MEXICO: OUTLOOK FOR THE SALINAS ADMINISTRATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP94T00766R000400060001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 23, 2016
• Document Release Date: February 25, 2014
• Sequence Number: 1
• Publication Date: May 1, 1989
• Content Type: NIE

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AbIN INTERNAL USE QNL_
WHITE KEY JUDGMENTS
SPECIAL WHITE KEY JUDGMENTS
Distribution
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oce,AJ'T- (
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1 President with PDB, VIA COURIER
2 Vice President VIA Briefer
3 Sec State VIA Briefer
Ki (
4 Sec Defense VIA Briefer (4 4
5 CJCS VIA Briefer
6 Nat'l Sec Advisor with PDB, VIA COURIER
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1,
7 DCI VIA Morning Briefing Book
8 DDCI VIA Morning Briefing Book
9 ExDir VIA Morning Briefing Book
10 DDO leave with DDO/DO
11 DDA VIA Morning Briefing Book
12 DDS&T VIA Morning Briefing Book
13 DDI VIA Morning Briefing Book
14 ADDI VIA Morning Briefing Book
15-16 VC/NIC Elivra deliver
17 D/CPAS Frank Reynolds
vL
CPAS Registry
18 Curtis W. Kanman, Acting
Director of Intelligence and Research
Room 6531, Department of State
19 Lieutenant General Harry E Soyster
Director, Defense Intelligence Agency
Room 3E258, Pentagon
20 RADM William O. Studeman, US Navy
?11X41-N?lifFERtikEr-USE--ONLY__
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Director, National Security Agency
Room 9A197, Fort George G Meade, Maryland
ADMIN INTERNAL USE ONLY
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ADMIN INTERNAL USE ONLY
21 Mr James H. Geer
Assistant Director, Intelligence Division
Federal Bureau of Investigation
Room 4026, J.E. Hoover Building
COPY # RECIPIENT
22 Mr Robert J Walsh
Assistant Secretary for Defense Programs
Room 4A014, Forrestal Bldg., Department of
23 Mr. Randall M. Fort
Special Assistant to the Secretary
(National Security)
Room 2049, Main Treasury Building
24 The Honorable James F. McGovern
Under Secretary of the Air Force
Room 4E886, Pentagon
25 RADM Thomas A. Brooks, USN
Director of Naval Intelligence
Department of the Navy
Room 5C6001 Pentagon
26 Lt General Sidney T Weinstein
Assistant Chief of Staff for Intelligence
Department of the Army
Room 2E464, Pentagon
27 Maj Gen C. Norman Wood, USAF
Assistant Chief of Staff for Intelligence
Department of the Air Force
Room 4A932, Pentagon
28 Brigadier General James D. Beans, USMC
Director of Intelligence, US Marine Corps
Headquarters, US Marine Corps
Room 2117, Navy Annex
Washington, D.C. 20480
29 Robert M. Gates
Deputy Assistant National
White House Sit. Room
30
31
32
The Honorable Lawrence S.
Deputy Secretary of State
Room 7220, New State Bldg.
Security Advisor
Eagleburger
Energy
Mr. Robert M. Kimmitt
Undersecretary of State for Political Affairs
New State Bldg.
The Honorable Donald J. Atwood
Deputy Secretary of Defense
Room 3E944, The Pentagon
ADMIN INTERNAL USE ONLY
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34
35
36
ADMIN INTERNAL USE ONLY
The Honorable Richard L. Armitage
Asst. Secretary of Defense for Internat'l Security Affairs
Room 4E808, The Pentagon
The Honorable Ronald F. Lehman
Asst. Secretary of Defense for Internat'l Security Policy
Room 4E838, The Pentagon
Mark Sullivan
Executive Secretary, NFIB
?
ADMIN INTERNAL USE ONLY
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Mexico: Outlook for the
Salinas Administration
National Intelligence Estimate
Key Judgments
These Key Judgments represent the views
of the Director of Central Intelligence
with the advice and assistance of the
US Intelligence Community.
Sec
NIE 81-89W
May 1989
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The following intelligence organizations* participated
in the preparation of these Key Judgments:
The 'Central Intelligence Agency
The Defense Intelligence Agency
The..National Security Agency
The Bureau of Intelligence and Research,
Department of State
The Office of Intelligence Support,
Department of the Treasury
also participating:
3
The Deputy Chief of Staff for Intelligence, Department of the Army
The Director of Naval Intelligence, Department of the Navy
The Assistant Chief of Staff, Intelligence, Department of the Air Force
The Director of Intelligence, Headquarters, Marine Corps
The National Foreign Intelligence Board concurs,
except as noted in the text.
The full text of this Estimate is being published
separately with regular distribution.
Warning Notice
Intelligence Sources
or Methods Involved
(WN INTEL)
National Security Unauthorized Disclosure
Information Subject to Criminal Sanctions
Dissemination Control
Abbreviations
NOFORN (NF) Not releasable to foreign nationals
NOCONTRACT (NC) Not releasable to contractors or contractor/consultants
PROPIN (PR)
Caution?proprietary information involved
ORCON (OC)
Dissemination and extraction of information
controlled by originator
REL...
This information has been authorized for release to...
WN
WN INTEL?Intelligence sources or methods involved
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Key Judgments
We believe that the odds (80 percent) substantially favor the achievement
by the administration of Carlos Salinas de Gortari of enough of its
objectives to maintain the initiative, preserve stability, and ensure a high
degree of political continuity through the midterm election in September
1991, the period treated in this Estimate. We judge, nevertheless, that
there is about a 20-percent chance that Mexico will experience sharply
deteriorated economic conditions, militant labor agitation, or drug-related
instability that would risk widespread violence.
The durable political system retains considerable strength, legitimacy, and
resiliency. It has a monopoly of coercive power
and is reinforced by important cultural
and historical underlying forces. No other party or political coalition
will match the capabilities and national reach of the long-dominant
Institutional Revolutionary Party (PRI), and Salinas and young reformers
in his entourage will probably succeed in their efforts to make it even more
competitive?or make the opposition less competitive.
If the Mexicans this year achieve their goal of a debt package of at least
$4 billion, including significant debt reduction, and absent adverse trends
in oil prices, US growth, and interest rates, we project growth of about 3 to
4 percent in 1990.' In the absence of such a debt package, growth would be
unlikely to exceed 2 percent, and the odds will be high that Salinas will
make good on his repeated warnings and unilaterally stop or sharply reduce
debt payments.
Salinas's Priorities
? His overriding goal is to restructure the economy?making it more
receptive to international market forces and investment, reducing the size
and role of the public sector, and encouraging private initiative?to
provide impetus for diversification and sustained growth.
' The Department of the Treasury wishes to underscore that the connection between
Mexico's debt negotiations and economic growth is complex and indirect. A debt deal
could increase investor confidence, promote investment, and lead to economic growth;
however, anti-inflationary policies, domestic interest rates, and oil prices will also continue
to be key determinants in Mexican economic growth.
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? He also places a high priority on reaffirming the presidency as the
linchpin of the political system. He has campaigned against crime and
corruption and has moved to reduce the power of entrenched labor
chieftains. As a result of these and other actions, he has gained popular
support and undermined the appeal and effectiveness of opposition
parties.
? Although he has promised to decentralize and democratize Mexico's
authoritarian system, he places a higher priority on preserving the PRI's
dominance and will go slow on enacting reforms to liberalize the political
process, conceding no strategically important opposition election
victories.
Mexico and the United States
Unlike his recent predecessors, Salinas believes that expanded relations
with the United States are both inevitable,(a4desirable. He seeks closer
ties and special treatment and will skillfully take advantage of US interests
in having a politically and economically stable neighbor on our southern
border.
He will seek to avoid or minimize differences on bilateral and international
issues, and will be likely to avoid stridently nationalistic or confrontational
policies. But he will also be faithful to the demands of Mexican nationalism
and will have no choice but to occasionally employ sharp rhetoric and take
positions that will conflict with US policies.
Although Salinas is approaching the narcotics problem pragmatically,
contentious bilateral problems related to Mexican antidrug performance
are likely to continue to affect relations adversely. There is broad
agreement in Mexico that certain US counternarcotics programs infringe
on Mexican sovereignty and that the US Congressional certification
process is particularly demeaning. If Mexico were decertified, we believe
Salinas would have the support of the bulk of the population in reacting
harshly.
Guided by an overriding concern with internal problems, Salinas is
committed to steering Mexico toward a less activist, pragmatic foreign
policy. He will play a less assertive role in Central America, at the UN, in
other international forums, and as a spokesman for Third World causes.
He will probably maintain relations with Cuba and the USSR at about the
same levels as in recent years. We believe the latter will eschew subversive
activities against the Salinas government.
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The Political Outlook
The election/in July for the control of the state legislature in Michoacan
will probably be a crucial test of Cuauhtemoc Cardenas's chances for
constructing a viable leftist-populist alternative to the PRI. If
election were held now, Cardenas's candidates would probably win control
of the legislature?something no opposition party has ever accomplished.
The PRI is devoting large-scale resources to prevent such an outcome.
Salinas will probably confront tough challenges in managing relations with
organized labor. Their grievances have been steadily mounting since 1982,
and Salinas's modernization program relies to some extent on reducing the
unions' entrenched interests. As he pursues that goal, his administration is
likely to be the target of spontaneous labor agitation.
If labor, student, or other violence were to occur on a scale large enough to
exceed the capabilities of the civilian security forces, the traditionally
apolitical military would be able to maintain or restore order under
virtually all circumstances likely to develop during the time period of this
Estimate.
Even though we believe Salinas is likely to preserve the PRI's dominance,
pent-up pressures and accumulated hardships have created an environment
with the potential for increased social unrest and violence. We do not
expect these outbreaks to be regime threatening during the period of this
Estimate, but the degree to which Salinas's program achieves positive
results?most critically in the economic sphere?will be the major factor in
mitigating the severity of such disturbances. Should one or more of the key
economic variables go wrong (such as a US recession or a drop in oil
prices), political pressures for expansionary, populist policies will increase.
Alternate Outlook
Given the large number of economic and political variables involved, and
the exceptional pressures on the political system, there are combinations of
developments that we estimate have a 20-percent likelihood that could
provoke a crisis during the time period of the Estimate. Severe economic
setbacks, for example, could cause more widespread unrest. Incidents in
which substantial numbers of civilians were killed by military or security
forces would damage the government's legitimacy and could create an
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increasingly polarized cycle of violence. Such a situation would be likely to
generate ruptures within the PRI, which would face the dilemma of losing
its congressional majority or resorting to blatant fraud that would spark
even greater protest.
In the most extreme case, we would judge the chances of domestic unrest
escalating to the point of threatening the government's hold on power at
less than 5 percent during the next three years and no more than 10
percent for the remainder of Salinas's term. In such a contingency, the
military would probably press for a larger role in national decisionmaking,
but we would expect Salinas to exercise his already-demonstrated decisive-
ness in responding to such a threat.
A unilateral move by the military to intervene would be contemplated only
in the extremely unlikely event that collapse of the political system was
imminent. The ensuing regime would probably seek to maintain close
relations with the United States. We believe, therefore, that even under
such a worst case scenario the extreme left would be unable to win power.
Nevertheless, US interests would have been adversely affected by the
initial instability and turmoil that would, for example, have accelerated
emigration to a flood, allowed drug trafficking to worsen, and resulted in a
contraction in bilateral trade.
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