THE USSR REGIONAL AND POLITICAL ANALYSIS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00912A000100010015-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 15, 2016
• Document Release Date: July 9, 2004
• Sequence Number: 15
• Publication Date: May 12, 1977
• Content Type: REPORT

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The USSR
NF.- 461,
AND
L A NALYS
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RP ASU 77-010
12 May 1977
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THE USSR
12 May 1977
USSR-Peru: Some Second Thoughts . . . . . . 1
Implications of Belorussia's
New Fuel Ministry . . . . . . . . . . . . . . . . 5
This publication is prepared by the USSR Division, Office of Regional and Political
Analysis, with occasional contributions from other offices within the Directorate of
Intelligence. The views presented are the personal judgments of analysts on signifi-
cant events or trends in Soviet foreign and domestic affairs. Although the analysis
centers on political matters, it discusses politically relevant economic or strategic
trends when appropriate. Differences of opinion are sometimes aired to present
consumers with a range of analytical views. Comments and queries are welcome.
Tk- rh .i I-- - -_ . .. - -
RP ASU 77-010
12 May 1977
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USSR-Peru: Some Second Thoughts
The USSR has growing doubts about the future of its
relations with Peru, a target of Soviet strategy since
1973 and the largest recipient next to Cuba of Soviet
arms in Latin America. At one time the Soviets were
hopeful that the leftist military in Peru would be sus-
25X1X ceptible to Soviet proselytizing. But I
nave concluded that the chances of Peru becoming a "so-
cialist" state are declining due to apparent shifts in
the course of the Peruvian revolution.
As part of its larger Latin American strategy, the
Soviets have tried over the years to improve their eco-
nomic relations with Peru. Although the prospect of eco-
nomic benefits has motivated the Soviets they have also
hoped that expanded economic relations with Peru would
improve their political fortunes in the region, an Amer-
ican sphere of influence, and prove to all of Latin
America that there is little to fear from the Soviet
Union.
As in other third world countries, the main elements
of the Soviet Union's policy toward Peru since 1968 have
been arms deals and, to a lesser degree, economic assis-
tance and trade. Since 1973, Lima and Moscow have signed
a series of arms agreements which, if finally implemented,
will amount to approximately $500 million. To date at
least $175 million worth of Soviet arms have been de-
livered, including SA-3 and SA-7 surface-to-air missiles
and more than 300 T-55 tanks. In the near future, Peru
will take delivery of three dozen or more SU-22 fighter-
bombers priced at $250 million; twenty-four have already
been delivered. The Soviets have trained several hundred
Peruvians to work and maintain this equipment. In all
of their dealings with Peru, the Soviets have offered
low prices, generous terms, and long periods of repayment.
At the same time, the USSR has attempted to expand
Peruvian-Soviet economic relations. The Soviets have
provided a $6-million feasibility study and technicians
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The Soviets appear ready to enter into more joint
economic projects with the Peruvians, but Lima has at-
tempted to keep them at arm's length. Peru has been
slow to use Soviet credits and has kept its options open
with regard to other foreign aid and trade, leading So-
viet officials to express their frustration on several
occasions and to reassess their position.
From 1968 to 1975, the USSR characterized the Velasco
government as a "progressive, military regime" with whom
it could do business and a model for future Latin American
development. Since 1975, however, the Peruvian revolu-
tion has taken an increasingly moderate turn. Although
pledging "revolutionary continuity," Velasco's successor,
Morales Bermudez, has softened much of the rhetoric of
the past. For instance, at independence day ceremonies
last July 28, he promised that programs aimed at creating
a "more just political, social, and economic order" would
continue, but he dropped all reference to "socialism."
This shift reflects the fact that the domestic and
international circumstances which originally led Peru to
improve its relations with the USSR have changed. Eco-
nomic problems have forced the Morales Bermudez govern-
ment to adopt a less radical, more austere economic
policy with greater emphasis on private investment and
enterprise in order to keep peace at home and encourage
much needed non-Soviet foreign investment. At the same
time, leftist and pro-Soviet members of the government
and military have been replaced by more moderate and
pragmatic individuals.
Relations between the US and Peru have improved.
With Washington's acceptance of Peru's 200-mile offshore
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fishing boundary and Lima's settlement of claims lodged
by US companies, many of the tensions that plagued US-
Peruvian relations in the late 1960s and early 1970s have
disappeared. In addition, the US did not criticize Peru
as severely as it did Chile, Brazil, and Uruguay for
human rights violations.
oreign minister, praised the new administration's more
positive approach, to Latin American matters.
One reason Peru had turned to the USSR for arms
was that the US refused to help it update and replace
its weaponry at a time when Peru felt itself strategi-
cally weaker than its traditional antagonist, Chile.
Recent purchases of Soviet arms plus the US embargo on
arms sales to Chile have recast the military balance in
the Andes and have removed both a point of friction in
US-Peruvian relations and some of the reasons for Lima's
interest in improving its relations with the USSR.
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IT he Soviets believed the downturn
in relations was only temporary and the result of pres-
sure on Morales Bermudez from more conservative elements
in the military and in the government. These assess-
ments changed after Morales Bermudez apparently engineered
the removal of the leftist leaning prime minister,
Fernandez Maldonado, whom the Soviets probably perferred
to his replacement, Arbulu Galliani, a reported anti-
RP ASU 77-010
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On April 14, Jose de la uen e, Peru'
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USSR has attempted to improve its relations with Peru's
neighbor to the north, Ecuador, by offering to sell it
advanced fighter aircraft.
The Soviets' attempts to broaden their influence
among Peru's neighbors is equally risky. Lima would
not appreciate Moscow arming Ecuador, a potential enemy.
Relations between Ecuador and Peru have declined recently,
lTnIS point of friction between the
ever, has at least temporarily disap-
peared because Ecuador has no intention of buying Soviet
aircraft.
For the time being, Moscow will probably be patient
and trust that its carefully nurtured relationship with
Lima will survive. Peru is still willing to purchase
Soviet arms, and Soviet war materiel figures large in
Peruvian strategy. Still, the Soviets apparently realize
that this does not assure future good relations, and
that Lima may be using the Soviet presence to pressure
Washington to adopt more favorable policies.
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Implications of Belorussia's New Fuel Ministry
Belorussian party chief Masherov has taken a small
bureaucratic step that may be intended to encourage some
reorganization of the national economic structure--in
the direction of consolidating management among ministries
that now have very narrowly defined responsibilties. On
April 27, Sovetskaya Belorussixa published a decree trans-
forming the Ministry of Peat Industry into the Ministry
of Fuel Industry, the only such ministry at the national
or republic level. The name change seems to imply that
the ministry will extend its management responsibilities
to all fuels and will not be concerned only with peat,
the republic's principal indigenous fuel.
The fuel and power sector was one of the groups of
industries that Brezhnev cited at the 25th Party Congress
when he called for better coordination in the adminis-
tration of "homogeneous branches." Masherov further
developed the theme at the Congress by criticizing the
efforts of USSR Gosplan and USSR Gosstroy to manage in-
tersectoral relations and by calling for the creation of
new subdivisions under the USSR Council of Ministers to
take on this task. Kosygin and the ministerial bureau-
cracy have appeared unreceptive to such proposals.
Masherov again demonstrated his hostility toward Gosplan,
and perhaps ultimately Kosygin, when the Belorussian
Central Committee met in August to criticize the per-
formance of the republic's Gosplan.
Soviet journals have carried several articles since
last fall discussing governmental reorganization in light
of Brezhnev's statements at the Congress. The authors
of these articles have floated a range of proposals, in-
cluding the creation of supraministerial bodies, the
merger of ministries, and the expansion of the role and
powers of head ministries. The latter are assigned re-
sponsibility for meeting national requirements for a pro-
duct which is produced by a number of ministries. It is
conceivable that the Belorussian Ministry of Fuel Industry
is intended to act somewhat like a head ministry at the
republic level.
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Belorussia, the only republic which had a Ministry
of Peat Industry, is poor in all other fuels. Outside
of peat, its fuel industry is modest and depends on fuels
imported from other parts of the country. A Belorussian
ministry that tried to exercise responsibility for all
fuel industries would still be largely concerned with
peat and would, thus in bureaucratic terms not tread on
as much turf belonging to union and union-republic min-
istries as such a ministry would in some other republics
that have more varied fuel industries. This circumstance
may make launching this bureaucratic initiative easier,
although it also could limit its implications on the
national level. At a minimum, it exemplifies the tendency
of republic leaders to push for local deviations from
Moscow's patterns.
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