Peru: Secret Arms Deals – An Invitation to Corruption?

  (IPS)-The Peruvian government will devote at least 514 million dollars this year to modernising and upgrading its military equipment, a figure surpassed only by the Alberto Fujimori regime in the 1990s, when arms buying was the main wellspring of corruption.

Furthermore, arms procurement has been initiated under the same provisions of state secrecy employed by the Fujimori administration (1990-2000), which spent one billion dollars on war materials, experts and officials warned.

The armed forces have obtained the approval of the National Public Investment System (SNIP), which operates under the Ministry of Economy and Finance, for 230.8 million dollars for the purchase, repair and maintenance of war material. Requests for another 283 million dollars are awaiting approval by the SNIP.

At least 50 procurement projects are involved, which the military authorities have declared "secrets of state" with the consent of the government of President Alan García.

One of the most frequent complaints by local and regional authorities against the García administration is the bureaucratic nature of the SNIP, which can take up to six months to approve infrastructure projects for the country’s provinces. By contrast, the appropriations for the armed forces were approved in under a month.

IPS learned from sources at the Defence Ministry and the Armed Forces Joint Command that 58 percent of the projects are for the army, 31 percent for the navy and 11 percent for the air force.

The army plans to spend 145.6 million dollars on tanks and 110 million dollars on anti-tank missiles. The next largest appropriation is for the air force, which will spend 46.5 million dollars on overhauling a number of its fighter planes.

The army’s planned outlay alone is greater than the 212 million dollars spent on the National Food Aid Programme in 2007, which benefited just over 1.2 million families. Another programme, "Juntos", which provides direct aid to the poor and, according to García himself, is the most important social programme in the fight against poverty, cost 177.5 million dollars last year.

The new military plans reflect a drastic change in the country’s defence strategy. The former plan, known as the Basic Effective Core (NBE), emphasised rapid response to a potential external attack and prioritised airborne defence and response capabilities.

Twelve Mirage 2000, seven MiG-29s and eight Sukhoi 25 fighter planes were to be overhauled at a cost of 469 million dollars, equivalent to 72 percent of the original 563-million dollar NBE budget for 2007-2011. However, the new strategy, renamed the Basic Defence Core (NBD), focuses on the army’s ground forces.

What has brought about such a radical change in government thinking?

First of all, on Jan. 16 Peru instituted proceedings against Chile, its southern neighbour, at the International Court of Justice (ICJ) in The Hague, requesting the delimitation under international law of the maritime boundary between the two countries in the Pacific ocean, which has been in dispute for over a century. The ICJ ruling is expected to take at least five years.

Secondly, military acquisitions undertaken by Santiago in the last decade include 338 Leopard tanks and an unknown quantity of Spike anti-tank missiles. Chile’s military strength far outstrips that of Peru.

According to Joint Command and navy sources, Peru needs to be prepared for a scenario in which Chile resorts to military means to maintain control over the disputed territorial waters if the ICJ ruling goes against it. The new NBD strategy is aimed at dealing with a situation of external aggression, "particularly from the south," and is "much more realistic," they said.

IPS asked the Defence Ministry why the lists of goods and services to be purchased by the military are treated as state secrets. The reply was that "not necessarily all the acquisitions will be secret." However, on the SNIP Internet page, all procurement by the armed forces is kept under wraps.

The law on contracts and acquisitions requires all state institutions, without exception, to consult the Office of the Comptroller General before making a purchase, but on this occasion the Defence Ministry failed to do so.

"We have told the Defence Ministry that arms purchases are potentially dangerous, and therefore it should inform us of each and every one of its transactions," a source at the Office of the Comptroller General told IPS.

"Recent history shows that the greater the secrecy and the more limited the transparency in arms purchasing, the more likely there is to be corruption involved," the anonymous source said.

The Office of the Comptroller General takes action in the event of finding some evidence of irregularity, by lodging a complaint with the Attorney General’s Office. This time, however, it will report the omission to the Congressional Defence Commission, the source said.

The Defence Ministry told IPS that although not all military purchases were secret, they were not at liberty to say which purchases are or are not confidential.

In spite of the clampdown on information, IPS learned from army sources that the ground forces’ priority is to replace their Russian T-55 tanks dating from the 1970s with T-72M1 tanks, to be bought from Russia or Poland. Peru has defence cooperation agreements with both of these countries, signed in 2005 and 2008, respectively.

Even before the SNIP approved the planned purchase of anti-tank missiles, the army sent technical missions to Israel, Germany and Russia, after persuading the Defence Ministry to declare the operation a state secret. This drew the attention of the Office of the Comptroller General, which immediately demanded information.

"Renewing the operational capability of the armed forces to guarantee our defence is very important, and for that very reason there must be transparency at each step of the acquisition process," said the source at the Office of the Comptroller General.

A spokesperson for the Superior Council for State Procurement and Contracting (CONSUCODE) confirmed to IPS that, if war equipment is purchased under state secrecy, it is mandatory to consult the Office of the Comptroller General beforehand.

"We have informed the Defence Ministry that classified purchases of war material are exceptions to the rule and must be justified according to stringent conditions. We have also indicated the rules that must be complied with prior to declaring an acquisition to be a secret of state," the source said.

During the government of president Alejandro Toledo (2001-2006), the purchase of four Italian Lupo frigates for 60 million dollars and repairs to 13 Russian Mi-17 helicopters for 18.6 million dollars were not classified as secret.

"Paradoxically, when I was defence minister as a retired army general, military procurement was transparent, while now that the defence minister is a civilian, arms acquisitions are secret," a former defence minister in the Toledo administration, retired General Roberto Chiabra León, told IPS.

"Given what happened during the Fujimori administration, it is dangerous to carry out secret military purchases. How the weapons will be used is a secret of state, but the acquisition process itself is not," he said.