Created: 11/1/1983

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Sandlnlsta concernossible invasion haiear panic level In the aftermath of US actions In Grenada.

continued Armynovo prompted General Vtdea to make sweeping changes In the military command structure, Including etrenathenlna the genera! staff and appointing more competent field commanders. In Guatemala, rightist violence has caused new problem* In Mafia's relations with the US and the Cethoifc Church. The Suoro government continue* to strengthen Its hand In Honduras. Costa Rica hasew proclamation of neutrality to Improve Its International Image. In Panama, General NoWepa ha* removed the leftist Vice President because of recent criticalan policy statements. Meanwhile, the Contorfom rtoootiatforo are



At the beginfiing- of the month, Sandinista policies toward Internal opposition group* hardened. Harassment of the Catholle Church for Its opposition to the military conscription law provoked the most Intense church-state dispute since the violent clashes of August last year. Draft registration figures announced by the government were only about half what the Sand in bus had predicted, thus indicating the unpopularity of the law snd possibly contributing to the confrontation with the Church. |

By mid-month, however, the Sandinistas wereifferenthey announced relaxation of pre* censorship, offered to Issue landowners guarantees against expropriation, and Initiated talks with opposition political leaders. The government also freedlafclto prison or? and proclaimed an amnesty for all insurgent rank and file. Finally, the Sandinlstaa announced thet the electoral process would begin In4 and elections would be held

unidentified Sandtnbta officials recently tok! the pressuban teachers and technicians recently left Nicaragua andilitary advisers would leave





The guerrillas were able to maintain the pace of their military attaeka in eaatem and central El Salvador throughout November. On three separatensurgent units routed newly-trained government battalions, two of which recently had received US personnel.

In an effort to bolster the government's sagging war effort, Defense Minister Vidro aiw>ouneed sweeping changes in the Salvadoran high command. Colonel Adolfo Blandonappointed Chief cf Staff, Lieutenant Colooe. Miguelhead of operations, and Lieutenant Colonel Domingo Monterrosa received command of the 3rd Brigade. At least nine other major field eommands-lnetudlng three of the four OS-trained immediate reaction battalions-received new commanders. In addition^ the Army'smilitary sones wart realigned, placing Uw auuenmon departments of Sen MigueL Morasan, and La Union under command of the 3rd Brigade. |

Blandon and Mender are competent and respected commanders, and their appointments almost certainlyubstantial increase in the command and control authority of the general staff. Monterrosa Is coral de red the Army's most effective combat commander, and the reorganisation of the easternfighting has been moat Intense over the past fewthe government's concern about recent guerrilla successes there.



Tha selective use of violence by far right terrorlat groups continued through November and likely wDlignificant factor during the upcoming presidential campaign- Extreme rightists are frustrated by their failure to reverse reforms, concerned with recant gains by the guerrillas on the battlefield, and fearful that

election process appears to be on track with the Aaacmbiys recent passageemporary electoral decree. The presidential election wDJ be held onarchand the new President will be Inaugurateduneive-year term. Military personnel who request retirement will be eligible to run for public office, but thus far no active military officers have lhown interest In pontes ling the election.ormal voter registration effort began this unlikely to be ready for use In tho presidential beDoUng. Nevertheless, many politicians are requesting that municipal el act lota be held onMarch, which wouldomprehensive registry.egistry could beleast InarchIt would force hundreds of thousand* to return to homeany

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A more serious threat to Meiia's initiatives and survival Is the rise in Insurant terrorism end abuses by security forces and ultraxigtitlst extremists. Mejia may decide to move up tho official convocation of the electoral campaign to tha month, but already at least six party organisers from new leftist political groups apparently have been kidnapped. Such intimidation of moderate and leftist parlies Is likely to Increase as elections approach and, if some groups decide not to participate, the field may be restricted to mostly rlghtwlng parties. This might prompt military intervention by reformist officers opposedictory by the far right. I

The Catholic Church stepped up its denunciations of the violence following the murderriest after MeJla publicly accused some in the clergy of supporting the insurgents. Although responsibility for the murder has not been established, Church officials and the media are blaming the government. In addition, neither the proas nor the diplomatic corps accepts the governmenri claim that the deaths of three of the Guatemalan employees of the US Agency for International Development kidnapped In October were due to an automobile crash.



The insurgents are Increasing urban terrorism and rural attacks, and recentlya notable success ambush.



Infighting In both major political parties continues and apparently Is strengthening President Suazo's hand. Tbe ruling Liberal Party la purging supporters of dissident former minister Jose Ascona del Hoyo in an attempt to weaken his chances5



presidential bid. In the opposition National Party, longtime leader Rloardo Zonlge was ousted from power by the Installationactious antl-Zuni|ra party bloc. Apparently Liberals and antl-Zunlga Nationalists in the Congress have concluded an Informal pact to support the Suazo Government as part of their efforts to weaken both AreonVi and Zuniga's influence. I


Assisted by the informal Congressional pact between the two major parties, theovernment achieved swift approval for4 central government budget In late October. Although its overall levelillion less thanhe budget slates enpcrcent Increase in funds for public debt servicing. Moreover, continued heavy payments on publicly guaranteed private debt probably will push Honduras out of compliance with its IMF standby agreement, thus Jeopardising disbursement of the3 trancheillion, pjjpj

Responding to recent private sector pressures, the Sua to government rammedemergency decree through the Congress In late November. The measureexecutive broad powers to enactas yettoproblems. Moreover,restructuring of the

President's economic cabinet appears Imminent as an additional gesture to the private sector. |





The resngnation of Foreign Minsterleading antl-Sandintstaraised fears In San Jos* and in thc ration thatf-centerin the government are gaining Influence. For aoae erltlee, thai einforced by Presidentormal proclamation of Costa Riesn neutrau'ty at mid-month. Navertheless. Monge sought to appease hardliners by the Insertion of language reaffirming Senommitments to regional security arrangements. The government's recant Indecision sbout whether to proceedevelopment project near the Nicaragua* border region Involving upS Army engineersurther sign of the more neutrsl direction of the country's foreign policy.

Despite the restoration of normal diplomatic tics In early November, relations between San Jose and Managua woraaned at mid-month following another border skirmish between Sandinista troops and Costa "lean-based insurgent farces. In addition, thc Increasing flow of Niceraguan refugees Into Coeta Rica has heightened government concern over the refugee canuioopulatton, which now numbersnd is Increasing by ISO per week.

Sen Jose narrowlyutoff of IMP funds this past month by unifying and adjusting Its two-tiered exchange rata, as required by last year's atsndby agreement, in time to comply with the IMF's Decembererformance targets. Negotiations toew standby agreementowever, have stalled over next year's proposed IS-billlon budget and IMF concern about some reforms that have not yet been enacted. It now appears thatnew accord, originally scheduled to be concluded this month, may be eeveral more weeks In coming.


The temporary replacement of Vice President Uluecs apparently was promptedv he rAntral American TVfa-a,

Defense Forces Commander Noriega had openly aispported the Council's revival and gJ^pjMpjl was angered by niuees's speech to the National Aasembly In November disavowing Panama's participation In the regional military organisation. Minister of Government and Justice Otorcs hat been appointed Acting Vice President, ostensibly until niueca's term aa President of the UN General Assembly expiree next September. |

Although the government tolerated earlier Indiscretions by lUuecaoncession to the left andeans of promoting Its Third World credentials, Noriega probably believes the removal of the leftist-leaning Vice President wtU helpore unified



In foreign policyoreover, luueca's tendency to majce foreign policy statements Independent of officiolDolicy line- la UWoly io prevent hla return to the vice-presidency. It ia unclear I lUueoa'a chastisement by the Panamanian leadership will cause him to UlTerl"more favorable posture towards Washington UN, where he mey atlll exert Influence Independently In the Oeneral Aaaembly.


Thc potentially explosive labor situation created by striking banana workers waawhan they returned to work after reaching settlement with the US-owned company, la addition, the labor union's Communist legal adviserource of disruption during thewill leave his postesult of the new conT'act. Although some nroblems still confront the banana Industry inthe current agreement wOl pave tha way for smoother relations



Nicaragua continued to show indications of flexibility, but its active diplomacy probably reflects Its fear that the Contadore dock Is sUoked against It. Junta coordinator Daniel Ortega toured all the Contadore capitals st mid-month to present "evidence" of an imminent Invasion by theecond purpose of the trip was to attempt to convince the Contadors countries to delay work on comprehensive treaty drafu and lo persuade them Io respood to Nicaragua's October peace proposals, which Include bilateral treaties with the US and Honduras as wellroad Central American security treely. ^pjfffl

Theai prcbsii;UVurilli Urt: of th* CcatftdCtf* eountrlea through their pursuit of areeolutlon during debate on Central America at the UN General Assembly. Only Mexico firmly supporteda few attempts to moderateesult was later publicry accused of bias by Honduras. The text of the resolution, which was finally approved by consensus, eon Ulna some minor victories for thevert hai ass. Itar cry from what tha Sandlntatas eoisrht and probably hoped Ihey could get, and was widely regarded at the UNetback for Nicaragua. I

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