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C O N F I D E N T I A L LIMA 000064 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 01/06/2016 
TAGS: PREL PGOV PE BL
SUBJECT: FOREIGN MINISTER ON PERU'S "ISOLATION," BOLIVIA, 
CHILE, ARTICLE 98 
 
REF: LIMA 30 
 
Classified By: Political Counselor Alexander Margulies. 
Reason: 1.4(b/d). 
 
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SUMMARY 
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¶1.  (C)  Foreign Minister Oscar Maurtua, in a breakfast 
hosted by the Ambassador on 1/4, said that Peru, as a 
pro-U.S. and pro-free trade advocate, sees itself as 
increasingly isolated in a South America moving leftwards, 
with only Colombia for company.  Maurtua pushed for signals 
of USG support:  a Toledo meeting with POTUS, rapid signing 
of the Free Trade Agreement and increased aid.  He expressed 
concern over Evo Morales' election in Bolivia, indicated that 
the GOP has given little thought to the practical 
consequences this may have for Peru, and conveyed President 
Alejandro Toledo's assurances that the USG will have Peru's 
full support if things go badly wrong in Bolivia and we need 
to stage an evacuation.  With respect to Chile, Maurtua only 
focused on its arms purchases and on the "nightmare" that the 
GOC might reach an accord with Morales on an exchange of gas 
for a Bolivian outlet to the sea.  On Article 98, Maurtua 
said that he wanted to move forward on an agreement meeting 
our International Criminal Court concerns through the 1952 
Bilateral Military Assistance Agreement, while his assistant, 
Alfredo Chuquihuara, added that he would soon have a response 
to the proposal made in December by Arms Control A/S Stephen 
Rademaker.  END SUMMARY. 
 
¶2.  (U)  The Ambassador, accompanied by DCM and Polcouns, 
hosted a breakfast on 1/4 for Foreign Minister Maurtua, who 
was accompanied by his Cabinet Chief Chuquihuara and Under 
Secretary for the Americas Amb. Pablo Portugal.  The 
 
SIPDIS 
conversation was wide-ranging over two-plus hours, focusing 
on Peru's sense of isolation in the region, the Bolivian 
election, perceived threats posed by Chile, Article 98 
negotiations, and ultra-nationalist presidential candidate 
Ollanta Humala's 1/3 appearance at Hugo Chavez/Evo Morales 
event in Caracas (this latter issue was covered in Reftel). 
 
------------------------------- 
ALONE IN A HOSTILE NEIGHBORHOOD 
------------------------------- 
 
¶3.  (C)  Maurtua said that the Toledo Administration, which 
defines itself as pro-U.S. and pro-free trade, is feeling 
increasingly isolated in a South America heading left.  He 
explained that it only feels close to Uribe's Colombia, has 
comfortable relations with Lula's Brazil, problematic ties 
with Kirchner's Argentina, is marching to a different drummer 
than Duarte's Paraguay and Vasquez' Uruguay, has impossible 
relations with Chavez' Venezuela, fears that Evo Morales' 
Bolivia will be a proto-Chavez force on its southern border, 
and has no/no expectation that Ecuador will be restored to 
stability.  While this is our characterization rather than 
Maurtua's, he is preoccupied that old problems with Chile 
deriving from the War of the Pacific could blow up in his 
face during this electoral year, meaning that for him it is a 
relationship fraught with risk rather than opportunity. 
 
¶4.  (C)  The Foreign Minister gave no/no indication that the 
GOP had reached any conclusions as to how it should cope with 
this situation other than to turn to the U.S. for signals 
that we recognize and appreciate Peru's efforts. 
Specifically, Maurtua again raised the request for a 
Toledo-POTUS meeting, urged prompt signing of the Free Trade 
Agreement (and was delighted to learn from the Ambassador 
that USTR intended to provide the requisite three-months 
congressional notification over the coming week), and pleaded 
for increased assistance.  With respect to aid, Maurtua said 
that Peru had the impression that the U.S., like Europe, was 
focusing too much on Africa:  "You need to pay more attention 
to us, we are only five hours from Miami."  He also lamented 
that Peru will lose USD 50 million in assistance this year 
because its regional governments have not been able to 
develop fundable projects with adequate safeguards. 
 
¶5.  (C)  The Ambassador agreed that the latter issue was a 
problem, pointing out that USAID was working with regional 
and local governments to improve their capabilities to design 
and carry out projects.  He offered to increase communication 
 
between the Embassy and the Foreign Ministry's international 
cooperation agency APSI, to improve coordination on the 
provision of this training; an offer the Foreign Minister 
gladly accepted. 
 
--------------------------- 
THE ELECTION OF EVO MORALES 
--------------------------- 
 
¶6.  (C)  Maurtua said that President Toledo would attend 
Morales' inauguration, as Peruvian presidents historically 
have participated in the inauguration of their Bolivian 
counterparts.  While Toledo had briefly met Morales in 
Bolivia and invited the latter to visit him in Peru, Maurtua 
confided, Morales had not/not taken Toledo up on this offer, 
traveling through Lima with a low profile on several 
occasions.  The Foreign Minister added that he would advise 
Toledo to carefully prepare his public and private remarks at 
this event, to echo the President's previous advice to Chavez 
that it is not enough to be elected democratically, one must 
also govern democratically. 
 
¶7.  (C)  After waxing on Peru's historical ties to Bolivia, 
dating back to the Inca Empire, through the Viceroyalty and 
the early republican period when the two countries were one, 
the Foreign Minister proceeded to demonstrate limited direct 
information of present-day events, saying that he sought 
advice and counsel on developments there from Peru's 
Ambassador to Brazil, who previously served in La Paz.  After 
observing that he knew Vice President-elect Alvaro Garcia 
Linera and found him to be a "brilliant mathematician," 
Maurtua acknowledged that he was also hopelessly ultra-left. 
He followed this up with the suggestion that it might be 
advisable to encourage Jaime Paz Zamora's return to active 
politicking, as Paz Zamora was a "clever fellow" who knew how 
to handle the Aymaras and Quechuas, then recalled that Paz 
Zamora had had his visa revoked by the U.S. on 
narcotics-related grounds.  He concluded by expressing 
pessimism on the prospects for carrying out the agreement on 
joint development of gas resources signed by Toledo and 
former President Carlos Mesa, observing that under a Morales 
government it is unlikely that there will be any development 
of gas resources in Bolivia. 
 
¶8.  (C)  The Ambassador explained the USG's position on the 
election of Evo Morales, stressing that we recognized his 
democratic election and would judge his government on its 
actions, particularly those that affect our interests, such 
as coca eradication.  He noted that while we did not have 
contact with Morales before the vote, Ambassador David 
Greenlee did meet with him on 1/2. 
 
-------------------- 
THE CHILEAN "THREAT" 
-------------------- 
 
¶9.  (C)  Chile, as seen through the Foreign Ministers eyes, 
is a threatening presence for Peru.  President Ricardo Lagos 
was "very prudent" regarding Morales election, Maurtua 
commented, sending him congratulations.  Peru's "nightmare," 
he added, would be if the GOC were to reach an agreement with 
Morales on exchanging Bolivian gas for access to the sea.  In 
addition to affecting Peru's maritime claims, he mused, this 
could complicate Peru's development of its own gas resources. 
 
¶10.  (C)  Maurtua also complained at length about Chilean 
arms purchases, observing that under Lagos the GOC has bought 
USD 2.8 billion in arms.  These purchases, he said, along 
with Venezuela's ongoing arms build-up, are destabilizing 
factors in the region and have led GOP officials to propose 
increasing the amount of funds Peru will dedicate to 
upgrading its weaponry as well as create a permanent 
mining/gas revenue set-aside to ensure continued military 
equipment funding as Chile has done with its copper revenue. 
 
¶11.  (C)  The Ambassador replied that the GOC has gradually 
sought to whittle away at the privileges and protections 
granted to the military by the Pinochet Government, 
eliminating the offices of lifetime senators and asserting 
presidential authority over the appointment of military 
service commanders.  The copper revenue set-aside will be the 
toughest nut to crack, he acknowledged, adding that the 
danger of creating an institutionalized set-aside in Peru is 
that it will be difficult to revise or eliminate it should 
 
national requirements change. 
 
---------- 
ARTICLE 98 
---------- 
 
¶12.  (C)  With respect to arms purchases, Maurtua said that 
Peru should move away from buying "scrap" ("chatarra") from 
Russia and former Soviet-bloc countries and purchase its 
replacement weaponry from the U.S.  He also expressed 
interest in increased training.  The Ambassador replied that 
the absence of an Article 98 agreement was an obstacle to 
both objectives.  Maurtua inquired as to the status and 
substance of an initiative in the U.S. Congress to revise 
American Servicemembers Protection Act restrictions.  The 
Ambassador explained that this initiative could affect IMET, 
but would not deal with the ESF or FMS programs. 
 
¶13.  (C)  Maurtua stated that he wanted to move forward 
quickly on an agreement meeting the USG's concerns regarding 
the International Criminal Court (ICC) through an 
amplification of the 1952 Bilateral Military Assistance 
Agreement.  Chuquihuara said that he would soon have a 
response to the proposal made in December by Arms Control A/S 
Stephen Rademaker.  He added that Peru was seeking to 
harmonize its preference for expanding the scope of "notice" 
with the USG's preference for expanding the fixed scope of 
"coverage" so that the USG's bottom-line that no Americans 
would be extradited by Peru to the ICC would be effected as a 
practical matter.  Both Maurtua and Chuquihuara emphasized 
that they were taking personal political and legal risks in 
promoting this solution. 
 
---------- 
COMMENT 
---------- 
 
¶14.  (C)  Maurtua is keenly aware that he represents a 
lame-duck government with a seven month life-span.  His main 
goals are to advance relations with the U.S. while avoiding 
regional and domestic political train wrecks.  In looking 
around the neighborhood, he sees problems, not opportunities, 
and seems at a loss how to approach these difficulties, much 
less resolve them.  It is particularly interesting how little 
focus the GOP in general, and the Foreign Ministry in 
particular, has given to Bolivia, given the two countries' 
shared border and historical ties.  By his own admission, 
when it comes to Bolivia Maurtua is depending on the counsel 
of his trusted friend, Peru's Ambassador to Brazil, who 
formerly served in La Paz, rather than Peru's own Embassy 
there.  In discussing Peru's options regarding Bolivian 
developments, he appeared to be primarily concerned to ensure 
that Peru not/not take steps that would upset the USG. 
 
¶15.  (C)  The Foreign Minister seems to view Chile solely 
through the problematic legacy of the War of the Pacific. 
Thus, he does not consider Chile's potential value as a 
regional ally in promoting free-trade and a free market 
economy.  Perhaps this is due to the pressures of domestic 
politics, where the GOP's initiatives to renegotiate the two 
countries' maritime boundary and to unilaterally proclaim its 
maritime baselines have proven as popular at home as they 
have engendered unease in Santiago.  Whatever the cause, 
Maurtua's narrow treatment of Peru's southern neighbor is 
quite different from the broad vision of his predecessor 
Manuel Rodriguez.  The latter, a native of Cuzco, recognized 
that the development of southern Peru required an integrated 
approach by Peru, Chile and Bolivia.  END COMMENT. 
STRUBLE