PERU: THE GARCIA ADMINISTRATION AND PROSPECTS FOR COMMUNIST INROADS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90T01298R000100090001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 21
• Document Creation Date: December 27, 2016
• Document Release Date: April 10, 2012
• Sequence Number: 1
• Publication Date: July 11, 1985
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2012/04/10 : CIA-RDP90T01298R000100090001-4 25X1
. , .' .. Carntrall W ft= ABrncy
IAML
. ..- ,.. - ?? .~ ...- - r.L .~ wry, .~r_-_s
Peru: The rcia Administration and
Prospects for Communist Inroads
DIRECTORATE OF INTELLIGENCE
11 July 1985
Summary
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. The leftwing social democrat can count on widespread
popular support in the early going, but the severity of the
country's economic difficulties, increasingly lethal leftist
terrorism, and a rapidly expanding illicit narcotics 'industry
are formidable challenges. Garcia's slowness in elaborating
concrete programs to deal with these problems 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 opposition will come from the Marxist-Leninist
dominated United Left coalition and from a Communist-controlled
labor confederation whose membership comprises some 40 percent
of organized workers. We judge that moderate center-right
opposition parties, tarred by President Belaunde'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 overcome the officer
corps' longstanding antipathy toward APRA. Garcia's reported
This typescript was requested by the National Security Council, and
prepared b of the Office of African and Latin American
Analysis with contributions from ether analysts in that office as well as
from the Office of Central Reference, the Office of Global Issues, and the
Office of Soviet Analysis. It responds to specific questions posed in the
NOT MICROFILM
00 c a- -L~
For Data Entry
n
ALA-M-85-10075
21
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 C F r R F T
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4 25X1
I I
request for additional Soviet military equipment--as well as
economic aid--probably also has helped bolster his support in
the armed forces .
The USSR has long looked to Peru as its major toehold in
South America, but during Belaunde's pro-US administration it
was forced to mark time. Soviet officials began courting
Garcia early in the election campaign. Moscow doubtless has
been encouraged by Garcia's post-election overtures and, in our
judgment, will respond by offering attractive prices on
military hardware and by demonstrating continued flexibility in
negotiating repayment of Peru's nearly $2 billion debt to the
USSR. 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 Communist
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 come to power in Peru.
Toward 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 Movement-Tupac
Amaru. We believe that it is highly unlikely that a pro-Soviet
group will take power over the next five years. If Garcia
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 three weeks
2
S E C R E T
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 S E C R E T
Declassified in Part -Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4 25X1
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.
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
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 plannina and control mpagimpg-
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 advisors 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
S E C R E T
25X1
LORI
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4 25X1
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 Emba elieves will assume increasingly
important positions.
S_~
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.
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 cooperation from commercial lenders.
Peru's foreign debt is on the order of $14 billion, with $2 billion in
repayments due this,year. He has signalled 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
must not further impoverish Peruvians.
IHe 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 y to help restrain
excessive demands from labor.
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 negotiate directl
S E C R E T
25X1
25X1
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 25X1
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
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 b t -- he current
financial impasse with creditors however, we
see some danger that his adjustment,; will he 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
problems for the new government.
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
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 penalities for use and trafficking, as
well as provisi n for itation centers and education
programs.
S E C R E T
25X1
25X1
9 X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4 25X1
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
drug abuse.
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
strengthening their influence in Lima.
Garcia's public statements suggest he clearly intends to promote an
activist foreign policy. Over time, the realities of international and
regional politics, as well as pressing domestic conerns presumably will
force him to scale back his ambitions and establish more carefully defined
priorities. Nonetheless, at this point his objectives
-- seeking the chairmanship of the Non-Aligned 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 C.j to the ambassadorial level;
-- expanding relations with tn_ Soviet bloc in economic, social
technological, and educatior.il fields.
S E C R E T
25X1
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 SECRET
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4 25X1
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 (SELA), 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
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
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 perspectives and overly
concerned with events in Central America while ignoring South America.
Garcia asked the Soviet
Ambassador this spring tor economic assistance if Lima proves unable to
reach an agreement with the IMF. He also requested increased military aid
and sharing of strategic intelligence information on the Andean and
Southern Cone regions. In our view, this is consistent with his desire to
foster Peru's nonaligned image. At the same time, the president-elect
probably hoped to solidify his position with the military by demonstrating
from the outset an interest in the equipment needs of the armed forces.
This early overture to the Soviets, however, raises the possibility that
Garcia may look increasingly to Moscow for help if he fails to elicit what
he considers a aenerous response from Western governments and creditors.
25X1
2~DAI
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4 25X1
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 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. We assume that the Soviets have used these
military programs to make inroads among the Peruvian military over the past
12 years, although 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, although the US Defense Attache in
June reported the names of several Peruvian officers reputed to be Soviet
agents. Soviet advisers in Peru have no apparent influence outside their
areas of military expertise. The obvious diplomatic and political impact
of Soviet military aid has been relatively small over the past few years;
Peru has taken few pro-Soviet positions in the international arena.
That may be changing, under the leadership of a friendlier
administration.
In the economic 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 increase in the years ahead as agreements similar
to the one covering 1983 to 1985 are made.
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 some Peruvian goods under a trilateral arrangement among Lima,
S E C R E T
25X1
L~.)A I
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4 25X1
Foreign Communist 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
existing relations with these nations.
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
remained fairly constant for the last several years. Of these, 152 are
military advisors--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 offirprs. cluding 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, Komsomolskaya 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 AP RA 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 (CGTP), 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.
The Peruvian Army and Air Force have purchased the bulk of their
equipment from the Soviet Union since 1973, and the military continues to
receive Soviet assistance to maintain the operational readiness of its
major ground forces weapons systems, fighter bombers, air defense artillery
S E C R E T
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
SUBJECT: Peru: The Garcia Administration and Prospects for
Communist Inroads
Distribution:
Original - NSC
1 - Executive Director
1 - SA/DCI/IA
1 - NI0/LA
1 - NI0/NARC
1 - NIC/AG
1 - PDB Staff
1 - C/DDI/PES
1 - DDI/CPAS/ISS
1 - D/ALA
2 - ALA/PS
1 - ALA Research Director
4 - CPAS/IMC/CB
2 - ALA/SAD
3 - ALA/SAD/SW
ALA/SAD/SW~ (11 July 1985)
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4 25X1
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 our judgment, the Soviet Union, Cuba, and Nicaragua share three
common goals for their policy toward Peru:
fishing boats, and chemical and fish processing plants.
mil on in Peruvian goods ree o charge as an arrangement allowing Peru
repay its debt to the USSR. The goods will include electric generators,
I Nicaragua may receive $300
-- To increase their influence within Peru as well as over Peruvian
foreign policy.
-- To erode US influence within Latin America.
the goals listed above.
-- 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
Communist Strategies
The Soviet Approach
25X1
25X1
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 from this approach by increasing assistance
to the United Left (IU) parties or even by offering support to the
Revolutionary Movement-Tupac Amaru or--far less likely--Sendero Luminoso.
Moscow probably reasons that these tactics hold out little promise in the
ea ling with Garcia, who already has expressed interest in increased Soviet
S E C R E T
From Moscow's perspective,
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4 25X1
near term, however, in view of Garcia's strong electoral mandate and the
disarray in the IU. 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 u ans 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 economic aid but offer services or
advisers, and to maintain ements that assure a
large Soviet presence.
-- Implement the new Soviet-Peruvian cultural accord signed last May
and promote scholarship or other long term training of Peruvians in
the USSR.
-- Encourage the upgrading of diplomatic relations between Cuba and
Peru in order to increase Castro's prestige in Latin America, build
momentum for other Latin American states to recognize Cuba. and
permit an increased Cuban presence in Peru.
-- 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.
-- Watch for conflict between -he United States and Peru and where
possible exploit these diff=ring views by publicly agreeing with or
favorably portraying the P- vian position.
S E C R E T
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 c r r R P T
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4 25X1
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
Castro's refusal to allow some 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, an APRA deputy who met with Castro recently 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 netting off on the right foot with the APRA
government.
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
Socialist Party and the Mariateguist Unified Party. Castro has
particularly courted IU President Alfonso Barrantes--smoothing ruffled
feathers resulting from Cuban contacts with Barrantes' rivals within the
S E C R E T
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4 25X1
Castro, however, apparently has not abandoned his goal of eventually
assisting a Marxist government to come to power in Peru, either through the
electoral route or, preferably, by promoting armed revolution.
Cuban leaders are likely to be alert to any opening. Havana may also find
cooperation with the Revolutionary Movement-Tupac Amaru attractive.
Although we have no evidence to indicate that Cuba presently is pursuing
this option, the group--some of whose leaders the government has charged
received Cuban training 960s--almost certainly would welcome such
support.
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 expression of interest in joining Contadora, and
recent Embassy reporting suggests that Nicaragua would strongly support his
participation in the negotiation process. Managua probably will also name
an aggressive ambassador to Lima and promote propaganda campaigns using
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-Tupac Amaru, and the Sandinistas might pursue this
option more vigorously if relations with Garcia deteriorate.
Possibility of a Pro-Soviet Group Taking Power
In our view, the most likely way a pro-Soviet group could take power
would be through an electoral triumph in 1990. 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
S E C R E T
Despite SL's apparent lack of receptivity to Cuban advances,
9F,)(1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4 25X1
and social problems, the IU will be well positioned to exploit Garcia's
drop in popularity and emerge 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 power 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.
A second, 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 acv APQ candidate probably would stand little chance at
A third 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 ro-Soviet leftist
officers would not be in command.
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
S E C R E T
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4 25X1
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
become 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
power 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 steo up their efforts in this area once Garcia
comes to power.
Finally, neither guerrilla movement--especially the Revolutionary
Movement-Tupac Amaru (MRTA) which is the most likely to embrace Cuba and
the USSR--appears likely to take power 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 MRTA probably would have an
advantage in competing 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
support to Peruvian guerrillas.
S E C R E T
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 25X1
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
Alan Garcia Perez
Alan Garcia, a masterful politician who heads the center-left American
Popular Revolutionary Alliance (APRA), will take office as President on 28
July. Only 36, he will be the world's youngest democratically elected
chief of state. His accession will mark the first constitutional
transition from one civilian government to another in Peru in 40 years and
the first time that APRA--Peru's oldest and largest party--has governed the
country.
President of All Peruvians
US diplomats attribute Garcia's success to his personal appeal and the
deep-rooted strength of APRA. In just three years, Garcia has made APRA
the nation's leading political force. He took advantage of widespread
dissatisfaction with the government of Fernando Belaunde Terry and
assiduously courted all sectors of Peruvian society. He drew votes from
the powerful Marxist-led labor unions and established contacts with the
military to the point where Gen. Julian Julia, Belaunde's Minister of War,
has publicly proclaimed that the military will support the Garcia
government.
The possessor of considerable political talent, Garcia exudes
affability and confidence and is a gifted extemporaneous orator whose
ability to seem responsive to the expectations of different audiences
appears to have helped him capture the middle ground of the political
spectrum. During the campaign, he successfully dealt in generalities and
avoided debates with his opponents. He portrayed himself as a man of the
people--even spending several nights in the slums--and his party as the
only group capable of extricating Peru from its severe economic and
security problems (he calls himself President of all Peruvians). He also
traveled abroad frequently, in part to create an image of a statesman.
Garcia received only a plurality (48 percent) of the votes in the April
1985 election. After his nearest rival, who garnered only 21.2 percent,
withdrew from the constitutionally mandated second round, Garcia was
declared President-elect by the National Election Board and was thereby
spared a runoff. APRA won a majority of the seats in both houses of the
legislature.
Alan the Autocrat
Garcia has been partly successful in erasing his earlier image as a
brash, irresponsible, and radical gadfly and projecting himself as a
moderate, mature leader. US Embassy officers have described him as the
brightest, most attractive, and most articulate of APRA's under-40
generation. Yet, despite his efforts to give the impression of good
16
S E C R E T
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4 25X1
judgment and maturity, negative aspects of his personality remain. US
diplomats report that he has a sizable ego and that he is accustomed to
being courted by those around him. He seems to consider himself well
informed about Peru's problems and uniquely able to solve them. He is
loath to admit that he and his colleagues lack experience in governing. To
augment the party's meager technocratic expertise, Garcia is seeking the
collaboration of political independents, technocrats, and diplomats.
Garcia appears to be sensitive to perceived slights and quick to seek
revenge. He is said to be an imperious leader who likes to appear open in
dealings with party officials but who actually retains tight control over
policy decisions. In our judgment, he will retain that same strong hand
over affairs of state. Since the election, Garcia has been traveling a
great deal, partly, say US Embassy officials, to avoid unpleasant
confrontations with colleagues in Lima. He has not allowed his advisors to
act for him during his absences, so that decision-making comes to a
temporary halt.
Beyond the Rhetoric
The vagueness of APRA ideology--the party is linked to European social
democratic movements, but it retains a streak of Latin American
populism--will allow Garcia ample latitude for action on a variety of
issues. On the basis of press and Embassy reports, we expect him to pursue
pragmatic policies aimed at slowing the serious economic deterioration,
countering the terrorist threat, and controlling drug trafficking.
Garcia has not revealed a detailed economic program, but he has
publicly stated that he will restructure the economy to stimulate
agriculture and fishing and that he will regulate foreign investment and
protect industry to a greater extent than the Belaunde government has
done. He has frequently declared that his administration will benefit the
poor (75 percent of the population) more than the wealthy, and he has
called on the rich voluntarily to sacrifice some personal gain for the
benefit of the country as a whole. We do not anticipate, however, that he
will undertake large-scale nationalizations or forced reallocation of
wealth. In fact, Garcia strongly opposes statism and appears to be
seriously committed to reduce the size of the bureaucracy and decentralize
government functions. Furthermore, he has publicly promised to initiate an
anticorruption campaign within the government.
Deeply concerned by the threat of Sendero Luminoso terrorists, Garcia
has stated that he intends to trans~er responsiblity for counterterrorist
operations from the police to the !-my and that he will attack the root
causes of terrorism by promoting e.-~lopment projects in the emergency zone
where the terrorists operate. Suc^ i development program may be hindered,
however, by a,shortage of funds.
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
PRIVATE SECTOR
National Society of Industries largest
(SNI) business
group
CHURCH
Peruvian Catholic Church
MILITARY
Armed Forces of Peru
Areas of
Strength
Origins
sub-group of
Confederation
of Private
Enterprise
Institutes
(CONFIEP)
Philosophy
Leaders and Factions
Foreign Ties
predominant
religion
moderate
hierarchy, but
lower clergy has
advocates of
liberation
Juan Cardinal
Landazuri-Rickets
Archbishop of Lima
Army-75,000
Navy-18,500
armor,
surface and
theology
anti-communist;
Arm
h
h
d
Gustavo Gutierrez-
leading radical priest
Minister of War
dependent on Soviet
Air Force-
submarine
y
as
a
Lt. Gen Julian Julia
Union for much of
40,000
fleet,
fighter
aircraft and
periods of
reformist
sentiment, Navy
conser
ti
Freyre
n arst army and air
equipment and
training, but seeking
air defense
missiles
va
ve
to diversify sources
Comment/Outlook
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.
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4
I I
PERUVIAN POLITICAL ENVIRONMENT
Areas of
Size Strength Origins
American Popular Revolutionary Alliance largest party north coast, founded in
46% of vote urban areas, L924 on
In 1985 intellectuals narrow
white collar sectarian
base
United Left (IU) (includes Peruvian 215 of vote Lima; 1980
Popular Christian Party.(PPC)
in 1985; southern coalition of
strongest mountains; 6 leftist
opposition labor and groups
party urban poor
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 Bernales-
moderate socialist
10% of vote lima, upper 1967. split center-right, Luis Bedoya,
in 1985 class from Christian- presidential candidate
Christian Democratic
Democrats
6% of vote in Amazon Basin 1956. Formed center-right
1985 by Belaunde
to counter
APRA
small; won 4 Lima & 1983, center
congressional Lambeyeque splintered
seats Depts from APRA
Democratic Front for National Unity won no personalist center-right
congressional vehicle
seats; very formed for
small 1985 election
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
groups, pro-US
Fernando Belaunde- strnnl t$.% to US
President of Peru
Javier Alva Orlandini-
presidential candidate
Francisco Morales
Bermudez, former
military President of
Peru and presidential
candidate
General Confederation of Peruvian Workers 40% of banking, controlled by pro- Valentin Pacho
(CGTP) organized construction, Soviet Peruvian
labor or mining, Communist Party
Confederation of Peruvian Workers
(CTP)
350,000 teaching,
workers peasants
152 of textiles,
organized sugar, white
labor or collar,
130,000 utilities,
workers transport
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
b ORIT will hamper efforts to gain
ground on CGTP
ILLEGIB
Declassified in Part - Sanitized Copy Approved for Release 2012/04/10: CIA-RDP90TO1298R000100090001-4