PERU: THE GARCIA ADMINISTRATION AND PROSPECTS FOR COMMUNIST INROADS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04T00447R000100360001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 22
• Document Creation Date: December 22, 2016
• Document Release Date: January 4, 2011
• Sequence Number: 1
• Publication Date: July 15, 1985
• Content Type: MEMO

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The Director of Central
'' :cutivt Registr
Washington . D. C. 20505 Y
2495/1
17 July 1985
MEMORANDUM FOR: 1)DI
D/Office of African and
Latin American Analysis
FROM: DCI
That's a good piece of work on the
response to the NSC Tasker on Peru.
William J. Casey
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Central Intdh nce Agency
Wuhir>glon. Q C. 20505
DIRECTORATE CF INTELLIGENCE
15 July 1985
Peru: The Garcia Administration and
Prospects for Communist Inroads
sumary
The 36-year old Alan Garcia, who takes office on 28 July,
parlayed a magnetic personality, youthful dynamism, and a
vision of a more egalitarian society for Peru into electoral
victory. Tile leftwirg social daiocrat can opt on widespread
popular support in the early going, but the severity of the
country's economic difficulties, increasingly lethal leftist
terrorism, and a rapidly e~opending illicit narcotics industry
are formidable challenges. Garcia's slowness in elaborating
concrete programs to deal with these problem and in selecting
a team to help him govern suggest that Peru may face
considerable political uncertainty in the months ahead.
The congressional majority obtained by Garcia's American
Popular Revolutionary Alliance (APRA) gives him an edge in
attempting to implement new programs to ease Peru's problems.
His major nppositicn will oaae from the Marxist-Leninist
dominated United Left coalition and from a Communist-controlled
labor confederation whose membership comprises same 40 percent
of organized workers. We judge that moderate center-right
apposition parties, tarred by President Belatnde's poor
performance and their own failure to present a unified
electoral slate, are likely to have little impact in the early
stages of the Garcia administration. By carefully cultivating
the military, Garcia has been able to overcame the officer
corps' longstanding antipathy toward APRA.
This typescript was requested by the National Security Council, and
prepared by of the office of African and Latin American
Analysis with contributions from other analysts in that office as well as
f ran the Office of Central Reference, the Office of Global Issues, and the
Office of Soviet Analysis. It responds to specific questions posed in the
tasking memorandum.
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In our ju39nait, Garcia will implement a Third
World oriented foreign policy that will be markedly less pro-US
in tone and substance than that of the outgoing Belande
administration. He already has publicly defended the
legitimacy of the Sandinista regime in Nicaragua, called for
the re-integration of Cuba into the inter-American system, and
endorsed I a multilateral solution to the Latin debt problem.
Peru's economic vulnerability and the potential for a
clash between Garcia and Western creditors may offer the
Soviets and their allies new opportunities for strengthening
their influence in Lima. The Soviets have supplied the
Peruvian Army and Air Force with the bulk of their equipment
since 1973. Garcia reportedly already has requested additional
Soviet military assistance, economic aid and intelligence.
This suggests, in our view, that he may look increasingly to
Moscow if he perceives Western goverri--aits and creditors are
not doing enou h to he him alleviate Peru's serious economic
difficulties .
The USSR has long looked to Peru as its major toehold in
South America, but during Belatnde's pro-CE administration it
was forced to nark time. Soviet officials began courting
Garcia early in the election c sign. Moscow doubtless has
been encouraged by Garcia's post-election overtures and, in our
judgment, will respond by offering attractive prices an
military hardware and by demonstrating continued flexibility in
negotiating repayment of Peru's nearly $2 billion debt to the
MR. We doubt, however, that significant additional Soviet
aid will be forthcoming because of Moscow's current financial
constraints. Moscow will urge Garcia to move quickly in
upgrading relations with Havana, and we expect both Ctmmist
governments to try to take advantage of Garcia's desire to
Promote unity among Latin American debtors.
For its part, the Castro regime has not abandoned its goal
of assisting a Marxist government to came to power in Peru.
Tbward that end, we judge that both Cuba and Nicaragua-and the
Soviets in a more circumspect fashion--will continue to foster
ties with a range of radical leftist groups. In the case of
the Sandinistas, we suspect-but have not confirmed-these
include the insurgent group, Revolutionary Move t-'P ac
Amaru. We believe that it is highly unlikely that a pro-Soviet
group will take pager over the next five years. If Garcia
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stumbles badly and the United Left avoids fragmenting, there is
an outside chance, however, that a radical leftist candidate
might win the elections in 1990.
The Garcia Presidency
Garcia and his key advisers
Alan Garcia has held the political spotlight in Peru for more than a
year, but he remains somewhat of an enigma. In our judgment, the prospect
of dynamic leadership by a representative of a new generation of Peruvians,
coupled with popular enthusiasm for his vaguely defined egalitarian
platform was sufficient to overcome widespread enmity toward his party and
sweep Garcia to victory. Nevertheless, the fact that the President-elect
is still seeking to formulate concrete programs with less than two weeks to
go until he takes office is contributing to growing uncertainty about his
leadership ability, according to the US Embassy.
Garcia's style probably helps explain his lack of speed in making
decisions on pressing problems. According to the US Embassy, Garcia
frequently immerses himself in the details of policy matters rather than
providing conceptual guidance.
even Garcia 's lack of governing experience, the emerging
picture is of a leader who has yet to cane to grips with the real task of
Garcia's indecision on policy matters has carried over to the choosing
of cabinet officers and other key members of his policy-making team. As of
early July he was still considering various individuals-often representing
k
mar
edly different viewpoints-for top government posts and weighing
On the economic front, the president-elect is counseled by three
different groups, according to the US Embassy. The least statist-oriented
of these is led by Senator-elect Silva Ruete, a former Minister of Economy
in the Morales Bermudez government (1975-1980) who has expressed interest
in cooperating closely with the US on economic matters. A second
group-consisting of technocrats identified with Second
Vice-President-elect Alva Castro-favors more government control of the
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economy. Finally, a third group led by Carlos Franco-labeled an
ex-velasquista because he was a member of the leftist military government
of General Velasco Alvarado in the early 1970s-advocates even more drastic
centralized planning and control measures.
On foreign policy and political matters, US Embassy sources also
report that the president-elect is receiving conflicting advice. Lifelong
friend and contemporary Carlos Roca is pushing for closer ties with Cuba,
Nicaragua, and North Korea, and strongly criticizes the United States.
Nevertheless, the president-elect also apparently is listening to more
moderate advisers who favor maintaining good ties to the US. These include
Carlos Alzamora, career diplomat and political independent, and Alan
Wagner, a foreign service professional who has served over the last several
years as the deputy chief of the Peruvian Mission in Washington.
Garcia's personal entourage represents a broad spectrum of political
views. His top political adviser, Luis Gonzales, has studied in the United
States but is a member of the left-leaning ex-Velasquista clique who are
relative newcomers to APRA. Other members of this group are Gustavo
Saberbein and Javier Tantalean who promote "participatory socialism"-an
ideology that envisions direct involvement of key segments of society,
especially workers, in political decision-making and the formulation of
economic policy. Deputies-elect Barnechea and Morales Bermudez are young
party moderates who the US Embassy believes will assume increasingly
important positions.
Garcia is aware that the support of the armed forces will be critical
to the success of his government and, according to US Embassy reporting, he
has spent nearly two years cultivating high-level officers. In our view,
his closest contact is Army General Sinesio Jarama, commander of the second
military region in Lima. Garcia has warm
relations with Air Force General Cesar Enrico, cattnander of the Air Force
and current chairman of the Military Joint Command.
Economic Policy
In recent public interviews, Garcia has outlined vague and conflicting
economic priorities. He has promised to pay Peru's foreign debt, but has
continued to criticize the IMF approach to Latin debt problems, even though
it is still the key to obtaining cm eraticn from commercial lenders.
Peru's foreign debt is on the order of $14 billion, with $2 billion in
repayments due this year. He has ~;i_inalled a willingness to undertake new
austerity measures to stabilize the economy-inflation is running at 155
percent and the budget deficit equals 10 percent of GDP-but says these
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Contradictions also are evident in Garcia's private discussions, where
he has acknowledged that adjustments must be made.
he has also told his party's
leaders that social chaos could ensue unless he improves living standards
for the poor. He is worried that social programs will be squeezed out by
requirements for debt servicing, government salaries, and military
spending. As one tentative option, according to the US Embassy Garcia is
considering heavier taxes on wealthy individuals and corporations. He also
has appealed privately to congressmen-elect from his party to help restrain
Even if the administration comes up with policies the IMF would find
favorable, the party's debt expert has told US Embassy officials that the
new administration will not sign an agreement with the Fund in the short
run. Instead, the president-elect evidently hopes to neqotiate directly
As another tactic in dealing with Peru's debt repayment problems,
Garcia is seeking to foster cooperation among regional debtors.
Garcia wants Latin leaders attending his
inauguration to sign a "Declaration of Lima", calling on the IMF and
commercial creditors to extend easier repayment terms.
Garcia's tough line with the IMF could gain domestic acquiescence to
additional belt-tightening measures. This could permit a self-imposed
stabilization program-monitored by the IMF-that would break the current
financial impasse with creditors. Given Garcia's vacillation, however, we
see some danger that his adjustments will be implemented in patchwork
fashion, leading to worsening economic performance over the near term. F_
Moreover, an anti-IMF stance and rhetorical backing for unified debtor
action could cause bankers to cease financial support. With exports
weakening, Garcia would soon face intensified cash strains that would
inhibit even token debt payments and quickly create economic and political
Anti-Narcotics Programs
Garcia appears genuinely concerned about the illicit narcotics problem
and has assured US officials he will continue bilateral cooperation in
narcotics control. According to the US Embassy, Garcia is planning an
ambitious program that deemphasizes crop eradication and enforcement in
favor of land reform and crop substitution. Under this plan, the
government would try to entice coca farmers to migrate to areas more suited
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to the cultivation of legal crops. This program will require substantial
foreign funding and assistance and will be difficult to implement. We
believe few farmers would participate in such a program without the threat
of strong enforcement and eradication efforts.
Although the government is unlikely to be able to bring the drug trade
under control, we believe Garcia will successfully implement several
aspects of his program including:
- An immediate investigation of all government anti-narcotics
organizations and projects, which Garcia believes are the principal
factors hampering the government's war on drugs.
- A law containing harsher penalties for use and trafficking, as well
as provisions for drug rehabilitation centers and education
programs.
Garcia also is considering other actions such as:
- Efforts to reduce some of the bureaucratic rivalries that impede
the effectiveness of government sponsored anti-narcotics efforts.
- A public relations program depicting the negative consequences of
Garcia will link the narcotics and debt
issues in coning talks with US officials. Garcia probably will ask the
United States to be flexible on Peru's foreign debt in return for Lima's
cooperation on drug control. We believe Garcia probably will ask for a
grace period, extended terms, special interest rates, and an absence of IMF
control on repayment of the debt, as well as increased US assistance for
narcotics control programs.
Likely Foreign Policy
In our judgment, Garcia will implement a Third World-oriented foreign
policy that will be markedly less pro-US in tone and substance that that of
the outgoing Belaunde administration. According to the US Embassy, he
hopes this approach will propel him to the forefront of Latin America's
diplomatic ranks. APRA leaders traditionally have been suspicious of the
Soviet Union, and we do not believe that Garcia intends to align his
government more closely with Moscow. Nonetheless, Peru's economic
vulnerability and the potential for a clash between Garcia and Western
creditors may offer the Soviets and their allies new opportunities for
Garcia's public statements suggest he clearly intends to promote an
activist foreign policy. Over time, the realities of international and
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regional politics, as well as pressing domestic oonerns presumably will 25X1
force him to scale back his ambitions and establish more carefully defined
priorities. Nonetheless, at this point his objectives,
- seeking the chairmanship of the Nonaligned movement in 1986;
- becoming the leader of the Latin American debtor nations;
- playing a significant role in Central American peace initiatives,
possibly through membership in-or other affiliation with-the
Contadora Group;
- upgrading relations with Cuba to the ambassadorial level;
- expanding relations with the Soviet bloc in economic, social,
technological, and educational fields.
The US Embassy reports that, at least initially, the new government
will heavily emphasize Latin American unity, particularly on the debt
question to enable both Peru and other Latin American governments to
confront Washington on more equal terms. Toward this end, Garcia will try
to strengthen such regional organizations as the Economic System for Latin
America (SETA), the Latin American Integration Association (ALADI), and the
Andean Pact. He also will place a high premium on achieving a Latin
American disarmament and arms control agreement in an effort to shift
scarce resources away from military spending toward critical development
Although Garcia and Cuban President Castro both espouse collective
action on the debt issue, we believe the two leaders are more likely to
compete than to cooperate because of personal rivalry and ideological
differences.
The president-elect has told US
officials that he objects to Castro's efforts to portray debt as part of
the East-West struggle when, in Garcia's view, it is a North-South problem;
he also asserted his intention not to let Castro take the issue away from
him. Castro's recent suggestion to a member of Garcia's party-reported by
the US Embassy in Lima-that Garcia "let others take the lead" on the debt
question because of Peru's economic vulnerability may have especially
Garcia has assured US officials that he wants cordial relations with
Washington, and his party's foreign policy platform calls for the
maintenance of stable ties. The president-elect on several occasions
privately has told US Embassy officials that much of his more radical
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rhetoric is only for public consumption. His apparent concern not to
unduly offend Washington-as well as not to be upstaged-was reflected in
his decision last month not to invite either Fidel Castro or Daniel Ortega
to the 28 July inauguration ceremonies. The US Embassy reports he also has
decided not to upgrade the status of the PLO office in Lima nor make a
visit to the headquarters of the Arab League in Tunis in order to avoid
antagonizing Israel and the United States at this time.
Nevertheless, Garcia's apparent desire to bolster his nonaligned
credentials almost certainly will cause him to adopt positions that will
complicate relations with Washington. He already has publicly defended the
legitimacy of the Sandinista regime in Nicaragua, called for the
reintegration of Cuba into the inter-American system, and endorsed a
multilateral solution to the Latin debt problem. He also has criticized US
policy toward Central America, claiming Washington's relations with Latin
America are unduly conditioned by East-West t)erspectives and overly
concwith events in Central America while ignoring South America.
arcia may look increasingly to Moscow for help if he fails to elicit
what he considers a generous response from Western governments and
creditors. We believe Western creditors will demonstrate little
flexibility in renegotiating Peru's debt, although some additional
assistance from western governments is possible.
Foreign Catmunist Activity in Peru
Foreign communist activity has been part of the Peruvian political
landscape since the leftist military regimes of the 1970s. In our view,
Garcia-given his Third World orientation-is likely to build upon Lima's
Soviet Involvement
According to the US Embassy, the total number of Soviet personnel in
Peru is 350-the largest Soviet presence in South America. This figure has
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remained fairly constant for the last several years. Of these, 152 are
military advisers-39 with the Army and 113 with the Air Force-and 96
Soviet personnel are assigned to the Embassy. The remaining Soviet
personnel are dispersed in their economic mission, Aeroflot, a commercial
office, a consulate, their media outlets, and in SOVINCA and SOVRYBFLOT,
their fishing organizations. We estimate that of this total presence
approximately 50 and 60 are intelligence officers, including two or three
military attaches who are probably GRU.*
To carry out their extensive propaganda placement efforts the Soviets
rely on a press attache office, as well as separate offices for Novosti,
Tass, Pravda, Kansomolskaya Pravda, Trud, and Soviet radio and TV. In
addition to the leftist Peruvian newspaper "El Diario Marka", the country's
highest circulation daily and the organ of APRA regularly receive press
The Soviet-Peruvian Cultural Association maintains centers in Lima and
18 of the country's 24 departments. These entities sponsor cultural
events, Russian language classes, and lectures on the USSR. They also
serve as focal points to advertise Moscow's extensive scholarship program
and identify potential grantees. The US Embassy estimates that about 150
Peruvians leave to study in Communist countries each year and that about
450 Peruvian students are in the USSR at any one time.
The Peruvian Communist Party is Moscow's most trusted vehicle for
exerting influence in Peru, according to the US Embassy. Although the
party has only about 1,500 members, it plays a significant political role
because of its dominance of the country's largest labor group, the General
Confederation of Peruvian Workers (COTP), and its participation in the
United Left (IU) coalition. In addition, over the years the Soviets have
carefully nurtured their ties to APRA's leftwing leader Armando Villanueva,
who has visited the USSR and Cuba on several occasions.
Fran 1973 to 1980 the Soviet Union became Peru's single largest
military supplier by delivering over $1 billion worth of equipment to the
Army and Air Force. Peru continues to receive Soviet assistance to
maintain the operational readiness of its major ground forces weapons
systems, fighter barbers, air defense artillery, and missiles. The
Intelligence Community estimates that 2,000 to 3,000 Peruvian military and
intelligence personnel have been trained in the USSR since the mid-1970s.
*The official US presence in Peru totals 146, well under half
that of the Soviet mission. -he estimated FY 85 assistance
program totals $81.8 million. The dissemination of US viewpoints
is aided by eight binational centers and numerous media
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The annual number of trainees going to the USSR has declined sharply,
however, from hundreds in the late 1970s to only a few dozen in recent
months.
Although it is reasonable to assume that the Soviets have made
recruitments among Peruvian military officers over the last 12 years-sane
of whan may now be at relatively senior levels-we lack reliable evidence
that this is the case. In our judgment, Peru's senior military leadership
remains fundamentally anti-communist and wants to reduce heavy dependence
on Soviet equipment. Peruvian armed forces personnel trained in the USSR
have not openly behaved in a pro-Soviet manner. In addition, the various
elements of the US mission have not unearthed convincing evidence of
Soviet-directed subversive activity within the military
Soviet advisers in Peru, however, apparently
have little influence outside their areas of military expertise.
such officers almost never
leave the Peruvian bases where they are assigned to mingle with Peruvian
civilians and that their contacts with military personnel generally are
confined to those with whan they work daily,
The obvious
diplomatic and political impact of Soviet military aid has been relatively
shall over the past few years; Peru has taken few pro-Soviet positions in
That may change under the leadership of a friendlier administration.
In the econanic sphere, Peruvian exports to the Soviet union have risen
steadily since 1982. Last year such exports more than doubled, primarily
as the result of an agreement that calls for the repayment of $215 million
of Peru's total debt of nearly $2 billion to the Soviet Union in goods over
a two-year period. For the first time, the USSR agreed to accept
repayments in non-traditional goods as well as minerals and other products
instead of hard currency. Peruvian exports probably will continue to
By contrast
1in FY 85 and an additional $800,000 in IMET
recently expressed interest in
The Peruvian Army Commander
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increase in the years ahead as agreements similar to the one covering 1983
Cuban Involvement
Although relations with Havana have been restricted to the charge
level since 1980, 63 Cubans are assigned to the diplomatic mission in
Lima. President-elect Garcia has expressed publicly interest in upgrading
relations after he takes office, and this move will offer the Cubans new
opportunities to expand their activities. In so doing they can build on
extensive ties the Embassy reports that they have with various leftist
leaders. Regarding trade ties, Peruvian exports to Cuba have fluctuated in
the $10 to $20 million range since the mid-1970s. In addition, Cuba may
receive sane- Peruvian goods under a trilateral arrangement among Lima,
The Nicaraguan Presence
Nicaragua has a five-person embassy in Lima headed by an ambassador.
While less prominent than the Cubans, Nicaraguan diplomats have been active
in Peruvian media circles and have frequent contact with key United Left
leaders, Fidel Castro's recent
statement an APRA official that the Sandinistas may have sane influence
with the Revolutionary Movement-Tupac Amaru lends credence to our suspicion
that the Nicaraguans-and perhaps the Cubans as well-maintain clandestine
contacts with that group.
Nicaragua may receive $300
million in Peruvian goods free of charge as an arrangement allowing Peru to
repay its debt to the USSR. The goods will include electric generators.
fishing boats, and chemical and fish processing plants.
In our judgment, the Soviet Union, Cuba, and Nicaragua share three
cannon goals for their policy toward Peru:
- To increase their influence within Peru as well as over Peruvian
foreign policy.
- To erode US influence within Latin America.
- To create a regime in Peru more favorably disposed to the USSR,
Cuba, and Nicaragua.
Although each nation has separate items on its agenda as
well-Nicaragua, for example, wants Peruvian support for the existence of
the Sandinista regime while Cuba seeks to upgrade relations with Lima to
the ambassadorial level-they will work separately and in tandem to achieve
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Communist Strategies
The Soviet Approach
campaign the Soviets identified Garcia as the best bet to further their
interests in Lima over the next five years. From Moscow's perspective,
dealing with Garcia, who already has expressed interest in increased Soviet
military and economic assistance, offers the greatest promise of political
payoff with the least risk. If the prospects for maintaining acceptable
state-to-state relations with his government decline markedly, the Soviets
and their allies could retreat fram this approach by increasing assistance
to the United Left (IU) parties or even by offering support to the
Revolutionary Movement-'rupac Amaru or-far less likely-Sendero Luminoso.
Moscow probably reasons that these tactics hold out little pranise in the
near term, however, in view of Garcia's strong electoral mandate and the
disarray in the TU. Nevertheless, we expect the Soviets-with an eye to
the future- to continue funneling money to the IU, while seeking to
'
persuade the coalition
s leaders to put aside their differences.
Based on Moscow's past actions we
believe the Soviets (along with the Cubans and the Nicaraguans) will act as
follows in support of their goals:
- Continue to offer the Peruvians attractive deals on military
hardware and undercut US and western prices and terms whenever
possible.
- Use propaganda, the media and public or private counsel to support
the Peruvian position on the Latin American debt issue. They can
be expected to emphasize IMF arbitrariness, while pointing out
their own willingness to restructure repayments on the Peruvian
debt to the USSR. At the same time, by arranging three-way trade
deals involving Nicaragua or Mexico with Peru and the USSR, the
Soviets are opening new avenues to expand ties within Latin
- Provide little additional eooncmic aid but offer services or
advisers, and to maintain or expand arrangements that assure a
large Soviet presence.
- Implement the new Soviet-Peruvian cultural accord signed last May
and pranote scholarship or other long term training of Peruvians in
- Encourage the upgrading of diplanatic relations between Cuba and
Peru in order to increase Castro's prestige in Latin America, build
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manentum for other Latin American states to recognize Cuba, and
permit an increased Cuban presence in Peru. 25X1
- Exploit political maneuvering or public venality among offical
Peruvians and seek out and maintain agents of influence or covert
agents.
- Support Garcia's stance on nonaligned issues and especially
encourage his pro-Sandinista position. 25X1
- Watch for conflict between the United States and Peru and where
possible exploit these differing views by publicly agreeing with or
favorably portraying the Peruvian position.
The Cuban Approach
Based on Embassy reporting, we believe the Castro regime is pursuing a
two-track strategy in Peru. Over the short term, Havana is promoting
improved diplomatic relations with the incoming administration. At the
same time, Cuba is cultivating contacts with more revolutionary Peruvian
leaders in hopes of furthering its long term goal of establishing a
pro-Cuban regime in Lima.
Castro's refusal to allow sane of the Cuban asylum seekers who flooded
the Peruvian embassy in Havana in 1980 to depart the country has been a
major impediment to improved relations, in our view. We believe Havana may
seize the opportunity of a change in government to resolve this issue.
Underscoring the Cuban leader's interest in seizing the initiative with
Peru, told US diplomats that
the Cuban leader displayed a detailed factual grasp of Peruvian politics.
Castro's interest in attending Garcia's July 28
inauguration-so close to Cuba's independence celebrations-indicates the
importance he attaches to getting off on the right foot with the APRA
government.
Castro sees Garcia as a potential ally
on Latin American issues, particularly that of a debt moratorium. For
example, Castro stated recently that
if the Peruvian President takes strong action against Peru's external debt
problem, Cuba will give him its full support. Nevertheless, we judge that
there is also the potential for competition between the two men on this
issue as each tries to establish his leadership.
Havana also may hope to use its links to legitimate opposition
political parties and other legal interest groups to move the Garcia
administration toward more radical, anti-US positions. Among members of
the United Left (IU), the Cubans probably will continue to emphasize
contact with the Soviet-aligned Peruvian Communist Party, the Revolutionary
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Socialist Party and the Mariateguist Unified Party. Castro has
particularly courted IU President Alfonso Barrantes-smoothing ruffled
feathers resulting fran Cuban contacts with Barrantes' rivals within the
Castro, however, apparently has not abandoned his goal of eventually
assisting a Marxist government to cane to power in Peru, either through the
electoral route or, preferably, by promoting armed revolution. According
Cuban intluence in Peru, stated their belief that in the long run, armed
revolutionary movements are the only means for bringing about those changes
in Latin America favored by Havana. The Cubans further implied that they
believe in the long run the Sendero Luminoso (SL) terrorist group will play
a more important role than a legal leftist coalition front such as the
Nevertheless, Havana repeatedly has been frustrated by its inability
to establish contact with SL members, and Cuban officials have stated
privately that thus far they have been ineffective in exerting influence on
the group. Despite SL's apparent lack of receptivity to Cuban advances,
Cuban leaders are likely to be alert to any opening. Havana may also find
cooperation with the Revolutionary Movement-'rupac Amaru attractive.
Although we have rm evidence to indicate that Cuba presently is pursuing
this option, the group-sane of whose leaders the government has charged
received Cuban training in the 1960s-almost certainly would welcome such
Nicaragua
Managua will almost certainly look for both overt and covert ways to
maintain Garcia's pro-Sandinista sympathies. We believe that independently
and in tandem with Cuba and the Soviet Union, Managua will cultivate the
new president in bilateral and international forums. The Sandinistas
probably welcomed Garcia's expressi--m of interest in joining Contadora, and
recent Embassy reporting suggests at Nicaragua would strongly support his
participation in the negotiation prrcess. Managua probably will also name
an aggressive ambassador to Lima and promote propaganda campaigns using
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The Nicaraguan Embassy is also likely to follow Managua's practice of
promoting relations with opposition leftist groups that could be called
upon to pressure Garcia, if his support for Nicaragua appears to waver. We
suspect-but have not confirmed-that Managua has ties with members of the
Revolutionary Movement-'Pupac Amaru, and the Sandinistas might pursue this
option more vigorously if relations with Garcia deteriorate.
Possibility of a Pro-Soviet Group Taking Per
In our view, it is unlikely that a pro-Soviet group will take power in
Peru over the next five years. Nevertheless, prospects are good for
significant Soviet and Cuban gains at Washington's expense.
The most likely scenario by which the Soviets and Cubans would
substantially strengthen their influence in Peru would be by continuing to
cultivate Garcia, particularly through such means as exploiting his
grievances against the West on economic matters. The US Embassy reports
that Garcia already has begun to condition the political environment for a
tough stance against Western creditors by calling a national conference of
mayors. In our view, it will be difficult for him to backtrack abruptly
from such an approach. If he is unable to deliver on his campaign promise
of quickly alleviating Peru's economic woes, he may explore more vigorously
the prospects for expanded commercial and economic ties with the Soviet
bloc. A forthcoming response from Moscow-for example by offering to
increase significantly its purchases of Peruvian goods-might ve the way
for greater Soviet bloc influence in other areas.
We believe there is an outside chance that a pro-Soviet group could
take per in 1990 through an electoral triumph. At the present time, with
the center-right parties in disarray, the Marxist IU coalition represents
the most serious, legitimate opposition to the Garcia administration. If
the new president proves incapable of dealing with Peru's serious economic
and social problems, the IU will be well positioned to exploit Garcia's
drop in popularity and merge the favorite in the next presidential race.
Aside from the possibility that Garcia may prove an effective
president, several other significant impediments would have to be overcome
for this scenario to eventuate. First, the IU will have to survive intact
over the next five years. In our view, there is an almost even chance that
growing internal pacer struggles, which are based on personal rivalries and
divergent ideological positions, will cause the organization to
disintegrate before 1990. But even if the IU holds together, and emerges
as the favorite in the election in 1990, it would have to tone down
dramatically most of its radical positions before the military would allow
the IU standard bearer to take office. Embassy reporting indicates that if
Barrantes had upset Garcia last April, the armed forces would have staged a
coup to prevent his assumption of the presidency.
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A third, less likely scenario centers around a challenge to Garcia
from within his own party. APRA's left wing-led by longtime Soviet ally
Armando Villanueva-might seize control of the party and nominate its
candidate in 1990. We believe Garcia has several advantages that would
assist him in beating back such a challenge. Most importantly, the
numerous patronage positions available should help him stem any severe
erosion of his position within APRA. Even if Villanueva were to capture
the APRA presidential nomination, his drubbing by Belaunde in the 1980
election suggests Villanueva would be a flawed candidate. Moreover, if
Garcia were sufficiently discredited by 1990 to lose control of the party,
we believe that any APRA candidate probably would stand little chance at
A fourth manner in which a pro-Soviet group could take power would be
via a leftist military coup. In this scenario, Garcia's ineptitude in
dealing with Peru's economic decline and indigenous terrorist violence
would lead to a virtual paralysis of the country that would prompt a
military takeover. The coup leaders would establish a leftist military
dictatorship and facilitate a major expansion of Soviet influence. In our
view, even though Garcia faces formidable challenges, the chances are
relatively remote that the situation under Garcia will degenerate to the
point where the public will clamor for a military solution. moreover, for
this scenario to eventuate, the military would have to overcome its current
reluctance to assume responsibility for the daunting problems facing the
civilian government. Lastly, even if a coup were to take place, our
understanding of the Peruvian military suggests that pro-Soviet leftist
Even beyond the question of a pro-Soviet takeover in Lima, however, we
judge that following on the heels of what is widely viewed as a failed
Belaunde presidency, an inability by Garcia successfully to grapple with
the country's economic and political difficulties would have grave
implications for the survival of democracy in Peru. In such a context it
is plausible that "progressive" forces in the military would again
emerge-especially given the leftist military dictatorships of the 1970s.
Although it is difficult to imagine such a group being willing to advocate
a deal with either insurgent movement, leftists in the armed forces might
became sufficiently influential to press for expanded ties with the Soviet
Mindful of the Peruvian experience in the 1970s as well as similar
developments elsewhere in Latin America during that time frame, Fidel
Castro publicly has predicted that progressive officers will return to
per in the region. We have no evidence that Cuba or the Soviet Union
have made significant converts in the Peruvian officer corps to this point,
but-having identified the armed forces as a major recruitment target-both
governments probably will step up their efforts in this area once Garcia
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Finally, neither guerrilla movement-especially the Revolutionary
Movenent-Tupac Amaru (MRrA) which is the most likely to embrace Cuba and
the USSR -appears likely to take per over the next five years.
Nevertheless, a collapse of democracy by the end of Garcia's term would
give a major boost to domestic insurgents. The MRTP, probably would have an
advantage in carpeting for recruits among radicalized youth because of its
less doctrinaire approach. In that context, we believe Cuba and the Soviet
Union almost certainly would give serious consideration to funneling
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Iq
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 C t' n n n m
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Distribution:
Original - NSC
1 - Executive Director
1 - SA/DCI/IA
1 - NIO/LA
1 - NIO/NARC
1 - NIC/AG
1 - PDB Staff
1 - C/DDI/PES
1 - WI/CPAS/ISS
1 - D/AIA
2 - AIA/PS
1 - ALA Research Director
4 - CPAS/IMC/CB
2 - ALA/SAD
3 - ALA/SAD/SW
ALA/SAD/SW
(15 July 1985) 25X1
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PERUVIAN POLITICAL INVIRONM(NT
Areas of
Size Strength Origins
American Popular Revolutionary Alliance largest party north coast, founded in
(APRA) 461 of vote urban areas, 1924 on
In 1985 intellectuals narrow
white collar sectarian
base
United Left (fu) (includes Peruvian 211 of vote Lima;
Popular Christian Party (PPC)
Popular Action (AP)
Maya Grassroots Movement (MON)
Democratic Front for National Unity
(FOUN)
in 1985; southern
strongest mountains;
opposition labor and
party urban poor
1980
coalition of
6 leftist
groups
Philosophy
Leaders and Factions Foreign Ties
Comment/Outlook
center-left, Alan Garcia-President-
social democratic, elect and party head
highly Armano Villanueva-
nationalistic left wing
Luis Alva Castro-
conservative wing
Luis Alberto Sanchez-
conservative wing
Socialist Intl. member Likelihood of Internal strains,
likely to normalize but Garcia moving to
ties with Cuba and consolidate his control;
possibly North Korea majority in congress augers
well for administration.
Marxist-Leninist Alfonso Barrantes- some member parties
presidential candidate Soviet- dominated
Javier Diez Canseco-
radical militant
Enrique Rernales-
moderate socialist
IOt of vote lima, upper 1961, split center-right, Luis Bedoya,
in 1985 class from Christian- presidential candidate
Christian Democratic
O motrats
61 of vote in Amazon Basin 1956. Formed center-right
1985 by Belaunde
to counter
APRA
groups, pro-US
Faces internal strains and
lacks strategy for challenging
government; limited potential
for congressional
obstructionism.
connections with Latin Needs alliance with other
American and European conservative parties to rebound
Christian Democratic from crushing electoral defeat
Fernando Relaonde- ctrnn, tier to US
President of Prri
Javier Alva Orlandini
presidential candidate
small; won 4 Lima 6 1983, center Andres Townsend
congressional Lambeyeque splintered
seats Depts from APRA
won no
congressional
seats; very
small
General Confederation of Peruvian Workers 401 of banking,
(CGTP) organized construction,
labor or mining,
350,000 teaching,
workers peasants
:onfealeration of Peruvian Workers
(CTP)
151 of
organized
labor or
130,000
workers
textiles,
sugar, white
collar,
utilities,
transport
personalist center-right Francisco Morales
vehicle, Bermudez, former
formed for military President of
1985 election Peru and presidential
candidate
controlled by pro- Valentin Pacho
Soviet Peruvian
Communist Party
democratic, Julio Cruzado,
affiliated with president
ICFTU; APRA ties
Faces long period of
rebuilding; unlikely to play
significant opposition role
no known foreign ties Plans to work with democratic
opposition in congress.
Likely to disappear in next few
years.
ties to USSR; Diverse base, but highly active
affiliated with WFTU and growing
supported by AiFLO and Cruzado is out of favor with
affiliated with ICFTU President-elect Garcia which
6 GRIT will hamper efforts to gain
ground on CGTP
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 PRIVATE SECTOR
National Society of Industries
(SNI)
CHURCH
Peruvian Catholic Church
MILITARY
Armed Forces of Peru
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Areas of
Size Strength
Ori ins
_.._9.__ Philosophy
Leaders and Factions
Foreign Ties
largest
business
group
predominant
religion
Army-15,000 it mnr,
Navy-18,500 "urt,ru? old
Air Force- sut>Imarire
40,000 fleet,
fighter
aircraft and
air defense
missiles
sub-group of center-right
Confederation
of Private
Enterprise
Institutes
(CONFIEP)
moderate
hierarchy, but
lower clergy has
advocates of
liberation
theology
anti-communist;
Army has had
periods of
reformist
sentiment, Navy
conservative
Juan Cardinal
Landazuri-Rickets
Archbishop of Lima
Gustavo Gutierrez-
leading radical priest
Minister of War
Lt. Gen Julian Julia
Freyre
dependent on Soviet
Union for much of
newest army and air
force equipment and
training, but seeking
to diversify sources
Initially leery of Garcia. SNI
now prepared to grant him a
honeymoon period.
Generally avoids involvement in
political issues, but widely
respected by all groups and
influential when it speaks out
on social issues.
The military has grown
conservative in recent years,
but has overcome its suspicion
of Garcia for present;
preoccupied with insurgent
threat and institutional
interests.
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