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C O N F I D E N T I A L LIMA 001669

NOFORN
SIPDIS
SOUTHCOM FOR POLAD

E.O. 12958: DECL: 2019/11/25
TAGS: PREL PGOV PTER MASS MOPS SOCI PE
SUBJECT: SCENESETTER FOR USSOUTHCOM COMMANDER, GENERAL DOUGLAS M.
FRASER

CLASSIFIED BY: P. Michael McKinley, Ambassador, State, Executive;
REASON: 1.4(A), (B), (D)

¶1. (C/NF) Summary: Embassy Lima warmly welcomes you to Peru.
You will arrive at a time of strong GOP interest in expanding
security cooperation with the United States. Under President Alan
Garcia, Peru has been a reliable U.S. partner and played a
constructive role in a complicated South America characterized by
resurgent populism and periodic flashes of tension -- most recently
between Colombia and Venezuela. Notwithstanding its recent strong
economic growth and falling poverty levels, Peru still faces real
security threats, primarily relating to drug trafficking and
reemerging Shining Path terrorism. Your visit affords an
opportunity to underscore our interest in supporting the GOP's
efforts to combat these threats in the several discrete areas where
we are best positioned to help. Peruvian sensitivities regarding
U.S. Arms Sales to Chile, although overshadowed by allegations of
Chilean espionage, remain acute and are likely to figure
prominently in your meetings here. End Summary.



Peru: A Good Friend in the Region

¶2. (C) We have built a strong bilateral relationship with Peru
in recent years, partly embodied in the Peru Trade Promotion
Agreement (PTPA). We also share a similar strategic vision, namely
that the region's foremost security threats originate from
transnational and non-state criminal actors such as
narco-traffickers and terrorists, as well as resurgent populism and
the meddling of Venezuelan President Hugo Chavez and his allies.
At the same time, we have sought to support Peru's efforts to
address the underlying causes of these threats -- including
persistent (if falling) poverty, corruption and social inequality
-- and to spread the benefits of economic development more widely.
We have also sought to support Peru's plan to reorient its security
posture away from its perceived conventional threats from its
neighbors (mainly Chile) and to modernize its military's doctrines
and retool its operational capabilities to confront its internal
threats. The GOP sees the U.S. as an ally and has asked for our
help. Despite our broadly shared interests, however, domestic and
regional sensitivities about a too close military-security embrace
with the United States persist.



¶3. (C) The GOP has played a constructive role in the region and
sees challenges and opportunities through a similar policy prism.
Under Garcia, Peru has helped to counter Bolivia and Venezuela's
efforts to blame the U.S. for rising regional tensions. In the
recent UNASUR President's meeting in Bariloche, for example, Garcia
vigorously defended Colombia's sovereign right to work formally
with the U.S. in combating drug trafficking and terrorism by means
of the Defense Cooperation Agreement ( DCA). Peru was active in
helping defuse the Colombia-Ecuador crisis in March 2008, and
continues to seek to help repair and restore relations between
those two countries. (Note: Colombian Embassy officials here have
told us that Peru is Colombia's "only ally" in the region." End
Note.) President Garcia's recent "Peace and Security Cooperation"
initiative appears to be a serious attempt to promote regional
stability and contain defense costs at a time of global economic
recession. Garcia's proposals seek to prevent an arms race in the
region, reduce military expenditures, formalize a non-aggression
pact and field a regional defense force ("Fuerza Sudamericana de
Paz e Intervencion").



¶4. (C) Peru's relations with Chile have been rocky following
Peru's decision to take its maritime border dispute with Chile to
the International Court of Justice in early 2008. Ties soured
further following Peruvian complaints over Chile's "Salitre 2009"
war games and have grown even tenser in the wake of allegations of
Chilean spying. Relations with Bolivia have also been strained
over alleged Bolivian political meddling, and personal insults
between Presidents Garcia and Morales. The GOP remains concerned

that Venezuela is trying to sow instability in the region through
its covert support of radical and indigenous groups in Peru and
elsewhere. Peru's robust engagement with (its former enemy)
Ecuador represents its greatest diplomatic success to date, which
MFA officials have told us is their "number one" foreign policy
objective. Peru has signed onto Brazil's UNASUR South American
integration plan and it desires a "strategic relationship" with
Brazil, focused on integrating infrastructure such as the new
inter-oceanic highways and investment. While it has respectful
relations with other countries in the region, Peru feels a special
kinship with Colombia for their similar drug trafficking and
terrorism challenges and their shared view that free trade and
openness to investment are the best way to foment economic growth
and advance national development.



Peru's Security Challenges and Threats

¶5. (C) Notwithstanding its recent strong economic growth and
generally falling poverty levels, Peru faces a series of largely
internal security challenges that could threaten its stability and
continued progress. Social conflict is one, and the June 5
violence in the northern Amazon city of Bagua in which 24 policemen
and 10 civilians were killed was the government's most serious
crisis to date. While a series of government miscalculations and
missteps was largely to blame, radical and possibly foreign
interference also played a role. That said, Peruvian military
officials are likely to focus their discussions with you on the
security challenges connected with drug trafficking and terrorism.
GOP briefings to U.S. officials tend to downplay or omit perceived
external threats to Peru such as Chile or Bolivia, but military
planning, doctrine, force structure and spending remain (in our
view) disproportionately focused on such threats.



¶6. (C/NF) Many analysts believe that SL, and its expanding
connections with drug trafficking, is Peru's primary security
threat - particularly in the VRAE. While there is continuing
debate about whether SL has abandoned its ideological struggle and
become just another narco-trafficking group, or rather adapted its
approach to the historical realities of the day while maintaining
its essentially political goals, the fact is that we know little
about its true intentions. Peru's own intelligence apparatus, in
disrepair since the collapse of the Fujimori regime, has only
recently begun to rebuild its capabilities. What is known is that
the SL threat was contained but not eliminated and may now again be
expanding. Over the past 18 months, terrorists have killed over 50
security forces, mostly in ambushes on isolated military patrols
but in some cases in direct assaults on provisional military bases
established as part of a targeted military operation in the heart
of SL terrain. Additionally, SL members have conducted civic
actions to gain the sympathy of local people and communities that
have been largely abandoned by the state.



Where the U.S. Can Help

¶7. (C/NF) Your visit affords an opportunity to underscore USG
interest in supporting the GOP's efforts to combat these threats in
the several discrete areas where we are best positioned to help.
The key word, however, is "supporting." In this context, the GOP
needs to develop a more effective political/military strategy for
turning the tide against a reemerging SL increasingly intertwined
with drug trafficking. We can help the GOP to fine-tune its plans,
but government leaders must demonstrate the political will by
committing funds, setting goals and benchmarks, and decisively
moving forward on implementation. There have been some encouraging
signs in this respect.

¶8. (C/NF) If an effective counternarcotics campaign and broader
development objectives in the VRAE presuppose security, the most
critical security need in the VRAE is for improved intelligence.
In this connection, the GOP is seeking to rebuild its human
collection capabilities. They also seek help in the area of
electronic intelligence, particularly to see from above the dense
jungle canopy. To seize the initiative and carry the fight to the
SL, Peru's Armed Forces also seek support in training, equipment
and transport. After extensive discussions at all levels, the GOP
may ask for the USG to assist it in the three following areas:



--- Help improve Peru's intelligence capabilities by providing
FLIR, UAVs, and satellite imagery;



--- Replace, replenish or repair their moribund helicopter fleet
and;



--- Support the construction of a fixed-wing airfield in Pichari
and supply equipment and training, including on countering SL's
increased use of home-made IEDs, mines and booby traps.



While Peru's security forces have welcomed a broad USG-led ("Tiger
Team") security review of their existing capabilities and threats,
you should be prepared to discuss our ability to support, in these
several discrete ways, Peruvian efforts to confront its real and
immediate internal security threats in the VRAE.



Tensions with Chile: Distracting the Focus

¶9. (C/NF) Peruvian sensitivities regarding U.S. Arms sales to
Chile remain acute. The announced prospective U.S. sale to Chile
of a Sentinel Radar system, a land to air defensive platform
(Avenger) with stinger missiles, and 100 AMRAAM missiles to equip
the 18 F-16s Chile recently purchased from Holland caused rankles
in Peru, particularly as the government was then actively and very
publicly promoting its "Peace And Disarmament" initiative with
leaders around the region. That announcement has been overshadowed
by allegations that a Peruvian Air Force NCO had been spying on
Chile's behalf for the past 5 years - allegations that have
dominated Peru's media for the past 10 days and sent its relations
with Chile into a tailspin. Still, the U.S. arms sales are present
in the minds of Peruvian political and military leaders, as tilting
the military balance even more decisively in favor of Chile, and
are likely to figure prominently in your meetings here.
MCKINLEY