Foreign Relations of the United States, 1977–1980 Volume XXIV, South America; Latin America Region

307. Letter from President Carter to Peruvian President Morales Bermudez¹

Washington, February 1, 1978

Dear Mr. President:

I would like to extend my best wishes and those of my nation to you and the people of Peru.

I know that the months ahead will be difficult economically for Peru. But your recent decisions to institute an austerity program—decisions which required courage and statesmanship—are an important step back toward economic health, and I am glad that the International Monetary Fund has supported them.² With your country adhering to the terms of the IMF standby arrangement, and with a roll-over of the burdensome military debt to your major supplier seemingly likely, I share your hope³ that Peru’s economic situation will now begin to improve.

For our part, we have accelerated the extension of new economic assistance to Peru. Food aid under PL–480 Title I concessional terms will be enlarged by $15 million above the $5 million program now under negotiation with your government. This will be the first time that Peru has received such assistance in this decade. We have also just announced the extension of a $13 million credit from the Commodity Credit Corporation for food procurement, in addition to the $57 million credit lines of last September.

I was concerned to hear that some problems developed with Export-Import Bank financing to your country. I understand that the Bank’s Board of Directors just this week reconsidered its earlier decision and took favorable action concerning some of your banks.⁴ I hope this will help maintain the confidence of the international banking community in your country.

I was interested to note your speech⁵ on Peruvian Army Day, especially your reference to the need for the military to “become examples of austerity”—exemplified by your commitment not to buy new arms during the remainder of military rule in Peru. We believe such a standstill or even a cutback of outstanding military purchases is one of the best ways to restore balance-of-payments equilibrium without causing economic problems for the Peruvian people.

I would like to mention the problem of conflicting territorial aspirations in the Andes. As I said in my letter of October 31,⁶ I was encouraged by the actions that you, the President of Ecuador, and the Presidents of Chile and Bolivia took in September to advance discussions on the questions of Amazon access for Ecuador and Pacific access for Bolivia. Your letter of November 10 indicates that there has not been much progress since then.⁷ Peru is a major force in these matters, and perhaps another Peruvian initiative could advance the discussion.

You will recall my offer to help organize support in the international financing institutions for the economic development of the area linking Bolivia to the sea. I believe such a project would benefit the three states involved, Peru, Chile and Bolivia. Let me reiterate that offer here.

I was glad to learn of the peaceful reduction of tensions between your country and Ecuador in the past week. As discussions proceed, a more lasting and stable peace may become more likely. And, of course, increased regional economic cooperation could help both economically and politically. My Administration is now examining ways of contributing to regional economic cooperation in Peru and elsewhere. I would welcome your suggestions.

Finally, I extend my best wishes for the success of the electoral process which you are initiating this year, in preparation for the national elections in 1980 that will return your country to rule by elected representatives.⁸

Your cable on the death of Senator Humphrey was very much appreciated, and I forwarded a copy to Mrs. Humphrey.⁹

Rosalynn joins me in sending you and Mrs. Morales Bermudez our warmest personal regards.

Sincerely,

Jimmy Carter

1. Source: Carter Library, National Security Affairs, Brzezinski Material, President’s Correspondence with Foreign Leaders, Box 16, Peru: President Francisco Morales Bermudez Cerutti, 5/77-6/80. No classification marking.
2. In telegram 473 from Lima, January 17, the Embassy reported Saenz’s January 13 announcement of “new wage, price, and budgetary measures designed to stabilize economy,” and described the GOP’s effort to “steer a narrow course between labor demands and the targets of the IMF austerity program.” (National Archives, RG 59, Central Foreign Policy File, D780026-0848)
3. See footnote 7, Document 306.
4. In a February 1 memorandum to Carter, Brzezinski wrote: “Apparently the Export-Import Bank inadvertently cut off several lines of credit to Peru, just at the time of Peru’s greatest need. We recommended that the Bank reconsider its decision, and decided to await sending the letter to you until the decision was made so that you could inform Morales directly. Thankfully, the decision was favorable and it is reported in your letter.” (Carter Library, National Security Affairs, Brzezinski Material, President’s Correspondence with Foreign Leaders, Box 16, Peru: President Francisco Morales Bermudez Cerutti, 5/77-6/80)
5. Not found.
6. See Document 306.
7. In a February 1 memorandum to Carter (see footnote 4, above), Brzezinski wrote that in the November 10 letter, “with respect to the Bolivian corridor issue,” Morales Bermudez “said that Peru continues to await agreement between Bolivia and Chile. On Ecuador’s desire for access to the Amazon, he is evasive.” (Carter Library, National Security Affairs, Brzezinski Material, President’s Correspondence with Foreign Leaders, Box 16, Peru: President Francisco Morales Bermudez Cerutti, 5/77-6/80)
8. In a February 1 memorandum to Carter (see footnote 4, above), Brzezinski wrote: “Morales’ position is reported to be very uncertain at this time, and the letter might help.”
9. The January 18 cable is in the Carter Library, National Security Affairs, Brzezinski Material, President’s Correspondence with Foreign Leaders, Box 16, Peru: President Francisco Morales Bermudez Cerutti, 5/77-6/80. Humphrey died on January 13.