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DJ UPDATE: Peru Government Insists Peruvian Spy Worked For Chile84 days ago
(Adds comments from Peru's defense minister at a later press conference, and from Chile's president; reaction from Peru's nationalist political party; and background.)
LIMA (Dow Jones)--Members of President Alan Garcia's cabinet continued to insist Tuesday that a now-detained Peruvian military official spied for neighboring Chile.
News that the Air Force official allegedly passed intelligence to foreign agents has caused a diplomatic row between the two nations.
Defense Minister Rafael Rey rejected statements from the Chilean government that it had nothing to do with any spying in Peru.
"It is logical that they won't recognize this [spying]," Rey said on RPP radio.
The alleged espionage was orchestrated through Chilean agents, he said. "Of this there is no doubt."
At a later press conference, Rey said that Chilean investment in Peru won't be affected by the diplomatic spat.
"Chilean investments in Peru are safe, in fact they are beneficial," Rey said. "It would be absurd to scare them [investors] away."
Chilean President Michelle Bachelet said that the Peruvian government's accusations that a Peruvian military officer spied for Chile were "offensive and grandiloquent."
Peruvian Foreign Affairs Minister Jose Antonio Garcia Belaunde called the spying an "unfriendly act," and said relations between Chile and Peru are at a "low point."
The president of the military's Supreme Tribunal, Admiral Carlos Mesa Angosto, told government news agency Andina that the alleged spy, Victor Ariza, could receive a sentence of between 20 years to 35 years in prison.
Chilean Minister of Foreign Affairs Mariano Fernandez said late Monday that the government doesn't practice spying, and rejected any links to the Peruvian official.
"I can say seriously and with responsibility that no Chilean state institutions nor officials had anything to do with these kinds of practices," Fernandez said in a statement.
Chile's ambassador in Peru has been in Chile for personal reasons, and will remain in Santiago for consultations until the date of his return to Lima is decided, according to Fernandez.
Peru's nationalist party, which has anti-Chilean policies, is demanding that Peru's government retaliate on the economic front.
"What we have asked for is a suspension of the free trade deal with Chile," nationalist party leader Ollanta Humala said Tuesday in a broadcast interview.
Relations between Chile and Peru have already been cool due to increased Chilean arms purchases, and as Peru pursues arbitration to back its claim for jurisdiction over a large patch of the Pacific Ocean that Chile considers its own.
In a report, the research and consulting firm Eurasia Group said, "The dispute is unlikely to escalate into a military dispute, or have negative effects on trade given that both countries have strong incentives to scale back the dispute."
-By Robert Kozak, Dow Jones Newswires; 51-1-99927 7269; peru@dowjones.com
(Carolina Pica contributed to this article.)
(END) Dow Jones Newswires
November 17, 2009 15:14 ET (20:14 GMT)
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