MercoPress. South Atlantic News Agency

Growing rift between Peru and Chile

With the background of the growing rift between Peru and Chile, a Peruvian Congressional Committee unanimously approved Wednesday a project banning investors from Chile and Ecuador in Peruvian port and airport concessions.

The project was approved by the Transport and Communications Committee arguing "national security reasons", and now must be considered by the full house for its final debate.

Congressional members from the ruling coalition and opposition anticipate the project will rapidly became law given the current situation created with Chile.

The approval was simultaneous to the Peruvian Executive decision to suspend all (political and military) "confidence building" measures with Chile al well as negotiations for the creation of a regional free trade area, given the Chilean government refusal to apologize for having supplied weapons to Ecuador in 1995 during the Peruvian-Ecuadorian border war.

"We don't think it can be reasonable to have Chilean citizens in sensitive areas for our economy and security", such as ports and airports said Jacques Rodrich, president of the Transport and Communications Committee. Mr. Rodrich also highlighted the inconvenience of a possible presence of Chilean nationals in El Callao, Peru's main port to the west of Lima and adjacent to the main Peruvian naval surface base and submarines' station.

The document to be considered by Peru's full Congress bans Chileans and Ecuadorians for the next forty years from participating in port or airport concessions.

Mr. Rodrich recalled that Peru has had border disputes with Chile and Ecuador repeatedly since becoming a republic in early XIX century.

Ecuador and Peru finally signed a peace agreement in 1998 ending border disputes but they still mistrust each other.

As to Chile, besides the 1995 arms to Ecuador incident, Peru claims the maritime border with Chile remains unmarked and has anticipated it will appeal its Pacific sovereignty before international law courts. Chile on the contrary believes there's nothing to talk about.

Actually these pending disputes this week impeded Chilean Minister of Interior Jose Miguel Insulza from becoming elected Organization of American States Secretary General by acclamation, because Peru, Bolivia and Mexico forced a vote.

A further reason to keep Chileans away from port and airport concessions is commercial, says Mr. Rodrich. "Peru and Chile's commercial interests are the same in international trade and therefore having Chileans managing our ports means mortgaging our future".

Mr. Rodrich admitted that some Peruvian businessmen are interested in Chilean investment in Peru but warned that "economic liberalism can't mean exposing our country or privileging Chilean interests".

However Lima's Chamber of Commerce said that the Committee's initiative has no fundamentals threatens the rule of the law and creates a discriminatory atmosphere.

"It's a terrible signal for international organizations and investment banks that are constantly monitoring risk conditions in different countries", said Graciela Fernandez Baca president of the Chamber of Commerce.