The Search for Independence
Berríos, Rubén
THE COUP D'ETAT THAT DEPOSED PRESI- dent Bela6nde on October 3, 1968, was engineered by an informed and politically active military which had become the most powerful organized force in...
...military mission...
...Washington threatened to apply the Hickenlooper Amendment and substantially cut its bilateral aid programs...
...For fiscal year 1986, the Administration proposed $25.85 million in military aid to Peru-an eightfold increase-which was halted only by the Brooke-Alexander Amendment squabble...
...This was a close relationship with the Soviet Union, which led to substantial trade between the two countries and made Peru the second largest Latin American importer of Soviet arms-second only to Cuba...
...Soviet trade with Peru became a fact in February 1969, with the announcement of a trade pact that provided credits for the purchase of Soviet machinery and equipment...
...2 ' In the diplomatic sphere, Peruvian talk of non-alignment took a back seat to Belatnde's vehement anti-communism, while the ideals of regional integration collapsed in the face of Peru's new emphasis on privatization, which ran counter to trends within the Andean Pact...
...Juan Jos6 Torres in Bolivia (1970-1971...
...And he has urged the revival and strengthening of regional bodies such as the Latin American Economic System (SELA) and the Andean Pact...
...29 Garcia's diplomatic campaign has strong local roots...
...the Stockholm Intemational Peace Research Institute (SIPRI...
...During the previous decade, many Army officers at the Center for Advanced Military Studies (CAEM) had become alarmed by the effect of Peru's development process on internal security...
...2 4 The Mirages may have had less to do with diversifying foreign military suppliers than with placating the Air Force...
...Woy-Hazleton, "Peru...
...Among others, W.R...
...Garcia has also proposed the creation of a Latin American Monetary Fund, and has already lobbied Argentina's president Ratil Alfonsin on the idea, recognizing that only participation by the region's "giants"Argentina and Brazil-will make the idea workable...
...electrical machinery from Hungary and Czechoslovakia...
...The Reagan Administration hailed the two countries' "common interests," responded warmly to Peru's democratization and applauded Belatinde's campaign to dismantle state-owned enterprises and bring a renewed influx of foreign capital...
...The Peruvian president has reportedly told associates that, "Castro focuses on East-West, but we are only concerned with the North-South confrontation...
...His activism owes a debt-of style as well as substance-to the tercermundismo, or "Third Worldism" of the first phase of military government...
...Under Gen...
...However, the shift to the left in Peru, Chile and Bolivia awakened Moscow's interest...
...29 JUNE 1986GAR CIA'S e APERU GARCIA'S PERU to the Soviet Union and Eastern Europe to receive military training between 1975-1981.'5 Only the traditionally conservative Navy refused to take advantage of Soviet credits and turned instead to West Germany and Italy for its supplies...
...Until recently, the Soviet Union lacked both the capability and the opportunity to conduct an active foreign policy in Latin America...
...In 1984, Belatinde approved the purchase of 26 of Peru's poor: Getting poorer all the time France's advanced Mirage 2000 aircraft, 16 of which were scheduled for delivery in 1985.* In the midst of the worst economic recession of this century, the exorbitant cost of the deal-some $700 millionshocked Peru's foreign creditors...
...Washington's response has been to try and wean Lima away from its close military ties to Moscow by presenting itself as a more attractive supplier...
...That pragmatism colored Soviet trade with Latin America in the 1970s-most notoriously in the case of Argentina, with whose anti-communist military rulers the Soviets established a significant trading relationship...
...In keeping with his defiant statement that the arrival of IMF negotiators will no longer be seen as "visitations by viceroyalties," Garcia has rejected the ultimatum...
...Latin America Weekly Report, January 25, 1985...
...It barred new investors altogether from key sectors of the economy such as banking, communications and transportation, while encouraging joint ventures with foreign capital, within the rules of the Andean Pact, in which the state would enjoy a majority share...
...Congress restricted the foreign sale of highperformance aircraft and the first Belaiinde Administration bought a number of Mirage jets from France...
...transport equipment from Hungary, the USSR and Czechoslovakia...
...In May 1969 Washington retaliated by suspending arms sales to Peru...
...SIPRI Yearbook 1984, pp...
...The Washington Post, July 27, 1984...
...THESE TRENDS PUT THE PERUVIAN MILItary on a collision course with the United States, especially since the quest for state ownership of natural resources and basic industry meant the expropriation of a number of U.S...
...3 " The motives for Peru's new aggressiveness on the diplomatic front are hardly a mystery...
...capital and adequate compensation for expropriated holdings.' Peru found access to loans denied and foreign credits at favorable rates hard to come by...
...Financial Times, February 18, 1986...
...2. Paul Sigmund, Multinationals in Latin America: The Politics of Nationalism (Madison: University of Wisconsin, 1980), p.180...
...SIPRI Yearbooks 1980-1984 (Stockholm: Stockholm International Peace Research Institute...
...Peru has begun repaying its $1.1 billion total debt to the Soviet Union and other CMEA countries by means of an unprecedented barter arrangement, agreed to under to Beladnde and beginning in July 1984...
...markets and toward new trading partners such as the Andean Pact countries, the rest of Latin America and Eastern Europe...
...Peru's new foreign policy, with its strong anti-U.S...
...On the rescheduling of the Soviet debt, see The Andean Report, June 1984 and May 1985...
...The first signs were not encouraging: Washington grumbled about Peru's "excessive" rhetoric and briefly invoked the rarely used Brooke-Alexander Amendment, which suspended new economic and military aid because Peru had fallen in arrears on military credit repayments...
...Trade with Peru was more modest, but constituted a vital element in the strategy of the military governments of the 1970s...
...The same pragmatism seems likely to guide the behavior of U.S...
...Peru's military debt to the Soviet Union, already renegotiated in 1979, was once again rescheduled in 1985...
...8. See Leon Goure and Morris Rothenberg, "Latin America," in Kurt London, ed., The Soviet Union in World Politics (Boulder, CO: Westview Press, 1980...
...29...
...We know that transformation is not a national fact of life, but rather an international commitment to action...
...Peru: A Case Study, 1950-1980," Ibero Americana: Nordic Journal of Latin American Studies, Vol.XII, nos.1-2 (1983...
...overtones, was part of a nationalist trend that swept several Andean countries in the late 1960s and early 1970s...
...2 In the end, Belatinde's impact on Peru's world role was twofold...
...Peru's New Policies Short on Specifics as MNCs Wait it out," Business Latin America, August 28, 1985...
...Since World War II, Peru had been one of the continent's major recipients of U.S...
...The armed forces were set on modernizing Peru's defense capabilities with sophisticated new equipment...
...On one hand, it diverts attention from the harsh economic realities at home and is part and parcel of the charismatic populism with which Garcia hopes to buy time for his domestic policies...
...Grace, General Mills, Cargill, ITT and Chase Manhattan sub...
...This is why we are members of the Movement of Non-Aligned Countries and why we assert the unity of Latin America.26 Garcia has painted a broad activist role for Peru in world affairs, as aggressive and forthright in its way as his conduct of domestic policy...
...See, for example, The Heritage Foundation, "Peru's Fledgling Democracy Needs U.S...
...On our continent, integration is the guarantee of non-alignment, which does not consist of freedom from one hegemony in order to sustain a natural alliance with the countries of the East.2 8 There are leadership ambitions here as well...
...also, Stanley Rose, The Peruvian Revolution's Approach: Investment Climate and Policy 1968-1980 (Buffalo, NY: W.S...
...He proposed as a principle of anti-imperialist action the integration of Latin America to build democratic socialism...
...6. See Charles Goodsell, American Corporations and Peruvian Politics (Cambridge, MA: Harvard University Press, 1975...
...See Jennie K. Lincoln, "Peruvian Foreign Policy since the Return to Democratic Rule," in Jennie K. Lincoln and Elizabeth G. Ferries, eds., The Dynamics of Latin American Foreign Policies: Challenges for the 1980s (Boulder, CO: Westview Press, 1984...
...Peru strenuously denied Chilean claims of Soviet influence in its armed forces.'" IN 1980, WHEN FERNANDO BELAUNDE formed a new civilian government to end 12 years of military rule, his main aim in foreign affairs was to realign Peru with Washington...
...at the same time, Ecuador, which borders Peru to the north, received a dozen Jaguar planes from Great Britain...
...There is also dispute over the terms of Soviet aid, though it is widely assumed to involve a repayment period of around 10 years and low interest rates of some 2.5...
...Juan Velasco Alvarado, one of the armed forces' central goals was to raise Peru's diplomatic profile and end its traditional passivity in foreign affairs.' Peru became an active member of the Non-Aligned Movement, recognized Cuba and joined the Andean Pact...
...He told the UN, We affirm the role of the principles of non-alignment maintained by Nehru, Tito and Nasser, and in Latin America by Haya de la Torre since 1924...
...3 2 1 - 3 2 2 . 24...
...see also George Black and Robert Matthews, "Sandinistas' No-Win Choice: Arms from the USSR-or from Nobody," The Nation, August 31, 1985...
...This pattern changed after 1967, when the U.S...
...3. See, for instance, Alfred Stepan, Peru: The State in Comparative Perspective (Princeton: Princeton University Press, 1978...
...Trade was one important barometer of the new Soviet presence...
...The Soviets also provided training and instruction in the use of the new equipment...
...ACDA claims 24% from 1974-1978...
...Today, there are more than 1,000 Peruvian students in the Soviet Union...
...In 1975, the Ford Administration agreed to sell 18 F-5s to Pinochet's Chile...
...In its Five Year Plan for 1986-1990, the Supreme Soviet has authorized the purchase of $750 million worth of imports from Peru.'" Yet the Soviet card has severe built-in limits...
...Washington complained that the Peruvian decision undermined the "United States plan for the continental security of Latin America.'" The Peruvian Army and Air Force took full advantage of Soviet credits to acquire a sophisticated array of equipment (see box...
...Thus, SIPRI puts Peru's arms imports between 1975-1979 at 20% of the Latin American total-up from 14% in the preceding five year period...
...Nicaragua has found that its close ties to the Soviet bloc, and above all its reliance on Soviet arms, have been the centerpiece of the Reagan Administration's obsessive hostility...
...Hein & Co., 1981...
...2 The "privileged partnership" that Belatinde sought was broken only by a brief estrangement in 1982, when Peru attempted to mediate a peaceful settlement to the Malvinas/Falklands War after Washington had aligned itself with British Prime Minister Margaret Thatcher...
...Many observers believe that the Soviet decision to develop close ties with Peru came as a response to the deterioration in U.S.-Peruvian relations-even if Soviet analysts may have harbored private doubts about the true depth of the Peruvian military's radicalism.'o The comprehensive bilateral economic relations between Lima and Moscow covered trade, economic assistance and financial arrangements such as credits, soft loans and barter deals...
...UN General Assembly, "Provisional Record...
...7. Edward S. Milenski, "Peru's Diplomatic Offensive: Solidarity for Latin American Independence," in Ronald G. Hellman and H. Jon Rosenbaum, eds., Latin America: The Search for a New International Role (New York: Sage Publications, 1975...
...Figures on the exact amounts of Soviet arms sales to Peru vary enormously.' 6 From 1975-1979, Peru accounted for between 20% and 24% of all Latin American arms imports...
...Morales Bermddez, many of the Peruvian reforms were undone...
...also Laura Ingraham and William W. Pascoe, "Peru: The Next American Trouble Spot," West Watch (Washington, D.C.: Council for Inter-American Security), Vol.VIII, no.4 (August 1985...
...And the Administration is likely to agree with the ultraconservatives that, in the wake of elections that saw a debacle for the Right under Belatinde and the emergence of the Marxist Left as the dominant parliamentary opposition, Garcia's social democracy may be the least unpalatable of U.S...
...FitzGerald, The State and Economic Development in Peru since 1968 (Cambridge: Cambridge University Press, 1975...
...Garcia also appears open to new military accords with the Soviet bloc: early in 1986, North Korea agreed to supply Peru with 10,000 submachineguns, and will send advisers to train Peruvians in producing ammunition for the weapons...
...Even a limited volume of trade bolstered Peru's determination and ability to withstand U.S...
...Generous Soviet credits to Peru in the 1970s, whether for trade or development projects, were often not used to their full potential, the victim of unstable trade flows, a resistance to generally inferior Soviet technology and manufactured goods, and the allocation of Soviet funding to specific large projects that were planned but never realized...
...tuna clippers in Peruvian waters...
...3 8 The barter deal opened the way for contracts to be renewed and fresh ones signed for the Soviets to buy Peruvian frozen chickens, textiles, wood, copper wire, zinc cells, steel saw blades, canned tomatoes and canned fish...
...Ibid...
...Sandinista arguments that these ties do not imply political alignment with the Soviet bloc have been dismissed out of hand in Washington...
...It demanded the overhaul of the Organization of American States (OAS) or the creation of a new body that would give the Latin American nations a greater voice...
...Arms Control and Disarmament Agency (ACDA), World Military Expenditures and Arms Transfers 1971-1980 (Washington, D.C.: ACDA, 1983), p.12...
...Will Peru have any better luck if Garcia chooses to play the Soviet card...
...influence had blocked any wider Soviet presence in the region...
...27GARCIA'S PERU REPORT ON THE AMERICAS rest of the world...
...Belatinde's trade policy reflected his conviction that Peru lay squarely in the Western sphere of influence...
...they also chose to use the issue as a display of national independence...
...The Morales years brought an abandonment of progressive diplomacy, a transition to free-market economics, a tough line against labor unrest at home and a series of measures that placated the IMF and again persuaded foreign bankers of Peru's creditworthiness...
...The most important technology flows from the Soviet Union to Peru have been the export of machinery and equipment, engineering and technical services and the training of Peruvian students and technicians...
...With the help of Soviet credits, the socialist bloc became an important market for Peruvian exports such as minerals and fishmeal, though results on the import side were less impressive...
...interests and might shift the balance of power in favor of the Soviet Union...
...government and multinational corporations together brought enormous pressure to bear on Peru, demanding protection for U.S...
...of these, anywhere from 41% to 65% came from the Soviet Union...
...In the emerging school of dependency theory, they found a framework for some of their institutional concerns...
...chemical products from Poland, Czechoslovakia and the GDR...
...ACDA estimates that total Peruvian arms supplies from the Soviet Union by 1980 had reached $900 million...
...It offers certain advantages-notably price stability and favorable repayment terms-but past dealings contain some salutary lessons...
...They therefore encourage greater U.S...
...On February 2, 1969, Peru and the Soviet Union formally established diplomatic relations...
...In the aftermath of the agreement, Washington resumed bilateral aid and external financing from the U.S...
...Peru received a range of goods that reflected the specialties of each CMEA supplier: fertilizers from Bulgaria, Rumania and the USSR...
...Soviet-Peruvian relations may have entered a new phase with the restructuring of the debt and increased levels of trade...
...39...
...See ACDA, World Military Expenditures, p.162...
...Even at the cost of antagonizing his own powerful military, he has called for a reduction in military spending and an end to the regional arms race...
...Alberto Andriazen, "Estados Unidos frente al proceso peruano, Cuadernos de Marcha (Mexico), November-December 1979...
...Under pressure, the military government quickened the pace of borrowing on harsher terms from the international private banks-something which had already started under Belatinde...
...See Aldo Vacs, Discreet Partners: Argentina and the USSR since 1917 (Pittsburgh: University of Pittsburgh Press, 1984...
...assets that had been nationalized...
...For an English-language summary of his thought, see Robert J. Alexander, Aprismo The Ideas and Doctrine of Victor Rail Haya de la Torre (Kent, OH: Kent State University, 1973...
...government figures, there were approximately 100 Soviet and Cuban military advisers in Peru by 1977, and an estimated 790 Peruvian officers traveled MAJOR SOVIET ARMS SUPPLIES TO PERU, 1972-1983 ARMY -450 T-54 and T-55 medium tanks (1973-81) -- 200 T-62 medium tanks (1978) -53 MI-8 helicopters (1975 and 1977) -100 SA-7 surface-to-air missiles (1978) -100 SA-3 surface-to-air missiles (1978) -Unknown numbers of tank transporters, artillery, radarcontrolled anti-aircraft guns, rocket launchers, 122 mm and 130 mm howitzers, AIR FORCE -4 MI-8 helicopters (1972) -Unknown numbers of SA-3 and SA-7 surface-to-air missiles (1976) -36 SU-22 Sukhoi fighter-bombers (1976) -6 MI-6 helicopters (1977) -16 Antonov AN-26F aircraft (1978) -12 MIG-21 fighters "on loan" from Cuba (1976) -16 MI-24 Hind-D helicopters (1983) Source: Efrain Cobas, Fuerza Armada, Misiones Militares y Dependencia en el Perg (Lima: Editorial Horizonte, 1982), pp.186-187...
...Latin America Regional Report: Andean Group, October 5, 1984...
...PERU HAS ALSO STAKED OUT A LEADERship position on the debt issue within the Cartagena Group of Latin debtor nations, and is a founding member of the Andean Reserve Fund (FAR), a five-nation group now backed by about half a billion dollars in reserves and a lending potential of some $4 billion...
...In 1975, the U.S.-owned Marcona Mining Company was expropriated but soon compensated to the satisfaction of both sides...
...Already, the Garcia Administration has begun the search to increase its options by finding new markets...
...7 From the Soviet point of view, the arrangement provided an ideal opening into the Latin American arms market...
...HE ACID TEST FOR GARCIA MAY BE HIS ability to reach a modus vivendi with Washington, while at the same time taking advantage of his relationship with the socialist world-a major part of Peru's foreign policy inheritance, as well as an appealing way of minimizing economic pressure from the West...
...Peru's exports to the CMEA countries declined from $169.5 million in 1979 to $77.7 million in 1982...
...But this led to some major economic fiascos in countries such as Nasser's Egypt, and shifted the pattern of trade during the Brezhnev years toward a more hardheaded, hard-cash approach.' Moscow began to pursue a more evenhanded policy toward the Third World, based more on need and capability than on revolutionary credentials...
...imperialism," but in his outspoken defense of Nicaraguan sovereignty-dramatically highlighted in a recent address to the Argentine Congress, in which he vowed to break off diplomatic relations with the United States if it invaded Nicaragua...
...In their demand for more independent and diversified foreign relations, the Peruvian generals made common cause with Salvador Allende's Chile (19701973) and the short-lived reformist regime of Gen...
...and ACDA...
...This, they reasoned, would allow them to restructure the domestic economy, reverse earlier patterns of foreign investment and transform the economic basis of Peru's relations with the JUNE 1986 Ruben Berrios is a Research Associate of the Grupo de Andlisis para el Desarrollo (GRADE), an independent non-profit research organization based in Lima, Peru...
...UN General Assembly, "Provisional Record of the Fifth Meeting," September 23, 1985...
...Some scholars also believe that Soviet support for the Peruvian military, like the close trading partnership with Argentina, was designed to exert pressure on the Pinochet government in Chile.'" Certainly the Peruvian buildup made Chile apprehensive, and tensions ran high around the hundredth anniversary of the War of the Pacific between the two countries...
...France and Israel, the first choices, proved too expensive...
...and scientific and medical equipment from Hungary...
...2 3 The United States reinforced its position as Peru's main trading partner and its principal supplier of credits and technology...
...imports from the socialist bloc dropped from $32.8 million in 1980 to just $9.7 million two years later...
...options...
...Hardline groups, such as the Heritage Foundation and the Council for Inter-American Security, raise alarm over Peru's heavy reliance on Soviet weaponry...
...A KEY QUESTION, OF COURSE, IS WHETHER the Reagan Administration will allow Garcia any breathing space for his brand of non-alignment...
...It declared offshore fishing limits of 200 nautical miles and began to seize large numbers of U.S...
...Woy-Hazleton, "Peru...
...And he has used his charisma and youth (at 36, he is Latin America's youngest president) to enhance Peru's prestige and gain wider recognition...
...ACDA puts the figure at 65...
...Peruvian officers became further alarmed when two neighboring countries acquired advanced fighter aircraft...
...SIPRI Yearbook 1980, p. 1 1 5 . 17...
...Though the Velasco government began discussions with Moscow on major arms purchases as early as 1973, when it acquired an initial consignment of T-55 medium tanks, it was not until the more conservative Morales Bermlidez took office that the Soviet-Peruvian military relationship began in earnest...
...But after waiting seven months for an answer, Peru looked to alternative suppliers...
...Optimistic Soviet observers saw a wave of anti-imperialist and national liberation struggles that challenged U.S...
...The Search for Independence 1. See Carlos Garcia Bedoya, Politica exterior peruana: Teoria y prdctica (Lima: Mosca Azul Editores, 1981...
...As the economy ran into trouble, Belatinde accelerated a process that the military had begun in the 1970s, of transferring the country's dependency to the international financial system, and mortgaging Peru's foreign policy to its huge commitments to the Western banks and the IMF...
...Spring 1977...
...P ARADOXICALLY, THE GROWING CONSERvatism of the military did nothing to alter the most remarkable aspect of Peru's foreign relations during the 1970s...
...See Luigi Einaudi, "Peruvian Military Relations with the United States," in D. Sharp, ed., U.S...
...also, E.V.K...
...assistance as a way of securing a dependable ally in the Western Hemisphere-though request that aid be channelled mainly to the private sector...
...But the Soviet Union offered generous terms, and Peru could not resist...
...27 With this in mind, Garcia has tried to delineate a Latin American model of non-alignment that does not entail Cuba's intimacy with the Soviet Union...
...The Washington Post, December 31, 1985...
...When Alan Garcia took office in July 1985, he inherited a country that was in a straitjacket and, at the same time, fast asleep...
...At the same time Belatnde deactivated Peru as a force in the international arena and returned it to the diplomatic lethargy of its conservative past...
...Morales Bermlidez turned to Washington for fresh supplies...
...The armed forces attempted to re28direct the bulk of Peru's trade away from its traditional reliance on U.S...
...At the same time, he has restored ties with Cuba, which had been severed in 1980 after Cuban dissidents took refuge in the grounds of the Peruvian Embassy in Havana-an event which led to the exodus of more than 100,000 refugees from the port of Mariel...
...Helan Jaworski, "Peru: The Military Government's Foreign Policy in its Two Phases," in Heraldo Mudioz and Joseph Tulchin, eds., Latin American Nations in World Politics (Boulder, CO: Westview Press, 1984...
...interests...
...As he said in his UN speech, We know that to carry out a democratic revolution, we must be anti-imperialist and fight against hegemonism...
...Export-Import Bank...
...IMF Direction of Trade Statistics Yearbook 1985 (Washington, D.C.: IMF, 1985), pp...
...The assertion of independence carried a predictably heavy price...
...sidiaries and the Cerro de Pasco Mining Corporation were nationalized.' Peru also asserted its nationalist rights in other ways...
...When the military took power in 1968, Peru was, in the words of one observer, "a classic case of an economy which was dominated by foreign investors and a domestic oligarchy...
...4. See Shane Hunt, "Direct Foreign Investment in Peru: New Rules for an Old Game," in Abraham Lowenthal, ed., The Peruvian Experiment: Continuity and Change under Military Rule (Princeton: Princeton University Press, 1975...
...sugar quota...
...Help," Backgrounder, no.446, July 23, 1985...
...Soviet technical cooperation projects have included the construction of the Paita fishprocessing complex, and help in building the Olmos hydroelectric power project in northern Peru, for which the Soviets provided $300 million-some 40% of the total cost...
...FBIS-LAM, April 28 and July 1, 1980...
...Peru in turn evicted the local U.S...
...Laura Madalengoita, "Peru-Estados Unidos 1980-1985: Busqueda y frustraciones de una relaci6n preferencial," Cono Sur (Santiago, Chile: FLACSO), October 1985...
...According to Business International Corporation, a consulting firm for many transnationals, several companies interviewed about Peru report "finding considerable flexibility behind the rhetoric.'"" It remains to be seen whether Washington will link its future policy to Garcia's compliance with the harsh conditions imposed by the IMF, which has set April 14, 1986 as the deadline for Peru to repay $70 million in arrears...
...This postponed the repayment period on almost half the debt-$519.5 million-and committed the Soviets to making purchases from a list of Peruvian products, three-quarters of which must be non-traditional goods...
...The level of new foreign investment declined sharply, with a $65 million net outflow of long-term private capital between 1968-1973.6 The U.S...
...Sandra Woy-Hazleton, "Peru," in 1985 Yearbook of Communist International Affairs (Palo Alto, CA: Hoover Institution, 1985...
...See The New York Times, December 13, 1985...
...3 6 The Reagan Administration has never accused Peru of aligning itself with the Soviet Union...
...THE COUP D'ETAT THAT DEPOSED PRESI- dent Bela6nde on October 3, 1968, was engineered by an informed and politically active military which had become the most powerful organized force in Peru...
...3 4 Peru's position will certainly provoke further confrontations with its creditors...
...3 2 The State Department, meanwhile, though still wincing at Garcia's rhetoric, sees his efforts to curb human rights abuses and combat drug trafficking as worthy of U.S...
...And the idea of continental solidarity as a way of increasing Latin America's bargaining power has a long history within the ruling party, going back to the classic book by party founder Haya de la Torre, entitled El Antimperialismo y el APRA...
...2 5 3 -254...
...Though a number of small Moscow-line communist parties have existed locally since the 1920s, geographical distance and the overwhelming weight of U.S...
...See Jos6 Encinas del Pando, "The Role of Military Expenditure in the Development Process...
...2 M UCH MORE STRIKING THAN TRADE AND economic aid, however, was Soviet military assistance...
...At the same time, broadening diplomatic contacts, projecting an image of regional leadership and searching for potential supporters are among the few cards that Garcia can play to ease Peru's economic predicament and escape from its isolation...
...2 2 Dealings with the socialist countries fell abruptly...
...8 The "progressive" nature of the Peruvian military drew praise, and Soviet analysts even began to reassess the character and role of Third World military elites that Moscow had previously dismissed as reactionary...
...also The Washington Post, August 26, 1985...
...But at the same time they fear that a breakdown of parliamentary democracy would only encourage destabilization by guerrilla groups more hostile to JUNE 1986 I 31GARCIA'Se z4 AePERU GARCIA'S PERU U.S...
...The pattern of military procurement also shifted...
...In the last four months of 1985, exports to the Soviet Union rose fourfold over 1984, to $150 million, as payment in kind on the Soviet debt...
...For the same periods, SIPRI claims the Soviet Union supplied 41% of all Peru's arms imports...
...5. For more on the nationalizations, see John E. Huerta, "Peruvian Nationalization and the Peruvian-American Compensation Agreements," New York University Journal of International Law and Politics, Vol.10, no...
...However, though conservative views on the subject vary, the Administration may have concluded that Garcia's Peru, for all its anti-imperialist language, should be tolerated...
...Foreign Policy in Peru (Austin: University of Texas Press, 1970...
...support...
...W ITH HIS DRAMATIC SPEECH TO THE General Assembly of the United Nations in October 1985, Garcia seemed to symbolize Peru's emergence from the Belatinde years...
...Miami Herald, July 28, 1985...
...There are frequent major discrepancies between three main sources: the Peruvian government...
...According to U.S...
...REPORT ON THE AMERICAS 30can unity...
...Garcia has asserted independence from Washington not only in his frequent condemnations of U.S...
...2 The country's new rulers decided that the answer was to enhance the power of an extremely weak state...
...See, for example, Robert K. Evanson, "Soviet Political Uses of Trade with Latin America," Journal of Inter-American Studies and World Affairs, Vol.17, no.2 (Summer 1985), p.104...
...3 ' The move, widely read as a reprisal, raised early fears of a greater confrontation, which might lead to Peru's exclusion from the Generalized System of Preferences, the advantageous bilateral textile exports agreement and the U.S...
...In continuing hostilities, Lima canceled a visit by then-Governor Nelson Rockefeller of New York, who was on a fact-finding mission to Latin America, and went as far as asking the Peace Corps to leave the country in 1974...
...From the death of Stalin until the mid1960s, Soviet trade with the Third World was for the most part politically motivated...
...Caretas (Lima), March 31, 1986...
...Peru's debt to the Soviet bloc for economic credits has also been rescheduled...
...See ACDA, World Military Expenditures, p.1 6 2 ; SIPRI Yearbook 1980, p. 1 1 5 . 18...
...9. See Elizabeth Walkenier, The Soviet Union and the Third World: An Economic Bind (New York: Praeger Publishers, 1985...
...3 5 According to one report, there are as many as 600 Soviet civilian and military personnel in Peru-the largest contingent of Soviet advisers in Latin America...
...The Soviet arms deal continues to be attractive, however, because of its flexibility...
...Invoking the principle of Latin American unity in his calls for a negotiated settlement to the Central American conflict, Garcia has been instrumental in creating the Lima Group-composed of Argentina, Brazil, Peru and Uruguay-to support the Contadora peace effort...
...economic pressure...
...investors...
...In the opinion of Enrique Zileri, editor of the Lima magazine Caretas, "Alan would really like to become the head of the Non-Aligned Movement...
...But as Garcia attempts to diversify Peru's international alliances in an increasingly bipolar world, he is likely to find that his chosen path is a bumpy one...
...Garcia's foreign policy stance has centered on three principles: anti-imperialism, non-alignment and support for Latin Ameri*In March 1986, after a visit to Paris by Peruvian Foreign Minister Allan Wagner, France allowed Peru to cut the order to 14 aircraft without penalties...
...The American Banker, March 18, 1986...
...The high spots were the Air Force's 1976 request for 36 supersonic SU-22 Sukhoi fighter-bombers worth $250 million, while the Army weighed in with a formidable lineup of helicopters and tanks...
...Any further reprisals by Western creditors will only make that search more urgent...
...Peru's Soviet arsenal, with its 350 tanks, its Sukhoi fighter-bombers and as many as 16 MI-24 Hind-D helicopters, is much greater than Nicaragua's, but it has aroused no comparable hostility...
...Ibid...
...in any event, it was eloquent proof of the continued power of the military behind Belatinde's throne...
...firms...
...Nor can the tolerance of Washington and the banks be taken for granted if Peru expands its ties to Moscow...
...But the nationalist surge began to lose steam by 1974...
...Between 1968 and 1972, the country received no new loans from the World Bank...
...37...
...Though undoubtedly troubled by Peru's reliance on Soviet military aid, it appears to find Peru's radical nationalist version of non-alignment manageable...
...Under the "second phase of the Peruvian Revolution," headed from 1975-1980 by Gen...
...other newly industrializing countries of Southeast Asia, as well as the People's Republic of China, Latin America and the socialist bloc are all on the list of potential new clients...
...At the heart of the rapprochement between Washington and Lima was real ideological convergence...
...Garcia's well-publicized conflicts with Fidel Castro over the debt issue is one of a number of areas in which Peru has entered into open competition with Cuba...
...In July 1984, the armed forces demonstrated that Soviet supplies were still quite acceptable, when Peru requested a further $50 million worth of arms from Moscow, including more helicopters and tanks...
...Agreements with other member countries of the Council of Mutual Economic Assistance (CMEA) followed...
...military aid: between 1953-1966, for example, only Chile and Brazil ranked higher...
...Breaking from the conservatism of earlier military elites, the government of the armed forces ushered in policies of economic nationalism, agrarian reform and limited nationalizations...
...It championed the cause in multilateral forums, gaining strong backing from other nonaligned countries but arousing the wrath of the Nixon Administration...
...4 Under Velasco, Peru adopted tighter controls on capital registration, remittance and reinvestment of profits, technology transfers and fadeout in joint ventures...
...U.S.-Peruvian relations improved as the military toned down its revolutionary rhetoric and in February 1974 reached settlements on U.S...
...3 Though Peru proved unable in the end to regulate foreign investment effectively or stand firm against pressures from abroad, it did develop a wide-ranging foreign investment code...
...South Korea has agreed to a major purchase of Peruvian goods...
Vol. 20 • June 1986 • No. 3
