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C O N F I D E N T I A L LIMA 001699 
 
SIPDIS 
NOFORN 
NSC FOR DRESTREPO 
 
E.O. 12958: DECL: 2019/12/15 
TAGS: PREL MOPS PARM PTER SNAR PBTS CI PE
SUBJECT: PERU: CHINESE TANKS, PEACE PROPOSALS AND U.S. MILITARY 
SUPPORT 
 
REF: LIMA 1653; LIMA 1647; LIMA 1635 
 
CLASSIFIED BY: P.Michael McKinley, Ambassador, State, Executive; 
REASON: 1.4(A), (B), (D) 
 
¶1.  (C/NF)  Summary:   Peru is reportedly poised to purchase 
Chinese tanks with an eye towards replacing its aging tank fleet 
and building up its "dissuasive" defense posture, and to buy 
aircraft from Brazil as well as MANPADS and anti-tank weapons from 
other countries.  These defense acquisitions are surprising, in 
light of President Garcia's high profile regional "Peace and 
Disarmament Initiative."   Neither were they discussed during the 
wide-ranging strategic dialogue in Lima with USSOUTHCOM's Commander 
December 1-3.  While President Garcia and Defense Minister Rey have 
defended the purchases and criticized skeptics, most observers 
believe the prospective tank purchases respond to domestic 
political pressures fueled by the perceived provocations of Chile. 
There may be an element of impetuous anti-Chile pantomime in this 
announcement, since Peru has rarely brought big purchases to 
completion in the last fifteen years.  Whatever the case, should 
these acquisitions actually materialize, it would suggest that the 
GOP will tilt toward those willing to play, including China and 
Brazil, which could complicate keeping Peru's focus (and resources) 
on the critical internal threat.  In the meantime, the Foreign and 
Defense Ministers have assured the Ambassador that the arms 
purchases will not distract Peru from improving its capabilities to 
deal with the Shining Path (SL) and drug traffickers.  End Summary. 
 
 
 
 
What Types of Weapons Does Peru Need? 
 
 ¶2.  (C)   Five Chinese-made "Al-Khalid" model (Type 98 MBT 2000) 
tanks appeared on display during a military parade in Lima on 
December 8.  The advanced tanks are reportedly on loan for testing 
by the Chinese company Norinco.  Media reports claim that the GOP 
has decided to purchase between 80 and 120 tanks at a price tag of 
$5-6 million each (other sources say $9 million), to eventually 
replace the roughly 140 aging T-55 tanks it bought from the USSR 
back in the 1960s and 1970s.  The deal was reportedly struck 
between President Garcia and the PRC's President Hu Jintao during 
the last APEC summit in Singapore. 
 
 
 
¶3.  (C)  Administration officials, including MOD Rey and FM Garcia 
Belaunde, were quick to explain that Peru is simply modernizing 
basic military equipment that has become obsolete due to the lack 
of maintenance, a task they say was neglected by previous 
administrations.  Government officials have stressed that Peru 
needs to maintain its "deterrence" capacity and that the 
Comptroller General's Office would be charged with overseeing the 
acquisition process.  Meanwhile, news of the Chinese tank purchases 
caused sharp reactions among the political opposition, including 
Nationalist party leader Ollanta Humala, who termed the decision 
"hasty."  Most of the opposition's commentary centered on whether 
the Chinese tanks were a match for Chile's Leopard tanks (or if 
kick-backs could be involved in the deal) , but few questioned if 
tanks and armor have practical military value in Peru (a country of 
mostly jungle and mountains) when it shares only a small 124 km 
border with Chile and little flat border with Ecuador. 
 
 
 
Other Weapon Systems 
 
¶4.  (C)  There have also been reports that Peru is interested in 
buying a dozen Super Tucano A-29 close-combat support aircraft from 
Brazil, with a cost of around $9 million each.  Details of the deal 
were reportedly discussed during the December 10-11visit to Lima of 
Brazilian President Lula da Silva, who traveled with a large 
commercial delegation in tow (septel).  The press quoted MOD Rey as 
 
 
making an "urgent" request to his Brazilian counterpart Nelson 
Jobim for an immediate delivery of  three or four Super Tucanos for 
use in the VRAE.  (Jobim said this was up to the aircrafts' 
manufacturer, Embraer.)   Nonetheless, most knowledgeable observers 
believe that the A-29s are well suited for counter narco-terrorism 
operations.  We have also heard reports that Peru is considering 
purchasing more MANPADS from Russia and anti-tank weapons from 
Israel, but we do not know the costs or amounts. 
 
 
 
Surprise? 
 
¶5.  (C)  These defense acquisitions come as something of a 
surprise, in light of President Garcia's intensively pursued 
regional "Peace and Security Cooperation" initiative.  Intended to 
reduce military expenditures, formalize a non-aggression pact and 
field a South American defense force, the GOP has actively promoted 
the initiative at various international fora, including UNASUR, 
UNGA, APEC, the Iberoamerican Summit, the OAS and the Vatican. 
That the flurry of Peru's high-profile peace-initiative diplomacy 
was punctuated by a domestic defense acquisitions announcement of 
this size has caught the government in a kind of double bind.  But 
government officials have sought to deflect the apparent 
contradiction. 
 
 
 
¶6.  (C/NF)  The planned arms purchases were also notable for their 
absence during the wide-ranging strategic pol/mil dialogue in Lima 
between USSOUTHCOM Commander General Douglas Fraser and his 
Peruvian counterparts December 1-3.  To the extent that arms 
acquisitions were discussed, the Peruvians complained about the 
slow and complicated U.S. defense procurement process (FMS and FMF) 
and high price tags for U.S. equipment such as helicopters.  After 
agreeing with their U.S. counterparts regarding the primacy of the 
internal threat arising from drug trafficking and terrorism, the 
Peruvians also told General Fraser that their main external threat 
emanated from Bolivia, where they see Evo Morales as consolidating 
power, eliminating political rivals and seeking to extend his 
radical brand of indigenous populism beyond his borders, with 
ALBA's help. 
 
 
 
¶7.  (C/NF)  President Garcia and Defense Minister Rey have defended 
the Chinese tank purchases as reflecting Peru's political interests 
and legitimate self-defense needs.  In response to criticism, 
Garcia accused the local press of being "anti-patriotic" for 
divulging supposedly classified details about the tank deal.  Most 
observers believe the prospective tank purchases respond to 
domestic political pressures fueled by the perceived provocations 
of Chile, including the "Salitre 2009" exercise, the announcement 
of its $665 million weapons deal with the U.S., and the recent spy 
scandal (refs) involving a Peruvian Air Force NCO selling security 
secrets to Chile.  Several Peruvian interlocutors also told 
USSOUTHCOM's General Fraser they were concerned that Chile would 
not abide by a prospective decision by the International Court of 
Justice (ICJ) at The Hague favoring Peru's argument that the 
maritime boundary be redrawn.  For that reason, they said, Peru 
would need to be prepared to deploy a minimum level of dissuasive 
military force in order to compel Chilean compliance with the ICJ 
decision. 
 
 
 
Comment: The Real Reason is... 
 
¶8.  (C/NF)  The real reasons for the announced purchases, 
particularly of the Chinese tanks, are surely many and clouded with 
questions.  There is speculation that corruption has played a role, 
although the low unit price suggests the Chinese are buying their 
 
 
way into the market.  If the entire package goes through, the cost 
would exceed Peru's entire $650 million "Basic Nucleus" strategic 
defense modernization plan - a disproportionately large "off-line" 
budget item.  In that sense, these planned acquisitions suggest 
that, in pursuing defense expenditures, the GOP will tilt toward 
those willing to play the game a certain way; i.e., selling the 
Peruvians what they say they want rather than what they are 
perceived to need.  At the end of the day, President Garcia could 
also be reacting to Chile with an impetuous decision. 
 
 
 
¶9.  (C/NF)  Comment Continued:   In our view, the utility of tanks 
in any real military scenario - including against Chile, whose air, 
ground and sea power is vastly superior to Peru's - is open to 
question.  There appears to be better, and cheaper ways to address 
the prospective external threat, including air and sea missile 
defense systems and anti-tank weapons.  At the same time, Peru is 
not yet making sufficient progress against its primary internal 
threat of drug trafficking and resurgent Shining Path (SL) 
terrorism in the VRAE.  Moreover, the GOP has yet to commit the 
$150 million needed for the VRAE campaign.  While the Brazilian 
Tucanos might make practical sense in the VRAE, the Chinese tanks 
manifestly do not.  Should the tank deal go through, it could 
undermine our efforts to keep Peru focused on the primary 
(internal) threats to its security.  The Ambassador raised this 
concern on December 14 and 15 with FM Garcia Belaunde and MOD Rey, 
and was assured that Peru remains committed to addressing SL in the 
VRAE, drug trafficking and related violence. Time will tell.  End 
Comment. 
MCKINLEY