FORE VISIT: FOREIGN MINISTER DISCUSSES BILATERAL

C O N F I D E N T I A L LIMA 000114

SIPDIS

SIPDIS

E.O. 12958: DECL: 01/22/2018
TAGS: PGOV PREL PINR PE
SUBJECT: FORE VISIT: FOREIGN MINISTER DISCUSSES BILATERAL
RELATIONS, REGIONAL ISSUES

Classified By: CDA James Nealon For Reason 1.4 (B)


1. (C) Summary: In a January 11 meeting with Foreign
Minister Jose Garcia Belaunde, USAID Administrator and
Director of Foreign Assistance Henrietta Fore offered U.S.
assistance for PTPA implementation and thanked Peru for its
support in the UN Security Council. Belaunde lauded the
state of bilateral ties and emphasized the importance of
continued U.S. engagement as Peru sought to turn rapid growth
into broad-based development. Turning to the region,
Belaunde observed that Venezuela's wealth enabled it to
conduct an aggressive policy in support of anti-systemic
groups in various countries, and expressed concern about
Bolivia's deterioration and potential future splintering. He
saw Ecuador's President Correa as more focused on national
interest than ideology, which created room for Peru to work
with him. Belaunde believed it unlikely that Brazilian
President Lula would take a more active role opposing
Venezuela, and speculated that Chavez's attempt to undermine
Colombian President Uribe via hostage negotiations with the
FARC would fail. Belaunde said Panama was working hard to
modernize and deserved our support. End Summary.


2. (SBU) USAID Administrator and Director for US Foreign
Assistance Henrietta Fore met January 11 with Foreign
Minister Garcia Belaunde. MFA Director General for North
America Jorge Felix Rubio, Director General for Foreign
Assistance Augustin Haya de la Torre and U.S. Desk Officer
Carlos Briceno also participated. Fore was accompanied by
Charge James Nealon, WHA Andean Affairs Director Arnold
Chacon, and USAID-Peru Director Paul Weisenfeld. (Director
Fore's meetings with other cabinet ministers and regional
leaders in Ayacucho are addressed septel.)

Positive Ties; Continued Support Needed
--------------

3. (SBU) Director Fore opened the discussion by
congratulating Foreign Minister Garcia Belaunde on passage of
the free trade agreement (PTPA) and underscoring USG
readiness to cooperate with Peru on implementation. She also
thanked him for Peru's hard work on the UN National Security
Council, especially on North Korea and Iran issues, and
offered the USG's full support on APEC.


4. (C) Minister Garcia Belaunde was extremely pleased with
the state of bilateral relations, noting his satisfaction
that President Bush had received President Garcia as an equal
with whom he could exchange views on important international
issues, not as a supplicant with a shopping list of requests.
He said the GOP was grateful about the passage of the free
trade agreement and the confidence it instilled in Peru but
concerned that, with the trade agreement in hand and Peru
growing rapidly, the USG would cut back its cooperation.
Garcia Belaunde stressed that, despite the boom, large parts
of Peru remained in deep poverty and required continued help
from the central government, with support from international
donors. Belaunde thanked Fore for the $35.6 million MCC
threshold agreement but added that Peru hoped for a full
compact soon, emphasizing that the combination of the PTPA
and an MCC compact to assist with implementation and related
reform measures would create tremendous constructive
momentum. Pointing to the example of Nicaragua, in which MCC
delays resulted in the funds going to the Ortega government,
he said that timing was key.

Regional Tour d"Horizon
--------------

5. (C) Asked by Director Fore for his views on regional
issues, Belaunde provided a focused country-by-country
analysis. He divided the region into two principal camps:
those countries like Venezuela and Bolivia that promise a
"progressive utopia," and those like Chile, Brazil, Colombia,
and Peru that are striving for "modernity."

-- Belaunde described Venezuela as a country with great
wealth that can afford to act aggressively, particularly on
the regional stage, by funding and supporting anti-systemic
movements in different countries. He said Hugo Chavez's
ambition is to be like Fidel Castro in the 1960s and 1970s,
when the Cuban dictator used Soviet wealth to project
personal power and influence. Chavez's machinations have

gained him influence over Bolivia and, to a lesser degree,
Ecuador. Belaunde complimented the USG for its patience in
dealing with Chavez and for not reacting publicly to his
insults.

-- Bolivia's Evo Morales is beholden to Chavez's money and
ideology and is neither willing nor able to disassociate
himself. He is a seasoned politician with a real party
apparatus and strong personal and political support, which
gives him more stability than his predecessors in office.
Nevertheless, his ideological approach and focus on
"cultural" and "indigenous" identity has brought him into
direct conflict with the most developed and powerful sectors
of the country, and he lacks the power to impose his will
over the whole country on issues like constitutional reform,
the way Chavez has done in Venezuela. He acknowledged that
the current crisis may be another example of Bolivia marching
to the edge of the political precipice before backing down,
but remains concerned that, if not now than several years
from now, it could lead to a fracturing of the state.

-- By contrast, President Correa of Ecuador has no real party
and also wants to maintain some distance from Chavez. He
does not have substantial resources, but he does have a clear
vision of the primacy of national interests over ideology.
This makes it possible for Peru to seek to work with him.
Correa's biggest challenge is the inherent instability of
Ecuador's political system, which has regularly toppled its
Presidents.

-- Belaunde commented that Argentina has wisely played
Venezuela by turningto Chavez every time it needs to pay its
debts.

-- Brazil's foreign relations are complicated by the fact
that it has two Foreign Ministers. The first, Celso Amorim,
interacts with the big players on the world stage. The
second, Marco Aurelio Garcia, is the de facto envoy for Latin
America. Garcia is sympathetic to Chavez and has promoted
Brazil's hands-off policy toward Venezuela. Belaunde said
that Brazil clearly does not want free trade agreements with
the US or Europe and predicted that Mercosur-EU trade talks
would fail for that reason. Brazil prefers to focus on Doha,
where the GOB thinks it can get a better deal. Uruguay and
Paraguay, on the other hand, resent Brazil's heavy hand
within Mercosur and would prefer to negotiate trade
agreements as they see fit.

-- Turning to Colombia, Belaunde remarked that the
Uribe-Chavez-FARC negotiations are complicated and show that
Chavez wants to win a public relations victory at Uribe's
expense. President Garcia thinks Chavez is miscalculating if
he thinks he can undermine Uribe within Colombia or abroad by
inserting himself into Colombia's domestic issues. Belaunde
added that he believes the FARC only released the two
hostages because of the Emmanuel scandal. Regarding the
Colombia-US free trade agreement, Belaunde said that Garcia
can act as a freelance advocate on Colombia's behalf, in
support of President Bush's efforts.

-- Belaunde closed with a discussion of Panama, which is said
is working hard to modernize and deserves more international
attention and help. He added that the Arc of the Pacific
initiative -- which groups the pragmatic-minded Pacific coast
countries of Latin America -- will be helpful for Panama as
well as Colombia.


6. (U) Director Fore cleared this message.
MCKINLEY