Welcome to Washington, Mr. Peruvian President: Alan García Perez’s Regional Foreign Policy

By: COHA Research Staff
  • García is out to prove that this time he will be able to get along with Washington and Wall Street, while helping to spearhead the Bush administration’s anti-Chávez strategy

On October 10, newly inaugurated President Alan García Pérez will arrive in Washington where he will be warmly greeted by a grateful White House and State Department. For the Bush administration, which is very much on the defensive in Latin America and whose reputation has hit rock-bottom in much of the region, García – once held in contempt by the Reagan administration for refusing to pay Peru’s international debt his first term in office – will now be a welcomed figure.

Peruvians voted former president García, who made his presidential debut in 1985, back into office earlier this year. This event was of international interest as opinion polls showed that there was a strong possibility that retired military officer and former-coup-leader-turned-leftist-politician, Ollanta Humala, could win. García’s triumph was seen by the State Department as helping to construct a “political wall” preventing Venezuelan President Hugo Chávez’s left-leaning “Pink Tide” from spreading throughout the continent. Many Peruvians, however, are anxious to see what policies García and his American Popular Revolutionary Alliance (APRA) will carry out during the next five years. This will be his second attempt to combat the economic instability and overall social unrest that marked his disastrous first term. Attracting foreign investment, increasing exports and making new allies around the globe are scheduled to be integral parts of the new president’s foreign policy.

Foreign Policy 1985-1990
In 1985, at 36 years of age, García became the youngest civilian president in Peru’s history. It was also the first time that APRA took control of the country. García assumed the presidency at a time when the nation was in a particularly dire state: the economy was in shambles and the outgoing president, Fernando Belaunde Terry (1963-68 & 1980-1985) had ceased paying off the country’s external debt. In addition, two rebel movements, the Maoist Shining Path and the Marxist Túpac Amaru Revolutionary Movement, had gained control of most of the country’s highlands and jungle zones. Additionally, the country was still recuperating from the short-lived 1981 border conflict (essentially a non-declared war) with Ecuador. Meanwhile, in the international context of the Cold War, third-world nations such as Peru had to carefully choose allegiances.

It was during this period of tumult that García tried to take a leadership role in Latin America. He went to the United Nations to address the General Assembly, explaining his plan to deal with world poverty. He argued that heavily indebted countries should only have to pay 10 percent of the income deriving from export earnings. He was initially applauded for this bold agenda, but in 1985, Peru needed to pay back more in international debt than the 10 percent was able to allow. This shortcoming destroyed Peru’s credit rating, prohibiting it from attracting additional foreign loans or new investments. The country’s economic condition was further aggravated by hyperinflation that García ignited when he “statized” banks later in his term. These events drove the International Monetary Fund and other lending institutions to declare the country ineligible for credit. Ultimately, García’s foreign policy proved ineffective in facilitating third world debt relief.

García Takes on the Left
With the weakening of ties to the Soviet Union, which were developed during Peru’s earlier military administrations, García prioritized foreign policy objectives in an effort to gain new friends abroad. He began attending international events such as two summits of the Non-Aligned Movement (NAM) to bring the country into diplomatic spotlight. He also hosted the Socialist International XVII Congress in Lima in 1986, in which he upgraded APRA’s ties to that social democratic body. Despite his debt-thesis fiasco, García persevered in his efforts to establish Peru as a prominent member of the Latin American community. In 1985, Peru joined Argentina, Brazil and Uruguay in the 1983 Contadora group, which sought an end to the Central American wars of that period. In December 1989, Peru withdrew its ambassador from Washington in protest to the first Bush administration’s invasion of Panama, aimed at overthrowing Manuel Noriega. García then took matters a step further and ordered the Panamanian flag to be hoisted in Peru’s presidential palace, as Noriega was being overthrown. In contrast to his first term, García now employs a shrewder foreign policy, and avoids alienating any future allies.

The Usual Suspects: García’s Potential Allies
Shortly after García’s 2006 electoral victory, but before he took office, he traveled extensively to neighboring nations. Colombian President Alvaro Uribe expressed his congratulations by sending his presidential plane to transport the new president-elect to Bogotá. García also visited Ecuador and Brazil. Regarding Lima-Brasilia relations, García supports the idea of constructing an inter-oceanic road tying Lima, via the southern Andean regions, to São Paulo to expedite the transport of agricultural products. Recently, the Brazilian oil company Petrobras and the Peruvian state oil company Petroperu signed an agreement. The agreement exemplifies Petrobras’ commitment to modernize Petroperu’s oil facilities and signifies its desire for a lasting relationship. Furthermore, García could certainly use his worldwide Socialist International (SI) contacts in order to boost the number of Peru’s allies abroad, particularly in the European Union. In theory, he could even facilitate the renewal of SI influence in Latin America.

The Unholy Friendship: Chile and Peru
One of García’s most surprising foreign policy decisions is his seeking rapprochement with Chile. The countries’ historical animosity dates back to the 1879 War of the Pacific, in which Chile, with considerable assistance from the U.K., defeated Peru and Bolivia (transforming the latter into a landlocked nation). Since then, each country has regarded the other as a security threat, and military purchases are usually seen as an arms race provoking renewed tensions.
In spite of this antagonistic legacy, García and Chilean President Michelle Bachelet have become friends. Bachelet was the only visiting leader who remained in Peru an additional day after García’s inauguration on July 28, accompanying the new president to a number of public events. García also spearheaded the movement to bring Chile back into the Andean Pact (Chile was a founding member of the Pact in 1969, but left in 1976), and both nations are now discussing a free trade agreement. This is not to say that historical tensions and an ancient border dispute have completely dissipated. The emerging relations between García and Bachelet merely suggest that he has been wise enough to avoid discussing many sensitive issues for the time being.

Why Washington and García Will Get Along
In spite of past tensions, it is likely that Washington and Lima will have a cordial relationship. U.S. policymakers were pleased with García’s victory over the populist indigenous leader, Ollanta Humala. For his part, the Peruvian president recognizes the importance of strong economic ties with the U.S. Currently, a Free Trade Agreement (FTA) between Lima and Washington’s waiting to be ratified by the U.S. Congress. The Peruvian media has reported that the U.S. Congress will most likely wait until after the November mid-term elections before dealing with such a contentious issue as the free trade agreement, and even then its ratification is not certain. Furthermore, Vietnam will be prioritized on the agenda as President Bush would like such an economic agreement signed before he undertakes his December Asian tour. Regardless of this back-burner status, one topic that the leaders are sure to agree on during President García’s visit is the hotly contested Latin American seat in the UN Security Council (UNSC).

Lima-Caracas Relations

García’s estrangement from Chávez has produced tension, providing proof that Lima will not likely back Caracas’ bid for a UNSC seat. During the recent Peruvian elections, Chávez was an unambiguous supporter of Ollanta, which led García to baptize Chávez as Ollanta’s “godfather.” In turn, Chávez described the APRA candidate as “Washington’s lapdog.” Tensions have continued to this day, with the Peruvian media recently reporting that Chávez has not forgotten García’s tart comments. “¿Olvidar yo? No. Si allá no hay dignidad aquí sí hay dignidad” (“Me, forget [what happened]? No. If there is no dignity over there [in Peru], it means there is dignity here [in Venezuela].” Chávez clarified that Peru-Venezuela relations would only be commercial, not political. As for the UNSC seat, Peru’s foreign affairs minister, Jose Antonio García Belaunde, recently informed La Republica that: “no hemos decidido a quien apoyar aun” (we have not decided who to support yet). This is not to say that Lima will necessarily back Guatemala (the U.S. choice for the Council seat), but possibly some third country. Peru might also choose to abstain from voting in order to keep a neutral stance.

Overall, García’s stance is seen by the State Department as part of a “Pacific Bloc” that could potentially counter Chávez’s “Pink Tide” movement, with Chile’s Bachelet and Colombia’s Uribe also standing between Chávez and the Pacific Ocean. Venezuela has also been at odds with Chile after Victor Delgado, the Venezuelan ambassador in Santiago, denounced the Christian Democratic Party (part of Bachelet’s ruling coalition) for its position against Venezuela’s bid for the UNSC seat. The net result was that Chávez, in his attempt to attack his adversaries, brought traditional foes Peru and Chile closer together. One challenge to this “Pacific Bloc” could arise from the upcoming Ecuadorian presidential elections, particularly if front runner and professedly pro-Chávez Rafael Correa wins the race.

An Optimistic Outlook for Peruvian Foreign Policy
Alan García’s second term as Peru’s president commenced in a far more tranquil time for him and the country than in 1985. Two decades ago, he was still a novice in politics, having to steer the country through the final years of the Cold War, as well as rule a nation plagued by two strong rebel movements. Today, he is a political veteran, navigating contentious issues and establishing strategic relationships abroad while presiding over a more peaceful domestic setting. García, and Peruvians, hope that this more pragmatic outlook will be much more conducive to alleviating poverty in today’s Peru.