Created: 10/1/1983

OCR scan of the original document, errors are possible


CTTRAL AI02RXCM HOITTHLT HZrOBTone tone in tha Mfien osatiiM to ttetlete aa thtor

t ptaotfal relation fOM Otl. Tha Sandlnleralme hmt cxmm mndtt

irittnta Military end emntmto preemrt ortrart monthetult of con timed tHtrntftrnt atttOta, bmt it It retctlrf *attmntlt ant ealllnp for mora military tit, tn tl Salvador, thtente herra eontlnaot thttr ottanaira tot font, althaymmti therir military raevpple from Cwbt arA tlearaarmt tmtdeotd. fit Caaramalm, Chi at of Stata Xajla hat ttmOWti cffM at hit main military tlvtle, batmxittj altuatlon remain* tanaatavlt of both rithttat and laftltt vlolanor. Tht Pondvren otrrerrtmtnt It puthtna tor ertater rr-jlonal exoneration meal net tht Stetdinittta amid report*otelblt mat tntarptnt Infiltration attempt. Ceartt Mlean relets ana withorta htrtow lowamltnMinlrtt attacktn border pott, ta Panama, Pratttmat ta la taptlalla tnt Oanatal Pore letet to maj%rtrer In pieptratton tor naat aaar'a achtdvimd tltetlont. Plnallf, tha Ccmt*aota pernor effort hapaerrtral draft trottlet, bitut Obattolta remain.






mil fry

Thealgnlfiecnt In*urgent action* this mot'.' > early October ralde on patroleua facilities at Corini . uerto iaah.i,n the deetruction of >nt of tbetorage capacity. Another sabotage attac* ui tha crude oil tarainal at Puerto Bandlno vaa evidently lt--eoceeaafDl, aa vara ralda on Puartond si Bl.ff.

Tha Ttm eontlnuad to harass sandinleta forcaa In cantral

Hic-ragua, with rliilm occurring alaoat daily. Bo far there la no evidence of tha supply probleaa that haapered tha inaurgent* last spring, daaplta tha loaaransport aircraft early In tha aonth. Tha largeat single action waa thectober takeover ofown in Hategalpa Department. By Bandlnleta accounts, tha lneurgentsovarnavantda*troved eeveral Military and government facilities. BBBBBBB|

Th* Mlsora (Kiakito Indian) guerrlllae appaar to controlof tha Atlantic coaatal region, apart froa tha aaln towna. Thar* ara reporta of fregoent fighting in th* oatakirta of Puerto Cabaiae, Bl Bluff, and Blo*fl*ld*. Tha Sandlnlataa ara digging ind th*nd thay continue to forcibly riom araaa of insurgent activity.

Thaave respondad to th* inaurgent activity with large seal*paratlona by regular and re**rve unit* and Increased use of airstrike*. Thay also ar* strengthening air. dafenaee around Managua, CorIn to, and Puerto Bandino. Tha buildup of th* nav territorial allltl* for local dafana* cootlaoae, with nav unit* being foraed in aany regions.

Conflraad deliveries of Military ago1paant ware light during October. leareguan cargo ahlp deliveredight transport aircraft froa Havana to Bl Bluff early in tha aonth. Tha aircraft waa transported to Bl Bluff in aaoaethIng tha Cabana have dona in tha paat toa to Angola. ew day*icaragoan ahlp returning froa Bortb Korea delivered two saall patrol boat* to Cor Into.

Th* Sandinistas have raactedt Insurcjantto tha invasion oforganising wasa rallies, calling for increased civilnd revolutionary vigilance, and bracing th* population for additional sacrifices. Th* ragiw* ha* also issuedpublic warnings to th* oppoaitlon. ^

Following Insurgent attacka on both northern and soath*rn border poats, Dafanaa Mlnlatar Hoambarto Ortaga aaaerted that th* Sandinista al*ltary would purso* th*Into Hondoran and Costa nican territory. Although those* later qualified, they lndlcat* waning Sandinlata patlance with insurgent incursion*. Th* regie* aubaagointlyecurity sort* off both It* coasts for sir and aia traffic.

Th* Sandinistas apparently consider tha KlaalngarO political ploy, and its visit was Barred by aharp axchangaa with Foreign Mlnlatar O'Bacoto and Junta Coordinator Daniel Ortaga. Ortega**with Assistant Secretary of State Motley waa also atralned. whileeadiness to aeet

Zntarior Nlnlatar Borge returned froat his trip to seven Waat Buropeen countrlea and Libya claiming ha had cecal*ad .conjUtiarable political and financial auppott. Never thelass ,1

leaders erltlelssd iITTIrr^^TTTkaap thalr democratic proalaea. visit to 0araany raportadly raaultad in awith Foreign Minister

both reglonalltatlon eC th* eonflict and radlcalintion o- the revolution if Inaurgent Attacks continue- saBBBBBBBBaa


Nicaragua's anargy situation has bacoaa at rained, but still manageable, aftar recent Inaurgent attacks on Its energy Infrastructure. The destruction of fuel tanks at Puertoevere effect on coast anargy supply. The crucial crude oil iaport terminal at Puerto Bandlno haa been repaired and is still functioning despite several sabotage attacks. Oettlng ahlpa to deliver crude froa Meilco haaerloua problem, however, and tha Sandinistas have asked for

Soviet and Cuban help.bbbbbbb

Xn early October, the government raised fuel prices byercent In an effort to conssrve supplies and raise revenue. Recently announced aeaeuree include cuta in rationing allocatlona and reduction of tha work week. Tha Sandlniataa are attemptingpopular discontent by continuing public transport eubeldiee.

The government ennounced In late Septeaber that It willMandatory pay acalaa for aU salaried employees in The plan will further extend stste control overand the private sector, andarge and

Nicaragua announced new credit agreements withthaBillion. Meanjwhlle, new Information indicates that Nicaragua haaoint econoale coaaleelon with CBMA, the Coamunist trade organ, but it did notull obeerver.

of th* oaapalgn.

built by th* Aray during it* *

Th* gusrrillaa* joint offanalva inn andSi Salvadorhroughout October. Th*ir activity In larga partn warned by hit-and-ranullnd isolated garrisons, sabotage offacilities and bridgaa,f governw*nt raliaf forc*a. Governaent unita took particularly heavyn attack*anclngo and Sdan da San Juan. Th* offensive has succeeded in blunting

'. lT

or raaponaibl

Insurgent laad*rshlp in Slcaragua racantly regarding plans for tha trpcoslng offensive.

Th* Aray's optlalatic outlook evident thi* soaster ha* now glvan way to aowe pesalaisa, soaie fieldhave been criticirtd for failing to be sorend junior offlcara reportedly are unhappy over the conduct of the war and tha failure of aany senior offlcara to visit th* battlafront. Severthelaaa, tha Arsy contlnuas to launch sweep operations to regain loat tarrltory and ptaearpt inaorgant action*.

Meanwhile,t over th* war andhaa prompted icaaa key jJlHiry cromaandere to propoa*|

thaae officers have convinced Dsfens*sweeping cosatand changes by tha end of th* year, including reshaping tha antira Oanaral Staff apparatua,ew Chiaf of Staff, and replacing sows department and unit ccesianderB. own poaitfon, however, appears safe at this juncture.

TM labTI* totIn"Wetraforas in tha draft

f? ion nq ^eted *" y. 00 aorkers and caarpaalnoaeaceful rallv

Christian Deaocratlc Party.

Kwnce ofaguad activity siaad at ending the reforaunion leader, and Wtiat intellectuele havi beenkilled. Oltr.rlghtiet leader Bobertoth.

flBO lMbo* organisation had tlaa with the estreae

i^islaUvi da^t!n*one threatertlclea, causing the aeeelon to be

suspended. Each of tha partlea in tha Aeaeably la proaotina its

th*of lMdfor futur,

m J that foreign Minister Chaves Nana baa agTaloTcTl^Jcf^unning mate, a

Thar* war* no aeetinge thi* sjonth between th*crowinion and th* insurgents. Th* InsurgentsBI Salvador a* the *it* for any future aaetings. alootant to accept this, however, and tbeat an apparent li

f Stat* Mejia'* lack of strong support Int hie vulnerable to deeand* frow various factions In th* Armed Forces, and ha ia having problem* trying to balance competing Interest*. Majia was presauredroup of seniorwho carried out the coop against depoaed Preaident Rio*Air Force officer*l*ce Chief of Staff General Lopes Fuentes. Opponent* ofecond ranking allltarythey were concerned about hi* longstanding tits to the rlghtwlng Rational Liberation Moveaent and that he would involve the allltary in vote-rigging in the constituent assembly elections nest year. The Air Force officers bad earlier forced Walla to remove their coaaander by threatening tooup. I

The removal of Lopesreportedly had been aiding the efforts of rightist coop plotter Slsnlega to oustother high-level change* In the military willplit between officers who want tbe armad forcea out of politics and theme who want their turn in power. Slsnlega and the Rational Liberation Moveaent havetrong ally in the former Chief of Staff, and they are likely to try to rally their remaining support In the allltary against Mejia. Th*r* are organised groups among both junior officer* and field-gradeand lieutenantare'* moves closely, and are being courted by tbe rightist coup

Mejia formally completed the electoral tla*tabl* by publicly endorsing const Itnent aaseahly election* neat July. Tie also noted that he Intend* to turn power over to an elected civilian


t In Someolitical organisation* have begun organlrlng to cont.it the elections, but probably lesa than half of thoae will aewt the regulrenenta to becoae Inscribed as political parties. Moreover, political Intleldation and huaan righta aboaea Increaeed thi* Booth aa the political campaign got underway, and aoae new partle* aay opt not to participate because of security concerna. Three Christian Democratic Party leadera recently were aurdered, and two leader* ofnew left-of-center party were abducted last aonth. There are indications that organised rlghtwlnginvolving aecurltyincreasing. Including two separate caaes involving the abduction of Guatemalan employee* of the tn Agency for international Development


During the first half of October, the insurgent* kept up the lncreaaed level of terrorist attack* noted in September. Beenthey hav* not been able to matte uae of the political instability to retake the tactical advantage from tbe allltary. The allltary. In fact, haa stepped up lta operation* in rural areaa, particularly in two areas along the Mexican border considered by the Aray to be aajor ineurgent aupply corridor*. llltary spoKeraan elalae that In one action the Arwv awhueherl an

been heavy. Security forcea alao continue to'uncover insurgent* satanon aas in Guatemala City and supply caches in rural areaa.

The insurgents, however, have countered with eieja visibility terrorismnd they appear to havetrong urban network. The Guatemalan Ccmmtunistannounced It was formally joining tbe guerrillatbe abducted ownerajor newspaper after receivingransom of0ropaganda statement publlahed. The guerrilla group that kidnapped the* ofa and Comer Pr**ld*nt Bio* Montt also secured publication of an antl aovaaaaaiit. anti-OS statement in exchange for.


Tai revenue* collected during th* first aonth under thevalue addedthe rate was reduced byfar below government projections, and shortfalls are likely to

Increase und.rweakened turn foraula. An IMF tee* vill study the lepict of reduced tea rarenoes on Guatemala's ability to comply with the guidelineaillion loan agreement signed in Septeaber.


Freaident Suaso continues to convalesce from bis July heart attack. Frees reports state that he is undergoing daily aedlcel evaluation* and working onlyay. The taw reports indicate that Cust.ro Adolfo Alf.ro, an economic adviser, haa takenubatantial role In handling affairs of stste. If tree, this developaent suggests that presidential troubleshooter Carlos Florae haa lost eoae influence. Haa!

Despite his health concerns, Suaso remains an active participant in regional Issues. He wss eager toeeting of regional heade of stste onepteaber under the auaplces of ccwdrca, altnough the plans fell through. Tegucigalpa apparently is ansloue to promote ccmur.cxeana of getting Guateaala and BI Salvador foraally coaaltted to the defense of Bondursa againat ssndlnlata attack, but those countrlea are reluctant to nova too rapidly in that direction. Military repreeenatlves fron the ccmrrCAEl Salvador, "ondurae, anddid aeet In Tegucigalpa in late October.

| Bavana Intends to continue ics support lor nemouran lneurgents daaplte thef the group infiltrated In July. Bondurans, Nicaraguana, and Latin Aaerlcan revolutionaries reportedly are being trained for tbe task in both Cuba and Vlcaragua. The Cubans hope to open an insurgent front in western Honduraa to achieve their aaln objectives of baraaalng the Suaso government for its support of OS policies and relieving pressure on Blearegua.


Border lneidenta continue to be reported by both Bonduras and Nicaragua, although there has been no notlcable increase in their freguency. Tegucigalpa reacted atrongly to Busbar to Ortega'e recent etatement that Nicaragua would enter Bonduras In pursuit of lneurgente, atatlng that It would use all of lta defensive resources to repel foreign incursions.

As mrr indication of lta concert, for border security, the nonduran Araed Forces recently purchased two Bratllian Bandeirant* reconnslssance aircraft for delivery Inhe Bonduran Air force already haa Maintenance and logistic problees stealing froe the diversity of its supplies, and the nddltlon of Braslllan equipment will farther cowpllcate Betters. I


Relations with Nicaraguaew low this past aonth. Sandlnlata troops attacked Costs Rlcsn border unite at Penaa Blancaa oneptember, apparently in retaliation for an aaaault by Pastors'a forces there earlier the aaaa day. San Jos* reacted by recalling; its Aabasssdor froa Managua and calling an extraordinary Beating of the OAS Permanent Council to denounce tbe incident. Prealdant Monge also dispatched high-ranking officials to enlist support froa Venezuela and Paniaa, who along with Coloabia reportedly have indicated they are prepared to

provide assistance if necessary. I


Officials have also stepped up security effort* in San Jos* becauseesurgence of terrorist activity in th* capital. An attack on th* British Aabaasador's residence onort*dly aay have Involved aeaber* of the Basque ETA terrorist group. Authorities have apprehended two aore terrorists linked to the ETA plot to aeeassinste insurgent leader Pastor* discovered in early Septeaber. Spain has formally requested extradition of the Basque terrorist arrested last aonth, but sources reportedly believe that Costa Rica Is unlikely to fulfill th* request. Mostlan to klu.-jrp government and OS Eabassy officlals has been uncovered. Tha hostages would be

exchanged for local terrorists currently imprisoned in Costa Ricaa Ji "

Regarding regional ties, Monge strengthened relation* with

M*xlco whileay trip ther* at nid-aonth. Bis meetings with Mexican President de la Madrid reportedly war* cordial, although aajorn policy toward Nicaragua pereiat.


groups, as long a* they conduct the Coats Rican collaboration remain* clandeetlne.


n,-onth cm In th* for*

of various Neetern aid pledge*. Thee*lllionlllion loan froa.5

"ii"2 rrd co-t-

lB*Norwegian donation of

n refuge* aaalatanc*. Th* growing refugeeaboutontinued flood of Nicaraguana, promptedto declarenational emergency in nrlr October. of NicaraguanainCoeta Men refugee ca*peoo.

avorable ecoroeic new*eportoot* Rica'* foreign public0 alllion, orercent, over ther to* total of'* billion. Furth*r, th*4 budget Uaued at th* end of Septembera to jeopardise Nonge'a araterlty policlea by nearly doubling the government's deficit from laat year's figur*. Thi* and comaltaenta specified inadoetponeaent of talk*4 IMP standbyt originally scheduled to tske place in aid-Octoher. Resumption of talk* recently have been conditionedequirement that the government cut public spending by atlllion, a

prerequisite that San Joe. indicate* it Bight b* ablet throughutting admlnietrstive practice* rather thanl*lon*.


The sodden withdrawal of foraer Rational Guard Coaaaander Parade* from tbe preeidentlal race early laat aonth created disarray in the electoral plans of both the ruling Revolutlonar

- nitlcal oppoaltlon,

Party and lta ^:

the politicalf Pari ill; o consider attempting to run for

ractions. When that ploy failed, be and allltary chief Noriega apparently supported effort, to conaider postponing th*

amUyim* tbe election* failed to attract auch

political aupport, however, andesalt tbe Prealdent haa publicly announced tbe election will be held as scheduled in May

Rmrthclflii, he and General Noriega probably have not

miapt to revive

It In tha future ahoald olrcuaatancee pac.it it.

Meanwhile, tha allalnatlon of bothnd the eronetitutionally-reetrleted de la Csprlella froa tha preeldential race his cast longtlae oppoaltlon leader Arnulfo Arlaa Into the role of frontrunner. The thrice-elected and1 popular political figure In Panaaa, but the Militaryaving ssrloua difficulty accepting an Aria* candidacy baoauee of Arlaa' traditional anlaoalty toward the araad BBBBBBBBJ

electoral political aanaeverlng in Panaaanly beginning, raowever, and both Noriega and Aria* will continue to test eachosition until tha laat poaaible aoaent. Desplts an

Deep 11

apparent laproveacnt in relatione between th* two recently,"baalo distrust rsaalns, and cloae collaboration between then seeae unlikely. tha ultlaate power arbiter incontinue to Insure tha allltary's interests ara bast served In the election* or elae he la lUely to intervene in the process.


Noriegaew law lata last aonth reorganising th* National Guard intof th* Republic of Panaaa.* Th* law establishes tha Pr*eld*nt a* supreme coaaandsr of tha Military and crsstes three additional general officerwhich will be filled aa the new force grows. The law also prohiblte active service aeabera froa Joining political parties or participating inpolitical activities, but does allow allitary personnel to vote,

The restructuring of tbe Ouard along aore conventional allitary fore* Unas probably reflect. Noriega'e growing concern ever regional unreet and hla deeire to significantly upgradeverall allitary cipih llltieS.that Noriega ha. recreated an Inforaalaonth to dlacuas force developaent projection* and possible OS security assistsnc* support. Mesmrblle, tha recent formation ofnit is being toutedha initial step toward th*ap Hon of fall responsibility for Canal defensee by the end of tha

The political oppoaltlon has bean highly critical of tha oefenee law, olalaing that it will allow the allitary to turn

Panamaolice state. Noriega haa moved quickly to defuae the controv-rsy, however, by requesting that the President review thoss artloleii of the law that lta opponants find most objectionable.

ci'i; u

oes not appear likely


ocalconaultant aaysis currently running at IT percent, andJnli^'i llolf stated that unemployment InI!-report_aalea down by aa


A new strike of hanana workers earlier thia aonth is adding to the government's problem*. The President has publicly termed the strike as irresponsible, threatening to use th* allltary to brae* it up If th*nionotcre reasonable negotiating position, officials of tha OS-owned company aayare prepared to close some operation* and lay off a* aanyy exacerbating the already crltioal unemployment situation.

The Foreign Mlnlatar* froa th* ContadoraVenexuela, Panama, andIn Panamactober to discuss implementing the 'document of objectives" which tbe five Central Americans nation*n September. Th* Mlnlatara reportedly completed rough draft* on two bilateraland Wlcaragua-Coatageneral Central American treaty.

The Vice-Foreign Miniet*r* of th* Contadora group will reconvene in Panama In early November for additional discussion of the drafts. According to Panamanian Foreign Minister Ortega, they will also work on other treaties on sras reduction, military advlaars, and allltary forces. eeting of all nine Foreign Ministers during the mid-November OAS General Assembly In Washington is planned.!

Nicaraguan Junta leader Ortega agreed to postpone ON debate on Central America9 September meeting with Contadora

iBfders inTort. The Sandinistas, citing th* deteriorating situation In tha region, later successfully puahed for Inclusion of tha agenda topic in tha General Aaeeebly plenary. The Sandinistas plan toooghly worded resolution at the debate, now scheduledovember.

Meanwhile, Foreign Mlnlatar D'Escoto unveiled new Nicaraguan


aca proposals after aeetlng with OS official* In Naehlngton on October. The Sendlnlat* initiative apparently waa Intended to maintain their eapheela on bilateral agreeaenta and to project an laage of flexibility during the us Congreeeional debate on Nicaragua. The propoeala Include two bilateralicaragua-OS and Nlcaregua-Bonduraa,road centralsecurity treaty. D'Eacoto stated that additional agreeaenta aight be negotiated on foreign allltary advlaera, the *ls* of alllt*ry forc*a, and Introduction of new weapon*. Th* Nicaraguan* propoeala avoid hay regional corvcerna each aa deaocratlxatlon and verification aeasur**.

Th* Sandinlfltaa alaoourth treaty that would and arms *bipa*nt* to th* governaent end th* guerrillas In Si Salvador. Thi* would place bothn an equal footing jr^gout conceding that Nicaragua ia supporting the Insurgents.

To get the Contadora countrle* to focus on El Salvador, D'Eacoto bad Mexico preaant the Nicaraguan peace proposele at the recent aeetlng In Fanaaa. The Sandlnlataa apparently seek Contadora involveaent in the Salvadoran peace processeana of obtaining greater legitimacy for the Insurgents. The othsr Central Aaerlcsn state* have Bought to focue on Nicaragua aa the aaln source of regional probleae.l

Original document.

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