was voted in last April as
the head of Sudan's first civilian government in 17
years, he inherited one problem that we believe has
overriding importance-the division of the country
into a largely Islamic north and a southern region of
mostly Christian and animist people. The two regions
had coexisted without serious conflict for much of
President Gaafar Nimeiri's long reign, but in 1983
Nimeiri took the radical steps of imposing Islamic law
(Sharia) throughout the country, and dividing the
south into three political regions. Those moves fueled
the insurgency in the south of John Garang's Sudan
People's Liberation Army (SPLA), whose core de-
mands are the repeal of Sharia, along with greater
regional autonomy. F__1
Government-
influenced area
Insurgent-
influenced area
Province boundary
( Mil?bil
A'ali anj~
Nil ~`
Al n/ Isti a'i
Sadiq's ability to manage the Islamic law issue effec-
tively in the coming months may largely determine
his government's chances for stability. The Prime
Minister himself is by no means a radical Muslim; he
received a degree in economics with honors from
Oxford, his wife was educated in the United States,
and he is forthright and friendly toward US Embassy
officials. He is, nonetheless, the leader of the coun-
try's largest and most influential Islamic sect. He has
offered to write a less radical law, but there are limits
to his willingness to compromise. Sadiq is conviced
that Islam-and some form of Islamic law-are
central to Sudan's national identity. Some 70 percent
of all Sudanese are Sunni Muslims.
If Sadiq presses for a revised Islamic law that is fairly
strong, in our view, he would reduce the chances for a
political settlement with the southern rebels, who have
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Prime Minister Sadiq
al-Mahdi n
consistently demanded abolition of all Islamic laws as
a precondition for negotiations. Such a pro-Islamic tilt
would also risk alienating the non-Muslim minority in
the capital, including those in the police and enlisted
ranks in the Army. If, on the other hand, he should
move to abrogate the old Islamic laws and not replace
them with a sufficiently stringent code, he risks losing
support within his own party and opposition among
the Islamic radicals and their military sympathizers.
would be galvanized. F_~
The Northern Political Stalemate
Islamic radicals, led by Hasan al-Turabi, appear
determined to prevent Assembly passage of any gov-
ernment program that does not advance the Islamiza-
tion of Sudan. We believe that, while Islamic radicals
view both the Sadiq's Umma Party and its major
coalition partner-the Democratic Unionist-as
"dynastic" family anachronisms, unable to chart
Sudan's course, they particularly oppose Sadiq be-
cause of his alleged softness both toward southern
demands for autonomy and toward what they consider
a "socialist" southern rebel movement. Even Sadiq's
relatively mild stand on the Islamic law issue prompt-
ed southern politicians to walk out of the Constituent
Assembly, and boycotts of the Assembly by feuding
northern party members were common, hindering the
passage of legislation
domestic problems, in our opinion, thereby hindering
effective leadership. After six months in office, Sadiq
has yet to consolidate power in his ruling civilian
coalition and move on to implement a program.
Power-sharing arrangements between Sadiq's Umma
Party, rooted in the Ansar sect, and the Democratic
Unionists, headed by leaders of the rival Khatmiyyah
sect, are under strain. Sadiq's attempts to gain more
political control through constitutional amendments
have met resistance from the Unionists, who oppose a
simple majority for passing legislation in the Constitu-
ent Assembly and resist cutting the powers of the
Supreme Council, which they head. Friction between
the two major coalition parties is likely to grow as the
traditional Unionist preference for Sudan's close
alignment with Egypt collides with the traditional
Umma preference for political independence from
Cairo.
Sadiq's concern that austerity might spark regime-
threatening demonstrations and strikes-like those
that helped to topple Nimeiri-has, in our judgment,
inhibited adoption of economic measures that would
please Sudan's international creditors, particularly
the IMF, and help to relieve Khartoum's debt prob-
lems. Khartoum is balking on hard measures such as
further currency devaluation, removal of most price
subsidies, a freeze on public-sector salaries, and a
general tax increase, while it searches desperately for
foreign aid. With prospects for substantial aid inflows
uncertain and a self-initiated economic rebound un-
likely, the government's chances of improving the
economy appear gloomy. F__1
Despite the absence of a collective effort by donors,
foreign aid has continued to trickle in from a variety
of sources, according to the US Embassy. Libya and
Saudi Arabia, for example, have donated large quan-
tities of oil, and the United States has provided wheat
and funds to buy oil. Total US aid and famine relief
to Sudan was worth more than that provided to any
other country on the African continent with the
exception of Egypt in the past year. This aid has
Political factionalism is also frustrating government
efforts to build a national consensus on persistent
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prevented a total collapse of the government-con-
trolled economy, but its ad hoc nature forces the
Sadiq government to exist on a month-by-month
basis, inhibiting any coherent, long-range budgetary
planning. F__1
Recent riots in western Sudan over price increases
and food shortages may point to future unrest.
Khartoum's markets are currently full of local pro-
duce, and fuel supplies appear adequate, but many
imported goods are in short supply and are available
only through the black market. Meanwhile, inflation
currently is running at 70 percent, fueled by govern-
ment spending-largely on the civil war-and by
shortages of consumer and industrial goods. We are
concerned that, if supplies dwindle and inflation soars,
government bureaucrats, students, and workers-
along with a growing refugee population-may take
to Khartoum's streets.
Loyalty of the Security Forces
Sadiq needs the Armed Forces on his side, but the
current officer corps-a product of the Nimeiri period
when the pro-Egyptian Khatmiyyah gained strength
at the expense of Sadiq's Ansar-has little personal
loyalty to the Prime Minister. US Embassy reports
indicate that most senior officers favor the Democrat-
ic Unionists and the Muslim Brotherhood. Sadiq's
bold dismissal of five key military officers in early
September probably succeeded in disrupting some
coup plots, but we believe that his open maneuvering
for control of the Army may be rankling the profes-
sional officer corps. F___-]
A pro-Libyan, anti-US regime in Khartoum would be
a strategic setback for Cairo; together with Libya and
Ethiopia, Sudan would form a hostile crescent to the
west and east of Egypt, controlling the vital headwa-
ters of the Nile River.
The Southern Quagmire
Meanwhile, the conflict in the south-a factor in the
fall of previous Sudanese regimes-is steadily weak-
ening Sadiq's position. Having tried diplomacy to end
the southern rebellion, the Prime Minister is building
up for a dry-season military offensive against the
SPLA insurgents-an effort unlikely to bring the
rebels to heel. Some of Sadiq's advisers already have
predicted a military stalemate at best and a disaster
at worst if government forces have to fight with
currently inadequate transportation assets, arms, and
equipment, according to US Embassy and press re-
porting. Nonetheless, Sadiq probably feels his only
real option is a military one, given the pressure from
his northern Muslim constituents after the rebel
shootdown in August of a civilian aircraft and espe-
cially the hard-line demanded by the Muslim Brother-
hood and its sympathizers in the Army. F_~
At the same time, we believe that insurgent leaders
are inclined to hold onto the military initiative they
have gained, in order to strengthen their bargaining
position at any eventual peace negotiations. Their
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capture of Juba, a major outpost for government
forces and the nerve center of outside famine-relief
operations to assist an estimated 2-3 million southern-
ers, would probably be a major turning point in the
war. At least until the struggle for Juba is resolved, a
political settlement to the civil war is highly unlikely.
Key Indicators To Watch
Most Likely Scenario: Sadiq's coalition government
continues to temporize, but survives the next three
months:
? Sadiq attracts enough foreign aid to prevent wide-
scale shortages of petroleum and basic foodstuffs in
Khartoum.
? He avoids austerity measures that would alienate
Khartoum residents-students and lower- and
middle-class laborers in particular-who depend
heavily on subsidies.
? Government forces avoid a major military "humil-
iation" in the south-such as the fall of Juba,
Malakal, or Waw to the rebels.
Alternative Scenario: Sadiq's government collapses
and the military takes over:
? Government paralysis resulting from deepening par-
ty factionalism coincides with rising shortages of
food and fuel supplies in the capital.
? Student and labor demonstrations start, then gather
momentum.
? Street clashes break out between Muslims and non-
Muslims in Khartoum.
? The Army suffers a major setback or setbacks
against the southern rebels.
? Younger generals collude with troop commanders in
and around the capital to overthrow the govern-
ment.
Secret 8
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Secret
Honduras:
President Azcona Seen as
Powerless Leader
? Any new military infighting that might arise from
the barracks revolt in September is unlikely to
endanger the civilian government of President
Azcona, in our judgment, because most senior offi-
cers share a perception that vital US aid is contin-
gent on the preservation of democratic rule.
? Nonetheless, the military reshuffle reinforces the
view of Azcona as a powerless leader. For the
second time since taking office in January, the
President was excluded from decisions affecting
control of the Armed Forces.
? Azcona's political credibility may be strained fur-
ther if the Nicaraguan rebels do not make signifi-
cant gains in their war against the Sandinista
regime once renewed US assistance becomes avail-
able. The government's support of the rebels could
become a political liability, especially if they are
perceived as losing inside Nicaragua and refuse to
? In spite of these problems, neither Azcona, nor the
opposition National Party, nor the military is likely
to back away from supporting the Nicaraguan
rebels so long as they feel there is a firm US
commitment to the security and economic well-
being of Honduras.
Military Infighting Shows Azcona Weakness
For the third time in three years, junior officers in late
September moved against senior commanders without
consulting the President-ostensibly the commander
in chief of the Armed Forces-but posed no threat to
civilian rule. In late September, a barracks revolt
removed Army Commander Thumann and placed
control of the Honduran army in the hands of a
Honduras
Rebel bases__-
gua
faction led by Colonel Riera.
this most recent upheaval-following
the ouster of Armed Forces chief General Lopez in 25X1
January 1986 and the removal of his predecessor,
General Alvarez, in March 1984-was the outgrowth
of competition between Riera and Colonel Said to
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Secret
Any new military infighting should not, in our judg-
ment, pose a threat to the civilian government. The
military's desire to maintain at least a facade of unity
most likely would keep factional strife an internal
matter. Also, the importance of US economic aid to
the Honduran economy remains a major factor inhib-
iting the military from acting against the civilian
government.
Azcona accepts that his authority is limited where
military interests are concerned-particularly regard-
ing command changes-and has sought to establish a
good working relationship with key officers, especially
with Armed Forces Chief Regalado, according to
reporting from the US mission in Tegucigalpa. The
President has gone to some lengths to reassure mili-
tary leaders that he supports their views on security
issues, such as the need to back the anti-Sandinista
rebels. F---]
Managing the Nicaraguan Problem
Although the
President and the military agree on the importance of
supporting the anti-Sandinistas, we believe that both
are sensitive to charges of subservience to US policy
and want to avoid a direct military conflict with the
Nicaraguans. Moreover, Honduran farmers displaced
by Nicaraguan rebels and refugees are becoming
more vocal in complaining about economic losses and
bullying by anti-Sandinistas. To reduce the level of
publicity surrounding the presence of the rebels in
Honduras, Azcona's government is likely to insist that
they be relocated to more sparsely populated areas in
the eastern portion of the country, making press
coverage more difficult.
The use of Honduran territory by Nicaraguan rebels
may lead to increased efforts at subversion and
terrorism by the left. While the Honduran extreme
left has not demonstrated an ability to plan or under-
take subversive acts on its own, we are concerned that
it could collaborate with foreign groups-such as
Salvadoran rebels-better prepared to carry out such
operations. In any event, Honduran authorities appear
to agree on the need to crack down forcefully on any
groups linked to terrorist acts, and such attacks
should not threaten the stability of the government.
Azcona is widely perceived as an honest but ineffec-
tive leader who has not delivered on campaign prom-
ises to attack government corruption and revive a
languishing economy. Both press and official report-
ing from Honduras indicates that much of the criti-
cism of Azcona stems from the poor performance of
his Cabinet ministers. The Cabinet is seen by the
public as incompetent and corrupt
frequent complaint is the failure of the government to
revive a languishing economy. Azcona, wanting to
avoid the impression that policy and appointments are
dictated by others, has responded to critics by publicl
endorsing his ministers.
Azcona's public image also has been damaged by his
vacillation in dealing with labor disputes, in our view.
Past concessions to labor unions, coupled with contin-
ued deterioration of the economy, will make it more
difficult for President Azcona to implement needed
economic reforms. For the most part, his administra-
tion has appeared to cave in to labor's demands-for
example, a $1 million settlement to end a strike by
miners. Many unions appear to have concluded that
strikes are the best way to wrest concessions from
both employers and the government, and an escalation
of protests and job actions appears likely. Azcona's
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recent public statements, however, coupled with pres-
sure for action by the Armed Forces, may signal the
government will adopt a tougher stand against illegal
strikes.)
Perceptions of Azcona's weak leadership will encour-
age the National Party, led by Rafael Callejas, to
back away from its agreement to support the govern-
ment's legislative initiatives. Although Callejas said
earlier he would cooperate with the administration in
return for control over the Supreme Court and several
congressional posts, we believe he is likely now to
exploit Azcona's political difficulties in hopes of
strengthening his own position for the presidential
election in 1989. If so, Azcona probably will dig in his
heels and pursue his previously announced economic
program with more intensity, even though his Liberal
Party lacks a majority in the legislature and needs
support from other quarters. This could paralyze the
government's legislative program and further damage
Azcona's image.
Increased perception that Azcona's government is
incompetent could cause the military to withdraw its
support. In those circumstances, Azcona might feel
compelled to resign.)
Most Likely Scenario: The perception of Azcona as a
weak leader encourages increased public criticism.
Azcona tries to counter his negative image and main
tains a stable, cooperative relationship with the mili-
tary on both domestic and national security issues:
? The military smooths over internal divisions by
distributing key commands more equitably among
rival factions, although the potential for later back-
room maneuvering remains.
? Azcona waits until January to replace ineffective
Cabinet members and announce new economic ini-
tiatives. Reforms with the lowest political costs are
the most likely to be implemented.
? The Callejas-led National Party, while more critical
of Azcona, supports the President's legislative initia-
tives on major security and economic issues.
? Stepped-up activity by Nicaraguan guerrillas pro-
vokes new Sandinista incursions that focus attention
on rebels operating out of Honduran territory.
? Increased leftist efforts to foment labor unrest and
protests against the presence of anti-Sandinista
rebels, and to undertake terrorist acts, are limited
by government security measures.F___1
Alternative Scenario: With growing rumors of mili-
tary factional strife, Azcona becomes uncertain of his
support among key officers and delays action on
pressing issues. Increasing doubts about Azcona's
effectiveness lead to calls for his resignation:
? Azcona resists military pressures to replace Cabinet
officials identified as leftist sympathizers, creating
doubts among some officers that Azcona can be
trusted.
? Growing nationalist sentiment against the anti-
Sandinista rebels operating on Honduran territory
causes a major split among factions of Azcona's
Liberal Party, giving the Nationalist Party virtual
control of the Congress.
? Key members of Azcona's government make public
statements implying Honduras does not support US
policy toward Nicaragua and call for negotiations
with Managua.
? Anti-Sandinista rebels fail to make significant mili-
tary gains while Nicaraguan propaganda increases
domestic political pressure on Azcona to expel them.
? The militar withdraws its support and Azcona
resigns.
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Secret
Sri Lanka:
Talks Fail,
Fighting Intensifies
? The bitter ethnic conflict now under way in Sri
Lanka poses the most serious threat to the country's
territorial integrity since it gained independence
from Britain in 1948. The three-year-old Tamil
insurgency is intensifying and the rebels have made
deep inroads into most of the north and much of the
east where Tamils predominate.
? The Indian-brokered peace negotiations between the
Sinhalese government in Colombo and Tamil mod-
erates appear to be losing momentum, and Tamil
militants have not yet agreed to negotiations with
the government.
? Political discord within the Sinhalese community is
rising. The hardline Sinhalese opposition party has
launched an all-out campaign to discredit President
Jayewardene's peace initiative, and has formed an
alliance with influential segments of the Buddhist
clergy and a proscribed radical leftist party.
? Some senior members of Jayewardene's Cabinet
and midlevel military officers also are unhappy with
his handling of the war, and may throw their
support behind the Sinhalese opposition.
Since the late 1970s, the Tamil separatist movement
has grown from a scattered handful of bankrobbers
and terrorists into an organized, armed, full-time
insurgency with an estimated 10,000 guerillas. The
US Embassy in Colombo estimates that the fighting
has caused over 3,500 casualties so far this year. The
most heavily populated areas of the north are now
administered by the insurgents. The battle for control
of the strategic Eastern Province intensified in
September as both the insurgents and government
security forces focused their efforts there. The fight-
ing is likely to continue, with both sides attempting to
consolidate territorial control. The country's once
vibrant economy has been weakened, with increasing
defense expenditures sapping money from develop-
ment projects and modernization plans. F__1
The fundamental factor fostering the insurgency is
the ethnic rivalry between the majority Sinhalese-
numbering about 11 million-and the Tamil minor-
ity-2 million plus. Sri Lanka's Tamils believe that
since the late 1950s successive Sinhalese-dominated
governments have discriminated against them-in
terms of religion, language, and culture, as well as
political and economic opportunities. In the aftermath
of the 1977 presidential election the perception of
injustice among Tamils intensified sharply. That year,
President Jayewardene won a landslide victory over
Sinhalese hardliner Sirimaro Bandaranaike, gaining
Tamil electoral support by promising to redress their
grievances. However, Jayewardene failed to deliver on
his campaign promises, and, as a result, increasing
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Secret
numbers of Tamils shifted their allegiances from
moderate Tamil leaders to militants.)
The insurgents are divided into five major groups:
? The Liberation Tigers of Tamil Eelam' (LTTE or
Tigers): the most active and most militant group.
? The People's Liberation Organization of Tamil
Eelam (PLOTE): the largest group, following a
Marxist agenda with the ultimate goal of island-
wide socialist revolution.
? The Tamil Eelam Liberation Organization (TELO):
severely weakened earlier this spring by a Tiger
attack, but now regaining strength.
? The Eelam People's Revolutionary Liberation Front
(EPRLF): a Tamil group with Marxist leadership
and largely nationalist rank and file.
? The Eelam Revolutionary Organization of Students
(EROS): another Marxist group specializing in eco-
nomic sabotage and bombing.
We estimate each of these groups maintains between
four and 15 base camps in South India.)
India, with numerous minority ethnic communities
itself-including some 50 million Tamils-generally
has sought to curtail separatist movements in South
Asia. Nonetheless, we believe that New Delhi has
provided funding to many Sri Lankan Tamil militant
groups since 1983, and the largest groups have been
allowed to maintain headquarters in the south Indian
city of Madras. The Indians, in our judgment, have
'Eelam, meaning nation, is the name Tamil insurgents give to their
proposed independent state comprising the traditional Tamil-inhab-
ited areas of the Northern and Eastern Provinces.
provided this support as a means of gaining a measure
of control over the insurgents.
The insurgents, initially heavily dependent on New
Delhi, are expanding their sources of funds and arms
to escape Indian control. We believe that the major
insurgent groups are heavily involved in international
drug syndicates and that narcotics trafficking-espe-
cially heroin-has become a major source of the
insurgents' funds. One kilogram of heroin will net
$2,500 for sale in Sri Lanka: enough money, we
estimate, to maintain a moderate-size insurgent train-
ing camp for a month.
we calculate that over three-fourths
o t e funds for major groups come from drug running
in South Asia and Europe.F__-]
The largest insurgent groups have developed a wide
variety of international contacts to acquire arms and
training. The Tigers use at least one large ship to
receive arms shipments at sea and to transport them
to their base camps. We strongly suspect some groups
have also received training assistance from radicals in
the Middle East, particularly Libya and the Syrian-
backed Popular Front for the Liberation of Palestine.
With this broadened base of support, the insurgents
can now operate effectively with less support-and
control-from New Delhi. Earlier this summer, most
of the groups began withdrawing cadre from camps in
the south Indian state of Tamil Nadu, and have
relocated their headquarters to Sri Lanka's Jaffna
Peninsula. The insurgents' increased strength and
international contacts have allowed them to take a
more hardline stance against the government in the
peace talks. They have also been able to step up
military operations during sensitive peace negotiations
with less concern that New Delhi could curtail fund-
ing and sanctuary.
At the same time, government forces are increasing
their strength. There has been an estimated
38-percent jump in the number of Sri Lankan mili-
tary personnel in the past year, and a 100-percent
leap in military spending. Colombo has stepped up
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requests for military aid from the United States,
Pakistan, and some moderate Middle East states. US
military assistance to the Sri Lankan Government,
however, could provoke attacks against American
facilities and also complicate US relations with India.
New Delhi, despite recent setbacks to its own mediat-
ing efforts, would see such US efforts as obstruction-
ist. Indeed, we believe that a major objective of the
Indians in managing the Sri Lankan crisis is to
demonstrate their role as the dominant power in the
region.)
Despite their numerical superiority, government
forces have been plagued with internal disorganiza-
tion and an uncoordinated, poorly thought out coun-
terinsurgency strategy. Until these problems are satis-
factorily addressed, we believe the Sri Lankan Army
has little chance of defeating the insurgents militarily.
Party (SLFP) has consolidated its alliance with lead-
ers of the three branches of the Buddhist clergy, a
smaller Sinhalese opposition party, and a proscribed
leftist group, Janatha Vimukthi Peramuna (People's
Liberation Front-JVP). This is the first time in
almost 18 years that the leaderships of all three
branches of the Buddhist monks have joined in a
common cause. F__7
At a minimum, the coalition of so many prominent
Buddhist leaders in opposition to the peace plan will
strengthen the alliance's appeal and credibility with
the public. If the alliance is maintained, unified
opposition to Jayewardene's initiative could undercut
the President's moral authority as leader of the
Sinhalese Buddhist majority. F__1
The government
We believe the Sinhalese opposition strategy over the
near term will be to rouse public sentiment against the
peace talks through a civil disobedience campaign and
attempt to undermine public confidence in Jayewar-
dene's United National Party (UNP) government. The
Freedom Party allegedly has already undertaken a
campaign of threatening phone calls and anonymous
letters to certain members of Parliament and senior
officials warning them against supporting the peace
plan. F_~
concentrating its efforts on halting consolidation of
insurgent strength in the east, especially around the
coastal city of Batticaloa. The government is in no
immediate danger of losing Batticaloa but may find it
increasingly difficult to ensure adequate supplies to
the civilian population and troops in the area-
because of insurgent attacks against provincial trans-
portation and power systems. Colombo has begun
contingency planning to supply the city with food and
fuel if the fighting continues.F___1
There has been little progress in the Indian-brokered
peace talks since the last round of negotiations ended
in August, and the optimism of this summer is slowly
fading. Colombo has not yet set a date for the next
round of discussions, and the US Consulate in Madras
reports that Tamil militants are reluctant to meet
with the moderates to discuss the results of the last
round.
Dissatisfaction with Jayewardene's peace initiatives
also is growing within the Sinhalese community, in
our judgment. The opposition Sri Lankan Freedom
The political opposition has substantial support from
some midlevel military officers and has probably co-
opted some hardline members of the President's own
party. Some Cabinet members, and possibly even
Prime Minister Premadasa, might throw their support
behind the opposition if they believe Sinhalese public
opinion is moving away from the President
Over the long term, the opposition may turn increas-
ingly to terrorist tactics in Sinhalese areas to under-
score the government's inability to effectively protect
its heartland. However, the Freedom Party will al-
most certainly try to hide its connection to any illegal
activities, relying instead on the leftist JVP.
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Most Likely Scenario: A protracted fight.
? India is unable to bring Tamil militants into peace
talks.
? Sinhalese opinion also turns away from support of
talks.
? Terrorist incidents increase in Sinhalese areas,
perpetrated by Sinhalese opposition party
collaborators.
? Insurgents remain united on the goal of an indepen-
dent Tamil state, but sharply divided over tactics.
? Insurgents may turn increasingly to Libya and other
radical states for support.
Alternative Scenario: Jayewardene and Tamil moder-
ates conclude an agreement, New Delhi able to
pressure some-but not the most important-militant
groups into negotiations:
? Jayewardene perceives he has sufficient public sup-
port to proceed with implementing the agreement.
? New Delhi cracks down on remaining insurgent
groups in south India in an effort to bring them on
board in the peace talks.
? Fighting in the east slows as the government at-
tempts to exhibit good faith.F__-]
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Secret
Part 2.
Developments and Trend
The six categories of indicators used in the following
charts focus on a broad array of issues that may
impact on stability:
? The social change/conflict indicators examine de-
velopments such as labor or religious unrest that
could undermine the regime's legitimacy and ability
to rule effectively.
? The economic factors link various dimensions of
economic performance to potential instability.
? The opposition activities indicators assess whether
the opposition can mobilize effective antiregime
activity or carry out acts that undermine public
security.
? The military attitude/activities category addresses
the military's degree of dissatisfaction with regime
policies, involvement in coup plotting, and behavior
relevant to the political process.
? The external factors category looks at foreign influ-
ences that could affect internal stability.
? Finally, the regime capabilities/actions category
focuses on what the government is doing that could
lessen popular support, otherwise undermine its
authority, and effect its ability to govern efficiently.
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El Salvador:
Selected Instability Indicators
Indicators Legend
financial and manpower resources to reconstruction.
President Duarte appears to be in firm control of the security
situation since the earthquakes in San Salvador on 10 October that
left about 300,000 homeless and caused at least $500 million
damage, according to the US Embassy. Faced with a deteriorating
economic situation before the disaster, however, the effectiveness of
the government will be tested in the coming months. The armed
forces' ability to sustain an aggressive counterinsurgency campaign
may be set back as a result of damage to facilities and transferring
Prospects for major regime or policy change
During next six months
During next six months to two sears
0 Negligible concern
Low concern
Moderate concern
V Substantial concern
? Serious concern
1985
1 11 III IV
1986 ?
1 11 111 IV
1987
I If
Social change/conflict Ethnic/religious discontent
Demonstrations, riots, strikes
?
?
?
? G
G
V
Economic factors General deterioration
Decreased access to foreign funds
Capital flight
Unpopular changes in economic policies
?
?
?
?
?
?
Food/energy shortages
?
?
?
?
?
?
?
?
Inflation
?
?
?
?
?
?
Opposition activities Organizational capabilities
?
?
?
?
?
?
?
?
Opposition conspiracy/planning
?
?
?
?
?
?
?
?
Terrorism and sabotage
?
?
?
?
?
?
?
?
Insurgent armed attacks
?
?
?
?
?
?
?
?
Public support
Military attitudes/activities Threat to corporate military interests/dignity
Discontent over career loss, pay, or benefits
Discontent over government action/policies
Reports/rumors of coup plotting
External factors External support for government
External support for opposition
?
Threat of military conflict
Regime actions/capabilities Repression/brutality
Security capabilities
?
?
?
?
?
?
G
G
Political disunity/loss of confidence
Loss of legitimacy
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Guatemala:
Selected Instability Indicators
Indicators Legend
1985
I II III IV
?
1986
Ill IV
I II
1987
1
Social change/conflict Ethnic/religious discontent
O
0
0
0
0
0
0
0
Demonstrations, riots, strikes
O
O
?
?
?
O
O
O
Economic factors General deterioration
Decreased access to foreign funds
Capital flight
?
?
?
?
?
?
Unpopular changes in economic policies
?
?
?
?
?
?
?
?
Food/energy shortages
0
?
?
?
?
?
?
Inflation
0
0
?
?
?
?
?
?
Opposition activities Organizational capabilities
O
0
0
Opposition conspiracy/planning
Terrorism and sabotage
Insurgent armed attacks
Public support
0
O
0
0
0
0
0
0
Military attitudes/activities Threat to corporate military interests/dignity
0
0
0
Discontent over career loss, pay, or benefits
0
O
0
Discontent over government action/policies
W
Reports/rumors of coup plotting
External factors External support for government
External support for opposition
Threat of military conflict
0
0
O
0
0
0
0
0
Regime actions/capabilities Repression/brutality
Security capabilities
Political disunity/loss of confidence
Loss of legitimacy
Civil-military relations remain generally smooth, but the armed
forces are growing increasingly concerned about some of President
Cerezo's policies. Some officers believe Cerezo is too soft on
Nicaragua and supports radical land reform measures. In our
judgment, Cerezo's failure to define a coherent land reform policy
and reassure landowners could strain his relations with the military
and the private sector. Meanwhile, the government's inability to
control rising consumer prices makes the outbreak of serious labor
disturbances and public protests likely in the coming months.
Prospects for major regime or policy change
During next six months
During next six months to two wars
O Negligible concern O Substantial concern
Low concern ? Serious concern
Moderate concern
Projected
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Honduras:
Selected Instability Indicators
Indicators Legend
We believe the prospects for stability in Honduras have improved
slightly as the military has temporarily resolved factional differ-
ences over the control of the Armed Forces. President Azcona,
despite a low popularity rating, has gained the confidence of the
Armed Forces and probably would not be threatened by renewed
infighting. Nonetheless, labor unrest and threats of terrorist attacks
may become challenges facing Azcona in the coming months, and
his political standing also could be undercut if the Nicaraguan
rebels do not make significant gains from their border bases. F_
Prospects for major regime or policy change
During next six months
During next six months to two dears
O Negligible concern
Low concern
Moderate concern
Q Substantial concern
40 Serious concern
1985
1 11 111 IV
1986
1 11 111 IV
1987
1 11
Social change/conflict Ethnic/religious discontent
0
0 0
0
0
O
0
O
Demonstrations, riots, strikes
0
0 0
0
0
0
0
0
Economic factors General deterioration
Decreased access to foreign funds
Capital flight
Unpopular changes in economic policies
0
0
0
0
0
0
0
0
Food/energy shortages
0
0
0
0
0
0
0
0
Inflation
O
0
0
0
0
0
0
0
Opposition activities Organizational capabilities
Opposition conspiracy/planning
Terrorism and sabotage
Insurgent armed attacks
0
0
0 0
0
0
0
0
Public support
0
0
0 0
0
0
0
0
Military attitudes/activities Threat to corporate military interests/dignity
0
0
0 O
0 0
0
0
Discontent over career loss, pay, or benefits
0
0
0 0
O_ 0
0
0
Discontent over government action/policies
Reports/rumors of coup plotting
External factors External support for government
O
O
O
O
O
O
O
O
External support for opposition
Threat of military conflict
Regime actions/capabilities Repression/brutality
0
0
0
0
0
0
0
Security capabilities
0
0
O
O
0
0
0
0
Political disunity/loss of confidence
Loss of legitimacy
0
0
0
0
0
0
0
0
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 . ... I ..... ...1 . _ 1 I
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Secret
Panama:
Selected Instability Indicators
Indicators Legend
The regime turned recently to the sensitive issues of reforming the
social security system and trimming the public sector to comply with
World Bank requirements. Scattered protests by students and
unions-including clashes with police-have been reported by the
US Embassy. We expect more vigorous demonstrations as the
proposed reforms are spelled out. Defense Chief Noriega has
publicly called for a cabinet shuffle, but we believe that overall
prospects for instability remain low because the military backs the
current system and opposition forces generally remain weak.
Prospects for major regime or policy change
During next six months
During next six months to two years
O Negligible concern
Low concern
Moderate concern
Q Substantial concern
? Serious concern
1985
I II III IV
1986 ?
I 11 111 IV
1987
1 11
Social change/conflict Ethnic/religious discontent
0
0
0
0
0
0
0
0
Demonstrations, riots, strikes
0
0
Economic factors General deterioration
Decreased access to foreign funds
0
0
Capital flight
0
0
0
0
O
0
0
0
Unpopular changes in economic policies
0
0
0
0
0
Food/energy shortages
0
0
0
0
0
0
0
0
Inflation
0
0
0
0
0
0
0
0
Opposition activities Organizational capabilities
0
0
0
0
0
0
0
Opposition conspiracy/planning
0
0
Terrorism and sabotage
0
O
0
0
0
0
0
0
Insurgent armed attacks
0
0
0
0
0
0
0
0
Public support
0
0
0
0
0
0
0
Military attitudes/activities Threat to corporate military interests/dignity
0
0
Discontent over career loss, pay, or benefits
0
0
0
0
0
0
0
0
Discontent over government action/policies
0
0
?
0
0
0
O
Reports/rumors of coup plotting
0
0
0
0
0
0
External factors External support for government
0
0
O
0
O
External support for opposition
0
0
0
0
0
0
0
0
Threat of military conflict
0
0
0
0
0
0
0
0
Regime actions/capabilities Repression/brutality
0
0
0
0
0
0
0
O
Security capabilities
0
O
O
0
0
0
0
0
Political disunity/loss of confidence
0
0
0
0
Loss of legitimacy
O
0
310841 1186
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 Declassified in Part - Sanitized Copy Approved for Release 2011/12/06: CIA-RDP87T00685R000300520001-9
Secret
Colombia:
Selected Instability Indicators
Indicators Legend
1985
1 II 111 IV
1986
III IV
I II
1987
I
11
Social change/conflict Ethnic/religious discontent
0
0
0 0
0
0
O 0
Demonstrations, riots. strikes
0
Economic factors General deterioration
Decreased access to foreign funds
O
0 0
0
Capital flight
Unpopular changes in economic policies
0
0
0
0
0
0
Food/energy shortages
0
0
0
0
0
0
0
Inflation
O
0
O
0
Opposition activities Organizational capabilities
G
G
O
Opposition conspiracy/planning
G
G
G
Terrorism and sabotage
Q
O
G
Q
Insurgent armed attacks
G
G
G
G
Public support
0
0
0
O
0
0
O
0
Military attitudes/activities Threat to corporate military interests/dignity
Discontent over career loss, pay, or benefits
0
Discontent over government action/policies
Reports/rumors of coup plotting
0
0
0
O
0
O
0
O
External factors External support for government
O
0
O
0
O
O
O
0
External support for opposition
Threat of military conflict
0
0
0
0
0
Regime actions/capabilities Repression/brutality
0
0
0
0
Security capabilities
0
O
G
G
G
Political disunity/loss of confidence
0
0
0
0
0
0
0
0
Loss of legitimacy
0
0
0
0
0
0
0
0
310842 11 86
traffickers.
The new government faces increasing guerrilla violence throughout
the country, but President Barco is trying to preserve the nominal
truce with the largest insurgent group, at least until he can improve
his limited counterinsurgency capabilities. The military has made
little progress against the guerrilla alliance outside the truce, which
has stepped up attacks on political and economic targets-partic-
ularly oil facilities. We are increasingly concerned about the violent
intimidation of judges and law enforcement officials by drug
Prospects for major regime or policy change
During next six months
Q During next six months to two tears
0 Negligible concern O Substantial concern
Low concern 40 Serious concern
Moderate concern
Projected
Declassified in Part - Sanitized Copy Approved for Release 2011/12/06: CIA-RDP87T00685R000300520001-9
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/06: CIA-RDP87T00685R000300520001-9
Venezuela:
Selected Instability Indicators
Legend
1985
I II III 1V
1986
1 II
111 IV
1987
I 11
Social change/conflict Ethnic/religious discontent
0
0
0
0
0
0 0
0
Demonstrations, riots, strikes
0
0
0
O
0
0 0
0
Economic factors General deterioration
0
0
Decreased access to foreign funds
0
0
0
o
Capital flight
0
0
0
__
0
0
Unpopular changes in economic policies
o
0
O
O
O
0
Food/energy shortages
O
0
O
O
O
O
O
O
Inflation
O
0 1
0
0
O
O
O
0
Opposition activities Organizational capabilities
0
0
0
0
O
0
0
O
Opposition conspiracy/planning
0
0
0
0
0
0
0
0
Terrorism and sabotage
0
0
0
0
O
0
0
Insurgent armed attacks
0
0
0
0
0
0
0
0
Public support
0
0
0
0
0
O
0
0
Military attitudes/activities Threat to corporate military interests/dignity
0
0 0
0
': 0
0
0
Discontent over career loss, pay, or benefits
0
0
O 0
0 I 0
_0
0
Discontent over government action/policies
0
0
0 0
O
0
0
0
Reports/rumors of coup plotting
O
O
0
0
O
O
O
0
External factors External support for government
0
0
0
0
0
0
0
0
External support for opposition
0
0
O
0
0
O
0
0
Threat of military conflict
0
0
0
0
0
0
0
0
Regime actions/capabilities Repression/brutality
0
0
0
0
0
0
0
O
Security capabilities
0
0
0
0
0
0
0
0
Political disunity/loss of confidence
O
0
0
0
0
0
0
0
Loss of legitimacy
0
0
0
0
0
0
0
0
President Lusinchi and the ruling Democratic Action Party domi-
nate a relatively calm political scene. Since 1 September, oil prices
have risen slightly, alleviating some economic pressures on the
government. Nevertheless, without any real prospect for a long-term
economic recovery and with campaigning already under way for the
1988 presidential election, we believe the administration is likely to
face increasingly stronger and more determined electoral challenges
and criticism. Organized labor, however, continues to back the
government and Lusinchi still attracts strong popular support.
Prospects for major regime or policy change
O During next six months
Q During next six months to two wars
O Negligible concern Q Substantial concern
Low concern w Serious concern
Moderate concern
Projected
Declassified in Part - Sanitized Copy Approved for Release 2011/12/06: CIA-RDP87T00685R000300520001-9
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/06: CIA-RDP87T00685R000300520001-9
Peru:
Selected Instability Indicators
Indicators Legend
1985
1 II 111 IV
1986 ?
1 11 i 111 IV
1987
I If
Social change/conflict Ethnic/religious discontent
Demonstrations, riots. strikes
0 0 0 0
? ?
0 0
O O
Economic factors General deterioration
?
?
? ?
? O
Decreased access to foreign funds
Capital flight
Unpopular changes in economic policies
?
?
? ? ?
+
? O
? ? ? ?
0 O O 0
Food/energy shortages
_
Inflation
Opposition activities Organizational capabilities
Opposition conspiracy/planning
0 0
0-
1
O
0
Terrorism and sabotage
?
? ?
?
?
Q
?
?
Insurgent armed attacks
? ? ?
?
?
G
O
Q
Public support
0
0
0
0
0
0
Military attitudes/activities Threat to corporate military interests/dignity
? ?
? Q
Discontent over career loss, pay, or benefits
Discontent over government action/policies
Reports/rumors of coup plotting
? ?
0
? G
0
G
External factors External support for government
0
0
External support for opposition
-
4
O
0
01
0
0
0
Threat of military conflict
0
0
-0- 1
0
0
O
0
0
Regime actions/capabilities Repression/brutality
?
?
O
Security capabilities
G
Political disunity/loss of confidence
?
Loss of legitimacy
?
O
0
O
O
O
O
310844 1186
borrow in August after Lima failed to clear its arrearages.
Tensions between President Garcia and the military have subsided
since June when he threatened to prosecute officers implicated in
the execution of jailed Sendero Luminoso members during prison
riots. One general will be tried by a military court. The deaths of
300 Sendero Luminoso adherents in the riots have failed to halt
their widespread attacks, which increasingly include assassinations
of members of the ruling party. We believe that Garcia also is facing
serious economic problems; the IMF declared Peru ineligible to
Prospects for major regime or policy change
During next six months
During next six months to two wars
0 Negligible concern Q Substantial concern
Low concern ? Serious concern
Moderate concern
Projected
Declassified in Part - Sanitized Copy Approved for Release 2011/12/06: CIA-RDP87T00685R000300520001-9
 . ... 1.... . 1 1
Declassified in Part - Sanitized Copy Approved for Release 2011/12/06: CIA-RDP87T00685R000300520001-9
Brazil:
Selected Instability Indicators
Indicators Legend
squatters will probably persist as land reform is implemented.
President Sarney's popularity remains high, and, in our view, his
coalition probably will retain its majority in Congress following the
election in November. Nevertheless, Sarney is coming under in-
creasing criticism and is likely to face challenges in the coming
months. Tax hikes and shortages of staples are provoking criticism
of his anti-inflation program. Strikes are likely in this period as
unions-unhappy with the government's wage freeze-seek in-
creases. Moreover, low-level violence between landowners and
Prospects for major regime or policy change
During next six months
During next six months to two wars
O Negligible concern
Low concern
Moderate concern
1985
1 11 111 IV
1986 ?
I 1 11 111 IV
1987
1 11
Social change/conflict Ethnic/religious discontent
0
0
0
0
0
~0_
0
0
Demonstrations, riots, strikes
0
Economic factors General deterioration
Decreased access to foreign funds
Capital flight
Unpopular changes in economic policies
Food/energy shortages
G
Inflation
?
?
?
?
G
Opposition activities Organizational capabilities
0
0_
0
0
0
0
0
0
Opposition conspiracy/planning
0
0
0
0
0
0
0
0
Terrorism and sabotage
0
0
0
0
0
0
0
0
Insurgent armed attacks
0
0
0
0
0
0
0
0
Public support
0
0
0
0
0
0
0
0
Military attitudes/activities Threat to corporate military interests/dignity
0
0
0
0
0
0
0
Discontent over career loss, pay, or benefits
0
0
0
0
0
0
0
Discontent over government action/policies
0
0
0
0
0
0
0
0
Reports/rumors of coup plotting
0
O
O
0
O
O
O
External factors External support for government
0
0
0
0
0
0
0
0
External support for opposition
O
0
0
0
0
0
Threat of military conflict
0
0
0
0
0
0
0
0
Regime actions/capabilities Repression/brutality
0
0
0
0
0
0
0
0
Security capabilities
0
0
0
0
0
0
0
0
Political disunity/loss of confidence
Loss of legitimacy
0
0
0
0
0
0
0
G Substantial concern
? Serious concern
Projected
Declassified in Part - Sanitized Copy Approved for Release 2011/12/06: CIA-RDP87T00685R000300520001-9
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/06: CIA-RDP87T00685R000300520001-9
Secret
Argentina:
Selected Instability Indicators
Indicators Legend
committed under the previous regime.
President Alfonsin's popularity is slowly eroding as he employs
stopgap measures to resolve the country's pressing economic and
political problems. A public outcry over high inflation has allowed
him to oust the Central Bank president, but he remains unwilling to
implement basic economic reforms. We are concerned that capital
flight-already significant-will increase further in the months
ahead. Labor mounted another general strike and civil-military ties
remain tense over the trials of officers for human rights abuses
Prospects for major regime or policy change
During next six months
During next six months to two wars
O Negligible concern
Low concern
Moderate concern
1985
V
I 11 111 IV
1986 ?
I 11 111 IV
1987
I 11
change/conflict Ethnic/religious discontent
0
0
0
0
0 0
0
0
Demonstrations, riots, strikes
Economic factors General deterioration
Decreased access to foreign funds
?
0
1O
0
V
Capital flight
Unpopular changes in economic policies
0
0
0
Food/energy shortages
0
0
0
} 0
0
Inflation
?
?
?
?
Opposition activities Organizational capabilities
0
0
Opposition conspiracy/planning
0
0
0
0
0
Terrorism and sabotage
0
-
0
O
Insurgent armed attacks
0
0
0
0
0
0
0
0
Public support
0
0
0
0
0
0
0
0
Military attitudes/activities Threat to corporate military interests/dignity
Discontent over career loss, pay, or benefits
Discontent over government action/policies
0
0
0
Reports/rumors of coup plotting
0
0
0
0
External factors External support for government
0
0
0
0
0
0
0
0
External support for opposition
0
0
0
0
0
0
0
0
Threat of military conflict
0
0
0
0
0
0
0
0
Regime actions/capabilities Repression/brutality
0
0
0
0
0
0
0
0
Security capabilities
0
0
O
O
0
0
0
0
Political disunity/loss of confidence
0
0
0
0
0
0
0
0
Loss of legitimacy
0
0 O
O
0
0
0
0
310846 1186
O Substantial concern
? Serious concern
Projected
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 II II I I I I
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Secret
Chile:
Selected Instability Indicators
Legend
between him and officers promoting a democratic transition.
President Pinochet has exploited the recent discovery of Commu-
nist-controlled arms caches and an attempt on his life to boost
temporarily his standing with the military and to repress opponents.
He will almost certainly continue a hardline approach in dealing
with the opposition and maneuvering to remain in power beyond
1989. In our view, Pinochet will dominate the Chilean political scene
over the next six months, but increasing terrorism and unrest will
prompt military criticism-setting the stage for a confrontation
Prospects for major regime or policy change
During next six months
V During next six months to two wars
0 Negligible concern V Substantial concern
Low concern ? Serious concern
Moderate concern
1985
1 11 III IV
1986 ?
1 11 111 IV
1987
1 11
Social change/conflict Ethnic/religious discontent
Demonstrations, riots, strikes
V
V
Economic factors General deterioration
Decreased access to foreign funds
?
?
Capital flight
Unpopular changes in economic policies
0
0
0
0
0 1
0
0
Food/energy shortages
0
0
0
O
O
O
0
0
Inflation
Opposition activities Organizational capabilities
?
?
?
?
?
?
Opposition conspiracy/planning
V
V
V
V
Terrorism and sabotage
V
V
?
?
Insurgent armed attacks
Public support
V
V
Military attitudes/activities Threat to corporate military interests/dignity
0
0
O
0
0
O
O
0
Discontent over career loss, pay, or benefits
Discontent over government action/policies
?
?
?
? ?
?
Reports/rumors of coup plotting
O
O 11
O
0
0
External factors External support for government
External support for opposition
W
W
Threat of military conflict
O
O
O
0
0
O
0
0
Regime actions/capabilities Repression/brutality
V
V
V
Security capabilities
V
V
V
Political disunity/loss of confidence
V
V
V
Loss of legitimacy
310847 1186
Declassified in Part - Sanitized Copy Approved for Release 2011/12/06: CIA-RDP87T00685R000300520001-9
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/06: CIA-RDP87T00685R000300520001-9
Spain:
Selected Instability Indicators
Legend
talks to reduce the US military presence there.
The recent upsurge in Basque terrorism is likely to continue for at
least several more months. We believe that Madrid's efforts to
reduce tensions with the Basque provinces will be handicapped
during the period by intensified factionalism and competition among
rival political leaders in that region. Spanish negotiators will
continue to press Washington hard in the current bilateral security
Prospects for major regime or policy change
O During next six months
O During next six months to two wars
Low concern
Moderate concern
1985
1986
V
1987
1
11
III
IV
I
II
III
IV
1 11
Social change/conflict
Ethnic/religious discontent
0
0
11
0
/O
O
O
O
O
Demonstrations, riots, strikes
0
O
O
O
0
O
O
O
Economic factors
General deterioration
Decreased access to foreign funds
O
O
O
O
O
O
O
O
0
O
O
O
0
Unpopular angel in economic policies
Food/e
Food/nor shortages
O
d
O
Inflation
O
O
O
Opposition activities
Organizational capabilities
0
0
O
0
Opposition conspiracy/planning
0
0
0
0
O
O
To
0
s
a
In
u gentarmed
atta ks -
0
0
0
0
O
O
0
0
Public support
O
O
O
0
O
' O
0
0
Military attitudes/activities
Threat to corporate military interests/dignity
O~ 0 j_ 0
0
0
0
0 0
t
Discontent over career loss, pay, or benefits
0
0
0
0
0
0
0
0
Discontent over government action/policies
/
O
0
_0
0
0
0
0
0
1
Reports
rumors of coup plotting
O
0
0
0
O
0
0
0
External factors
External support for government
E
l
o
0
0 0
0
0 0
0
xterna
support for opposition
0
0
0
0
0
0
0
0
Threat of military conflict
O
0
O
O
O
O
O
O
Regime actions/capabilities
Repression /brutality
O
0
0 1
0
O
O
O
O
Security capabilities
0
0
0
O
O
O
J
O
0
Political disunity/loss of confidence
0
0
O
0
O
O
0
Loss of le
iti
g
macy
O
0
0
0
0
0
0
0
310848 11 86
Projected
Declassified in Part - Sanitized Copy Approved for Release 2011/12/06: CIA-RDP87T00685R000300520001-9
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/06: CIA-RDP87T00685R000300520001-9
Secret
Greece:
Selected Instability Indicators
Indicators Legend
miscalculation could lead to conflict.
Despite a poor showing in the first round of the municipal elections,
Prime Minister Papandreou is firmly in control. Internal disputes
have weakened both the conservative and Communist opposition,
and the labor movement remains disorganized. Papandreou should,
in our judgment, be able to weather any opposition to austerity
measures and set his own course on the base negotiations. Tensions
continue, however, between Greece and Turkey over Cyprus and
their longstanding Aegean disputes, and the possibility remains that
Prospects for major regime or policy change
0 During next six months
0 During next six months to two years
O Negligible concern
Low concern
Moderate concern
Q Substantial concern
A Serious concern
1985
1 11 III IV
1986 V
1 11 111 IV
1987
I II
ious discontent
e/conflict Ethnic/reli
Social chan
0
0
O
O
O
0
0
0
g
g
Demonstrations, riots, strikes
O
0
Economic factors General deterioration
Decreased access to foreign funds
Capital flight
Unpopular changes in economic policies
0
0
0
Food/energy shortages
0
0
0
0
O
O
0
0
Inflation
Opposition activities Organizational capabilities
Opposition conspiracy/planning
0
0
0
0
0
0
0
0
Terrorism and sabotage
Insurgent armed attacks
O
0
0
0
0
0
0
0
Public support
0
0
0
0
0
Military attitudes/activities Threat to corporate military interests/dignity
0
0
O
O
0
O
0
0
Discontent over career loss, pay, or benefits
0
0
O
O
0
0
O
0
Discontent over government action/policies
Reports/rumors of coup plotting
0
O
0
0
O
O
0
External factors External support for government
0
O
O
O
O
0
0
0
External support for opposition
0
O
0
0
O
0
0
0
Threat of military conflict
0
0
0
ime actions/capabilities Repression/brutality
Re
0
0
0
0
0
0
O
O
g
Security capabilities
Political disunity/loss of confidence
0
0
0
0
0
O
O
Loss of legitimacy
O
O
O
O
O
O
O
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Turkey:
Selected Instability Indicators
Indicators Legend
1985
1986 ?
1987
1 11 111 IV
I II III IV
1 11
Social change/conflict Ethnic/religious discontent
Demonstrations, riots, strikes
O
O
O
O
0
0
O
O
Economic Factors General deterioration
Decreased access to foreign funds
0
0
0
0
0
0
Capital flight
Unpopular changes in economic policies
0
0
t I
_
Food/energy shortages
O
O
O
O
O
O
O
O
Inflation
-
Opposition activities Organizational capabilities
O
Opposition conspiracy/planning
O
O
Terrorism and sabotage
Insurgent armed attacks
Public support
0
0
0
0
O
0
77
Military attitudes/activities Threat to corporate military interests/dignit
y 0
0
0
0
0
0
0
0
Discontent over career loss, pay, or benefits
Di
0
0
O
O
O
0
O
0
scontent over government action/policies
Reports/rumors of coup plotting
0
0
0
0
0
0
O
0
External factors External support for government
0
0
0
0
0
0
0
0
External support for opposition
0
O
O
O
0
0
0
0
Threat of military conflict
Regime actions/capabilities Repression/brutality
Security capabilities
0
0
O
O
0
0
0
0
Political disunity/loss of confidence
O
{
Loss of legitimacy
0
0
0
O
O
O
O
O
,
310850 11 86
strengthen ties to Europe-especially the EC.
The unexpected strength of a rightist competitor in recent
byelections preoccupies Prime Minister Ozal's ruling Motherland
Party. We believe that pressure is likely to build for constitutional
changes lifting restrictions on former politicians, raising the specter
of military opposition. Because economic issues figured minimally in
the byelections, the government will maintain its economic poli-
cies-and the support of international lending agencies. Ozal,
perceiving a need to demonstrate leadership, also may try to
Prospects for major regime or policy change
During next six months
During next six months to two wars
O Negligible concern Substantial concern
Low concern ? Serious concern
Moderate concern
Projected
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 11~__~ 1
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Morocco:
Selected Instability Indicators
Legend
1985
1 II 111 IV
?
1986
III i IV
I II
1987
I 11
Social change/conflict Ethnic/religious discontent
Demonstrations, riots, strikes
Economic factors General deterioration
Decreased access to foreign funds
Capital flight
opular changes in economic policies
Un
p
Food/energy shortages
0
0
O
0
O
0
0
Inflation
activities Organizational capabilities
iti
O
0
0
0
0
0
O
0
O
on
ppos
Opposition conspiracy/planning
Terrorism and sabotage
0
0
O
0
O
Insurgent armed attacks
0
0
O
O
O
O
O
O
Public support
Military attitudes/activities Threat to corporate military interests/dignit
O
O
Discontent over career loss, pay, or benefits
Discontent over government action/policies
Reports/rumors of coup plotting
External factors External support for government
0
0
0
0
0
0
0
O
O
0
O
O 0
0
0
0
0
0
External support for opposition
O
O
O
O
0
O
Threat of military conflict
O
0
abilities Repression/brutality
tions/ca
i
R
O
O
p
me ac
eg
Security capabilities
0
0
O
0
O
O
0
0
-
Political disunity/loss of confidence
_
-
O
0
0
i
Loss of legitimacy
0
0
0
0
0
0
0
0
crunch.
King Hassan's recent abrogation of the Arab-African Union in-
creases the prospects for Libyan meddling in Morocco. Qadhafi
almost certainly used the union to establish a network of agents to
subvert the Hassan regime. Nonetheless, the King believes his
military and security forces will be able to handle the threat,
according to US Embassy sources. Financial problems are diminish-
ing as Rabat proceeds with a new IMF agreement. In addition, a
good harvest and lower oil prices have significantly reduced the cash
Prospects for major regime or policy change
During next six months
During next six months to two fears
O Negligible concern iii Substantial concern
Low concern 0 Serious concern
Moderate concern
Projected
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Egypt:
Selected Instability Indicators
Legend
1985
1986
1987
I 11 III IV
I
II III IV
1
II
Social change/conflict Ethnic/religious discontent
0
Demonstrations, riots, strikes
0
411 Q&
Q
?
Economic factors General deterioration
Decreased access to forei
n funds
Q Q
~Q
Q
g
Ca
ital fli
ht
0
?
?
p
g
O
O
to 0
Unpopular changes in economic policies
? ?
Q ?
G
?
Food/energy shortages
O
0
0
0
Inflation
0
Opposition activities Organizational capabilities
0
0
0
O
0
0
0
0
Opposition conspiracy/planning
0
0
0
Terrorism and sabotage
Insurgent armed attacks
0
0
0
0
0
0
0
0
Public support
0
0
_
0
Military attitudes/activities Threat to corporate military interests/dignit
0
0
0
0
0
0
0
0
Discontent over career loss, pay, or benefits
O
TOG
O
01
0
0
Discontent over government action/policies
0
0
0
0
O
~
O
Reports/rumors of coup plotting
O
0
0 +
O
O
0
0
0
External factors External support for government
0
0
0
0
0
0
0
0
External support for opposition
O
O
O
t
O
O
0
0
0
Threat of military conflict
O
O
O
o
0
0
0
0
Regime actions/capabilities Repression/brutality
0
0
0
0
0
O
O
O
Security capabilities
0
0
0
0
Political disunity/loss of confidence
0
0
0
Q
Q
Q
Q
Loss of legitimacy
0
0
0
0
O
O
O
31085
2 11.86
President Mubarak continues to walk a fine line between economic
and political disaster, as Egypt's financial situation worsens and the
necessity of imposing politically sensitive austerity measures looms
closer. Economic reforms to date have not included subsidy cuts on
the most basic necessities. However, if the IMF requires additional
reforms in order to endorse Egypt for standby status, Mubarak may
be forced to implement measures that could cause demonstrations,
riots, and strikes. We believe Cairo will need additional resource
flows by early next year to avert a destablizing financial crisis]
Prospects for major regime or policy change
During next six months
During next six months to two wars
O Negligible concern Q Substantial concern
Low concern ? Serious concern
Moderate concern
Projected
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Iq
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 11 V L_1 ...1-.- I
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Iraq:
Selected Instability Indicators
Indicators Legend
Iraq's bombing campaign against Iranian economic targets in the
past several weeks is taking effect. The near obliteration of Iran's
main oil shipment terminal-Khark Island-will reduce Tehran's
oil revenues and may curtail some military operations since oil
revenues fund the war. This has buoyed Iraqi morale and given it a
new lease in the war. Even so, we are concerned that Iraq still faces
a major Iranian ground offensive. A strong assault which caused
substantial Iraqi casualties could intensify the strains not only on
the armed forces but also on the civilian population.F__1
Prospects for major regime or policy change
During next six months
During next six months to two rears
O Negligible concern
Low concern
Moderate concern
1985
I 11 1 111 IV
1986 ?
1 11 111 IV
1987
1 11
Social change/conflict Ethnic/religious discontent
?
?
?
?
?
Q
Q
Q
Demonstrations, riots, strikes
0
0
0
Economic factors General deterioration
0
? ?
?
?
Decreased access to foreign funds
? ?
?
?
Capital flight
0
0
0
0
Q
Q
Q
Unpopular changes in economic policies
0
0
0
0
Q
?
?
Food/energy shortages
0
0
0
Inflation
Q
?
?
Opposition activities Organizational capabilities
0
0
0
Opposition conspiracy/planning
0
0
0
Terrorism and sabotage
?
?
Insurgent armed attacks
?
?
?
?
?
?
?
Public support
0
0
Military attitudes/activities Threat to corporate military interests/dignity
0
0
0
Discontent over career loss, pay, or benefits
0
0
0
0
0
Discontent over government action/policies
O
O
0
Reports/rumors of coup plotting
0
0
0
0
0
External factors External support for government
0
0
0
0
0
0
0
External support for opposition
0
-0-
Threat of military conflict
?
?
?
?
?
?
?
?
Regime actions/capabilities Repression /brutality
0
?
?
?
?
Q
Q
Security capabilities
Political disunity/loss of confidence
0
0
0
0
Loss of legitimacy
0
0
0
0
0
Q Substantial concern
? Serious concern
Projected
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Secret
Iran:
Selected Instability Indicators
Indicators Legend
1985
III IV
I II
1986 ?
1 11 III IV
1987
11
1
Social change/conflict Ethnic/religious discontent
Demonstrations, riots, strikes
?
?
0
Economic factors General deterioration
?
?
?
? ?
?
Decreased access to foreign funds
?
?
G
G G
O
Capital flight
?
?
?
?
G
O
G
O
Unpopular changes in economic policies
G
G
?
?
Food/energy shortages
G
G
?
?
Inflation
G
G
?
?
Opposition activities Organizational capabilities
O
0
0
0
0
0
0
Opposition conspiracy/planning
O
0
0
Terrorism and sabotage
Insurgent armed attacks
Public support
0
Military attitudes/activities Threat to corporate military interests/dignity
Discontent over career loss, pay, or benefits
Discontent over government action/policies
Reports/rumors of coup plotting
External factors External support for government
0
0
0
O
0
0
0
0
External support for opposition
0
0
0
0
0
0
Threat of military conflict
?
?
?
?
?
?
?
?
Regime actions/capabilities Repression/brutality
Security capabilities
Political disunity/loss of confidence
G
Loss of legitimacy
0
0
Iraq's bombing campaign against Iranian targets has crippled the
economy and is confronting Tehran with difficult choices. The dire
economic situation greatly increases the risks for Iran that serious
domestic unrest will erupt-and possibly coup plotting-if its
planned offensive fails. This is intensifying the debate within the
leadership over whether to proceed but prowar leaders appear to
retain the upper hand. Ayatollah Khomeini's deteriorating health
has rendered him unable to arbitrate disputes among the leadership,
causing increased infighting over the succession as well. F__1
Prospects for major regime or policy change
Q During next six months
G During next six months to two tears
O Negligible concern G Substantial concern
Low concern ? Serious concern
Moderate concern
Projected
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Secret
India:
Selected Instability Indicators
Indicators Legend
1985
1 11 III IV
?
1986
I ' 11 111 IV
1987
I II
change/conflict Ethnic/religious discontent
?
? ?
0 Q Q O
Demonstrations, riots, strikes
Economic factors General deterioration
0
0 0
0
O O 0 0
Decreased access to foreign funds
o
O
O
O
O 0 0 0
Capital flight
0
0
0
0
0
0
0
0
Unpopular changes in economic policies
0
0
0
0
0
0
0
Food/energy shortages
0
0
O
0
0
0
0
0
Inflation
0
0
0
0
Opposition activities Organizational capabilities
0
0
0
0
0
0
0
0
Opposition conspiracy/planning
0
0
0
0
0
0
0
0
Terrorism and sabotage
?
?
G
G
1
Insurgent armed attacks
0
0
O
0
0
O
0
Public support
0
0
0 0
0
0
0
0
Military attitudes/activities Threat to corporate military interests/dignity
0
0
0 0
0 O
0
0
Discontent over career loss, pay, or benefits
Discontent over government action/policies
_
Reports/rumors of coup plotting
0
0
0
0
0
0
O
t
O
External factors External support for government
0
0
0
0
0
0
0
0
External support for opposition
0
0
0
0
0
O
O
O
Threat of military conflict
Regime actions/capabilities Repression /brutality
0
0
0
0
0
0
0
0
Security capabilities
Political disunity/loss of confidence
b
O
O
O
O
O
O
0
Loss of legitimacy
b
O
O
O
O
O
O
O
in the short term-result in considerable communal violence.
Lapses in security permitted Sikh extremists to attack Prime
Minister Gandhi and his chief security official in Punjab, and to kill
the Army general who commanded the 1984 sweep of the Sikh's
Golden Temple. Gandhi shuffled his Cabinet after the violence,
naming new security and foreign ministers. The moves will assuage
critics calling for action but, in our judgment, Gandhi will remain
vulnerable because competing, ill-trained bureaucracies are respon-
sible for his safety. Gandhi's death by assassination could-at least
Prospects for major regime or policy change
During next six months
During next six months to two sears
O Negligible concern Q Substantial concern
Low concern ? Serious concern
Moderate concern
Projected
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Secret
Somalia:
Selected Instability Indicators
Indicators Legend
President Siad continues to recover from his automobile accident
and recently was nominated by the ruling party for another term as
president. The behind-the-scenes succession struggle continues as
some factions of the Marehan tribe remain opposed to Siad's
designation of Vice President Samantar as his eventual successor.
We believe the President is trying to find a way to protect Marehan
interests under a Samantar government; an extraordinary party
congress is scheduled for November to address the issue.) 25X1
Prospects for major regime or police change
During next six months
During next six months to two tears
O Negligible concern Substantial concern
Low concern ? Serious concern
Moderate concern
Projected
1985
I
1986
1
III
?
IV
11987
1 11
Social change/conflict Ethnic/religious discontent
O~
0
0
0
10
Decreased access to foreign funds
0
10
0
0
0
O
O
Capital flight
Unpopular changes in economic policies
0
'0
Food/energy shortages
0
10
Inflation
Opposition activities Organizational capabilities
Opposition conspiracy/planning
Terrorism and sabotage
Insurgent armed attacks
Public support
o
F-0-
Military attitudes/activities Threat to corporate military interests/dignity
O
0
0
10
0
0
!
O
Discontent over career loss, pay, or benefits
0
0
0
0
__
0
0
Discontent over government action/policies
Reports/rumors of coup plotting
External factors External support for government
External support for opposition
Threat of military conflict
Regime actions/capabilities Repression/brutality
Security capabilities
Political disunity/loss of confidence
Loss of legitimacy
O 1
0
0
310860 1186
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Kenya:
Selected Instability Indicators
Indicators Legend
1985
I 11 III IV
1986 ?
I 11 III IV
1987
11
1
Social change/conflict Ethnic/religious discontent
Demonstrations, riots, strikes
0
O
O
0
0
0
Economic factors General deterioration
F
-
Decreased access to foreign funds
0
0
0
0
0
0
Capital flight
0
0
0
0
O
0
0
0
Unpopular changes in economic policies
0
0
0
0
0
0
0
Food/energy shortages
O
0
0
0
0
0
0
Inflation
0
0
O
O
0
0
O
0
Opposition activities Organizational capabilities
0
0
0
0
Opposition conspiracy/planning
O
0
Terrorism and sabotage
0
0
0
0
0
0
0
0
Insurgent armed attacks
0
0
0
0
0
0
0
0
Public support
0
0
0
0
0
0
0
Military attitudes/activities Threat to corporate military interests/dignity
0
0
0
0
0
0
0
0
Discontent over career loss, pay, or benefits
0
0
0
T
Discontent over government action/policies
0
0
0
0
0
Reports/rumors of coup plotting
0
0
0
0
0
0
0
O
External factors External support for government
0
0
0
0
0
0
0
0
External support for opposition
0
0
0
0
0
0
0
0
Threat of military conflict
0
0
0
0
0
0
0
0
Regime actions/capabilities Repression/brutality
0
0
0
0
0
0
0
0
Security capabilities
0
0
0
0
0
0
0
0
Political disunity/loss of confidence
0
0
0
0
0
0
0
0
Loss of legitimacy
0
0
0
0
0
0
0
0
President Moi's relations with ethnic Kikuyus and Christian clergy
remain strained. Some Kikuyus believe that government manipula-
tion caused the collapse of two banks largely controlled and
patronized by their ethnic group, and they are upset that the
government has failed to reimburse small depositors. Some clerical
leaders have publicly opposed Moi's call for the abolition of the
secret ballot in the 1988 election. Neither controversy appears likely
to pose a major threat to Kenyan stability in the near term.F~
Prospects for major regime or policy change
During next six months
During next six months to two dears
0 Negligible concern Q Substantial concern
Low concern 0 Serious concern
Moderate concern
Projected
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Zaire:
Selected Instability Indicators
Indicators Legend
Social change/conflict Ethnic/religious discontent
Demonstrations, riots, strikes
Economic factors General deterioration
O Negligible concern Q Substantial concern
Low concern 41 Serious concern
Moderate concern
Decreased access to foreign funds 0 0
Capital flight 0 0
Unpopular changes in economic policies
Food/energy shortages
Inflation
Opposition activities Organizational capabilities
Opposition conspiracy/planning
Terrorism and sabotage
Insurgent armed attacks
Public support
Military attitudes/activities Threat to corporate military interests/dignit O
Discontent over career loss, pay, or benefits
Discontent over government action/policies
Reports/rumors of coup plotting
External support for opposition
Threat of military conflict
Regime actions/capabilities Repression/brutality
Political disunity/loss of confidence
Uganda as a result of Qadhafi's recent visit to Kampala.
President Mobutu faces no immediate political challenge but is
frustrated with the results of his four-year IMF-backed economic
reform program. Although the IMF recently granted a waiver that
will allow Zaire to continue drawing funds despite its failure to meet
program targets, the Embassy reports that political elites are
pressing Mobutu to abandon austerity. Meanwhile, Mobutu remains
concerned about Zairian dissident exiles, and officials believe that
Libyan-backed rebels may be allowed to use bases in neighboring
Prospects for major regime or policy change
During next six months
During next six months to two wars
1985
I
1986
I 1 II
Projected
198)
III I IV I I 11
OTO
O
0-
0
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South Africa:
Selected Instability Indicators
Indicators Legend
1985
1 ^ 111 IV
1986
I II III IV
1987
1 I[
Social change/conflict Ethnic/religious discontent
O
O
Q
Demonstrations, riots, strikes
?
?
?
?
?
?
?
?
Economic factors General deterioration
Decreased access to foreign funds
O
?
?
Q
O
Q
Q
Capital flight
O
0
Unpopular changes in economic policies
0
0
0
0
0
0
0
Food/energy shortages
0
O
0
0
0
O
0
0
Inflation
Opposition activities Organizational capabilities
0
O
0
0
0
Opposition conspiracy/planning
0
0
0
0
0
0
0
0
Terrorism and sabotage
0
O
O
O
Insurgent armed attacks
0
0
0
0
Public support
Military attitudes/activities Threat to corporate military interests/dignity
0
0
0
0
0
0
0
0
Discontent over career loss, pay, or benefits
0
0
0
0
0
0
0
0
Discontent over government action/policies
0
0
O
O
Reports/rumors of coup plotting
0
0
O
O
0
0
0
O
External factors External support for government
?
?
External support for opposition
0
0
0
0
0
Q
O
Q
Threat of military conflict
0
0
0
0
Regime actions/capabilities Repression/brutality
?
?
?
?
?
?
?
?
-
7
Security capabilities
0
O
0
0
0
O
0
0
Political disunity/loss of confidence
Loss of legitimacy
0
0
0
0
0
0
0
0
but probably will cause only minor problems for Pretoria.
State of Emergency restrictions and the detention of thousands of
antigovernment activists have limited, at least temporarily, the
ability of opposition groups to organize. Nevertheless, US Embassy
and press reporting indicates that civil disobedience campaigns are
growing and blacks are regrouping. These activities will not become
regime threatening in the near term because Pretoria will impose
progressively harsher measures to suppress protests. Economic
sanctions imposed thus far may have unpredictable consequences
Prospects for major regime or policy change
Q During next six months
? During next six months to two }ears
O Negligible concern
Low concern
Moderate concern
G Substantial concern
? Serious concern
Projected
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Philippines:
Selected Instability Indicators
Legend
1985
1 II 111 IV
1986
I II
III IV
1987
I II
Social change/conflict Eth
/
i
li
i
d
n
c
re
g
ous
iscontent
Demonstrations, riots, strikes
Economic factors Gener
l d
t
i
i
0
a
e
er
orat
on
Decreased access to foreign funds
?
?
?
0
0
Capital flight
0
0
0
0
0
0
0
Unpopular changes in economic policies
?
?
0
0
Food/energy shortages
0
0
0
0
0
0
0
Inflation
Opposition activities Or
aniz
ti
l
b
O
O
O
0
0
0
g
a
ona
capa
ilities
Opposition conspiracy/planning
0
0
0
0
Terrorism and sabotage
Insurgent armed attacks
?
?
~?
?
?
?
?
Public support
?
?
?
~?
Military attitudes/activities Threat to
corporate military interests/dignity
Discontent over career loss, pay, or benefits
Discontent over government action/policies
Reports/rumors of coup plotting
O
?
0
? +
0
O-T
0
Q
External factors Exter
l
f
na
support
or government
0
0
O
O
External support for opposition
Threat of military conflict
Regime actions/capabilities Re
ressio
/b
li
O
O
0
0
O t
0
o
0
0
0
0
0
0
0
O
0
p
n
ruta
ty
O
0
0
O
0
Security capabilities
Political disunity/loss of confidence
Loss of legitimacy
?
0-
0 ?
0
0
0
0
and Ftliptno businessmen from investing in the economy.
President Aquino's progress toward consolidating control continues
to be hampered by Cabinet infighting, particularly Defense Minister
Enrile's unceasing criticism of the cease-fire talks with Communist
insurgents. We are concerned that such differences could lay the
groundwork for organized opposition to Aquino's government in the
coming quarter. Both the Communist Party and politicians on the
right are organizing to field candidates in next year's local and
legislative elections. Political uncertainty continues to deter foreign
Prospects for major regime or policy change
During next six months
During next six months to two years
0 Negligible concern Substantial concern
Low concern ? Serious concern
Moderate concern
Projected
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Indonesia:
Selected Instability Indicators
Legend
antiregime elements would try to exploit.
The government is increasingly concerned about the possibility of
unrest resulting from a deteriorating economy and, in particular, the
devaluation of the rupiah. The always intense popular resentment
toward the Chinese business community already appears to be
growing as Indonesia's oil-based economy deteriorates. Disturbances
directed against the Chinese in several cities have caused authorities
to place security units on alert. Disturbances so far have posed no
threat to the regime, but an incident could create a situation that
Prospects for major regime or policy change
During next six months
During next six months to two }ears
O Negligible concern
Low concern
Moderate concern
Q Substantial concern
0 Serious concern
1985
I II III IV
1986
1 II 111 1 IV
1987
I
Social change/conflict Ethnic/religious discontent
Demonstrations, riots, strikes
0
0
0
0
0
Economic factors General deterioration
0
0
V
Q
Decreased access to foreign funds
0
0
0
0
0
Capital flight
O
0
0
0
Unpopular changes in economic policies
0
0
O
O
0
Food/energy shortages
O
0
O
O
0
0
0
0
Inflation
0
0
O
O
0
0
0
anizational capabilities
tivities Or
i
i
0
0
0
0
0
0
0
0
g
on ac
t
Oppos
Opposition conspiracy/planning
0
0
_
0
0
0
0
0
Terrorism and sabotage
0
0
0
0
0
0
0
ent armed attacks
Insur
0
0
O
0
-
O
0
0
0
g
Public support
0
0
0
O
O
0
O
O
Military attitudes/activities Threat to corporate military interests/dignit
O
0
0
0
O
0
O
O
Discontent over career loss, pay, or benefits
0
O
0
O
0
0
0
Discontent over government action/ policies
O
O
O
O
O
O
O
O
-
Reports/rumors of coup plotting
External factors External support for government
0
0
0
0
0
0
0
O
O
O
O
O
O
O
O
O
External support for opposition
0
0
0
O
O
0
0
0-
Threat of military conflict
0
0
O
0
0
0
0
0
Regime actions/capabilities Repression /brutality
Security capabilities
O
O
0
0
O
0
0
_0
Political disunity/loss of confidence
O
0
0
0
0
0
0
0
Loss of legitimacy
O
0
0
0
0
0
0
0
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South Korea :
Selected Instability Indicators
Legend
1985
I
II
111
IV
1986
I 11 III
?
IV
1987
Social change/conflict Ethnic/r
li
i
di
1
11
e
g
ous
scontent
o
O
o
L
Lo
0
0
0
0
Demonstrations, riots, strikes
Economic factors General d
t
i
i
?
~Q
-
} i
e
er
orat
on
Decreased access to foreign funds
Capital flight
O
O
0
O
0
O
0
O
0
O O
O 0
0
O
0
0
O
0
0
Unpopular changes in economic policies
F
d/
0
0
0
0
0
oo
energy shortages
0
0
0
0
0
0
0
Inflation
Opposition activities Or
anizational
bili
i
0
0
0
0
0
0
O
O
g
capa
t
es
O
i
i
/
ppos
t
on conspiracy
planning
T
Q
-
errorism and sabotage
Insurgent armed attacks
P
bli
0
0
0
I
+
0
0
0
0
0
u
c support
T
-
Military attitudes/activities Threat to co
rporate military interests/dignit
Discontent over career loss, pay, or benefits
government action Di-scon-tent over- /po
Repo is/rumors of coup plotting hues
External factors External
f
0 T
0
0
0
0
0
0
0
O-
O-L O
0-
support
or government
O
0
0
0
External support for opposition
-
Threat of military conflict
Regime actions/capabilities Re
ression/b
t
li
O
O
O
O
O
O
O
0
p
ru
a
ty
Security capabilities
0
0
--
0
0
0
0
0
O
Political disunity/loss of confidence
-
Loss of legitimacy
Q
f
31(PFf
ti.RF
The constitutional revision issue could come to a head before
yearend. Opposition bosses Kim Young Sam and Kim Dae Jung are
pursuing a more confrontational strategy to promote a directly
elected presidency. The Chun government appears committed to its
parliamentary system proposal, and has signaled it will tighten down
on dissidents who try to exploit the constitutional issue. The two
Kims could drag the opposition party into the streets out of
desperation if hardliners push their plan through the National
Prospects for major regime or policy change
During next six months
During next six months to two tears
O Negligible concern i& Substantial concern
Low concern ? Serious concern
Moderate concern
Projected
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Iq
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Secret
Part 4.
Special Annex
The Middle East: The
Impact of an Iranian Victory
on Regional Stability
Iran in recent months has built up forces and material
that position it to mount large-scale offensive opera-
tions against Iraq. Uncertainty exists concerning the
specific shape and extent of an impending attack and
its prospects for success or failure. An Iranian mili-
tary breakthrough, however, would increase the pros-
pects for an Iranian victory in the war-which would
have a significant impact on stability in the Middle
East and on US interests in the region. We are
offering here a speculative discussion of the implica-
tions of such an outcome.)
A partial victory, in whicn Iran achieves its minimum
war aims: We believe this would entail the fall of
Saddam Husayn, Baghdad's acknowledgment of guilt
for starting the war, and possibly the payment of war
reparations. Such a scenario might also include the
establishment of a Shia puppet government in a
portion of southern Iraq and the cession of some Iraqi
territory to Iran. This outcome, in our view, probably
would lead Tehran to step up its subversive efforts
against Gulf Arab regimes, strengthen the forces of
Islamic fundamentalism, and increase domestic pres-
sure on pro-Western and moderate Arab
governments.
A total victory, in which Iran achieves virtually all of
its war aims: This unlikely case would probably entail
the collapse of Iraqi military forces, the fall of the
entire Ba'thist government, the institution of a Shia
regime in Baghdad, and military occupation of a
significant portion of Iraqi territory:
? Under this worst case scenario, we believe that
Tehran would further intensify its aggressive activi-
ties against the moderate Arab states, and possibly
move militarily against Kuwait or Bahrain.
? This outcome would almost certainly prompt some
Arab states to request increased US military assis-
tance and presence and significantly raise the poten-
tial for direct US involvement in regional hostilities.
Implications for Political Stability
Iran. Even a partial Iranian victory would bolster the
position of the clerical regime and buy time for the
government to address serious domestic problems.
The hardliners within the leadership would be partic-
ularly strengthened by the fall of the Saddam Husayn
regime. Even regime critics would be likely to rally
around the government in the immediate aftermath of
a victory, and internal and external opposition ele-
ments would be weakened.
Aside from the psychological uplift that victory would
provide, the regime's position would be strengthened
by a gradual improvement in Iran's economy after the
war. This improvement would result from:
? A possible increase in oil revenues.
? An increase in real economic activity because of the
cessation of war damage and the initiation of recon-
struction efforts.
? The probable receipt of some war reparations. C
Despite the probable psychological and economic
benefits of victory, the Iranian Government would
still face formidable domestic problems, including
unemployment, continued austerity, abridgement of
individual freedoms, and political infighting. Tehran,
at least initially, would be likely to concentrate on
raising the standard of living as a way to reward
Iranians for enduring the hardships of war and to
increase popular support for the regime. The avail-
ability of goods and the quality of services probably
could increase within several months of a victory.
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Secret
Arabian
Domestic problems would not, in our judgment, deter
the militant leadership from exporting the revolution.
Indeed, the need to distract popular attention from
domestic issues could lead the regime to seek new
targets to replace Saddam Husayn.F__1
Iraq. Any successor to the Husayn regime almost
certainly would have to rely on repression to maintain
power. Even if a secular Sunni regime similar to the
present Bath government assumed power, serious
political infighting would be likely
If a total Iranian victory brought a Shia government
to power, the new regime would face strong opposition
from ethnic and confessional groups and would have
difficulty with establishing control, especially since
Sunni forces almost certainly would receive extensive
financial and military support from other Arab states.
The regime would be likely to focus its efforts on
maintaining control over major cities, oilfields, trans-
portation routes, and waterways, while opposition
forces probably would remain in control of some large
cities, such as Mosul in the north. The opposition
would stand a good chance of eventually ousting a
Shia government, especially if Iranian military sup-
port slackened over time.)
Persian Gulf States. We believe that even a partial
Iranian victory would be likely to embolden Tehran to
pursue its longer-term objective of toppling politically
moderate Gulf Arab governments. Despite continuing
problems at home and in occupied Iraq, we believe
Tehran would step up support for antiregime groups
throughout the Gulf, expand subversive cells in Gulf
Shia communities, and lend logistic and financial
support for terrorist activities. Although Tehran
would probably focus its efforts on Kuwait and
Bahrain-with their large Shia populations-Iranian
leaders also would try to foment unrest among the
400,000 Shias in Saudi Arabia's Eastern Province.
Regardless of the extent of Iranian inspiration, we
believe that Gulf Shias would become more active
politically following an Iranian victory.
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If Iran were able to pacify Iraq, it might move more
quickly against Gulf Arab regimes that it sensed were
vulnerable. While Tehran would be most likely to rely
on subversion, a conventional attack against Kuwait
or Bahrain cannot be discounted. In the event that
Kuwait or Bahrain faced destabilizing domestic un-
rest or an Iranian military attack, Saudi Arabia
would be likely to lend military assistance. F__1
The Levant and Israel. Any Iranian victory almost
certainly would generate greater Iranian involvement
in Lebanon, where Tehran supports factions of the
large Lebanese Shia community. At a minimum, we
would expect an increase in Iranian Revolutionary
Guard presence and increased financial support to
Hizballah and other radical Islamic groups. Probable
Syrian and Israeli countermoves would increase pros-
pects for large-scale fighting between the pro- and
anti-Iranian factions.
A total Iranian victory might invigorate Islamic fun-
damentalist Sunni forces in Syria and Jordan, leading
Damascus and Amman to resort to repressive mea-
sures. Tehran might also sponsor subversive activities
in Jordan in retribution for Amman's strong support
Under almost any Iranian victory scenario, Tehran
would be likely to focus increased attention on the
Arab-Israeli conflict. Iran probably would encourage
radical Islamic and Palestinian groups to stage in-
creased terrorist attacks against Israel, using Lebanon
as a staging ground. F__1
Egypt and North Africa. Restive Sunni Islamic
groups in Egypt, Morocco, and Tunisia probably
would be energized by an Iranian victory and might
use the occasion to organize antiregime activities. The
replacement of Iraq's secular government with a
fundamentalist regime would provide a tremendous
psychological boost to Islamic groups, which could
exploit the prevailing poor economic conditions in
these states to engender some popular support. Iran
would be likely to lend logistic support and subversive
training to these groups, putting aside Shia-Sunni
differences for the sake of weakening moderate Arab
governments. F__1
Prospects for instability in Egypt would increase
further if an Iranian victory resulted in the repatria-
tion of a large number of the approximately 1.2
million Egyptians residing in Iraq. Egypt's already
strained economy would be unable to absorb many of
these returning workers, and resulting economic pres-
sures might spark unrest among nonfundamentalist
segments of Egyptian society. F__1
Pakistan and Afghanistan. Tehran would step up its
support to selected insurgent groups in Afghanistan
following a victory over Iraq. Iran's assistance would
continue to be channeled mainly to Shia groups,
although it might increase support to some important
Sunni groups, such as the fundamentalist Hizbi
Islami and Jamiat-i-Islami parties.
Some political unrest probably would develop in Paki-
stan after a total Iranian victory, as happened in 1979
after the fall of the Shah. An upsurge in Shia activism
almost certainly would be countered by a strong
fundamentalist Sunni reaction, resulting in sectarian
violence. Islamabad would be likely to respond to such
violence with heavyhanded tactics of its own, which,
in our judgment, probably would fuel popular unrest.
Additional Implications for US Interests
Political instability that stemmed from an Iranian
victory would harm US interests in virtually any state
in the region:
? Instability in the Gulf Arab states, Egypt, Pakistan,
Jordan, Tunisia, or Morocco probably would prompt
criticism of security, political, and commercial ties
to the United States, causing some governments to
distance themselves from Washington. The fall of
any of these governments would threaten important
US strategic interests.
? Instability in the Gulf Arab states would threaten
the flow of oil exports to the West since oil facilities
almost certainly would become targets of antiregime
activities.
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? Instability in Iraq that resulted in a radical
Syrian-Iraqi-Iranian axis would pose a more serious
threat to Israel.
? Although an Iranian victory also is counterproduc-
tive to most Soviet objectives in the Middle East,
Moscow would seek to exploit instability in pro-
Western states by. fueling popular criticism of West-
ern influences and perhaps by supporting radical
antiregime elements.
? Many groups ideologically opposed to the Soviet
Union probably would accept Soviet support to
achieve their goals, giving Moscow important in-
roads in countries where it now has little influence.
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Secret
Secret
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