Created: 10/12/1967

OCR scan of the original document, errors are possible


7 .

library j

Cm* nlj^*

... V



The Political Prospects in Nicaragua Over the Next Year or So


tfiAA^ 1



Al Indicated overlecrl7

Apprcved forDate ,,

The following intelligence organizations participated in the preparation of this estimate:

The Central Intelligence Agency and the Intelligence organization* of theof State and Dcfeme, and tha NSA.


Vice Adm. Rofui Taylor, Deputy Director, Central Intelllgenoe

AV.he Director of Intelligence ond Research, Department of Stale

Moj. Gen. Robert R. Gion, for tha Director, Defense intelligence Agency Or. Loud W. Tordella, for the Director, Nahonol Security Agency

Dr. Otenlei H. Reichardt, for the Aubtant General Manager, Atomic Energy Com-million ond Mr. WllUom O. Cragar, for the Awttant Director, Federal Bureau of Inveitigotton, thebeing ovtnde of theit jurisdiction.


f the United State* ThU mal^alSC,, theoaning o. to an unauthorised perso"

mteton or revelation



Anastasio Somoza is in uncertain health, butare better than even that he will remain alive and activethe period of this estimate. He is not likely to alter the basicNicaraguan foreign policy, though his regime may becomeauuHoritarian. and die incipient friction in his relations withis likely to grow.

the event of Somoza's death within the next year or so,of the country's inner politicalthe Somozapropertied interests, the Nationalist Liberal Party (PLN),Nationalprobably workonstitutionalwith excellent prospects of success. The resultingprobably be more flexible in domestic policy and easier forto deal with.

however, Somoza became incapacitated but remainedto insist on continuing in office, or if heeriesdisruptive moves and then died, the sequence ofbe more unsettling. We regard these contingencies asnot probable.


Over the years US influence and tbe impact of US policies have been very great ia Nicaragua. Indeed, for twohe US and the US Marine Corps were largely responsfble for such public order as was maintained there. When Anastasioof the presentpowere acted from his position as commandant of the Nicaraguan National Guard, which had been organized and trained by the US. He and his family maintained close ties with the US, and saw to it tbat the political party tbey molded, tbe Nationalist Liberal Partyid so too. The principalopposition, the Traditional Conservative Party, has also favored friendly relations with the US as tbe soundest course for Nicaragua.

While sometimes embarrassing the US by.tbe fervency of its embrace, Nicaragua has given little cause for concern during tbe pastears about its political stability. The first Anastasio Somoza wasne-manTbe regime was autocratic, arbitrary, and frequently repressive.Somoza used bis power to increase greatly bis and his family's fortunes. Nevertheless, he carefully maintained the forms of representative government and kept in close touch with the public. After bis assassinationhereradual shiftess arbitrary process. Under the administration of his older son and successor,imited but significant loosening took place in the Somoza family's domination. For example, Luis had the constitution changed soresident could not succeed himself or be succeeded by any close relative. The poetical opposition was permitted more opportunity to express its views,arger innerrelatives, key figures of the PLN, others of wealth and socialto have more influence on the governments decisions. This tendency continued during theof Rene, Luis' chosen successor1

The current President, Anastasio Somoza Dcbayle, one of tbe oldtwo legitimate sons, is not in good health andenchant for arbitrary and disruptive actions. Thus, an element of uncertainty is introduced into tbe situation. In the paragraphs below, we will discuss pertinent aspects of the politic-ill and economic pattern, consider the prospect if this Somoza remains in power for some time, and estimate the consequences of his death or removal.


A. The Administration

Luis Somoza's expert skill at political organization andcould by itself have guaranteed Anastasio's election to the Presidency in

'When Schickhe remaining months of his term were served by Lorenzo

7air contest, Anastasio resorted to widespread fraud to ensure himself and the PLN an impressive majority. Anastasio also succeeded inumber of people by bis tendency to regard tbe Presidency as his by right and to label any opposition asome party members supported him because they thought tbat Luis would beosition tooderating influence on the new President. But Luis diedeart attack inhortly before Anastasio's inauguration; his death foreclosed that possibility and for the time being ended tbe dialogue with the opposition which tlie predecessor governments had maintained.

* For example, Francisco Lainez, president of tbe Central Bank, Jose Maria Zelav>,private secretary, and Roberto Incer, secretary of tbe Presidency, have been singled out as "dangerousoldover appointee, has earned respect for his abilities in public finance but Is widely distrusted for his political ambitions and Influence with SomoBL

The reputation of the younger Anastasio Somoza before tbe election and certain of his actions since then, Indicate that he will not govern in the style of Luis Somoza and Schick; bis inclination seems to be in the opposite direction. He has inherited his fathers fondness for power, though not bis skill in ibt use. While Luis was becoming adept in the political forum, Anastasio wasilitary education and soUdifying his position as commander of tbe National Guard. Here too his headstrong quality has been apparent;esult of the oppressivo measures he carried out when his father was assassinated, he is feared and hated by many of his opponents.

year-old Presidents ownidney af-fllcaUon and gout are apparently the mostbeen exacerbatedong period by excessive eating, drinking, and general debauchery. Medical treatmentore careful regimen during the past year or so have kept them from becoming appreciably worse, but it is not easyan of Somoza's temperament to check his appetites or to control bis reactions to the pressures of government.

Somoza deeply resented the US Embassy's neutral position during the election campaign. He is convinced that this was far cooler treatment than was accorded to any of tbe Somoza family's previous candidates, and he seems to think that this means the US will be less cooperative and forthcoming with his administration than it was with the others. This does not mean he is likely to change the basic lines of Nicaraguan foreignpro-US and sharply anti-Communist stance, the eagerness to cooperate with others against the Castro regime in Cuba, the commitment to work with neighboringin the Central American Common Market and other economic entities. But it probably doesegree of friction in his relations with the US.

A few of Somoza's appointees are carryovers from farmer administrations,umber of the most important positions are held by politicians morefor their professional competence than for their political standing. Many of them were trained in the US. Some are regarded as "leftists" or worse by the opposition and by disgruntled conservative elements in the PLN as well.*

No little part of this suspicion, however, derives from the shifts andin the bureaucracy which have been undertaken by tbo "technocrats0 with Somozas backing. While political discontent has grown, the bureaucracy has been made more responsive to presidential control.

his father and brother. President Somoza has apparentlycan govern without the close and willing cooperation of the PLN. Helittle effort to insure the continuing backing of any of itsappointments on the basts of technical competence rather thanhas antagonized many Liberals, including some faithful Somodstas.though in general the party's representatives In the Congress wereby tbe Somoza family, Anastasio may receive less than enthusiasticthere.

National Guard

ultimate source of Somozas power is tbe National Guard, tbein which the nation's military and police forces are combined.*two decades, following his graduation from West Point, Somoza hasexcellent rapport with US military officers. He has held topthe Guard and has been its Jefe Directors The mostin the Guard are held by appointees who have demonstratedto him. Brig. Gen. Julio C. Morales, who as chief of tbe Ceneralin charge of operations, has just returned fromears in Washingtonno personal following in the Guard. (Brig. Gem Gustavo Montiel,as chief of staff during the election campaign, was one of theand respected officers in the Guard. He has been shifted to theCabinet as Minister ofesponsibility for the personaltho President is entrusted to Somoza's half-brother. Brig. Gen. Tose*recently promoted and loyal follower. The National Guard is probablyof handling any disorders shortell coordinated and widely


the last three decades, political opposition in Nicaragua hasending the predominance of tbe Somozas. There are still vestiges ofLiberal-Conservative rivalry, which hasegional basis, but

' Too throe principal faction* are; the SomocbUa, loyal to the Somoza family; tho SaoarirtJj, who represent the economic and political Interests of tbe important, and related, Sacasaand tbe QuimcnUtai, foDoueis oformer Cabinet minister end perennial aspirant to the Presidency.

' The Guard hasfficers and men distributed as follows: air; coastactical ground units totaling; and the remainder in police companies and in such service Junctions as Customs and immigration.

Mr.n accordance with constitutional requirements, Somoza resigned from me National Guard, leaving hit former key positions in safe hands. Onoe inaugurated ashe quickly resumed the directorship of the Guard from tbe outgoing President Lorenzo Guerrero.

there is not much difierence in tbe political ideologies of tbe PLN and itsctpponent, tlie Traditional Conservative Party. Both represent the country's propertiedarge part of tbe rural population Is apathetic and tends to vote as diieclcd by local political bosses. The other opposition politicat parties are small and ineffective, and labor and student organizations have had very little political influence under the Somozas.

Formal opposition to the Somozas is still seriously divided, despite the formationational Opposition Union (UNO) to contest the electionhe elder Anastasio and Luis fostered the existence of the mainpolitical party, the Conservatives, and sought its partidpatioo in election campaigns, because they were confident that tbe GmscrvaUves could be beaten and that at tbe same time their participation in electoral contests would blunt foreign criticism of the Somoza regime. When the Traditional Conservatives boycotted the elections7uis encoiuaged tbe formationplinter conservative group, (be Nicaraguan Conservative Party; this mamtained the tradition of Conservative opposition but ensured that it would beToepetition of that experience, the Traditional Conservatives joined7 with the smaller Independent Liberal and Social Christian Parties to form the UNO. But the three groups were soon fighting over their shares of the seats in tbe Congress (one-third) reserved by the Constitution to tbe opposition parties.

The Traditional Conservative Party's leadership is generally incompetent and rent by personal animosities and ambitions- The present party chief,Aguero Rocba, campaigned vigorously7 as the UNO's Presidential candidate. Late in thr< campaign when it became apparent tliat be would not win, Aguero instigated disorders and imsucccssfully called upon tbe National Guard to turn against the government. His admitted hope was to cause the US or tbe OAS to Intervene for the purpose of guaranteeing fair elections. It is highly unlikely, however, tbat he would have won ovenair election.

Tbe Communists are lunilarry split by personal rivalries and disagreement over bow to oppose tbe government. The Nicaraguan Socialist Party, which follows the Moscow line, is illegal and probably has no moreembers. It supportedandidacy but not has instigation of disorder. Then, inmall group of dissidents critical of the party's inactivity succeeded in ousting its top leaders. Subsequcndy, under the new leadership, the party's central committee has advocated cooperation with all armed groups against the Somoza government. Thus far, however, theocs not appear to have become actively involved in Insurgency. It has tbe usual student, labor, and political front groups, but none of these has been netioeably effective inits influence,11

umber of tha party members have received or are now receiving training In tbe USSRastern Europe.

attro-oricnted organization, the Sandmlsta Front of National Liberationhich has from time to time fielded guerrilla bands and has had tome tuccoii in carrying out individual terrorist act) and robberies. Several of its members iho participated in tbe disorders ofhe FSLN membership Is small, probably fewer. These include tome members trained In insurgency in Cuba and Guatemala. Although the Castro government bar proclaimed its support for armed revolution tn Nicaragua, there is do tangible evidence of present direct Cuban support for tbe movement. Theresent capabilities for conducting armed insurrection appear to be small. Inational Guard patrols lolled some members of an FSLN band encountered in tlie mountainous north-central area. Other guerrillas, under the FSLN leader, Carlos Fonseca Amador, are being sought by the Guard.

icaraguan student and labor groups have been kept under control by thn Somowi* and have been largely impotent Although many university students are particularly antagonistic to the present admmlsttatlon, they aro divided into rival Communis! and Social Christian organizations and have little stomach lor challenging the National Guard. Organized labor, which represents1 only some five percent of Nicaraguan workers, is even more seriously split and is viilncrablf- to the Legal controls available to tbe administration.


icaragua's major economic asset is its plentiful supply of arable15 the extension of tbe road system and considerabletechnical and credit assistance enabled cotton producers to capitalizeodest rise in world cot tooecovery in coffee prices, aod some diversification of exports, also helped to push gross national product (CNP) upward.tate which we estimate at an annual average of moreercent orercent per capita. The rapid expansion took place without adversely affecting the price level or the balance of payments. It was accompanied by sizable foreign and domestic private Investment in the Industrial sector andmaller but growing public investment program aimed at developing transportation and electric power.

IS. Great disparities in wealth and income in Nicaragua liave persisted; for example, we estimate that theercent of ihe population which is dependent on agriculture receives at most one-third of the national income. Yet recent rarOgrCSX has clearly provided some material benefitsarge proportion of the population and the cotton bonanza added some new members to tbe small group that controls most of the wealth. Nevertheless, the holdings of the Somoza family ire still clearly predominant. Their business interests aro esti-

' In as land area of0 squareearly two-thirds of tbe efzfcullural land isunused. Tbe population ofill ton ts predornuuuvdr mraoxo (about BS per-oeot) withegrond Indianeiceni) mtnorlnM. About half thelltnite. and educational facilities ara largely concentrated In riaea of the louthwestrrn third of the country.

mated to account for someercent of the country's stock of capital. Including many of the largest manufacturing and commercial firms, tho only locally owned airline and steamshipignificant part of the country's communications media and possibly as much asercent of all tbe land in farms. The largest newspaper, however, it owned by one of the principal opposition families.

Over the long term Nicaragua's economic prospects are mvorable, but at present, the economy is in the doldrums.esult of the droughtroduction of cotton and coffee, the major exports, fellercent andercent, respectively. That decline, however, was partially offset by sharp rises in minor exports such as beef, copper, shrimp, and industrial items. The annual rate of increase in CNP was down, though atercent it was soil enough to match tbe annual rate of increase in population. Even so, increased Nica-raguan imports6harp rise in tho deficit In balance ofon current accountillion5illion, and net international reserves fell fromillionillion by the endotton and coffee crops have been largernd CNP is probably growinglightly higher rate thanwing to tha poor export performance, however, the country's balance of payments has continued to deteriorate.

Tbeso problems now confront the new administration with the need for some kind of remedial action. At the same time, Somoza is strongly Interested in carryingevelopment program of considerable scope which would be directed especially at bringing economic and social Improvements to the rural population. His administration isavorable position to borrow money abroad; on the other band, the balance of paymentsikely to impel him to some austerity measures. He hopes to add to the income side of the budget by improved collection of taxes. These measures would hardly be popular politically, and some of the burden will havo to fall on the political inner circle ofperhaps even on the SomoKB family's own interests.


President Somoza's health willtrong influence on the course of developments in Nicaragua- It might deteriorate slowly, and Incapacitate him for several daysime. It might even collapse suddenly, but we have no evidence that any of his present ailments is likely to cause his death or more than temporary incapacitation over the next year or so. What is more likely is that the particular nature of his complaints, and the difficulty of sticking to the regimen prescribed, will make rum irritable and arbitrary. Beyond tbe realm of natural causes, there is. of course, the possibility of assassination; Anastasio has more than the usual quota of enemies, and in Indulging his various appetites he has sometimes neglected the strong security protection which be ordinarily regards as essential.

All things considered, we believe the chances are better than even that Somoza will stay alive during the period oi this estimate, and well enough to

govern. He will have to cope with budget and foreign payments difficulties since the economy is not likely toreat deal better7S thanhere is some danger that Somoza will come to feel frustrated by the lack of rapid economic progress. Some discontent in Somoza's own party and antagonism on the part of the opposition is likely, but wc doubt that the situation will develop so adversely as to compel htm to become harsher and more authoritarian. The danger is that these problems will become more serious because of the actions he may take. If, for example, he should becomein his development program or suspect tbat he is being conspired against politically, he would be likely to become somewhat more arbitrary. And be might thereby produce precisely tbe kind of situation be was bent on heading off.

Somozas approach to foreign relations is heavyhanded. We wouldsome increased difficulties in Nicaraguan relations with tbe US while be is ine strongly resented the neutral stance taken by the US during the election campaign. Since assuming office be has indicated tbat be expects the US to help finance Ids development program but to play little or do part in its formulation. Somoza's tendency to credit his administration alone for the results of US-supported projects Is likely to continue. At the same time, bis methods may raise political tensions to the point where it will be difficult for the US Embassy to maintain contact with the opposition. He might alsodisturbing incidents by meddling in the domestic affairs of neighboring countries.

If Somoza were to depart tbe scene, much would depend on tbend particularlyien of bis going. If he were removed during the next year or so by death from natural causes or by assassination there would be somebut they would probably bendeed, we believe that the chancesonstitutional succession would be excellent; this kind ofwould probably have tbe support of members of the innertlie Somoza family, other propertied groups, the PLN. and the National Guard. It would even have the support of some of the opposition. And in such athe views of the US Embassy would almost certainly be sought and given considerable weight.

The Constitution of Nicaragua provides that wlsen the President dies or is permanently incapacitated in office, tbe Congress shalluccessor from one of the two Vicethis case Alfonso Callejas Deshon, Minister of

Gen. WuUam P. Vaiborough, Assistant Chief of Staff for Intelligence Department of the Army, believe* that the rapport between Scenota and US military officers provide) an additional means through which US-Nlcaragoan affair* may be influenced.

'We think lt Important to note Iiere that the case of Nicaragua, at least at this stage of the game, has little in common with the case of the Dominican Republio prior to tbe crisisicaraguaeasonably cohesive political inner circle which was lacking in tbe Dominican Republic; tbe big Nicaraguan opposition patty is conservative rather than sharply to then the Dominican Republic; and tbe Nsoaragnan National Guard is better officered and more unified than the Dominican Republio military was.

Development and Public Works, and Francisco Urcuyo Mah'afio, Minister of Publicoth men are loyal Somocistas. Although Callcjas is clearly the abler of the two men and has wider public acceptance, Urcuyo is more easily influenced and might be preferred by some pou'tical leaders. We doubt that either Callejas or Urcuyo would attempt any sweeping changes in Nicaraguan domestic or foreign policies. We think, however, tbat chances would be good for atemporary closing of ranks within the PLN, tbe reopeningialogue with Traditional Conservatives,eturn to easier relations with tbe US.

A more difficult situation could develop if Somoza were in fact incapacitated but remained active enough to insist that be was still capable of governing. There probably would be differences in the Congress and more generally within the establishment about what action to take,talemate might develop. This would allow time for maneuver by ambitious individuals not in accordonstitutional succession and eager to end the Somoza dynasty. Fernando Aguero, tbe bitterly anti-Somoza leader of tbe Traditional Conservatives, might be tempted to try to line up supportoup, if he should, bis chances for success would be slight, but tbe administration might in its turn overreact. This might cause some opponents of tbe regime to resort to violence. Even so, except in the unlikely eventplit in the National Guard, tbat organization would probably be able to deal with any disorders which might arise.

Yet another, and at least equally unsettling, sequence of events is possible. If Somoza shouldhole series of ill-advised and arbitrary moves, these could destroy the cohesiveness of the present political inner circle,the unity of the National Guard, and cause responsible elements of the opposition to despair of further nonviolent tactics. And if, aftertage had been reached, Somoza were removed by natural death orhaoticessentially unpredictableensue. Wcthis to be an unlikely course of developments; we note fr, nonetheless, as the worst plausible case.

"It should be noted that the ConstitubODresident from being succeeded by any close relative (specifically by anyone "within the fourth degree of cotisangoioity oruring an interrupted term and the following term. The Constitution further provides tbat the President roust be overears of age. The eldest sons of Luis and Anastasio are, respectively,ndears of age.


following officials within their retpectlv*

of Intelligence and

Defense Intelligenceand the organization of

c Assistant Chief ofeportment of the Army *

Chief of Naval

Chlel of

of Intelligence, AEC. j

Director, FBI, forDirector of NSA, for the

L Director of Control

I, This document wo* dliiemlnated by the Control Intelligence Agency. This copy ii for tho information and um of tho recipient and of penoni under hit jurisdictionaed-to-fcnow ha.i. Additional essential dhiermnancfl 'may bo outhoriied by tho


J'W^iho^bffico of the' Secretary of ie*Jolnt Chief/of Staff /

the Army, for the

.'for tho Department of the

'Apartment of the Air '


for any other 'Department or Agency

ThU document may be retained, or destioyod by burning In accordance with applicable security regulations, or returned to the Central Intelligence Agency by arrangement with the Office of Control Reference, CIA. -j. w

When thisissenslnoted overseas, the overseas recipients mayeriod not in excess of one year. At tho end of this period, the document should either bo destroyed, relumed to tho forwarding agency, orshould be requested of the forwarding agency to retain it in accordance with2

he title of this document when used separately from tho text should be clossifledi



White House Notional Security Council Department of State Department of Defonse Atomic Energy Commission federal Bureau of Investigation

Original document.

Comment about this article, ask questions, or add new information about this topic: