VZCZCXYZ0000
RR RUEHWEB

DE RUEHPE #0994/01 0821741
ZNY CCCCC ZZH
R 231741Z MAR 07
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC 4636
INFO RUEHBO/AMEMBASSY BOGOTA 4480
RUEHBR/AMEMBASSY BRASILIA 7258
RUEHCV/AMEMBASSY CARACAS 0247
RUEHLP/AMEMBASSY LA PAZ MAR QUITO 1101
RUEHSG/AMEMBASSY SANTIAGO 1185
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUMIAAA/CDR USCINCSO MIAMI FL

C O N F I D E N T I A L LIMA 000994

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/22/2017
TAGS: PGOV MARR KICC PREL PE
SUBJECT: SCENESETTER FOR PERU MOD WAGNER'S VISIT TO
WASHINGTON

REF: A. LIMA 513
     ¶B. LIMA 3259 (06)

Classified By: POL David C. Brooks, for Reasons 1.4 (c,d)

--------
Summary:
--------

¶1.  (C) Peruvian Defense Minister Wagner is sending a
deliberate message by visiting the U.S. before any other
region outside of South America.  Wagner is pursuing an
ambitious defense reform agenda, which includes developing
higher levels of professionalization, building a joint
operational rapid response capability, and fighting
corruption.  He also wants to redefine Peru's military
mission away from supposed threats from neighbors toward
meeting the menace posed by transnational crime and
terrorism.  Wagner is under no illusion that the United
States can remedy the Peruvian military's serious
deficiencies in resources and equipment, but he will
reiterate his request for Excess Defense Articles to improve
his navy's ability interdict narcotics along Peru's northern
coast.  More broadly, both Wagner and Peruvian President
Garcia see GOP and USG national security interests as closely
aligned and desire to strengthen mil-mil relations, which lag
behind other areas in our bilateral agenda.  As proof of this
intention, we expect Wagner to reiterate Peru's willingness
to explore offering post-Manta facilities for U.S.
counternarcotics flights in the region.
End Summary.

------------------------
The Message of the Visit
------------------------

¶2.    (C) Minister Wagner told Ambassador Struble in late
2006 that he was holding off on offers to travel outside of
South America until he could visit Washington.  In A March 21
conversation with the Ambassador, Wagner reiterated that he
prizes Secretary Gates' invitation because it is an
opportunity to manifest Peru's priority interest in
military-military relations with the United States.  While
Wagner's predecessors under the Toledo government were
similarly well disposed towards the United States, the
attitude of the armed forces presents a mixed picture.  We've
been close to the Peruvian navy for decades, but the Army and
to a lesser extent the Air Force continue to labor under the
legacy of dictator Velasco Alvarado (1968-74).  General
Velasco, who turned to the Soviet Union for equipment and
training, viewed U.S. political, economic and military
influence within the hemisphere as strongly limiting Peru's
freedom of action; he sought to limit our influence without
actually rupturing the relationship.  Former colonel Ollanta
Humala, who narrowly lost last year's Presidential election,
reflects the old Velasquista nationalist mindset; Humala was
reputed to enjoy the support of 75 percent of the Army below
the rank of Colonel.

------------------------------
Minister Wagner's Target Areas
------------------------------

¶3.  (C) Minister Wagner has identified four key target areas
for reform of his Armed Forces.  They are:

- Correctly Identifying the threat and mission:  In his first
speech to the troops last August and consistently since,
Wagner has argued that Peru does not face a military threat
from any of its neighbors.  He has identified the real menace
as violations of Peruvian sovereignty by transnational
criminal and terrorist groups.  Wagner has also urged his
Armed Forces to increase its capacity to participate in
international peacekeeping operations.

- Professionalization: Like much of Peru's stock of dated
Soviet-made equipment, a good deal of what passes for
military education in Peru's Armed Forces needs significant
updating.  Generations of officers remain inculcated with
dated ideas from the Velasco era which portray U.S. influence
in this hemisphere as a threat to Peru's national interests.
Training programs and exchange opportunities will help us
counter these notions, and begin introducing new, modern and
realistic thinking (particularly vis a vis the U.S.) into

Peruvian military education.  The MOD has asked us for
information on U.S. Military education to assist him and his
team in their reform efforts.

- Rapid Response, Joint-Operational Capability: Since
September 2006, the MOD has been promoting the idea of
forming a multi-service, multi-capable military force that
could respond to a variety of threats at a moment's notice.
Dubbed the "Nucleo Basico Eficaz (NBE)," this would give the
GOP a rapid response capability for contingencies ranging
from terrorist incidents to natural disasters.  The MOD is
using the NBE as a way of compelling the different services
to channel their budget in ways that can sustain joint
operations.  (Further details septel.)

- Corruption: MOD Wagner has told us that corruption remains
the number one problem in the Peruvian military, and recent
investigations by the Comptroller's Office bear out his
concern.  In his view, the Navy has remained relatively
professional, but both the Air Force and particularly the
Army suffer from high levels of endemic corruption, a
situation that will require a generational change in the
officer corps before it is resolved.

--------------
The MOD's Plan
--------------

¶4.  (C) The MOD's plan possesses two key elements.  These are:

- Build the capacity to protect national land, air and sea
space against non-conventional threats.  The MOD has directed
his joint chiefs to develop four operational plans.  The
recently announced "Plan VRAE," is multifaceted interagency
approach to combating narcotraffickers and Sendero Luminoso
terrorists in the Apurimac and Ene River Valley (VRAE)
through better  intelligence, targeted security operations,
expanding the  state's presence with investments in basic
transportation,  health and education infrastructure in
addition to civic  campaigns to win over local populations.
It will be followed by a similar approach in the Monzon
valley, where a second Sendero Luminoso column provides
material support to entrenched narcotraffickers.  A third
plans seeks to enhance GOP presence and control over the
Putomayo river border with Colombia to prevent the FARC from
using Peru as a logistical, recruiting and R&R base.  The
fourth plan is to enhance the navy's ability to surveil and
patrol waters along Peru's north coast, which is the
country's most active transit corridor for cocaine.

- Re-Build Military Capabilities: The Peruvian military has
paid a high price for its corruption and politicization
during the Fujimori years.  During the Paniagua and Toledo
governments, its budget was severely slashed even as the
Armed Forces had to become an all-volunteer force. By 2004,
up to 98 cents of every budget dollar went to fixed
obligations (salaries, food, utilities) leaving little for
maintenance and operational training.  Much of Peru's
equipment is composed of dated and poorly maintained Soviet
materiel.  The critical loss of capabilities was underlined
when an armed militant group tookover the provincial town of
Andahuaylas in January 2005; no military transport aircraft
were operational so troops had to be rushed to the area in
the President's plane.  MOD Wagner has a commitment for USD
650 million over five years to rebuild capability.  This
money will be directed to "joint capabilities" (transport,
special forces, helo airlift) that can respond to terrorist
incidents, Andahuaylas-type uprisings and natural disasters.

-----------------------
What the MOD Will Raise
-----------------------

¶5.  (C) The MOD will raise the following two issues with
Washington interlocutors:

- An EDA Waiver: To combat narcotrafficking and enhance its
maritime control capabilities, Peru wants a waiver from
American Servicemen's Protection Act (ASPA) limits on Excess
Defense Articles sought by its navy.  We have explained to
the Minister that this is not possible under current policy.
It is in the U.S. interest, however, that Peru enhance its
maritime control capabilities.

- MOD Wagner will also restate the recent GOP offer to allow
U.S. surveillance aircraft to have access to an airfield in
northern Peru in the face of our likely loss of access to the
Manta Cooperative Security Location (CSL).  Wagner told the
Ambassador on March 21 that he believes the U.S. and Peru
should discuss what such use might entail before putting a
name (FOL or CSL) or entering into specific negotiations.
(See Ambassador's recommendations in Ref B).
STRUBLE