LATIN AMERICA REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T01184R000201080001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 17
• Document Creation Date: December 22, 2016
• Document Release Date: August 27, 2010
• Sequence Number: 1
• Publication Date: October 5, 1984
• Content Type: REPORT

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uteNI~ ence
Review
Latin America
ALA LAR 84-018
5 October 1984
394
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ceu CL
Latin America
Review F-I
Uruguay- The Future of the Left
The Uruguayan left has stepped up its activities sharply to take
advantage of the opening of the political system and the anticipated
return to civilian rule, but the anti-Communist armed forces will
continue to define the limits of acceptable political behavior. F_
advances against the drug industry unlikely over the next year.
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Government forces' occupation of the Chapare, the country's
principal coca-growing region, is the first major effort by President
Sites to combat the influence of narcotics traffickers, but domestic
constraints and the magnitude of the problem make significant
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party
President-elect Nicolas Barletta, handpicked by General Noriega
and declared the winner of a fraudulent election, will be restricted in
his policymaking by both the military and politicians of the ruling
Brazil is abandoning its traditional indifference to the problem of
rapid population growth because of changing public attitudes and
the prolonged economic recession, but its efforts are not expected to
make a significant difference before the end of the century. F-7
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Peru: Problems With IMF
Mexico: Military Austerit
Cuba: Sugar Outlook
Costa Rica: Labor Unrest
Articles have been coordinated as appropriate with other offices within CIA.
Comments and queries regarding this publication may be directed to the Chief,
Production Staff.. Office of African and Latin American Analysis
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Uruguay: The Future of the Left
The Uruguayan left has stepped up its activities
sharply to take advantage of the opening of the
political system and the anticipated return to civilian
rule next year. The presidential, congressional, and
municipal elections scheduled for 25 November offer
leftist organizations an opportunity to demonstrate
their appeal to the electorate, to emerge from the
shadow of the traditionally dominant Blanco and
Colorado Parties, and to gain a share of power after
more than a decade under military regimes. Internal
squabbling, however, may erode their ability to win
votes and cooperate after the election. Moreover, the
anti-Communist armed forces will continue to define
the limits of acceptable political behavior.
The Broad Front
The Broad Front a leftist coalition that includes the
Communists, Socialists, Christian Democrats, splinter
factions of the Colorado and Blanco Parties, and
several other groups is positioning itself to score
impressive gains in the balloting next month. Public
opinion polls indicate that the Front will do well in
Montevideo, a traditional center of leftist strength
that contains nearly 50 percent of the national
population. In the country's last elections in 1971, the
Broad Front polled over 18 percent of the vote
nationally and almost captured the mayoralty of the
capital.-1
Despite internal disagreements, the Front participated
with other political parties in negotiations with the
armed forces. In August it also signed the resulting
civil-military accord that established the conditions
for a return to civilian rule.
organization's leaders took this course to obtain the
release of many incarcerated militants and to pave the
way for the Front's participation in the new 25X1
democratic system.
US Embassy reporting indicates that organizing
efforts have benefited greatly from the military's
subsequent release of Broad Front chief Liber
Seregni, who spent eight years in prison, and the
lifting of political restrictions on more than 7,000
members. We believe the armed forces are
deliberately facilitating the Front's surge, up to a
point, to draw votes away from the center-left Blancos
and aid the Colorado Party. To keep the tactic under
control, some 3,500 additional members of the Front
remain under proscription and consequently are 25X1
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Although still outlawed, the Uruguayan Communist
Party is parlaying its role in the coalition into greater
influence in national politics-but at the cost of
The Blanco Party
The Blanco Party, long a conservative grouping based
in the rural interior, has moved left of center during
the last two decades. Its transformation stems partly
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Broad Front chief Liber trn~~~a~
Seregni
from the ascendance of Wilson Ferreira, a
charismatic leader who narrowly lost the presidential
election in 1971. Jailed by the military on returning
from an l l-year exile in June, Ferreira was forced to
resign as a Blanco presidential candidate. He chose
his substitute, however, and,
Ferreira devised the strategy of
contrasting the party's antimilitary image with its
rivals' accommodation with the armed forces.
The US Embassy reports that the party chief's son-
Juan Raul Ferreira, a 31-year-old leftist-became a
major Blanco powerbroker during the party
convention in August. The younger Ferreira earlier
headed the now-disbanded Democratic Convergence,
a leftwing, antimilitary group that had been part of
the Broad Front. According to press
he currently maintains close relations with a
Juan Raul Ferreira's efforts to move the Blancos
leftward have seriously divided the party. His
exclusion of longtime party stalwarts from Blanco
electoral lists in favor of young radicals has alienated
the Blanco conservative action-who also is one of
the party's three presidential candidates-publicly
blasted the younger Ferreira as a leftist usurper and
Blanco Party o ictal Juan La Pra. a
Raul Ferreira
called for a return to traditional Blanco principles.
if they lose the presidential race
Outlook
Although the more conservative Colorado Party leads
in the presidential race, we believe the left is likely to
be a major force under the civilian regime. In our
opinion, the Broad Front has a good chance to win the
mayoralty of Montevideo as well as a number of
legislative seats. Likewise, the Blancos are likely to
gain a significant share of power in the Congress even
We believe a victorious Colorado Party would
confront determined and potentially debilitating
opposition from the left. The Blancos probably would
dispute the legitimacy of a Colorado victory by
continuing to paint the civil-military accord as a
sellout to the armed forces. The Broad Front and
some Blanco factions also might unite in Congress to
block Colorado initiatives and might incite labor
strikes and civil disruption. In the face of such
obstructionist tactics, a Colorado administration
would be hard pressed to establish its authority and
undertake a coherent legislative program.
The military will remain the most important check on
the behavior of the left. Concerned by the Blancos'
intransigence and the Communists' growing
influence, the armed forces will monitor the political
scene carefully. Although the Broad Front may be
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cautious in pushing radical programs to avoid
antagonizing the generals, the Blancos have shown no
inclination thus far to softpedal their antimilitary line.
Eager as they are to return to the barracks, the armed
forces are unlikely to tolerate investigations into
military abuses and corruption or other assaults on
their image and prerogatives. Moreover, a resumption
of urban terrorism, radical policy changes, or
widespread disorder could lead the military to seize
power again. The generals probably will give the left
enough rope to hang itself, as long as their own hands
remain on the trapdoor lever.
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Paraguay
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Bolivia: Antinarcotics Efforts
in the Chapare F--]
Government force's occupation of the Chapare, the
country's principal coca-growing region, is the first
major effort by President Siles to combat the
influence of narcotics traffickers. The initiative is only
an initial step in what will be a long and difficult
process. We believe that domestic constraints and the
magnitude of the problem make significant advances
against the narcotics industry unlikely over the next
mid-1960s, the Chapare became a magnet for coca
farmers because its soil is ideal for producing high-
yielding coca plants. Moreover, the area's remoteness
facilitated the creation of a drug empire free from
close government supervision. By early this year, the
US Embassy estimated that the Chapare was
producing 80 percent of Bolivia's coca, including more
than 90 percent of the cocaine products sold abroad.
yea
Background
Over the past decade, Bolivia's narcotics industry has
expanded to the point that it is now the source of
approximately half of the cocaine illegally imported
into the United States. Major factors for this growth
are the impact of international demand for cocaine on
the cultivation patterns of Bolivian peasants and the
inability of the country's political institutions to
withstand the corrupting influence of narcotics
traffickers.)
Bolivia provides a hospitable environment for
narcotics trafficking because coca has been used by
peasants there for centuries to help alleviate feelings
of cold, hunger, and fatigue. Nevertheless, only in
recent years have peasants embarked on large-scale
cultivation for the illicit international narcotics
market. The Garcia Meza regime, which ruled from
1980 to 1981, gave a major boost to traffickers by
allowing them to expand operations and by spreading
corruption through all levels of government. The
traffickers gained additional time to solidify their
positions because succeeding military governments
lacked the strength and determination to tackle the
problem. F-1
As Bolivia grew in importance as an international
producer and exporter of illicit coca paste and base,
the Chapare became the center of the country's coca
production. Practically uninhabited before the
government initiated land colonization projects in the
Siles9s Approach to the Narcotics Problem
The Siles administration has been slow to deal with
the burgeoning narcotics problem. Soon after Siles
took office in October 1982, he attempted to
strengthen security in the Chapare, but backed off
after coca-growing peasants led by local traffickers
evicted the narcotics police. Discouraged by this
initial failure and preoccupied with economic and
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political difficulties, the government made little effort
on the narcotics front for nearly a year. In August 25X1
1983, however, Siles-prodded by the US Embassy-
signed a narcotics control agreement with the United
States that called for reducing coca production and
established a special narcotics police force. The
government originally planned to send this police unit
into the Chapare last December, according to the US
Embassy, but delayed until this summer when it
finally responded to US demarches and entreaties
from officials of the Catholic Church.
On 31 July, Siles declared the Chapare a military
zone and gave control of antinarcotics operations to
the army commander in Cochabamba. To guard
against unnecessary violence, government
representatives spent several days negotiating with
local campesino groups, but the publicity that resulted
from these discussions gave the traffickers ample
advance warning. When the strike force of 1,200
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military personnel and 310 narcotics police arrived on
10 August, some 2,000 traffickers either had left the
Chapare or had closed down their operations,
Press reports indicate that as many as 30,000 farmers
also had fled the region.
While the operation resulted in few arrests, it, at
least, temporarily disrupted trafficking patterns and
enabled the government to reestablish its presence in
the Chapare. Siles has assured the US Embassy that
he will keep a large military presence there until
approximately mid-November, and the pacification of
the region may enable him to fulfill his pledge to
redeploy the narcotics police to adjoining Yungas
region. In addition, government forces followed up the
Chapare operation with raids in neighboring Beni
Province, where most of Bolivia's coca paste is
processed for shipment abroad. They were able to
capture 380 kilos of cocaine base and three light
planes belonging to traffickers, according to press
reports.
Outlook
In our view, the Chapare operation is the first clear-
cut indication that the Siles government is willing to
take seriously US concerns about Bolivia's massive
narcotics problem. Nevertheless, even with persistent
US prodding, we believe that continued progress will
be halting. This is so because in no other country in
Latin America is the corrupting influence of drug
traffickers more pervasive or the societal attitude
toward coca cultivation more permissive. Moreover,
Siles probably will be too preoccupied with issues
more critical to his political survival to make the
antinarcotics effort a major priority. The reluctance
of senior military officers to be drawn into the
struggle against drug traffickers
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Limited Authority
Economist and technocrat Nicolas (Micky) Ardito
Barletta was elected President last May in Panama's
first national election in 16 years and will be
inaugurated on 11 October. He was handpicked by
General Noriega, commander of the Panamanian
Defense Forces (PDF), the country's ruling authority,
as a person with whom the military could work:
consequence, has clashed with Noriega.
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ruling Democratic Revolutionary Party (PRD), the
major coalition component that controls the
legislature. We believe that Barletta, who lacks a
decisive mandate, will be hampered in his
policymaking efforts by those two powerful
institutions and possibly will not complete his five-
year term
friction has already surfaced between Barletta
and Noriega as a consequence of the President-elect's
initial efforts to establish his own authority
Constraints on the President
Barletta has never been closely associated with any
political party in Panama and joined the broad-based
PRD in early 1984 only after becoming the coalition's
candidate. The party's dominant left-of-center
element, however, views Barletta as a member of the
oligarchy. Because of his weak power base in the
party, his lack of broad popular support, and the
historically strong influence of the military, we believe
that Barletta probably will be pressed into accepting
PRI) political demands that are at odds with his more
conservative views.F_~
Barletta has already run into problems with both
Noriega and the party. During the campaign, he
coordinated major policy decisions with the military
The new President's effectiveness will also likely be
limited by his lack of popularity. In his previous
government positions, he did not cultivate widespread
public support, nor has he demonstrated any notable
political skills. The reaction to his election has been
largely negative, as indicated in recent press cartoons
that have depicted him as a front man for the
military.
Barletta has earned respect at home and abroad,
however, for his honesty and competence as a national
and international public servant.
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ALA LAR 84-018
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Brazil: New Population Policy
Brazil is abandoning its traditional indifference to the
problem of rapid population growth because of
changing public attitudes and the prolonged economic
recession. Many Brazilians who have moved to the
city or into the middle class have become interested in
limiting the size of their families. At the same time,
growing awareness of widespread poverty has
undermined the Brazilian elite's conviction that a
large population would boost national development.
Many in these groups now believe that massive
increases in population and the labor force will
hamper efforts to improve living standards. As a
result, use of contraceptives has become common in
all social classes, and the government reversing its
longstanding policy-has launched an official family
planning program. Nonetheless, we do not expect such
efforts to enhance per capita income significantly
Brazil. Estimated Population and
Labor Force, 1950-2000
Total Labor
Population Force
1950
53 17
1960
72 23
1970
96
1980
122 44
1990
154a 58
2000
190a 73
before the end of the century.
Shifting Attitudes
Brazil's ruling elites, according to a recent study,
historically have been more concerned with
populating sparsely settled regions, securing cheap
labor, and expanding domestic markets than with the
problems created by rapid population growth. Many
Brazilians also have believed that a larger population
would help fulfill their country's aspirations to
become a world power. These attitudes were
reinforced, in our judgment, by Brazil's high
economic growth, especially during the I 970s, when
living conditions improved for most social groups. In
addition, according to the press, leftist activists and
elements of the Catholic Church denied the existence
of a "population problem" and proposed to cure
poverty through redistribution of the nation's wealth.
these perceptions, according to press
more of a burden than an asset. Expansion of the
middle class, which we estimate now accounts for 20
percent of the population, also has contributed to
growing interest in and demand for family planning.
Beyond this, the political liberalization begun in the
1970s has enhanced public awareness of a "social
debt"-poverty, malnutrition, illiteracy, inadequacy
of basic services-that is partly attributable to rapid
population growth
Population Momentum
Contributing to these changes in attitude is the
concern that population growth, although slowing,
will continue into the distant future and dilute the
benefits of economic development. Brazil's annual
rate of population increase has dropped over the past
20 years from 3 percent to about 2.3 percent,
according to the US Bureau of the Census, and the
average number of children born per woman has
dropped from six to less than four. Several studies
Owing in part to large-scale urban migration,
over half of Brazil's population now lives in cities of at
least 20,000, where many find large families to be
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dropped from six to less than four. Several studies
anticipate a further decline before the end of the
century, but they agree that by the year 2000 the
number of Brazilians currently about 134 million
will have grown by around 50 million because so
many women are in or about to enter childbearing
age.
The labor force almost certainly will grow more
rapidly than the general population, hampering
efforts to reduce unemployment and
underemployment, which we currently estimate at 25
percent or more. According to a recent study,
plausible average economic growth of 4 percent over
the next few years would create only about 950,000
new jobs annually, far less than the 1.3 million
persons added to the work force each year. The chief
of the Brazilian census institute recently told the press
that the economy would have to grow at an annual
rate of at least 8 percent twice as fast as we
foresee-to reduce unemployment substantially. The
study also indicates that new jobs are likely to be
concentrated in lower paying occupations, such as
domestic service and small-scale trade. Even with the
improved economic performance that the study
anticipates in the I 990s, job creation at that time will
barely keep pace with increases in the labor force.C
Spread of Birth Control
As a consequence of these societal changes and the
government's slowness in responding, promoting
limitation of family size has fallen to the private
sector. Since the 1960s, according to the press, private
physicians and commercial distributors have
increasingly made contraceptives available to middle-
and upper-class women. In addition, an
internationally funded organization has provided
contraceptives to growing numbers of the poor.
Abortion is illegal under most circumstances, but
press accounts indicate it is widely practiced. F-1
These developments have been largely responsible for
the decline in Brazil's fertility and population growth
rates. contraceptive
usage among married women of childbearing age may
be as high as 50 percent, ranging from about one-
fourth in depressed rural areas to nearly two-thirds in
the economically developed, highly urbanized state of
Sao Paulo. Abortions-as many as several million
annually, according to press sources-nearly equal
the number of live births.n
Policy Turnabout
Through the 1970s, the military government generally
tolerated privately sponsored family planning
activities, but had no population control programs of
its own. Over the past few years, the regime has
reversed its attitude as a result of the changes in
public attitudes and the economic recession. This year
it launched an official family planning program and
has begun distributing contraceptive materials and
information through the many existing hospitals and
public clinics. The multimillion dollar program is
designed to provide a wide range of health care
services to women of childbearing age. Brazilian
officials also advocated this new approach at an
international population conference in August.
The armed forces chief of staff recently spoke out in
favor of a federal policy on population, in part because
the Army has found it must reject nearly half of its
recruits for physical defects resulting from
malnutrition. Priority topics at the military's Superior
War College this year include population policy,
underemployment and unemployment, and urban
migration,
Outlook
The growing use of privately distributed
contraceptives suggests that most Brazilians will
welcome or at least accept the new government
program. We doubt that Catholic Church strictures
against some contraceptive methods-already widely
ignored-or the opposition of the extreme left will
raise significant obstacles to the program's
implementation. Furthermore, published polls show
that a large majority of urban Brazilians favor birth
control, indicating a potential for increased demand.
Although more widespread family planning would
significantly reduce Brazil's demographic expansion
in the long run, the new program can do little to
improve the welfare of the average Brazilian before
the end of the century. With GDP likely to grow only
slightly faster than population and labor force, we
believe that increases in per capita income before the
year 2000 will be small compared with the rapid gains
of the past.
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Latin America
Briefs
Peru's difficulties with the IMF are threatening its financial rescue program. The
IMF representative in Lima has told US Embassy officials that Peru will be
ineligible to draw further on the standby loan signed last April. The US Embassy
reports that the projected fiscal deficit more than doubles the 4.1-percent IMF
target set in April. We believe President Belaunde will have great difficulty
reconciling differences with the Fund. Popular demands to relax austerity make
either large tax increases or sharp cuts in spending politically risky, especially with
elections scheduled for April 1985.
An impasse with the IMF will erode Lima's ability to obtain foreign financial
support. We believe that failure to reconcile with the IMF will stall the pending
commercial debt refinancing package and will cut access to $100 million in
embargoed foreign bank credit.
The Mexican military is coming through the current severe financial crisis in
better shape than most observers expected. Military leaders have cushioned
defense cutbacks by publicly supporting President de la Madrid's austerity
program while quietly maneuvering for traditional pay and manpower benefits.
Government worries about domestic unrest, oilfield vulnerability, and the potential
spillover of instability from Central America have encouraged a more active
military role in domestic security affairs, although defense leaders do not play a
key role in policy formulation.
De la Madrid's efforts to rescue the Mexican economy and restore confidence in
the government have been aided by the strong endorsement of his policies by the
armed forces. Secretary of Defense Arevalo responded to belt tightening by
sharply reducing imports, suspending many defense construction projects, and
limiting training to save on fuel and ammunition.
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optimistic propaganda ploy.
Cuba continues to set ambitious sugar production targets despite adverse
conditions locally and a world glut that has sent prices to 13-year lows. Production
in 1983/84-a near-record high of 8.2 million metric tons--still fell short of the
target largely because of equipment failures, fertilizer shortages, and unseasonal
rains. Owing to premature harvesting of seed cane last year, delayed planting of
new cane this year, and the spread of cane diseases, output in 1984/85 probably
will fall well below the 10-million-ton target. Moreover, Havana's highly touted
goal of 12 million tons by 1990 is regarded by most industry analysts as an overly
economic dependence on sugar before the CEMA summit last June.
Union which imports more than half of Cuban's total sugar exports at a
premium price-reportedly rebuffed Havana's longstanding desire to cut its
Havana's apparent decision to devote massive resources toward sugar production
over the next few years probably was influenced heavily by Moscow and is likely to
be reflected in the 1986-90 CEMA plans now under consideration. The Soviet
United Brands in southwestern Costa Rica collapsed when
the Communist Party failed to line up sufficient financial
Communist influence by funding rival labor and political activity.
is concerned about further leftist labor agitation and plans to counter the
and other tangible support for the strikers. Striking workers reportedly began to
fear losing their jobs and to believe government charges that the Communists were
using their union strictly for political reasons. Although the stoppage failed to
trigger sympathy strikes or lead to armed insurrection as the radical left had
hoped, it was the longest strike in Costa Rican history and cost several million
dollars in lost revenues and taxes. According to the US Embassy, President Monge
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