Código Fecha Clasificación Origen
09LIMA924 26 June 2009 Confidencial Embassy Lima

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DE RUEHPE #0924/01 1772213
R 262213Z JUN 09

C O N F I D E N T I A L LIMA 000924


E.O. 12958: DECL: 06/26/2019

REF: A. LIMA 899
C. LIMA 697
D. LIMA 794

Classified By: CDA James Nealon for reasons 1.4(b) and (d).

1. (C) Summary: Its economic success of recent years
notwithstanding, Peru remains fertile terrain for anti-system
radicals, with persistent endemic poverty and social
inequality, the absence of the state from large swaths of
national territory, and clumsy, sometimes jarring public
action when the state does intervene. But if these kinds of
structural factors have played a role in recent protests
(refs), so has a radical anti-system political project that
is seeking to take political advantage of them to undermine
Peru’s progress, weaken the government and lay the groundwork
for a more systematic assault on the pro-growth model.
Public and private statements by the diverse and not
necessarily unified leaders of the anti-system movement paint
a compelling portrait of their real aims, which can be
summarized in the words of one Peruvian indigenous leader
that "Evo Morales is our President." Foreign participation
in this anti-system movement, including from Bolivia, is real
but maybe not as central as some analysts maintain. End

2. (C) Peru has been a regional good news story for some
time now, enjoying sustained, solid economic growth,
burgeoning trade and foreign investment and a sense of
promise and possibility unparalleled in the memory of most
living Peruvians. The perspective of a Peru on the march
over the last decade - successfully climbing out of the
trench into which it had fallen in its years of economic and
political crisis when quadruple-digit inflation and
encroaching terrorism threatened the very integrity of the
state - remains palpable. Many observers also insist that
the statistics don’t lie, that economic growth has benefited
more than a select few, that poverty is noticeably down and
that, whatever the structural challenges (ref A), the
government is making real progress on basic infrastructure
such as roads, water, and electricity. As one observer from
a neighboring country noted during a recent visit to Lima,
"Peru’s agenda is real."

3. (C) That said, the progress of Peru’s real agenda so far
has been insufficient to overcome the serious, deep-seated
challenges that underlie latent political instability. If
poverty rates have fallen to below 40%, a politically
significant number of Peruvians continues to live in
precarious conditions, with close to 20% of the population at
or near subsistence level. The distribution of wealth is
also uneven, with the country’s most deeply entrenched
pockets of poverty located in the southern highlands and
Amazon regions — not coincidentally also the areas where the
state is virtually absent and anti-government sentiment and
political instability are greatest. Moreover, as Peru’s
Human Rights Ombudswoman recently noted to a group of mining
executives, these regions also tend to be where mining and
other extractive industries’ activities are concentrated.
This precarious and potentially combustible situation is
exacerbated by clumsy, sometimes jarring public action when
the state does intervene — such as the police’s recent
action to end road blockades in Bagua (septel) — and by the
broader institutional weaknesses that hinder basic service
delivery even where the state is present. One of Garcia’s
closest political advisors told us the President’s principal
frustration relates to the institutional dysfunctionality and
inefficiency of the state apparatus at all levels, which
undermines the transition from political vision, plan or
marching order to real progress on the ground.

Fertile Terrain for Radicalism

4. (C) For all these reasons, Peru remains fertile territory
for anti-system radicals seeking to take advantage of an
opportunity to turn the tables around, and to convert Peru
from the camp of pro-growth pragmatism to that of vague "21st
century socialism" a la Venezuela, Bolivia and Ecuador. To
this end, anti-system elements are pursuing a conscious and
well-planned political strategy to undermine Peru’s progress,

weaken the government and lay the groundwork for a more
systematic assault on the pro-growth model. This project has
been clearly in evidence in recent protests, including
Amazonian communities’ successful clamoring for the repeal of
a series of legislative decrees (refs B) that intended to
facilitate investment and promote development (while
protecting the environment and setting aside lands for native
communities) in one of the country’s most abandoned regions.
It has been reflected in the scattered protests that have
followed, which have called for stopping a planned
hydroelectric project, repealing a new water law and ending
concessions relating to mining and other extractive
industries (still the basis of Peru’s economy). And it is
likely to be seen in diverse protests currently being planned
for the future, which will have no shortage of pretexts, real
and imagined, from which to borrow.

5. (C) Whatever the legitimacy of the protesters’ disparate
underlying grievances and aspirations (which are often
directly connected to the kinds of structural problems
described above), anti-system elements have successfully used
the protests to fan a growing chorus of criticism against
President Garcia, the entire government, private investment
in general and the "neoliberal" economic model. (It is
important to emphasize that "state abandonment" and its
succession of unfortunate consequences long predate Peru’s
modern age, liberal economic model or current government,
with roots that go back several hundred years to the Colonial
and Republican eras.)

"Evo Morales is our President"

6. (C) Public and private statements by the diverse and not
necessarily unified leaders of the anti-system movement —
who are many, of different stripes and often local in their
immediate focus — paint a compelling picture of their real
aims. Miguel Palacin, who leads a pan-Andean indigenous
group based in Lima, is one of the movement’s leading
figures, organizing parallel anti-summits (during the
Peru-based EU-LAC and APEC events of 2008) and painstakingly
building links to bring the disorderly diversity of the
anti-system opposition under one banner. Tellingly,
Palacin’s office displays Bolivian flags and a presidential
portrait of Evo Morales. Palacin recently told us he sees
Bolivia as a model for Peru, and that indigenous people
consider Morales "our president." Palacin said his
organization was working to repeal the remaining contentious
legislative decrees (refs) and to press for the overhaul of
Garcia’s cabinet. In the longer term, Palacin said his group
aimed to procure property titles for all indigenous land
(hinting that once this had occurred there would be no land
left for private development), and ultimately to write a new
constitution incorporating language from the UN Declaration
on the Rights of Indigenous Peoples. The "plurinational"
agenda pushed at the IVth Indigenous Continental Summit in
Puno - in which Palacin was a major protagonist - could also
have far reaching consequences on fundamental social and
economic principles such as who can "own" water, land and
other natural resources. While not pivotal to the Amazonian
drama or the more recent spin-off protests, Palacin has
vocally defended the protestors throughout.

Ollanta Humala

7. (C) Still widely seen as the political leader of the
government’s ideological opposition, former presidential
candidate Ollanta Humala and his Partido Nacionalista Peruano
(PNP) opposed the legislative decrees since 2008, claiming to
represent the interest of indigenous groups in doing so. The
GOP has blamed the PNP for deliberately misinforming
communities regarding the content of the decrees and also for
inciting violence. A recently surfaced video from 2008
showing one PNP Congresswoman telling a community that
legislative decree 1090 would allow the government freely to
sell off indigenous lands to private investors appears to
confirm this fact. More ominously, following the violence in
Bagua, Humala himself in a television interview warned
security forces not to use weapons against protesters because
"a future government may choose to investigate human rights
abuses." Many analysts observed that Humala’s statements
were intended to weaken the will of an already discredited

police force, undermine the ability of the government to
impose order, and, more indirectly, suggest that the Garcia
government’s days were numbered.


8. (C) Aidesep and NGO contacts close to the organization
have repeatedly denied that the recent Amazonian protests
were instigated by outsiders, but they have also readily
welcomed outside input and assistance. Some of this
assistance has been overtly political, and clearly intended
to heighten native suspicions about the government’s
supposedly predatory plans for their land. In response,
Aidesep leader Alberto Pizango, currently in exile in
Nicaragua, called for "insurrection" against the Peruvian
government, and while he later retracted the call, it is
included in a formal written Aidesep declaration dated May
14. Other notable elements of that declaration include the
assertion that Peruvian law does not apply in indigenous
territories, that the government will be forcefully repelled
if it attempts to enter community lands, and that Aidesep
would join forces with other groups to "change the state
model which only benefits a handful of national and
international profiteers." Meantime, Pizango has continued
to make public statements about Peru from his political
sanctuary in Nicaragua.

Latter Day Liberation Theologists

9. (C) In some areas, Catholic Church representatives have
aligned themselves with Amazon protesters as part of an
ongoing struggle against private investors in the region,
arguing that the latter contaminate the jungle and impede
equitable development. In San Martin, a local priest, Father
Mario Bartolini, was an outspoken participant in roadblocks
on the Yurimaguas-Tarapoto highway. The GOP has blamed
several Amazon area radio stations, including one belonging
to the parish of Yurimaguas, for inciting violence in Bagua
on June 5. Tape recordings of the parish radio station
broadcasts from mid-May include numerous propoganda spots
against the legislative decrees and against private
investment and investors in general. In these spots,
investors are caricatured as rapacious capitalists,
abrasively indifferent to the concerns of locals and plotting
only to steal their land. In Cajamarca, Father Marco Arana,
who leads an NGO opposed to local mining concerns, has
emerged as a potential future presidential candidate for the
anti-system left.

The Ultra Left

10. (C) Apart from the relatively moderate leftist groups
noted above and a spectrum of unions who typically join in
solidarity with local and general strikes, Peru continues to
have a cornucopia of fragmented radical groups with
self-proclaimed Marxist-Leninist or Maoist political
philosophies. Some of these organizations are said to be
fronts for remnants of Shining Path or MRTA, and sometimes
overlap with the main teachers’ union (SUTEP), the Marxist
party Patria Roja and the radical group Vanguardia. Recent
intelligence leaked to the press suggests ultra left-wing
activists in Cusco embarked on their own copycat strikes
inspired by Bagua, and discussed killing police officers in
order to gain the attention of the GOP. Sendero Luminoso and
MRTA are also cited as having infiltrated June 11 protests in
Lima and elsewhere. Another press report from a reputable
source alleges representatives of various local "Defense
Fronts", the MRTA-related "Venceremos" group, Patria Roja,
PNP, "ethnocacerists", as well as members of Aidesep met
recently to discuss how the past month’s events have opened
up space for "People’s Power" in Peru, and to plan for
upcoming general strikes.

Foreign Interference

11. (C) Foreign participation in this anti-system movement
is real but probably not as central as some analysts
maintain. We have heard from several sources that Miguel
Palacin, for example, is close friends with Bolivia’s
Ambassador to Peru, Franz Solano. Moreover, according to the
Foreign Ministry, Solano rarely deals with Peruvian

government officials but sees himself rather as the envoy to
Peru’s social sector opposition, with whom he brokers
meetings for visiting Bolivian government officials,
including Foreign Minister Choquehuanca. Similarly, many
observers argue that maintaining roadblocks for long periods
of time requires real money, which comes from somewhere. A
number of theories arise in this connection, and include
narco-trafficking and illegal logging interests that would
theoretically benefit from the absence of order or government
control. But the more widepread view has Venezuelan money,
and the Bolivarian Republic’s informal networks in Peru,
playing a role in ensuring protestors have the financial
support they need (ref C). Some reports have also alleged
the presence of Bolivia cash, including in connection with
the recent protests in Cusco.

12. (C) Even if no "smoking gun" on the external finance
front has been discovered, most observers believe that the
influence is more "ideological" and emotional than economic.
Bolivian President Evo Morales’s letter read aloud at the
Puno summit calling on indigenous people to rise up in a
"revolution" against their government continues to ring in
Peru with a lasting clarity. Morales piled on after the June
5 violence in Bagua, calling the violence in which 24 police
officers and 10 protestors were killed an "FTA-inspired
genocide." However counterintuitive, to many observers the
message was clear: Peru’s continuing problems were the
exclusive responsibility of the current government and Peru’s
pro-growth model — a model that, needless to say, Morales
and certain other influential outsiders believe should be

Comment: The Plan Evolves

13. (C) The principal concern here is that radical actors
both inside and outside of Peru are making progress in their
project to destabilize the Garcia government and replace it
with something more to their liking, most likely in the 2011
general elections. Recent and ongoing protests have softened
the terrain (ref B); future planned actions will seek to
strengthen the opposition’s momentum while keeping the
government on its heels. To many (and to us), the similarity
of this subversive campaign to events that unfolded in
Bolivia in 2003 - with the unwitting help of well-meaning
actors and the active support of able political radicals is
uncanny, even if we also agree that the institutional
underpinnings of Peru’s "system" is comparitively stronger.
While the links between radical organizations and disparate
protests are difficult to detect, the protestors’ tactics and
methods are both easy to recognize and difficult for an open
society and a weak government to effectively counter. That
will be a challenge for the Garcia government in its
remaining two years.