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C O N F I D E N T I A L LIMA 001611 
 
SIPDIS 
 
DEPT. ALSO FOR WHA/AND AND PM/WRA 
SOUTHCOM FOR POLAD 
 
E.O. 12958: DECL: 10/29/2019 
TAGS: PREL PGOV PARM KHDP EC PE
SUBJECT: PERU AND ECUADOR: GOOD VIBES AT 3RD BILAT 
MINISTERIAL 
 
REF: LIMA 01350 
 
Classified By: Ambassador P. Michael McKinley for 
reasons 1.4 (b) and (d). 
 
¶1. (C) Summary: Presidents Alan Garcia and Rafael Correa 
presided jointly over the Third Binational Ministerial that 
concluded in Piura, Peru on October 22.  According to press 
accounts and our MFA contacts, bilateral discussions were 
infused with good feelings and helped advance two of Peru's 
key foreign policy goals: (A) cementing bilateral ties with 
Ecuador - in part to offset the sour relations with Chile and 
Bolivia, and (B) enlisting support for Garcia's efforts tocurb burgeoning arms 
expenditures in the region. 
Participants also reviewed commitments made at previous such 
meetings in Tumbes, Peru in 2007 and Machala, Ecuador in 2008 
(reftel), including completion of the "Peace Bridge" and the 
"Spondylus" highway linking Guayaquil and Piura.  This year, 
seven new agreements were signed to promote economic and 
social development along the common border.  Among the most 
significant of these was to accelerate the long-delayed 
Puyango-Tumbes irrigation project and the demining of the 
sensitive one km sq. Ecuadorian battle monument of Tiwinza, 
located inside Peruvian territory. End Summary. 
 
Background 
---------- 
¶2.  (C) The Third Ecuador-Peru Binational Ministerial was 
held in Piura, Ecuador on October 21-22, roughly coinciding 
with the eleven-year anniversary of the 1998 Brasilia 
(Itamaraty) Peace Accord that ended decades of hostility 
between the two countries over a sizable swath of disputed 
territory (finally ceded to Peru).  The United States, then 
one of the four Guarantor countries of the Peace Accord (the 
others being Argentina, Brazil and Chile), provided 
approximately $40 million towards development projects along 
both sides of the border and about $10 million for 
post-conflict humanitarian demining.  Most of these US 
development projects have since been completed, but the 
greater (international public and private sector) investments 
envisioned at the time (of about $1.5 billion for each 
country) did not happen, and the humanitarian demining has 
progressed slowly. (Note: During a GOP-sponsored visit to the 
shared border on October 26, Ecuador's Ambassador to Peru 
stated to Peruvian and international officials that Ecuador 
was "disappointed that the $1.5 billion in international 
cooperation had never materialized".  He mused aloud that 
this was probably due to "more dramatic" needs elsewhere 
around the world, such as relief efforts for the tsunami that 
devastated parts of Indonesia's coast. End Note.) 
 
Regional Peace and "Best Ever" Bilateral Relations 
--------------------------------------------- ----- 
¶3.  (C) The Third Ecuador-Peru Binational Ministerial was 
capped by front page photos of the two smiling leaders in 
fraternal embrace, symbolizing the enormous political 
progress made since the formal cessation of hostilities over 
ten years ago and the excellent state of the current 
bilateral relationship today.  Peace and development were the 
main themes underlying the discussions at the Piura event. 
Garcia was quoted as saying that, "We are advancing with the 
confidence of brothers with no reason to worry about what the 
other one might be doing."  For his part, Correa said, "Peru 
and Ecuador are currently enjoying our best ever relations in 
history."  Garcia emphasized his concerns about increased 
arms purchases in the region, and asserted that since the 
creation of the Union of South American Nations (UNASUR) five 
years ago, the region has spent some $23 billion on new 
weapons purchases.  He noted that that amount of money could 
have been used instead to lift 30 million South Americans out 
of poverty.  Garcia warned that if the trend continued 
unchecked over the next five years, South American countries 
will spend another $35 billion on new armaments -- which will 
mean that total defense expenditures for the region will 
reach $200 billion. 
 
¶4.  (C) Correa remarked that "The permanent desire for 
integration by both countries has allowed us to place crucial 
 
issues at the heart of the CAN (Andean Community of Nations) 
and UNASUR agenda... such as a shared vision of legislation 
for the protection of intellectual property, dedication to 
peace and a rejection of an arms build-up."  He was also 
quoted as saying that investment in the border area in 
2007-2008 (his years in office so far) was $902,387,695 -- 
exceeding the $718,597,883 invested in the previous eight 
year period (1998-2006.)  Statistics for tourism and 
commercial activity along the coastal section of the border 
generally reflect the rosy assessments of both governments' 
officials.  According to a local newspaper, 127,000 
Ecuadorians traveled to Peru in 2008, while 150,000 Peruvians 
visited Ecuador.  The increased visits are partly explained 
by eased travel restrictions, the newly-constructed 
"Spondylus Road" (EU financing) and improved border 
infrastructure.  The seven recently-signed agreements relate 
mainly to taxes, culture, hydraulic resources, police 
cooperation, and new highways. 
 
Demining at Tiwinza 
------------------- 
¶5.  (C) Since last year's ministerial in Machala, Ecuador 
(where humanitarian demining topped the agenda), Peru has 
resumed its previously stalled demining operations in 
earnest, mostly with USG assistance.  We understand neither 
Peru nor Ecuador has yet contributed their promised two 
million dollars in "seed money" to the special fund set up 
with the Andean Development Corporation (CAF) aimed at 
redoubling demining efforts. However, our MFA contacts said 
that at Piura both Garcia and Correa ordered that the funds 
be allocated as soon as possible. We also understand that 
Ecuador has committed an additional USD 500,000 to its annual 
demining budget, but its demining operations continue at a 
slow pace due to lack of funding.  In addition, the Piura 
ministerial promised to target demining of the 
politically-sensitive one square kilometer Ecuadorian battle 
monument of Tiwinza located inside what is now Peruvian 
territory.  MFA officials have told us that the creative 
formula used to solve the Tiwinza problem in 1998 (i.e., 
privately-owned government land inside another country's 
territory) could serve as a model for solving other disputes. 
(Note: In early October, Peru sent a survey team to Tiwinza 
to conduct an impact study. Emboffs later attended a special 
briefing which suggested that the site is heavily 
contaminated with landmines, booby traps, unexploded ordnance 
and other explosive remnants of war. Mosat of the experts 
present opined that it will take a joint effort by both 
countries and international cooperation to get the job done. 
End Note.) 
 
Comment: Ecuador is Peru's Top Priority 
--------------------------------------- 
¶6.  (C) Several MFA and MOD officials have told us that the 
strengthening bilateral relations with Ecuador is Peru's 
"number one" foreign policy objective -- in part, as one 
official put it, "because we already have enough tensions in 
the south with Chile and Bolivia."  The proposed "Salitre 
2009" military exercise in Chile had caused considerable 
consternation in Peru until the exercise' scenario was 
changed (with our help behind the scenes and that of Embassy 
Santiago) to accommodate sensitivities here. Meanwhile, the 
personal animosity between President Alan Garcia and 
Bolivia's Evo Morales occasionally descends into 
name-calling. (Note: Some local observers speculate that 
Morales is encouraged by Chavez to keep Peru-Bolivia 
relations frosty. End Note.) Other MFA officials contend that 
Peru can also act as an important intermediary for helping to 
patch up the rocky relations between Ecuador and Colombia. 
 
¶7. (C) Comment Continued: With respect to Garcia's regional 
peace proposals: our MFA contacts insist that they are 
genuine. Garcia first raised them at the September 15 UNASUR 
ministerial in Quito, via his letter to the FMs and MODs in 
which he outlined his visions for preventing an arms race in 
the region, reducing military expenditures, proposing a 
non-aggression pact and creating a regional defense force 
("Fuerza de Paz"). Since then, the MFA has launched an 
international campaign to promote the President's 
 
initiatives.  A big question for Peru remains, however: is 
UNASUR's pro-tempore President Rafael Correa sincerely in 
support of Garcia's peace proposals, as seemed to be the case 
in Piura -- or do Garcia's proposals contravene too strongly 
the wishes of Venezuela's Hugo Chavez? End Comment. 
MCKINLEY