Foreign Relations of the United States, 1951, The United Nations; The Western Hemisphere, Volume II

611.23/3–2251

Policy Statement Prepared in the Department of State

secret

[Washington,] March 22, 1951.

Peru

a. objectives

The US seeks to maintain Peru’s support for our objectives in this Hemisphere and throughout the world. We wish to obtain a fair contribution from Peru to hemisphere security¹ through its continued collaboration in the United Nations and the Organization of American States, and by its acceptance of the role assigned to Peru in an agreed inter-American defense plan. We seek to encourage stability in government and the growth of democratic political institutions. Through positive cooperation in the economic field we seek to contribute to the economic development and stability essential to the attainment of other objectives. We particularly wish that Peru might supply increasing quantities of strategic raw materials for the civil and military economy of the US.

b. policies

Background. Our policies toward Peru have to take into account basic social and political conditions in that country. There has been bitter antagonism between the poverty-stricken mass of the population and the conservative propertied groups who have controlled the Government of Peru almost constantly since the achievement of Peruvian independence. This economic and social cleavage is aggravated to some extent by a racial issue, since the poor are largely of Indian and mixed blood, while the ruling group is largely of European stock.

The conservative groups, including the large landowners and the “commercial aristocracy”, have generally resisted the demands for social reform and for the extension of political democracy. In this they have often been supported by, or have given their support to, military leaders who seize power by coup, d’etat.

In 1945, Peru had its first extended experiment in political democracy. Jose Luis Bustamante y Rivero, a middle-of-the-road leader, was elected President with the support of Alianza Popular Revolucionaria Americana (APRA), the numerically strong anti-communist leftist party which professes to be the champion of democracy in Peru, and to speak for the Indian and mestizo masses. Divergence of objectives and the authoritarian pattern of APRA’s party organization quickly cooled this political friendship, until Bustamante was forced to rely entirely on conservative support and the backing of Army leaders. One of the results of the persistent political tension was the boycott of Congress by the anti-APRA bloc, preventing the enactment of any legislation after February 1947.

In early October 1948 an unsuccessful revolt by naval units and civilians occurred. Charging that APRA was behind the attempt, Bustamante outlawed the party. Some of its leaders were imprisoned, while others went into hiding or into exile. Three weeks thereafter Bustamante was overthrown by a military revolt in Arequipa, with the probable financial support of the conservative civilian groups.

The resulting Military Junta, under General Manuel A. Odría, confirmed the interdict of APRA, and also outlawed the Communist Party. The Junta formally dissolved Congress, assumed legislative powers, and until July 28, 1950, governed as a dictatorship. Early in January 1950, the junta issued a call for elections, which were held on July 2, with Odría the only candidate for the presidency. The Government’s control of the electoral machinery ensured a pro-Odría Congressional majority, but some opposition candidates were elected. The new Congress was installed, and the new half-civilian cabinet sworn in, on July 28.

Policies. Our relations with Peru have traditionally been friendly. Peru has been generally cooperative with the US in the Organization of American States, and in most of our inter-American policies and problems. Similarly, in the United Nations, Peru has been generally cooperative and has been of real assistance in promoting United States objectives in the economic and social, non-self-governing territories, and political and security fields. Only where there was a distinct Peruvian interest or bias as in the questions of relations with Spain, status of Jerusalem, and disposition of the Italian colonies has Peru opposed us on issues of the moment.

During World War II, despite some pro-German and pro-Italian sentiment, Peru leased us the military bases we needed, helped in antisubmarine patrols, and cooperated satisfactorily in our various procurement programs. In return we provided Peru with war materiel under the lend-lease, surplus property, and interim arms program agreements, and we continue to assist in arms procurement under MDAP. The US maintains naval, military, and air missions in Lima; the work of those missions and our program of bringing military officers to the US for tours of study or inspection trips bore fruit during the period the military was in full control of the government. Due to the lack of a Congress until July 28, 1950, the Peruvian Government has only lately ratified the Rio Treaty.²

Various US groups, particularly labor unions, have charged that the Government of Peru has attempted to control trade union activities and has forcibly eliminated Apristas from open participation in the trade union movement. Our policy has been that such charges are best handled by the International Labor Organization and the UN Economic and Social Council. We have supported the efforts of those international organizations to establish machinery to investigate in any country such alleged violations of trade union liberties and, through publicity which would arouse world public opinion, to help ameliorate such conditions.

We have tried to encourage political and economic stability, the development of democratic principles, and a rising standard of living through various technical aid programs and our cultural and information programs. Under the Institute of Inter-American Affairs,³ a Food Production Mission, a Health and Sanitation Mission, and an Education Mission are maintained in Peru. These cooperative services have been very successful in securing the financial and political support of all Peruvian administrations, and are generally highly regarded and well received by Peruvians. Technical aid in the fields of agriculture, civil aviation, geology, social anthropology, vital statistics, and census procedures has been granted by the Interdepartmental Committee on Scientific and Cultural Cooperation.⁴ Individual specialists have visited Peru under our technical aid program in other fields. These programs will be expanded under present “Point IV” technical assistance legislation.

Peru has remained primarily a producer of raw materials, of which the most important are cotton, sugar, petroleum, and non-ferrous metals. There has been intermittent Peruvian Government interest in industrialization and economic development. Industrial development has been hindered by the conflicting interests of the controlling conservative groups, especially by the opposition of some of the large agriculturists. The Military Junta commendably determined to assess present problems and future development possibilities. In August 1949, it contracted for the services of a non-governmental group of US technicians headed by Dr. Julius Klein. The Klein Mission⁵ studied and made recommendations on a wide variety of subjects, including monetary policy, foreign trade and balance of payments problems, tax structure, budget, customs, and the government administration generally. It also devoted considerable time to the possibilities of economic development. A large majority of the Mission’s recommendations were in line with our policies and objectives, and fortunately the Peruvian Government has adopted many of the recommendations.

As a means of gaining tariff concessions for its major export products and to revise the 1942 United States-Peruvian trade agreement, Peru is negotiating with us and with other countries at Torquay for accession to the General Agreement on Tariffs and Trade (GATT).⁶ We are encouraging Peruvian accession to the GATT both in order to insure a new trade agreement more satisfactory to Peru than the 1942 agreement⁷ and to widen the Latin American coverage of the GATT.

It is the policy of this Government to encourage the use of private US capital on a non-discriminatory basis in the financing of petroleum, mining and industrial development projects. This course offers the best means of ensuring the efficient production and continued accessibility of Peruvian strategic resources to the US. There is already considerable US capital invested in Peru, especially in petroleum, mining, textiles, sugar, and transportation. We have indicated our approval of the new mining code, based on the recommendations of the Klein Mission, which encourages the investment of foreign capital, and should promote the development of the mining industry.

Peru’s petroleum reserves are important to its economy and potentially to hemisphere security. Their development has been retarded by lack of domestic capital and technical skills, and by the legal, administrative and financial obstacles placed in the way of new foreign investment. For several years we have urged the promulgation of a new petroleum law which would attract foreign capital. A bill is now before the Peruvian Congress, but various interests are making it difficult to pass it in a form satisfactory to US private investors.

c. Relations with other countries

The present government of Peru has both real and imaginary difficulties in foreign affairs. Relations with Ecuador, long embittered by a perennial boundary dispute, tend to become tense periodically with reciprocal accusations of troop movements and bellicose preparations along the border, most of them based on unfounded rumors.

Peru’s relations with Colombia are particularly strained at this time as a result of the asylum granted to the APRA leader Hay a de la Torre⁸ by the Colombian Embassy in Lima and the conflicting interpretations given to the judgment of the International Court⁹ on this matter by both countries. The Department vigorously urged both countries to settle their differences amicably and thereby to preserve hemispheric solidarity, so necessary in view of the present crisis.¹⁰

Relations with Chile are lacking somewhat in cordiality. While the loss of Peruvian territory to Chile following the War of the Pacific¹¹ is no longer an active issue, the Chilean Government’s strongly pro-democratic stand in inter-American affairs has been an obstacle to close relations between the two countries ever since the overthrow of the democratically elected government of President Bustamante in Peru by General Odría in 1948. A factor in this situation is the presence in Chile of an active group of exiled APRA leaders.

Relations with Bolivia are occasionally clouded as a result of machinations of Bolivian military plotters receiving some support from military hotheads in Peru. In general, however, relations are cordial.

Neither Guatemala nor Costa Rica maintain diplomatic relations with the Odría Government because the latter assumed power by what those governments consider to be illegal methods. Peru broke off diplomatic relations with Cuba in 1950 because the Cuban Embassy in Lima assisted certain APRA leaders to escape from Peru.

The Peruvian Government is on good terms with the Government; of General Perón¹² of Argentina. Latin American liberals have even: charged that there is more than a mere affinity of political inspiration between the Governments of Argentina and Peru. There is no evidence, however, of Argentine intervention in Peruvian politics.

The present Peruvian Government has often been attacked by liberal opinion all over the continent as a dictatorship serving reactionary interests. Irked by these repeated expressions of hostility, Peru has often demonstrated an intransigent and uncooperative attitude in the conduct of bilateral relations with its neighbors.

Relations with European countries have little more than commercial and cultural significance. Peruvian cotton and a few other products are exported to the United Kingdom, encouraging the consumption of British manufactures in Peru. The Peruvian wealthy classes maintain particularly strong cultural ties with Spain. This is true in most Latin American countries. However, in the case of Peru, in view of the fact that these classes are still predominant politically, this cultural and social influence of Spain may have somewhat greater significance than in other countries.

Peru does not maintain diplomatic relations with Russia or its satellites.

d. evaluation

In regard to our objective of maintaining Peruvian support of United States policies in world affairs, our policies with respect to Peru have been successful. Wide as may be the gap between US ideals of democratic government and the political philosophy of the government of Peru, Peru sides unequivocally with the US on the international issue resulting from the aggressions of Communist imperialism, This does not mean that Peruvians are fully aware of any responsibility on their part to share our military burdens. Failure to realize such responsibility, however, does not result from any design to stand aloof in the East-West struggle, but rather from implict confidence in US strength. On the whole, Peruvian diplomatic support of US opposition to Soviet Russia has been outstanding.

The USIE Program has been reasonably successful in acquainting the Peruvian Government and people with our views and obtaining support for our policies. However, both information and cultural activities should be intensified and extended, and an expanded program of in-service training grants in the fields of press and radio are desirable.

As regards our objective of economic development of Peru, our policies in this respect have been making slow progress. On the whole, the technical assistance furnished by the US Government, especially in the fields of health and agriculture, is achieving its purpose from a long-term viewpoint. Opportunities, however, for rapid expansion and multiplication of programs of technical assistance are not very many in Peru. This may be due to the fact that the Peruvian Government has not been sponsoring any consistent, national economic development program of its own and there has been little enthusiasm for industrialization under government planning. As to financial assistance for economic development, Peru has not received any considerable credits from the Export-Import Bank or the IBRD. This is due, in part, to the absence in Peru of any enthusiasm in favor of any over-all program of economic diversification or industrialization. Another cause of Peru’s failure to obtain financial assistance is the Peruvian Government’s rather poor record in the liquidation of its financial obligations. Economic development of Peru is more likely to be fostered by private capital investments, and our policy of encouraging the Peruvian Government to adopt policies favorable to such investments should be continued. The Klein Mission has been of considerable help to Peru in this field.

As regards encouraging the establishment of a stable and democratic government in Peru, this objective is far from realization. Charges have often been directed against our policy, frequently with small foundation in fact, to the effect that our cultivation of normal friendly relations with governments established by force such as that of President Odría of Peru, and even our recognition of such governments, encourages military coups d’etat and dictatorships. This reasoning overlooks the fact that overriding considerations, such as the need for maintaining hemisphere solidarity in the face of world crisis, and the importance of maintaining the principle of non-intervention in domestic affairs preclude our resorting to a policy of discrimination against non-democratic governments in this Hemisphere. Furthermore, our long-term policy objective of encouraging democratic stability is better served by continuing friendly relations with, and extending economic aid to, the people of a country like Peru, irrespective of whether their government meets our definition of democracy.

1. Documentation concerning United States policy with respect to hemisphere defense and related matters may be found on pp. 985 ff.
2. For text of the Inter-American Treaty of Reciprocal Assistance (Rio Treaty), opened for signature at Rio de Janeiro, September 2, 1947, and entered into force for the United States, December 3, 1948, see TIAS No. 1838, or 62 Stat. (pt. 2) 1681.
3. The Institute of Inter-American Affairs (IIAA) was established in 1942 and became a United States Government corporation in 1947. Its purpose was to aid governments in the Western Hemisphere by promoting technical programs and projects for health, sanitation, and food supply. As of mid-1950 the IIAA operated in conjunction with the Technical Cooperation Administration (TCA). For background information on the IIAA, see the statement made by Assistant Secretary of State for Economic Affairs Williard L. Thorp before the Senate Foreign Relations Committee on June 10, 1949, printed in the Department of State Bulletin, June 19, 1949, pp. 795–797. For information on the activities of the IIAA and its relationship with TCA in 1950, see the editorial note in Foreign Relations, 1950, vol. ii, p. 679; for documentation on the IIAA in 1951, see pp. 1038 ff.
4. Officially in existence from 1938 to 1950.
5. For information on the Klein Mission and its recommendations, see the editorial note in Foreign Relations, 1950, vol. ii, p. 996.
6. For text of the General Agreement on Tariffs and Trade (GATT), concluded at Geneva, October 30, 1947, and entered into force for the United States, January 1, 1948, see TIAS No. 1700, or 61 Stat. (pts. 5 and 6).
7. For text of the Reciprocal Trade Agreement between the United States and Peru, signed at Washington, May 7, 1942, and entered into force July 29, 1942, see Department of State Executive Agreement Series (EAS) No. 256, or 56 Stat. (pt. 2) 1509. The trade agreement was terminated October 7, 1951, when Peru became a contracting party to GATT; for text of the understanding effected by an exchange of notes signed at Lima, September 12 and 28, 1951, and entered into force on the latter date, see TIAS No. 2421, or3 UST (pt. 2) 2548.
8. Victor Raúl Haya de la Torre.
9. The International Court of Justice (ICJ) in a series of decisions in late 1950 and 1951 concluded essentially that the asylum granted to Haya de la Torre must end, but that the Colombian Government was under no obligation to surrender him to the Peruvian authorities. Ultimately, the two governments reached agreement for a safe conduct to be followed by Haya de la Torre’s expulsion from Peru, which occurred on April 6, 1954. For additional information, see Marjorie Whiteman, Digest of International Law (Washington, 1968), vol. 6, pp. 473–488.
10. Documents pertaining to the interest of the United States in the case of Haya de la Torre in 1951 are in Department of State decimal file 723.00.
11. 1879–1883.
12. Juan Domingo Perón.