Foreign Relations of the United States, 1969–1976, Volume E–11, Part 2, Documents on South America, 1973–1976

321. Memorandum From the Assistant Secretary of State for Inter-American Affairs (Shlaudeman) to Secretary of State Kissinger¹

Washington, July 21, 1976.

Chile-Peru and the Congress

You have asked that we examine what might be done to focus constructive attention in the Congress on the dangers to regional stability inherent in Soviet military sales to Peru and the growing imbalance of military forces between Peru and Chile. An effective Congressional strategy will require us to address the complex interaction between Chile and Peru and our own policies.

Our Problem

For more than two years, we have argued extensively in the Congress that cutting Chile off from military assistance and supplies would increase regional tensions in light of the Peruvian arms buildup and the ancient enmities between the two countries. That argument has had no discernible impact. Key members, including notably Fascell and Humphrey, think our case is a smokescreen designed to permit us to continue bolstering Pinochet’s repressive regime.

The growing military imbalance and the potential increased Soviet role are such as to now offer some prospects of persuading responsible members that our warnings are not simply deceptions. But the voting in both houses on the recent Security Assistance legislation demonstrates that our chances for obtaining a modification in the Chile ban remain virtually nil under prevailing circumstances. To turn the Congress around on Chile we would need:

—dramatic progress on human rights in Chile, or

—much clearer evidence than we have of Peruvian planning for a war of aggression, plus

—an unmistakable record of vigorous US efforts to persuade or coerce Peru into shutting down its military buildup.

What we could automatically expect from Congress at this point would be demands to cut off military and economic assistance to Peru. Any such public outcry now would limit our options, strengthen the Soviet hand, and risk reversing a trend in the Peruvian domestic political situation that is clearly favorable to other US interests, and which may also inhibit Peru’s willingness to obtain Soviet weapons.

Our practical options in this situation, therefore, center on a Congressional strategy carried out in conjunction with measures to influence both Chile and Peru.

Peru and the SU–22

The immediate key is what the Peruvian Government does about the Soviet offer of 30-odd SU–22 fighter-bombers. A purchase of this magnitude would almost certainly convince the Chileans of Peru’s aggressive intentions, and would probably set off major political repercussions throughout South America, possibly leading to a genuine arms race.

The moderates now in control in Peru are likely to look more closely at these implications than their immediate predecessors. They are also increasingly aware that Peru’s desperate financial condition greatly increases the economic risks entailed. Hence, presumably, their reported desire to improve relations with the United States and with their neighbors.

But the incentives remain.

—The terms of the Soviet offer are apparently financially attractive.

—The latest turn in Peruvian politics does not necessarily mean that Morales Bermúdez is now in a secure position. Buying off the generals with new arms and the populace with a “patriotic cause” may still be a tempting tactic.

—Most motives for the buildup, in particular Peru’s fear that Chile might comply with its apparent commitment to act unilaterally on Bolivia’s access to the sea, are probably unchanged.

In light of these considerations, a Peruvian decision to back off from SU–22 would be a decisive signal in our judgment. It would not affect the underlying tensions, but would materially reduce the likelihood of a major crisis.

The Chilean Perspective

Following your meeting with Pinochet on June 8, Foreign Minister Carvajal gave Bill Rogers a paper urging that we “act vigorously before the US Congress” to avoid a prohibition on arms to Chile in order “to reestablish the historical balance of power between Chile and Peru.”

No actions realistically available to us or to the Chileans over the next few years can restore that balance. But no balance can be achieved if either Peru or Chile becomes so isolated that their endemic paranoia leads them to undertake extreme measures. The current sense of isolation in both countries is already high.

From a Chilean standpoint, the restrictions on military transactions with us are an incomprehensible—and dangerous—betrayal. The supply of spares and defensive arms to counter the Peruvian buildup is thus essential to Chilean stability and the regional balance. And we can realistically aim at modifying the Chile ban in the FY ’78 security legislation to permit furnishing spare parts for US-origin equipment and perhaps strictly defensive anti-tank and anti-aircraft weaponry. Humphrey has indicated that he would reconsider the absolute ban next year—but not before—if Chile were to show credible improvement on the human rights front.

The Multilateral Dimension

Though vital, arms for Chile will not alone ensure regional stability. Chile’s drive for security had led it to seek alliances with its neighbors, and specifically to attempt to engage Bolivia’s desire for an outlet to the sea in a way that would isolate Peru. And Peru is determined to prevent Chile from unilaterally turning formerly Peruvian territory over to Bolivia.

In this multi-cornered game, Peru’s potential purchase of Soviet fighter-bombers is the single most immediately destabilizing element.

Our Objectives

In dealing with Peru, we should seek:

—to turn off the SU–22 sale, and

—to persuade the Peruvians that a continuation of their buildup will call into question their credit worthiness and thus shut off their access to international financing.

In dealing with Chile, we should seek to make clear to Pinochet that any significant restoration of Chile’s access to military supplies from the U.S. will require:

—perceived progress on human rights, and

—an educational effort to ensure its accurate portrayal to Congress.

Multilaterally, we should seek to focus regional and overall Latin American attention on the need for a renewed effort toward arms limitations.

Finally, in dealing with Congress, we should seek informal consultations so linked to our policy options that they convey our active concern without precipitating destructive reactions.

Our Options

The most obvious course of action is immediate bilateral pressure on Peru. This would involve informing Peru that we would find further Soviet purchases unacceptable and that without assurances, including cancellation if necessary of any SU–22 deal, we would oppose any further public or private U.S. assistance or credits to Peru. Such a course would naturally be coupled with an immediate and strong approach to Congress to lift the Chile ban as well as to inform it on Peru.

We believe, however, that such a course of action is unworkable and possibly self-defeating. Our relations with Peru and our ability to talk with and influence the Peruvians have been impaired by the dispute over Marcona. We are now probably too close to a settlement to use that as leverage to pressure the Peruvians on the SU–22. We could try of course, just as we could try to stall the U.S. bank loans Peru so desperately needs until we get some satisfaction.

The advanced state of both the Marcona and bank negotiations and the history of our relationship with the Peruvian military since 1968, however, strongly suggest that a better tack is to clear the decks of the Marcona dispute and work from there toward a frank dialogue on the arms question. Peru’s economic crisis is so severe, and the commercial banks are so concerned, that we will have ample opportunity to use economic pressure almost immediately again in any case.

A second line of approach would be to attempt to develop multilateral pressure on Peru and its neighbors. This would involve using a variety of instruments (OAS, Inter-American Development Bank, Andean Pact, etc.) and arguments (Soviet penetration, dangers of regional conflict, wastefulness of resource diversion to military ends, etc.) to activate regional concern over arms purchases, and thereby deter Peru from continuing its military build-up. This approach could possibly also entail a more active U.S. role in seeking a generally acceptable solution to the issue of Bolivia’s outlet to the sea.

Though elements of such an approach could be useful, we believe it is too long-term and uncertain to constitute a realistic option.

Against this background, we believe the most effective course of action is to be sought in a combination of phased bilateral pressure on Peru and selective multilateral and Congressional consultations. We are therefore developing for your consideration a series of options on how to:

—approach Peru directly on the volume and sources of its arms purchases;

—undertake initial consultations with Venezuela, Colombia and Brazil on the Peruvian buildup and the prospects for more definitive regional and inter-American action on arms control; and subsequently

—open in coordination with DOD a series of congressional consultations on the Chile ban, beginning with selected members of the more conservative armed forces committees.

The immediacy of Peru’s possible SU–22 purchase, however, requires us to make a decision now on whether and how to approach the Peruvians. In particular, we need your guidance on the relationship of any approach on the SU–22 to the Marcona negotiations.

We have two basic options:

OPTION ONE: To approach Peru directly before a Marcona settlement, without conditioning the settlement itself on Peru’s not obtaining the SU–22, but making clear that future relations would be severely impaired should the purchase be made.

Pro

—would convey our concern in time to affect any impending GOP decision;

—would not depend on the still uncertain Marcona time table.

Con

—might stimulate the GOP to make or reaffirm an SU–22 purchase out of nationalistic orneriness and prevent consolidation of moderate tendencies in GOP;

—might delay or prevent a Marcona settlement without for the time being preventing new U.S. private credits.

OPTION TWO: To approach the Peruvians soon after the Marcona settlement.

Pro

—does not foreclose our options on whether to approach Peru directly on the SU–22 or on arms issue in general;

—would not endanger the Marcona settlement;

—would enable us to plan our démarche in a context of greater mutual confidence.

Con

—might be too late to prevent a SU–22 purchase.

Under both options, the nature of our presentations in the Congress would be heavily influenced by the Peruvian response to the initial démarche.

Recommendations:

That you authorize us to prepare a démarche for delivery in Lima following settlement of the Marcona dispute (Option Two)

ALTERNATIVELY, that we prepare a démarche on the SU–22 purchase for immediate delivery to the GOP (Option One)

1. Summary: Shlaudeman outlined two different policy options regarding prospective Peruvian purchases of Soviet aircraft. Kissinger decided to wait for an agreement on Marcona before delivering a démarche to the Peruvians on Soviet arms purchases.

   Source: National Archives, RG 59, Central Foreign Policy File, P760120–0606. Secret. Sent through Maw. Drafted by Shlaudeman, King, and Einaudi on July 22. Pezzullo concurred. Kissinger approved the first recommendation on July 30. On August 2, Kissinger summarized the memorandum for the President. (Ibid., P760125–0785) Kissinger’s June 8 conversation with Pinochet is Document 228.