Created: 7/10/1996

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Prospects for Acquiring Advanced Weapon Systems T

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Intelligence Community analysts believe thai (he oddshat Lima will acquireircraft within the next year. Analysts assess

likely (no more


Peru: Prospects for Acquiring Advanced Weapon Systems

Hirer Alternative Explanation*

Peru is looking io acquire

-iy comoat urcrainguska air defense systems withissiles at well as standard weapons and antiaircraftcs. and air defense radar. In addition. Peru it discussing the acquisition ofissiles with North Korea.r"

Whether Lima will actually accept delivery within the next year of one or more advanced weaponaircraft.r Scudless certain. Intelligence Cornmurutyave formulated three possibilities j

Pen; wili acquireire raft, and possibly. hit DO Scwfe

Peru will acquire Scuds us well asircraft and/or

Peruvian officials are actively engaged in the process of acquiring advanced weapon systems, hut none of thesel actually he delivered within the next year. | ]

Three factors will largely determine which scenario unfolds:

perception of Peru's defenseeru's ability lo finance major arms purchases.

Fuj.mon's uu.tiv.ty io US.nd international reactions iocquisition of advanced weaponthe potential this would have to undercut, other adnunistrauon priorities, such asdevelopment and APEC membership.

I: Peru Acquireso Scudaj |


Caw Afford To

in Peru's inventory of major weaponaod outdatedmajor factors inrelatively poor performance in5 border conflictSignificantly improving these Mobilities would entailoutlays that wc assess Peru can absorb. Peru's defenseincreased from0 nulUon toillion in the lastand operations and maintenance costs have declinedesultcounterinsurgency requirements. We estimate thai overfew years Peru could spend several hundred million dollarsarms purchases without undercutting the adiTunistration'sgoals and

the Air Force badly needs new fighter aircraft to modem: re lis rapidlyfleeL

In ihis scenario. Fujimori is unlikely to approve the acquisition of Scuds because herecognizes the serious international and regional repercussions that would result. The Missile Technology Control Regime (MTCR) Annex classifies Scuds asissile* that are capable of carrying weapons of mass destruction because they can deliver payloads of atilograms to ranges of atPeru would face severe trade sanctions under (IS law if it acquires Scuds. Several Latin American countries, including Argentina

and Brazil who are members of MTCR, would consider Peru'sof Scuds highly dcslabili/ing to the hemisphere. The Peruvians, however, may not understand that even "conspiring" to acquire Scuds would raise the issue of sanctions under US law. II

eru Acquire.issile f

Korea an

key factor motivating Peru to acquire Scuds would be the desire to intimidate Ecuador and deter it from further aggression along the border. In addition, the North Koreans have aggressively marketed Scuds; they are much cheaper than aircraft, and Peruvian officials involved in the discussions stand to profit personally from the |

Since Scuds are relativelyprobably would not preclude plans to purchase other advancedthender this scenario, however, one would have to assume that the Peruvians do not realize that acquiring Scuds would constitute an act that would result in severe US trade unctions-1 1

Economic Factors Could Delay Acquisition

o Advanced Weapons Are Acquired

The possibility thai Peru will take delivery of no advanced weaponover the next year is the least likely of the three scenarios. Peru probably can afford to buy one or more advanced weapon systems, but Fujimori is under pressure lo delay or avoid some acquisitions because they would entail major financial outlays. Increased defense spending would hurt the administration'* ability to pursue other priorities such as cuonornic growth, poverty alleviation, and the need to comply with strict IMF fiscal targets.!

yen must weigh lhe possibility ihai its chances of receiving favorable debt terms al Uie Paris Club talks that star! in July would be jeopardized by an advanced weapons acquisition, as well as its hopes of gaining APEC membership, which hinge in part on obtaining ihe support of Chile and Japan. I

Plans to acquireircraft orlso could fall through, for example, if lima, ihe arms brokers, or nipphers failed to meet theirobligations. Moreover. Peruvian military officers havewn lo negotiate for major arms purchases that never materialize.

Finally. Lima may be engaged only in contingency plaraiing forScuds. Fujimori may have given senior officials the go ahead to enter into discussions with the North Koreans, tmnlong this would help keep lhe pressure on Quito as rumors of potential arms purchase-;bul would not actually purchase Scuds unless the border conflict with Ecuador reignites.

tke Probabilities

Community analysts assess ihc oddshat Peru will acquireircraft within the next year. We estimate the chances us lesshat Peru will delay the deli very ofircraft for moreear or that Lima is engaged only in contingency planning to acquire the aircraft:

Prospects for Perucuds are rated as tow. primarily because of the severe regional and wterruuonal repercussioas that would result from such an acquisition:

Analysts are confident, however, that senior Peruvian officials are engaged in ongoing discussions or contingency planning lo acquire Scuds,inal decision by President Fujimori.

International Pressure Could

would come under significant pressure not to acquire sucb weapons if:

Paris Club creditors and IMF officials expressed concern tbat such acquisitions would have an adverse impact on ongoing financial negotiations.

Members of the Asian-Pacific Economic Council (APEC) indicated that such acquisitions would undercut Peru's bid for membership.

The United States warned Peru that it would face severe sanctions under US law if iteven "conspired" toScud missile system.

Other members of the nonproliferation community made iheir conccrns known to Peru.

Selected Latin American countries, the Rio Treaty guarantors, and Japan protested that such acquisitions would upset the regionalbalance of power and undermine negotiations to resolve Peru's border dispute with Ecuador.

The new Ecuadorian Government said Quito would not upset the regional balance of power by seeking advanced tighter aircraft if Lima did not acquire soch systems,redible mechanism is proposed to verify such commitments.

What Would Dlssiuade th* Suppliers? P

It would take major political and economic inducements to dissuade North Korea from selling Scuds to Peru. Russia will maintain itsefforts to sell arms not only to Peru bul lo other countries in Latin America and the worldhole. Pressure on Russia to desist will not work, particularly since Russia's sales to Peru are not prohibited by any international agreements. Belarus almost certainly will follow Russia's lead, except in the unlikely eventhange in leadership occurred in that country and the new leaders decided lo emphasize developing their relations with the West.

Original document.

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