Foreign policy and defense
Peru is a nation in South America. Its capital city Lima. Peru’s relations with the outside world are generally good. The protracted conflicts that for decades have led to wear and tear in the interaction with neighboring countries are now settled in agreements. The country participates in several trade agreements in the region and is committed to continued increased cooperation.
The protracted conflict between Peru and Ecuador (see Older History) led to a brief war in early 1995. After a fragile ceasefire, the countries agreed to start negotiations, and a peace agreement was signed in 1998. Parts of the demilitarized border area have been transformed into a common national park. However, relations between Peru and Ecuador are still sensitive, and in July 2017, Peru called home its ambassador to Ecuador in protest at the neighboring country’s refusal to stop a wall construction along a canal forming a border between the two countries. According to Ecuador, the wall protects against flooding. A few days later, however, Ecuador announced that the construction will be stopped.
- Countryaah: Overview of business holidays and various national observances in Peru for years of 2020, 2021, 2022, 2023, 2024 and 2025.
An agreement between Bolivia and Peru from 1992 gives Bolivia access to the Pacific via the Peruvian port of Ilo. In exchange, Peru gains access to the Atlantic and southern Brazil through the Bolivian city of Puerto Suárez on the Paraguay River that opens into the Atlantic.
Relations with Chile have been chilly throughout history due to Peru’s loss in the Pacific War in the late 1800s when the country was forced to resign some provinces to Chile. However, relations have improved since the turn of the millennium. Trade between the countries has increased and the proportion of Chilean investments in the Peruvian economy has been considerable.
A remaining dispute concerned the boundary in the fish waters between the countries. After unilaterally changing the boundary, Peru reported the dispute to the International Court of Justice (ICJ) in 2008. When the ruling came in early 2014, Peru was allocated most of the area while Chile had to maintain a smaller, but more fishy, zone. Both countries stated that they would respect the decision. Nevertheless, a new dispute arose the following year, when it turned out that they did not agree on where the new border begins: according to Chile, it is at the same place on the coast as before and according to Peru 270 meters inside the coast. Peru established a new district on the site, with 15,000 residents, which led to protests from Chile.
Relations with Venezuela were strained during the first decade of the 21st century when the left-wing President Hugo Chávez ruled Venezuela. Chávez was accused by the Peruvian government of meddling in the 2006 election campaign and after a steep word war, diplomatic relations were broken for about a year. In the spring of 2009, a new conflict surfaced since Peru had granted asylum to Manuel Rosales, a leading opponent of Chávez. Peru also accused Venezuela and Bolivia of trying to spread Chávez’s “Bolivarian” ideology to Peru, but after the change of government in Peru in 2011, both countries were ruled by left-wing presidents and tensions generally diminished.
Trade and cooperation agreements
Peru is a strong advocate for free trade and participates in numerous regional cooperation organizations. The country is one of three Latin American states included in the Pacific Economic Cooperation Forum Apec, and in 2011 co-founded the Pacific Alliance with the aim of increasing economic cooperation between the member states of Peru, Chile, Colombia and Mexico. Peru is a full member of the Andean community and associate member of Mercosur. All twelve nations in South America formed Unasur in 2008, but Peru was one of six countries that 2018 was the first to suspend its participation in the Union so far.
Separate free trade agreements have been concluded with the USA, China and the EU. Trade with China has grown strongly. China is now Peru’s largest trading partner alongside the US. China buys raw materials and in turn sells industrial products to Peru.
Peru was also present when twelve countries around the Pacific signed the Free Trade Agreement TPP (Trans-Pacific Partnership) in 2016. One purpose of the agreement was to counterbalance China’s dominance in Asia. In its original form, the TPP would have covered 40 percent of the world economy, but it failed before it came into force when the US withdrew after Trump’s entry. However, the remaining eleven countries decided to stick to the agreement. They together account for about 14 percent of the world economy and have a total population of over 500 million, which is more than the EU. After some adjustments, they signed in March 2018 under the TPP-11, or CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Parthership). The agreement means that tariffs will be lowered between the countries and, according to the hopes, will contribute to increased growth. CPTPP includes economic heavyweights such as Japan, Canada and Australia. The other Latin American countries in the CPTPP are Chile and Mexico.
Peru’s armed forces have an officer corps that is considered well-trained, and the military is modernly equipped. Substantial cuts in manpower and military budget were made after the turn of the millennium, at a time when the reputation of the armed forces was low after the extensive war against the left guerrillas. Actions against what remains of the guerrillas are still an important part of the military’s work, as are interventions against illegal cocoa cultivation.
The military service has been voluntary since 1999, but all youngsters must sign when they are 17 and can be called up as reservists until the age of 45. Part of the country’s police force has semi-military training and equipment.
FACTS – DEFENSE
Army: 47,500 Men (2017)
The air Force: 9,500 men (2017)
The fleet: 24 000 men (2017)
Military expenditure’s share of GDP: 1.0 percent (2017)
Military spending’s share of the state budget: 4.6 percent (2017)
The President kicks the government
Decides to review all energy contracts concluded with foreign companies since 2006. It is immediately revealed that circuits within the government have received bribes in exchange for a contract with a small Norwegian oil company. Following allegations that Chief Minister Jorge del Castillo was also involved, García dismisses the entire government.
Land sales cause protests
A decision aimed at facilitating foreign companies to lease or buy land for exploitation leads to protests in several provinces. More than 10,000 members from around 65 indian groups participate in the demonstrations against new laws that say that about half of the local residents accept land sales. In the past, yes, two-thirds were demanded. Roads are blocked and a couple of oil and gas plants are occupied. The government is preparing for an emergency permit, but after just over a week, the actions have been suspended since Parliament voted to reject the new laws.
Fujimori is prosecuted
Several legal proceedings are initiated against Alberto Fujimori. According to the indictment, the ex-president is held responsible, among other things, for murders carried out by the security service’s “death patrol” Grupo Colina.
Guerrilla leaders are killed
The second highest leader of one of the Maoist guerrillas Sendero Luminoso’s two factions is killed. It is noted as one of the few successes in the fight against guerrillas.
Fujimori is shipped from Chile
The Supreme Court of the neighboring country decides that former President Alberto Fujimori should be extradited to Peru.