PERU AND CHILE: REASSESSMENT OF THE POTENTIAL FOR CONFLICT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01099A002000090001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 20, 2016
• Document Release Date: June 27, 2006
• Sequence Number: 1
• Publication Date: December 16, 1974
• Content Type: REPORT

/VI0111EF
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Secret
Peru and Chile:
Reassessment of the Potential for Conflict
Secret
DCI/NIO 2694-74
16 December 1974
Copy N2 264
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Warning Notice
Sensitive Intelligence Sources and Methods Involved
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
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PERU AND CHILE: REASSESSMENT OF
THE POTENTIAL FOR CONFLICT*
PRECIS
Both Peru and Chile have strengthened their military capabilities
since last July. Peru still enjoys military superiority over Chile, and
the Chileans have continued to experience difficulty in purch
arms.
but Peru's dispositions do not suggest that military action is imminent.
Chile's dispositions in the north are clearly defensive.
We continue to believe that the Chileans will not initiate hos-
tilities against Peru, except as a desperate act of pre-emption in the
conviction that Peru was about to attack. The chances of a deliberate
attack by Peru over the next year or so also remain small. Peru's sense
of isolation and of a regional threat, and its uncertainty about the
outcome, are at least as great as in July and probably greater. The
growing dissension and disunity in Lima can cut both ways, but it
*This memorandum was prepared under the auspices of the National Intelligence Office
for Latin America. It was drafted in DIA and has been reviewed with representatives of CIA,
DIA and INR and endorsed by them.
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is more likely to deter a foreign adventure than to stimulate one.
We consider that war arising from accident or miscalculation is also
unlikely, but believe that the chances are somewhat greater than in
July. With the passage of time, each country's perception of the
threat: posed by the other appears to have increased. The potent
mixture of old antagonisms, mutual fears, and the action and reaction
of the arms build-up could cause events to get out of control and
produce results which neither party contemplates.
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PERU AND CHILE: REASSESSMENT OF THE
POTENTIAL FOR CONFLICT
1. This memorandum constitutes an undate of
portions of an earlier memorandum, II
I It first
considers military developments since July in the
two countries, and then discusses recent events
affecting the possibility of conflict between them.
It concludes with a reassessment of the likelihood
of such conflict.
Recent Military Developments
2. Since publication of the earlier memorandum,
both Peru and Chile have continued efforts to
strengthen their military capabilities.
3. A Soviet cargo ship arrived at Callao in early
November making another delivery of T-55 tanks.
There are probably now between 150 and 200
T-55s in Peru. Although there have been numerous
reports of the tanks being moved south, they have
been seen only in Lima
tion is underway on two large installations, prob-
ably armor associated within 50 miles of the border.
Improvements to the Mariano Melgar Air Base at
La Joya-potentially the largest in Peru-are near-
ing completion. These efforts reflect long-range
plans for modernizing and improving Peruviar25Xl
military capabilities in the area. Construction is
proceeding at what appears to be a measured race.
s will probably be assigned to a new armored
division which is apparently to be formed in the
south. a militar?5X1
complex to be developed at La Joya will become
the principal armor base in the region.
4. Peru is also improving its antitank capability
in the south. An antitank battalion is projected
for the Tacna area and additional antitank rockets
will probably be purchased. Additionally, in its
current plans for the establishment of an air mobile
force, Peru is emphasizing the maximization of
firepower on the force's helicopters, to give it a
formidable capability against tanks.
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5. Air defense is also. receiving attention. An air
defense division is reportedly to be formed in the
south and will probably be equipped with surface-
25X1 to-air missiles. Last: February, Army Commander
General Mercado ordered a suitability study of the
Soviet SA-6/GAINFUL and SA-7/GRAIL systems.
Both arc effective air defense weapons, highly
mobile, and primarily intended for battlefield use.
Peru also continues to negotiate for added attack
and bomber aircraft. These would, in the first in-
stance, improve Peru's offensive capability, but
they would also free its Mirage 5 aircraft for the
air defense role.
6. The government is currently spending some
$1.5 million-with another $4 million scheduled
over the next two years-to improve port facilities
at Matrari, near La Joya. The improvements in-
clude roads and railways, and construction of un.-
derground storage tanks and warehouses that could
be used for military purposes.
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7. In contrast to the measured pace and the long
term nature of military improvements in southern
Peru,
Chile underscores I I sense of urgency in
shoring up its northern defenses with all available
resources. Military barracks are being constructed
in the north. This supports earlier reporting that
northern troop units are being reinforced with per-
sonnel and units from the south to bring them up
to their authorized strength of approximately 10,000
men. Also in evidence are new defensive positions
and support areas south of the Camerones River,
In addition,
work has accelerated on a new air force base near
Iquique, from which Hawker Hunter and Vam-
pire aircraft have recently operated, and two other
airfields are being improved.
8. Chilean military leaders are particularly sensi-
tive to the threat posed by Peru's Soviet tanks, and
construction of antitank barriers, trenching, and
deepening of river banks has been accomplished
north of Arica close to the border. This represents
II Chile evidently wishes the Peruvians to see
these defensive preparations as a forceful example
of its determination to defend Chilean territory and
as evidence of the futility of war. While Chilean
leaders recognize that their northern forces remain
poorly equipped and would be incapable of repel-
ling a large-scale Peruvian attack, they doubtless
see the need of strongly conveying their resolve to
defend Arica.
9. Chilean defensive strategy also continues to
include plans for a pre-emptive strike, but only if
Chile were to obtain what they consider solid evi-
dence of an imminent Peruvian attack. With such a
strike in mind, recent Chilean planning has identi-
fied a variety of specialized units to seize Peruvian
territory and hold it for bargaining purposes. Exor-
cises related to this scenario have been held in re-
cent months, including a large amphibious maneu-
ver with tactical air support. Some generals have re-
cently cautioned against a pre-emptive strike, how-
ever, describing such a strategy as suicidal.
10. Chile is continuing a vigorous search for
arms, but is experiencing difficulties in acquiring
them. It has reportedly negotiated the purchase of
armored personnel carriers equipped with antitank
weapons from Israel and has concluded a $3.1 mil-
lion cash purchase in France of antitank missiles
and rockets designed for use by aircraft. Chile has
also arranged for some arms from the US, but its
poor international image has led to refusals from
other potential suppliers. Such traditional suppliers
as the UK and West Germany have declined to ap-
prove additional sales, even of spare parts for equip-
lnent previously supplied, and France has retained
its credit restrictions on sales to Chile. Chief of the
National Defense Staff General Brady recently
visited European countries and the USSR in an ef-
fort to obtain weapons, with results that are not yet
clear.
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11. In the face of their continuing difficulties in
utilizing government-to-government channels, Chil-
ean officials are seek ng arms from commercial deal-
ers. Their sense of urgency has led them to agree to
deal for cash rather than on credit, and even to con-
sider deals at greatly inflated prices.
Other Recent Developments
12. There is evidence of an intensification of Peru-
vian doubts about Peru's ability to engage success-
fully in a war with Chile. President I
was repor e to navel
decided to seek an easing o tensions be-
tween the two countries. An "embrace of friend-
ship" in mid-November by Peruvian and Chilean
commanders of border garrisons, representing the
first joint commemoration of the 1929 treaty estab-
lishing the Peru-Chile border, was one consequence
of Velasco's decision; another was the meeting be-
tween the Peruvian and Chilean Army Chiefs of
Staff in early November.
13. Peruvian uncertainties have been fed by still
further developments.
alleged
large-scale arms shipments between the US to Chile
and Bolivia. This misinformation probably origi-
nated Peruvian military lead-
ers apparently place credence in the reports, and
this has contributed to their already exaggerated
sense of Chilean capabilities. At the meeting be-
tween the army chiefs of staff, the Chileans warned
Peruvian General Morales Bermudez that Chile
would fight, if necessary, to the last man and would
never acquiesce in outside efforts to bring a war to
a quick conclusion. President Valasco's sense of iso-
lation and his perception of a regional threat have
also apparently increased in recent months. He has
expressed strong distrust of Brazil, which he be-
lieves will support Chile in the event of conflict. He
also appears more uncertain of Bolivia's position in
case of conflict.
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14. Some recent statements by various Peruvia25X1
officers, however, have a different thrust. General
Mercado, who is to retire in January 1975,0
logically for an offensive against Chile.
two Peruvian Army colones5X1
stated that the Peruvian Arme25X1
Forces are preparing for a war with Chile, and
other officers are reported to have expressed the
belief that war with Chile is inevitable. The context
of these statements is not entirely clear, but at a
minimum, the talk is of the kind that creates a
psychological predisposition in favor of war.
15. The current political and military unrest in
Peru represents the most serious crisis that the mili-
tary government has faced since the 1968 coup, a
it could have an impact on the potential for con`-'
flict. In recent months, Velasco has been faced with
growing dissension
Important elements o the Navy have e 5X1
disaffected since the forced retirement in May of
Navy Minister Vice Admiral Luis Vargas Caballero.
Recent forced retirements of senior Navy office
designed by Velasco to pave the way for the desi
nation of a more pliable Navy Minister, have added
to the disaffection.
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Navy, and an aborted revolt on December 6 illus-
trates the high level of unrest in that service. Fur-
ther, there was a near confrontation between mili-
tary moderates and radicals in late October over
the apparent intention of President Velasco to pre-
vent the scheduled accession in early 1975 of Gen-
eral Morales Bermudez, the leading moderate, to
the posts of Prime Minister and Minister of War.
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16. Velasco recently reiterated that Morales Ber-
mudez would succeed as scheduled, and this deci-
sion not to force a confrontation within the Army
by tampering with seniority has assured the support
of the Army, at least for the time being. The Army
is the dominant service and no coup attempt would
have much chance of success without its participa-
tion. Tension and uncertainty will continue, how-
ever, because of major changes soon to occur in the
military and government hierarchies as a result of
scheduled retirements and reassignments. Further-
more, Velasco will almost certainly continue ma-
neuvers designed to insure that what he considers
important in the Peruvian revolution survives his
eventual departure.
17. For present purposes, disunity within the
military cuts two ways. On the one hand, if it were
to become a serious threat to his position, President
Velasco might see an attack on Chile as a means
of uniting the military behind himself. Dissension
could then be equated with a lack of patriotism.
Although neither has yet done so, radical or mod-
erate :factions might seek to exploit revanchist sen-
timent if they thought it would strengthen their
positions. On the other hand, dissension within the
military as well as widespread civilian disaffection
seems to be generating a crisis of confidence within
the military power structure over its ability to gov-
ern. The advocacy of war could itself produce fur-
ther disunity and threaten the future of the revolu
tion, whose preservation remains the highest pri-
ority of Velasco, the junta, and most senior officers.
Under these circumstances, President Velasco or
others would probably hesitate to attack a neighbor-
ing country, particularly if a quick victory were not
certain.
18. The high priority that Velasco and the Peru-
vian regime assign to social-economic development,
coupled with the growing economic and political
problems which the government faces, continue to
serve as constraints.
19. With regard to Chile, officials in that country
remain convinced that the Soviets and Cubans are
attempting to encourage a Peruvian move against
Chile as a means of avenging the overthrow of
Marxist President Allende. Chilean leader claim
that "international communism" is spending more
than $100 million a month in an anti-Chilean cam-
paign. In the November meeting between the
Chilean and Peruvian army chiefs of staff, the
former, in obvious reference to the Soviets, warned
his counterpart against becoming inveigled into war
by a "third party". Views such as these heighten
the Chilean perception of the Peruvian threat as
well as Chilean sensitivity to any signs of Soviet or
Cuban activity in Peru. This, in turn, increases the
potential for Chilean overreaction and for miscal-
culation.
20. Chile has been engaged in a political and
psychological campaign in an effort to defuse ten-
sions. The campaign has included an increased num-
ber of contracts with Peruvian military leaders to
convince them of the futility of war. The Chileans
have assigned their former Military Attache to Peru
as the new Commander of the 6th Division at
Iquique. Because of his personal knowledge of Peru
and Peruvians, he will probably provide more real-
istic assessments of Peruvian capabilities and inten-
tions. His assignment should also lessen the chances
of overreaction. to unconfirmed .reports of Peruvian
military activity in the border region.
The Potential for Conflict
21. In our view, nothing that has occurred since
the publication of the earlier memorandum changes
its conclusion that the Chileans do not intend to
initiate hostilities against Peru, except as a desper-
ate act of pre-emption in the conviction that Peru
was about to attack. Quite clearly, recent Chilean
actions have been aimed at defusing tensions and at
establishing a defensive posture designed to deter
Peru.
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22. The situation with respect to the deliberate
initiation of warfare by Peru is more complicated.
Peru now eninvs milithrv cnr,Ar;nr;+,> ri ;l
And the Peruvians are continuing the construction
of military facilities, the strengthening of their mili-
tary forces, and the purchase of advanced military
hardware abroad.
23. Such considerations have led some analysts
to conclude that Peru must be planning an act of
aggression against Chile. The reasoning is that the
Peruvians have long wanted to redeem their honor
by avenging Peru's defeat in the War of the Pacific,
that they wish to do so by 1979 (the 100th anni-
versary of the outbreak of that war), that they now
have the military capability to seize and hold
Chilean territory, and that they would not have em-
barked on their programs of arms purchases, or
currently be pursuing it so vigorously, unless they
intended to use the arms in an actual conflict.
This argument tends to dismiss Peruvian claims that
Peru's build-up is for defensive purposes, on the
grounds that Chile constitutes no military threat
to Peru, and does not in any event contemplate an
attack on Peru.
24. The difficulty with this reasoning is that it
rests on a perception which the Peruvians almost
certainly do not share. As noted earlier, the Peru-
vians apparently believe the reports that Chile has
recently received large shipments of arms. Some
Peruvians believe that Chile covets and wishes to
seize Peru's copper deposits in the south much as
Chile seized Peru's nitrate deposits during the War
of the Pacific. More broadly, what the Chileans
view-and what objective observers might view-
as military superiority, is almost certainly viewed
by the Peruvians as no more than the rectification
of a previous military imbalance, particularly in the
border region, where the Peruvians have not in the
past maintained much of a military presence. Such
a difference in perception, implausible as it may
seem, is not without precedent, and it is reinforced
in this case by Peru's deep fear of Chile and its his-
torical sense of inferiority. Fear of Chilean aggres-
sion is also nourished by Peru's feeling of beleaguer-
ment as the most leftist government in Latin Amer-
ica, surrounded by conservative regimes or tradi-
tional antagonists.
25. Thus, although the pace and scope of the
Peruvian arms build-up have become a source of
greater unease, we continue to believe that the
chances of a calculated attack on Chile over the
next year or so remain low. The reasons given in
the original memorandum continue operative:
doubt about Peru's ability to achieve a quick and
clear-cut victory; a sense of regional isolation and
a regional threat to Peru, focused principally on
Brazil; and the high priority assigned to socio-
economic development, which would be placed at
risk by a conflict. We consider that the growing
dissent and disunity in Lima will more likely deter
a foreign adventure than induce the Peruvian
leaders to engage in one.
26. This section has so far considered the possi-
bility that Chile would initiate hostilities or that
Peru is planning a calculated act of aggression
against Chile to avenge its defeat in the War of the
Pacific. There remains the possibility that war will
arise not as a result of rational calculation by the
two parties, but out of growing tensions generated
by the continuing arms build-up, and by old antago-
nisms and mutual fears. The result could be border
incidents which escalate or miscalculations which
draw the countries into war.
27. Broadly speaking, each country's sense of the
threat from the other appears to have increased
since last July and with it, the potential for misper-
ception, miscalculation, and overreaction. It is an-
other thing, however, to estimate the chances of an
outcome which rests on particular events whose
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occurrence is essentially unpredictable. Moreover,
as described earlier, steps are being taken on both
sides of the border to guard against miscalculation
and misperception. Even if tensions were tempo-
rarily raised to the boiling point, a decision by one
party to strike against the other would require time,
and the factors which militate against calculated
war would still be largely operative. There would be
at least some important voices against war on both
sides. The process of consultation among key offi-
cers to gain the necessary consensus for war would
under most circumstances lend some time for out-
side calls for calm to be heard.
28. Still, there appears to be, on both sides, a cer-
tain sense of the inevitability of conflict apart from
any conscious decision to undertake one. Tensions
between Peru and Chile are high and on the whole
increasing, and they are of the kind that generate
emotionalism and emotional responses. Velasco's
growing irascibility and unpredictability continue
to worry the Chileans and increase the likelihood
of overreaction. by both countries. Recent intelli-
gence reporting has conveyed a somewhat sharper
sense than before of the possibility that the continu-
ing arms build-up will stimulate and be stimulated
by old antagonisms and mutual fears and produce
results which neither party contemplates or desires.
29. Taking these considerations into account, all
participants in this memorandum agree that:
a. It continues to be unlikely that there will
be a conflict between Peru and Chile over the
next year or so as a result of accident or miscal-
culation.
b. Nevertheless, the chances of such a conflict
have risen somewhat since last July.
c. Moreover, the chances are sufficiently high,
given the serious consequences of such a conflict,
to warrant close and continuing monitoring of
future developments.
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