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The PR Government,and
The MLN and Rightist
Communist
ANNEX I
The Guatemalan Economy in
ANNEX II
Map of Guatemala
CENTRAL INTELLIGENCE AGENCY Directorate of6
INTELLIGENCE MEMORANDUM
Current Appraisal
SUMMARY
The three-month-old Mendez governmentrecarious position and probably will not complete its constitutional term. Mendez' slow start and apparent Inability to lead effectively have not created an encouraging picture. Rightist plotters from the National Liberation Movement and somecommanders are agreed that Mendez must beand they are trying to build support within the military. Using the argument that Mendez has not moved against the Communist guerrillas, the plotters are gaining some support for their planned action. The plotters fear that the Communists will return to the prominence they enjoyed duringra. Any significant increase in guerrilla terrorism will unite the military into action against Mendez, This could lead to bloodshed and perhaps civil war.
Note: This memorandum was produced solely by CIA.
It was prepared by the Office of Currentand coordinated with the Office of National Estimates, the Office of Research and Reports, and the appropriate division of
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Background
Extremist partisans of the right and the left are transforming Guatemala into an armed camp. Each side, while warning the public of danger from the other, is building its forces, readying for what each hopes will be tho fall of the three-month-old Revolutionary Party government headed by President Julio Cesar Mendez.
The Mendez government isrecarious position. The Revolutionary Party (PR) has notsuccess gracefully, and its cavalierof the opposition on the right has goaded the conservatives toward extremism. Mendez' offer of amnesty to Communist-led guerrillas and terrorists was rejected by them, and the Communists haveon their low-key selective terrorismwhile training and arming peasants ln the countryside. The Communist buildup is alarming not only the far rightists, but members of Mendez* own official family. The rightist National Liberation Movement (MLN) is attempting to recruit Honduran merconarles and arming its own partisans for an anti-Communist fight.
Tho old political rivalries, bitter and deep, have revived, bringing with them the leftlst-extremiat specter of Arbenz and the rightist specter of Castillo Armas. Guatemalan politics still run on the fuel of mutual hate and fear between the leftist-extremistheyday under Arevalo andas at the expense of the traditionalthe "liberationlsts" who under Castillo Armas purged the country of Communism and restored rightist power. The reopening of the political wounds of the "revolutionary" and "llbera-tionist" eras, the arming of the two partisan camps, and Mendez' apparent Inability to lead effectively
do not make an encouraging picture.
though Mendez is fortified with aa legislative majority, strongthe Unitedooming nationalthe tolerance of the military, there can bethat he will fill out his four-yearmemorandum explores tho reasons why, and assesses
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the forces working for and against the MendezThe economy is treated separately inI.
The PR Government, Its Resources and Policies
Every new government in Guatemala finds little on which to build. Guatemala's chronicand poor constitutional record (only one elected government survived its term) present aand psychological burden for the executive. The government must also contend with social and economic underdevelopment. Over half ofillion population is Indian, Livingulture apart from modern or "Ladino" Guatemalans. Literacy is only aboutercent, health problems are many, and labor productivity is low. Corruption inand the dearth of administrative talentighly Inefficient bureaucracy.
When President Mendez took officee had some obvious advantages in his majority in Congress, his lack of personal political enemies by virtue of his nonpoliticai background, and the acquiescence of the military in his assumption of office. However, the legislature has never been mucholitical force in Guatemala, Mendez'for political cleanness was bound to tarnish, and the military's latent distrust and enmity were well known. Guatemala was nevertheless almost euphoric on and immediatelyuly over the fact that the three-year-old military government actually handed over the reins of governmentreely elected civilian administration. Once this was done, most sectors of the country were wiiLing to try this experiment in democracy. Yet, almost none expected the new government to survive its
legal four years of life,
insecurity of the Mendez governmentmade clear during its three-monthis likely, but not certain, to overcome thethreat it hascoup now in theor not an attempt is made against Mendezlongevity as president depends on theprogress much beyond the record toactivity so far suggests that his approach
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is basically Idealistic and grand scale. Hishasood deal of attention to forolgn affairs andrief period has enhanced Guatemala's stature internationally. His foreign minister has participated In various regionaland haa been nominated for the presidency of the General Assembly of the UN.
8. Mendez' domestic policiesong-range approach. He has expressed his belief that insurgency cannot be quelled by arms, but only by solving the fundamental socioeconomic problems which aro exploited by the dissidents. He presents his political policy as one of tolerance and generosity toward the opposition. This policy has been implemented most plainly and most publicly toward leftist dissidents, however. Theoffer of amnesty to Communist guerrillas was followed by another "call to peace" after theinitial rejection of the government. The lack of decisive action by the government suggests that the government is either afraid of thedivided and confused about what to do about them, or perhaps even sympathizes with their social
aims.
Mendez hasittle patience toward the right, but not publicly. He hss not yet taken action against rightist plotters although he has evidence against them. Neither has he, however, made peace overtures to them or sought theirin his government or in pursuit of his programs.
Nono of his policies has had the immediate impact wanted and expected by the public. While the soundness of long-range planning is not questioned, the almost complete concentration on it withoutfor pressures for quick progress onistake. The most dramatic, novel policy of the PR government to date was Mendez' proffer of amneety, which not only failed to win over thebut has bocn cited by the opposition as evidence of the President's Communist taint. In addition, he has shown little discretion in certain appointments. Heommunist writer as ambassador to France,orrupt grafter
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ola.ti.ve) as chief of the national police, and named as general treasurer of the nation, Elian Darioember of the Communist Youth Group.
11. The most important of Mendez' problems is the continuance and growth of the Communistmovement. igorous counterinaurgentmould go far to diffuse the mounting pressureoup. Pressure forampaign is most vociferous from the right extremists but not at all confinedanatical element. Serious concern over the security situation and over the failure of the military to move against the Communistaseven among thestaff and chief advisors. This concerna rationale for the plotters in the MLN, who would ln any case conspireR government. It is not lost on the MLN that the PR, already the only well-organized national party in Guatemala even before6 elections, will be anpolitical organization0 if it controls tho governmenterm. This conclusion and the fact that the PR has made no accommodation with the right give the MLN the strength of desperation.
The Military
12. The decision whether to tolerate Mendez or to move against him belongs to the military, the final arbiters of political power ln Guatemala. Restive rumblings from the military are political storm signals, and there has been unrest within the military since the presidential campaign early this yoar and particularly since Mendez' accession to power. Realizing the importance of the armed forces, Mendez has taken pains to cultivate their loyalty, recognizing that certain among them are unalterably opposed to him and his party.
13. Although divergent opinions oxist within the military establishment, the armed forces are always united when the preservation of theis at stake. Factions which oppose Mendez will not movo against him until they are certain of majority support for their actions. They take seriously their role as defenders of the established order, however, and are determined to prevent the
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Communists from repeating the gains they made duringevolution. Mendez' staying power is directly related to the state of military opinion on the presence and urgencyommunist threat.
tension has risen andtimes since the election period. Theof Col. Peralta, the chief of governmentpreceding military regime, staved offwho would notR victory at After taking office, Mendez mollifiedby appointing Col.ighlyofficer, as minister of defense and making
a pact with the military, assuring them he would not interfere in armed forces affairs. The atmosphere changed rapidly ln early Augusteries of FAR terrorist activities began, directed against rightists, the military, and large landowners. The consequent wave of unrest throughout the military was most marked among the younger officers, who complained of the lack of government and high command action against the guerrilla/terrorist elements. By September, most military discontent was channeled against Minister of Defense Arriaga for his inaction and penny young Turk" element led by Col. Carlos Alberto Prem planned to demand that President Mendez remove Arriaga. Three officers were dismissed from the service and three were arrested for conspiring againstthe minister of defense. These developments have no doubt left scars on the militaryand are indicative of the deep discontent running through the armed forces.
rightist politicians' assiduousof military supportoup appears sohave gained no general reception from the ew commanding officers have,the need to overthrow Mendez, and thea significant number of militaryserious development such as another seriesattacks could unite the military onof the rightist plotters. Symptomatic ofdistrust of the PR on the part ofis the contention of Col. Cifuentes,of the Mariscal Zavala Brigade, thatmembers were securing high-levelthe government. The oddsilitary coupin proportion to any increase in amountof Communist activities.
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Tho MLN and Rightist Subversion
The MLN and other rightists continue to plot against the government and to arm rightist terrorist groups. The HLN has keptapid dialogue with high-ranking military officers and has dwelled in public media on the dangers ofimplying with little subtlety that theand the PR are riddled with Communists. The MLN has noted the "arrogance" of the FAR toward the government and intimates that the FAR hasinformation" that its activities will be answered by new amnesties and pardons. The HLN suggests that the FAR does not need to struggle for power since through the PR it already has the reinsower in lta hands. This kind of goading has brought the HLN some allegiance from the military.
Although the MLN cameoor third in the March elections, it has made substantial gains in membership since then, largely from the now defunct official party formed under the Peralta government. While the HLN isinority party, its members and sympathizers Include numerous wealthy supporters who regularly finance election campaigns and coup
plots.
16. Alarmed at its victimization by Communist terrorists and at the lack of government success against Communist insurgents, the MLN has begun to arm. Besides Its armed party members, the MLN counts on the support of most military commissioners (ex-servicemen who serve as agents for the military) throughout the country. The MLN hasroup called the "Mano Bianca" (White Hand)to terrorizing Communists and their sympathizers, and other small armod groups called tho CRAG and the National Resistance Front. These groups are waging psychological warfare, via the telephone and the mail, against leftists on the MLN blacklist. They also haveew bombs around Guatemala City, but have caused only negligible damage.
19. The MLN's main thrust has been directed at overthrowing the PR government. The MLN haselements in the military and neighboringfor support and Is receiving some financial
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from the business comnunlty. Ex-array chief of staff and defeated MLN presidential candidate Miguel Angel Ponciano is at the center of current MLN/military plotting. Ponciano has beenand almost obsessed by theoming president. The government is aware of Ponclano's involvement and has hishas been used for meetings with MLN leaders and mlll-
aen--under surveillance. Ponciarvi VfVMfJffMammmW told MLN leader Mario Sandoval that keyeaders are agreed that the PR government is abetting the Communist guerrilla movement and have decided to
the MLN. ammmmVmVmmTammmmmmmmmr*
included among the plotters are^coT^JoH^Tomeo Poreira, commander of the Cuartel General; Col. Manuel Arturo Giron, commander of the Guardla de Honor Brigade; Col. Carlos Manuel Arana, commander of the Zacapa Brigade; Col. Felix Estrada, commander of the Quezaltenango Brigade; Col. Enrique Clfuentos, commander of the Mariscal Zavala Brigade; Capt. Mario Palz, commander of the First Airborne Company in Retalhuleu; and Col. Felipe Doroteo Monterroso, chief of the air force. Ponciano HmamaVmrnmlfplans to leave Guatemala If the coup la no^eTxecTed byctober.
20. The MLN is probably exaggerating itsstrength, but lt does In fact appear to be gaining sympathetic ears within the military.ultimatum"demanding the disml-ofnewry* appointed government officials considered Communists or leftists will be presented toMendezctober, if he accepts its terms, Ponciano and the military will, for tho time being, abandon their plansoup. If Mendez rejects the ultimatum they Intend to go ahead with their attempt to overthrow the government.
Communist Insurgents
21. The Communist Party (PGT) is banking on an MLN/mllltary coup attempt at some point ln the Mendez term. Even though Mendez has hardly beenightist coup against him would amountauntlet flung at tho left. The PGT leaders believe that Mendez* fall could well spark civil war. The Communists have used the past
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three months of politicalMendez lifted the state of siege and halted the repressive activity of the securityprepare to fill the political vacuum that civil war would cause.
22. The PGT, with support from theas well as from the poor, constitutes the only truly revolutionary force in Guatemala now that the democratic left controls the government. Since the inaugurationuly, the Communists have gained strength and even respectability from tholr continuing open dialogue with the Mendez In contrast with their repression under the military regime, the Communists now have access to press, radio, and the public forum in general. Even their rejection of Mendez1 amnesty offer has enhanced their image, and made themore potent and determined force than they had appeared before. The guerrillas give the impression that theyirtual statetate,rowing one.
The PGT and its action arm, the Rebel Armed Forcesogether represent the most disciplined and best trained organization in the country. Fidel Castro sees the FAR as one of the ablest revolutionary groups in Latin America and has promised it Cuban support. Since Luis Turclos was killed in an auto crashctober, the FAR has been led by his chief lieutenant, Cesaryear-old former law student and member of the Communist Party. The loss of Turcios is notto cause significant change in the guerrilla picture.
With their new-found peace the Communists have resumed recruitment in the labor field. One of the more interesting recent developments Is the potential revltalization of the Communist-dominated labor union FASGUA, which has been moribund for some time. FASGUA is currentlyarrage ofstatements, petitions to the government, and calls to the workers to join its few affiliates. Carlos Toledo, the secretary general of FASGUA's major affiliate,the Guatemala City Bus Drivers Unionas been appointed alternate to the labor representative on the governnent's Council of State,
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and other FASGUA leaders are appearing in public for the first time in recent memory. eal danger exists that insidious influences from the FASGUA camp may be able to worm their way into thelabor movement, which the Communistsduringra.
25. Communists have also been recruiting and concentrating their activities in the so-called "Ladino crescent." (see map) This areathe fertile areas to the southwest ofCity and to the northeast of Guatemala City to the Caribbean coast. The area is inhabited by Ladinos, who are more susceptible to Communistthan the Indians. The Indians tend to remain outside the mainstream of society.
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increasingly large numbers of campesino leagues in the southwest. The basis for campesino support is the Communist demand for extensive agrarianinclude the expropriation of private property. In the Department of Escuintla, farm administrators have been forced to leave and in some cases have been assassinated. FAR meetings are openly held on some farms and in some rural villages, and propaganda is widelyGT/FAR campesino congress is now scheduled to be held in the city of Escuintla in mid-November, and similar congresses are planned for other departments.
27. The guerrilla organization in the northeast is excellent. Guerrillas have been operating there for over five years and have eluded the military with considerable success. There are indications that the guerrillas haveodus Vivendi with the peasants and that they receive somefrom them. Over the years the guerrillas have paid for what they have taken and have provided the peasants with free medicalin behavior with the high-handed manner of much of the military. While pursuing the guerrillas.
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the military, on occasion, have roundedroup of innocent peasants, accused them of beingand shot them.
an arms-smuggling ring locatod^in^IJexlco
City
28. Current estimates on the guerrilla strength Indicate that the FAR has considerably moreen in the field at any one time. This number can be easily augmentedreserve" force--perhaps numbering as manyof secondary andstudents, professional people, laborers, and others located In Guatemala City. Studeats usually participate In training and guerrilla activityvacations and weekends .
City and Tapachula on the Guatemalan border.
police authorities who arresteding in late September report that documentsthatS-made rifles have been smuggled Into Guatemala for the FAR since early There is no reason to doubt that the guerrillas are well armed.
There are Indications that the FAR has penetrated the military and the government. redoubts that have been located and destroyed usually had been evacuated. The guerrillas usually get advance information on military movements. Even though the army patrols the Atlantic Highway from the capital to Puerto Barrios, guerrilla elements are able to stop traffic at will and disrupt
The guerrillas' most important asset is the poor training, indecisiveness, and lack of initiative of the armed forces. The Guatemalan Air Forcerecentlyountain top that was alleged touerrilla camp and later learned that It had hit the wrong one. Although this is Just one incident, it is Indicative of the poor military intelligence system. Earlier this year
the air force strafed andountain redoubt on the Honduran side of the border. Subsequentrevealed that the guerrillas had cleared the area prior to the attack.
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32. Unlike most of the armed forces, manyhe guerrillas are generally well educated, have apparently received good training and, mostthey are dedicated to the task of eventually overthrowing the government anda Guatemalan social revolution.
uring the recent
peTwo^iriegu^rrT^as have been strengthen-
ing their organization, recruiting, training, and preparing for action. Statements made by Turcios before his death indicated that the guerrillas were not contemplating immediate action but were ready to take advantage of any opportunity that presented itself. Although they cannot attack the army head-on, they can mount small and effective attacks on various fronts. In the confusion surrounding any attempted coup they could be even more effective in sabotage and harassment.
34. Another guerrilla group,ovements headed byYon Sosa, who follows the Chineseamong this group is believed toen in the.field at any one time.has not figured prominently in anyfor atear. There hadove to reunite the group withwas under way, but there is no evidencehas, in fact, occurred. The group'sindicate that it has either broken apartwith the FAR or that it is no longer aof
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THE GUATEMALAN ECONOMY IN
lackening of retail sales since the inauguration of the new government, tho economy is expandingace approachingrowth rate of eight percent. Industrial production has increased by approximately ten percent this year and new private Investments have not abated. production has been exceptionalf abundant rainfall. Nearly all crops were larger Production of coffee, the principal export commodity, increased byercent; cotton output jumpedercent; corn, the basic food crop, increased five percent; sugar advancedercent while rice production droppedercent. Beans, wheat and vegetables also showed improved harvests. However, preliminary estimates for agriculture for the nextonthsore normal expansion and in someecline in output.
There has alsoise in financialin the past six months. Demand deposits have increasedercent, reflecting an influx of export earnings and more liberal credit policies of the Central Bank. The bumper agricultural harvest has pushed exports in the first six months6 toercent above the same period have grown by only nine percent and netreserves amounted toillion at midyear, more thanercent higher than at raid-year Official capital inflows from US and international lending agencies have risen sharply since the new government assumed poweruly. Loans8 million have been signed, and additional agreements valued atillion are under negotiation.
These loans will greatly assist thein fulfilling its platform of expanded capital investments, despite an increasingly tight fiscal situation. Revenues in the first six months6 have increased less than one percent and remain nearly two percent below budgetary estimates, while current expenditures have risen. It is expected that nearly all of the administration's capital investment program will be financed by foreign resources.
Original document.
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