SECRET
UK EYES A
physical challenge to our position in the Falkland Islands and South Georgia will intensify significantly. An effective ballistic missile threat is possible, especially if the decision is taken to develop a nuclear weapon. Much will depend, therefore, on the political climate and the extent to which the maturing of Argentina's democratic institutions and assumed greater prosperity moderate the country's
nationalistic aspirations.
5. It is probably appropriate to mention here the possible need for the United Kingdom's interests in Antarctica to be underpinned, in the last resort, by a preparedness to employ a military presence, at least nearby. The Falkland Islands are, of course, ideally located to provide such support, together with the ice-free natural harbours of South Georgia.
REST OF SOUTH AMERICA
6.
Despite the painful debt burden carried by so many South American countries, we expect the civilian governments which have taken over from the military to survive (although not without major difficulties in most cases) and become the norm in the Continent. The only country which might, by the end of the period, be in a position to exert some influence outside Latin America is Brazil. Chile, in better economic shape than its neighbours, has a good chance of turning once again into a respected liberal democracy. Both Brazil and Chile will view any resurgence of Argentine military capability with grave disquiet, and a regional arms race is likely to ensue. Brazil, with its burgeoning defence industries and useful export markets, has the potential to become a considerable military power. Developments in the rest of South America are unlikely to affect British interests adversely.
CYPRUS
7.
The Government of Cyprus recognizes
that the country gains considerable economic benefit from the
and.2s1
D-3
UK EYES A SECRET
THIS IS A COPY THE ORIGINAL HAS BEEN
CLOSED UNDER
FOI EXEMPTION NO...27(1.).
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